Edward Chancellors is a financial historian and journalist, as well as a former investment strategist and fund manager (at Lazard Brothers and GMO). His book, The Price of Time, has a simple but radical proposition: interest is not just the price of money, it is the price of time itself. While not a new concept, his framing sets the stage for a much deeper discussion of why interest matters — and why attempts to suppress or abolish it have consistently failed. The book traces the 5000-year history of interest, from ancient Mesopotamia to today's ultralow and sometimes even negative interest rates.
Chancellor describes interest is the time-value of money—a fundamental mechanism that governs capital allocation, and argues that in the modern era, interest has been suppressed too much.
From the very first chapter, Chancellor makes clear that interest is not a modern invention. It is almost as old as written history itself, appearing already in the loan contracts of ancient Mesopotamia. The practice has always been morally contested. Religious traditions, from the Old Testament to the Quran, repeatedly condemned usury. Philosophers like Aristotle declared that money should not “breed” money. Yet despite taboos and prohibitions, interest never disappeared.
INTEREST AS A COORDINATION MECHANISM
What makes this first chapter worth highlighting is not just the historical anecdotes, but the way Chancellor frames interest as a coordination device across time.
- For the lender, interest compensates for uncertainty: the risk that money lent today will not be repaid tomorrow.
- For the borrower, interest signals the cost of deferring repayment into the future.
- For society, it balances the trade-off between present consumption and future investment.
This is where the link to money debates becomes clear. If money is a social technology for exchanging value across space, then interest is the mechanism for exchanging value across time.
THE MORAL SUSPICION
Religious prohibitions against usury were not arbitrary. They expressed a broader suspicion: that profiting from time itself was unjust. To many, charging interest looked like extracting value without producing anything. In the medieval Christian world, this suspicion kept formal interest rates underground for centuries. Lending continued, but often through loopholes, hidden fees, or actors outside the dominant moral order.
These debates are still relevant. Consider how today’s monetary system subsidizes debtors at the expense of savers through artificially low interest rates. Or how “yield” is rebranded and financialized in decentralized finance. The moral unease is the same: who should capture the value of time?
Key arguments in the book
Chancellor avoids prescribing exact solutions, noting the natural rate of interest is elusive. Still, he issues a stark warning: subdued interest rates threaten financial stability and undermine capitalism itself. In the book he explains that:
- Interest has existed for millennia and has always been controversial—from Babylonian loans to moral objections in medieval and religious contexts.
- Ultralow interest rates (post-2008) have helped fuel asset bubbles, zombie firms, inequality, weak productivity, and disincentivized savings.
- He compares overly accommodating monetary policies to forest fire suppression that leads to catastrophic fires—easy money kept inefficient firms alive (“zombified”) instead of allowing healthy renewal.
- Low rates distorted economic behavior—they stretched supply chains, disincentivized capital investment, and fueled risk-taking and speculative frenzy.
Part 1: Historical Interest
- Babylonian Birth – Early origins of interest in ancient civilizations.
- Selling Time – Early conceptualization of interest as the cost of time.
- The Lowering of Interest – Historical trends in rate declines.
- The Chimera – Illusions or myths around interest and economics.
- John Bull Cannot Stand Two Per Cent – Skepticism toward low rates in British history.
- Un Petit Coup de Whisky – Likely referencing a whimsical or era-specific interest environment.
Part 2: How Low Rates Begot Lower Rates
7. Goodhart's Law – Influence of policy on economic indicators.
8. Secular Stagnation – Long-term low growth environment.
9. The Raven of Basel – Possibly central bank policies (e.g. Basel accord context).
10. Unnatural Selection – Rates changing economic Darwinism.
11. The Promoter's Profit – How promoters thrive on cheap money.
12. A Big Fat Ugly Bubble – Formation of large financial bubbles.
13. Your Mother Needs to Die – Title suggests controversial or hyperbolic narrative.
14. Let Them Eat Credit – Widespread credit expansion.
15. The Price of Anxiety – Psychological cost of living with uncertainty.
16. Rusting Money – Depreciation of currency’s efficacy or credibility.
Part 3: The Game of Marbles
17. The Mother and Father of All Evil – Perhaps interest as a root problem.
18. Financial Repression with Chinese Characteristics – China's credit squeeze or manipulation.
Conclusion: The New Road to Serfdom – Lower rates as a path to financial servitude.
Postscript: The World Turned Upside Down – Final reflections on a distorted monetary world.
LESSONS FOR THE CRYPTO ERA
Chancellor’s opening chapter also resonates with debates around Bitcoin. Bitcoin was designed to remove political discretion from money creation, but it did not solve the question of interest. In a system with a fixed money supply, what should the cost of time be? Can there even be a stable interest mechanism when the currency itself is so volatile?
This raises a larger point: the critique of fiat money cannot stop at supply caps. It must also grapple with how societies value time, how capital is allocated, and how risk is shared across generations. Chancellor’s historical lens is useful here because it shows that these problems are not new — they are as old as money itself.
WHY THIS MATTERS
The first chapter of The Price of Time is not just a history lesson. It is a reminder that interest is a social contract about time. Attempts to suppress it — whether through religious bans or today’s central bank interventions — usually distort the very system they are meant to protect.
For anyone interested in Bitcoin, DeFi, or the redesign of money, this is a critical starting point. Understanding interest as the price of time is essential to understanding why monetary systems succeed, fail, or mutate into something else.
