In Joel Kurtzman's nonfiction book, The Death of Money, we meet Wall Street's quantitatively oriented traders, or "quants," who are engaged in an arms race of trading high-powered mathematical models for complex packages of stocks, bonds, currencies, and commodities bound together with trap doors of all descriptions. These abstract mechanisms are realized through computer programs that continually interact with the world's markets. Like old-fashioned arbitrage on steroids - the goal is to profit not from economic fundamentals but from incremental shifts.
Author Kurtzman's symbols are up-to-the-minute: He portrays the global market as a neural network ceaselessly reacting to its own internal motions; a cyberspace far removed from real folks life. His underlying lesson, though, is one my great-grandparents were telling in rural Minnesota a hundred years ago: Speculators make big bucks through otherwise meaningless market swings, and the resulting volatility makes life miserable for the ordinary folks who depend on the prices they can get for their goods.
Were my ancestors right? I happen to think so. But Kurtzman offers little fresh guidance on the subject. He is clear on the astonishing magnitude of global capital flows and the decreasing effectiveness of national economic policies in a globalized economy, but he also has a peculiar preoccupation with the gold standard, as if Richard Nixon's abandonment of the Bretton Woods currency-trading system (the supposed "death of money") were a cause and not an inevitable effect of intensifying market forces. He underestimates the regulatory circuit breakers installed in the stock market after the 1987 crash. And by focusing on quantitative traders and ignoring the unfolding logics of the actual industries, he most often wins his arguments by fiat. Nonetheless, The Death of Money is a clear and entertaining guide to the accelerating world of global electronic markets.
- Phil Agre
The Death of Money, by Joel Kurtzman, US$22. Simon and Schuster: (800) 223 2336, +1 (201) 767 4990.
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