I love the world of asset management, because most of that is devoted to people's retirement and preparing them for an economic life in the long term, after their working life has passed. The invention of something like bonds and annuities and stock that people could buy with some level of trust—those created this possibility of people being able to save for themselves or for their family members. It created an economic future that they couldn't really create before. Before capital markets and financial innovations like that, a retirement plan was to have a lot of kids and then make sure enough of them lived long enough to support you when you got old. Finance, on the one hand, reduced the need to have a savings plan that was based on reproduction. Then, also, in some sense, it freed up the children to do what they want.

Lam: We hear often about the finance industry being ethical or unethical, and I was wondering if you came across that in different time periods.

Goetzmann: I think that anytime you have a very powerful tool that can focus and create value, anything that has the monetary value that finance has—you're going to attract people who are bad apples. There's no question that financial markets have created the possibility of scams and frauds on an enormous scale. For example, what we're seeing now with the invasion of the Swift system and the theft of $80 million—there's no question that there are real serious ethical breaches.

There’s one thing that people focus a lot on. The first thing that comes to mind is the word greed. It's a moral term. It's not well-defined, by the way, but it's a term that harkens back to the seven deadly sins. It comes from a long-term cultural norm to expect people to curtail their desire for more. When you think about it in economic terms, it means you simply prefer more to less, no matter how much you have. Economist have put the notion of greed into a framework for understanding it, even though it seems like one of the most commonly-used and misunderstood words there is when it comes to issues of money and wealth. It's the first term that's used when finance is criticized, the fact that somebody wants money and that they're accumulating it.

Karl Marx, for example, had these really powerful and compelling images of greed: money bags, and people who just wanted to save and not give. I think that's something that, as a culture, we have to ask ourselves when somebody starts using the term greed. We have to take a step back and look at how much of that is a projection of not cultural values—but cultural stereotypes.

Lam: How have you seen this projection of cultural values play out in different civilizations, in terms of how their financial sectors have developed?

Goetzmann: The strongest one is the prescription against usury. In the Islamic world, borrowing and lending and debt finance is sharply constrained. In the Christian world, usury was condemned and the definition of usury shifted around a little bit because you couldn't entirely constrain people from borrowing and lending. But you could call someone a usurer, and it evokes great hatred and vilification. You see these connections between attacks on finance and anti-Semitism throughout European history as an example of that.