On 24 January, a Tuesday, Mr Cedric Brown, chief executive of British Gas, testified before the House of Commons Committee on Employment on the subject of his pay, which is £475,000 a year. In the course of a brisk and competitive exchange with MPs, he showed emotion at only one point, when he said this:
I started at the bottom. I wielded a pick and shovel and when the board came along three years ago and said they wanted me to be chief executive I was delighted to accept. For Britain to create a society where someone in the seventh-biggest company can go from the top to the bottom is something which should be encouraged.
The MPs and reporters tittered. What larks! That this man, so admirably bluff and brutal, can’t even manage a standard piece of sentimental Thatcherite cant without ballsing it up! In reality, Mr Brown was speaking from his injured heart, for he knew in the depths of that organ that his ascent on the rising tide of money was a fall and all his gain a loss.
Few people have suffered Mr Brown’s blinding insight into the psychology of money. One of the curious aspects of modernity is that, in an epoch where money has infiltrated every human relation in almost every country in the world, we know absolutely nothing about it. Most people I know accept money without question. They devote their lives to its pursuit, accumulate it beyond their needs, subordinate to it honour, peace of mind and the welfare of their children. It is the foundation of their self-worth, despite the daily evidence on every street in every part of town that money does not necessarily reward energy and virtue, or punish stupidity and sloth. Though dimly aware that money is an invention of human beings, they ascribe to it an external authority as once their forebears did the gods. And because money breaks the link between action and consequence, they have a grasp of reality more tenuous even than that of Don Quixote: when they discover that the crimson package whisked over the supermarket check-out was once an animal, they break down in inconsolable grief.
As individuals, so states. States are now ungovernable against the power and capriciousness of markets. Making a virtue of necessity, governments all over the world pronounce that capital markets reflect the people’s will and resolve all clashes of interest more efficiently than the slow mechanisms of custom or ramshackle representative democracies. The old notion, going back at least to Adam Smith, that the untrammelled pursuit of individual monetary self-interest would secure the public good, has been radically simplified: there is no public good, because there is no public (Mrs Thatcher’s ‘no such thing as society’) and no good, unless it be money. Dr Johnson’s more principled formulation – that money-making keeps men out of mischief – seems to have no place for Mr Nick Leeson, 28.
Because money now sets no limit to trade, cities have expanded to extents unimaginable a generation ago, and humanity is confronted by strange new physical and moral limits to its development. The next time money fails in its exchange function (which it does every now and then), there will be suffering in the world that I cannot begin to describe. In the meanwhile, some wizard from Watford is preparing for you an interesting and challenging retirement. (When I suggested, in discussions with a US magazine last month, that a famous bank would soon lose its entire capital by speculating in derivative instruments, the editor said: ‘Surely not!’)
You would have thought that human beings would study their greatest invention, using their second greatest, which is language. But money has fallen between two sciences. Economics long ago ceased to examine why people act as they do, and assumes instead that each will pursue his rational self-interest – a notion which was self-evidently false long before the UK National Lottery revealed it was so to every person in the kingdom. The economists view money as purely functional, as a means of exchanging or storing value: a view too ludicrous to be worth discussing. In psychology, Freud saw at the outset that attitudes to money could be as symptomatic as attitudes to sex, but chose – either for biographical reasons or in the manner of a goalkeeper in a penalty shoot-out who must dive one way – to concentrate on sex.
That still leaves philosophy, history and imaginative literature. But if Kevin Jackson’s anthology of money, a heroic labour which I cannot praise too highly, shows anything it shows this: that sustained thought about money ceased in Europe and America in the 18th century. You come away from reading it with a deep melancholy. (Or perhaps anthologies are not for reading, but for giving; in which case, being technically rational, transitory, impersonal and convenient, they resemble gifts of money.)
As far as I can tell, there were two periods in which money was an object of productive study. The first was in Antiquity, beginning with the invention of coinage (if those things from the Artemision in Ephesus are coins) in or around Lydia at or about the end of the seventh century BC. The first book of Herodotus’ Histories appears to be about money, and that is what one would expect: Herodotus could not have travelled and enquired, could not have existed, without it. The European Middle Ages selected for their legacy from Antiquity some very difficult and interesting statements in the Gospels and Aristotle. (The passages from these authorities should not be attempted in translation, not even in Mr Jackson’s.)
The second period opens in the late Middle Ages and bursts into life with the voyages of discovery, the conquests in America, and the inauguration of the Potosí mine in what is now Bolivia in the 1540s. Great intelligences engaged in a meditation on the nature and effects of money: the best of these are Shakespeare and Cervantes. Oddly, Mr Jackson ignores Cervantes. He seems aware (possibly from Trilling) that novels are in an important sense ‘about’ money, but does not think to consult the founder novel. The spread of public and private credit gave further impetus to thought in the 17th century, whose economists are worth reading, though already they are striving for the fatal precision of the physical sciences. This second period draws to a close with the fall of John Law and the great financial collapses in Paris, London and the Dutch cities in 1720-1. On 29 August 1728, Montesquieu visits the Scots financier in Venice and, on the evidence of the shorthand notes in the posthumously published Voyages, does not understand one word, not even et and le.
By now, in England at least, money is firmly established as the foundation of personality and, through the system of corruption established by Walpole, of the state; though Pope, for one, fights in retreat for God, virtue and family. In an attempt to bring some moral order to this new world, Smith writes The Wealth of Nations and the Theory of Moral Sentiments: history consigns the second to the dustbin, a receptacle in which Mr Jackson might have looked with profit. Across the Atlantic, after a debate enlivened by Alexander Hamilton’s articles in the Federalist of New York, the United States is founded on money rather than on virtue. In France, the Revolutionaries try to revive Law and get Bonaparte. The Romantics decide that money has made the world boring, but their response is feeble in the extreme:
Much have I travelled in the realms of gold
And many goodly states ...
The beacons are few. There is Marx in his first Parisian exile, though there is nothing in his application of the Hegelian concept of alienation that wasn’t better expressed by Shakespeare or, as here, by Herbert:
Nay, thou hast got the face of man; for we
Have with our stamp and seal transferr’d our right:
Thou art the man, and man but drosse to thee.
Baudelaire miraculously escapes not only the division of labour imposed by money but even the notion of time implicit in interest. In those phrases in his verse (Mr Jackson only has his prose) which express time, un soir or à l’ heure où le soleil tombant and so on, one might be in Antiquity. Later in the century, there are some interesting sentences in Dostoevsky’s Gambler and in The Wings of the Dove, though these aren’t in Mr Jackson. Then there is silence, or rather prattle.
Lest you think I exaggerate, let me show you what I mean. First, from the ancients:
Gold is very excellent ... it will even get a soul into Paradise.
Your Royal Highness will remember one day at Marly ... I had the honour of saying to him that ... the bank is not the only or the grandest of my ideas. I will devise a scheme that will astonish Europe by the alterations it will make in France’s favour, alterations more radical than those procured by the discovery of the Indies or the introduction of credit ... By my efforts, I will make the Indies redundant.
John Law, 1715
And for the moderns:
Papa! What’s money?
Daddy ... What are bonds?
Tom Wolfe, 1987
I do not know if Mr Jackson is aware of this intellectual degeneration. He is anyway imprisoned by his project, for an anthologist must pluck his flowers in as many meadows as he can find. His own tastes run to Pound’s Cantos (admirably kept under control) and the European 19th century (not). He is dutiful towards economics, but has little interest in finance, Islam, China, or those regions south of the Equator or cast of the Elbe that have been detonated by money in our lifetimes.
But it is the 19th-century bias which is unfortunate. Mr Jackson quotes Prescott quoting Bernal Díaz on Montezuma’s gold, and Washington Irving on Law, when the originals would have knocked his socks off. We trudge through acres of Balzac, Dickens and, forgive the impropriety, Edith Wharton; but the problem is crystallised in Jane Austen. She gives her admirers little frissons with her guineas and annuities: such insight into the economic prisons of her heroines! In reality, Jane Austen frames her stories with precise sums of money because she genuinely believes that money has some reality beyond convention: that is, that money is of a higher reality than, say, the custom of serving tea a couple of hours after dinner. That is not just nonsense in itself, but it leaves a dreadful legacy for novels whereby money substitutes for character and event (as it does in the satires of Jonson and Molière). Balzac’s courtesans and misers sell their souls for rentes: the author has a touching faith in fixed-income investment, a sure route to actual and literary bankruptcy. These novels are the artistic counterpart of gold-standard economics. Dickens’s struggle with money is literally puerile: he is trying to master some crisis of adolescence embodied by money, but keeps slipping into adolescent self-pity.
But nothing in the last century will prepare the reader for the stupidities of our own. We have Fitzgerald’s ‘her voice is full of money,’ Maugham’s ‘money is like a sixth sense,’ and Updike’s repulsive Kruggerrands, all scrupulously copied out by Mr Jackson. These modern authors can no more write about money than a child can keep change behind the counter of a sweet shop.
We also have this, from a novel called Money and published in the Eighties:
Last year, the pubs were full of incredulously spendthrift Irishmen: they didn’t have money in their pockets any longer – they had Euromoney, which is much more powerful stuff. There’s some bundle in the Middle East, and a new squad of fiscal space invaders starts plundering the West. Every time the quid gets gangbanged on the international exchange, all the Arab chicks get a new fur coat.
In the dispute between Shylock and Antonio in the first act of The Merchant of Venice, Shakespeare shows an advanced understanding of the technical debate in commercial circles on the propriety of interest, as opposed to profit arising from participatory risk. In Martin Amis’s novel, the words ‘Euromoney’, ‘fiscal’, ‘international’, ‘exchange’, ‘gang-bang’, ‘quid’, have no meaning: they are just sounds. Because these authors invest no thought, they bear no risk. Their bonuses are paid in full, so they can go and fuck up again, as at Barings.
At some point, of course, probably sooner rather than later, the Bank of England or the Federal Reserve will lose the entire wealth of their respective nations attempting to exploit tiny arbitrage differences in an artificial exchange between the Spanish peseta and the Zambian kwacha. In the ensuing Depression, somebody will begin to question the association of money with reason, prosperity and liberty. Mr Jackson’s book will then be seen not as a compendium of thought about money, but for what it is, 90 per cent nonsense.