What Is This Thing Called Money?

Years ago, a foreign friend stayed at our house to sightsee and go shopping. For some reason having to do with exchange regulations (not drugs; it was a more innocent time and our friend is a saint, though well-off), his shopping fund was entirely in $100 bills. There were 100 of them and, over the weekend with the banks closed, they lay on the piano.

The inch-high stack was oddly shocking. It had a physicality we no longer associate with money, what with checks, credit cards and bank transfers. This was one part of the strangeness. The other was the knowledge that the small gray-green wedge atop Bach’s Two-Part Inventions represented $10,000 (perhaps $30,000 today) of what one economist has called “frozen labor”: the work that went into accumulating it.

Also, as in the title of James Buchan’s book, it represented “frozen desire”: the potential range of wants inherent in the stack--goods, travel, sensuous pleasure, security (savings), enrichment (investing or gambling), power (hiring a servant or bribing a judge) and much else.

“Goods can fulfill a need. Money can fulfill Need itself,” wrote Arthur Schopenhauer, the German philosopher whom Buchan, a journalist and novelist, quotes in this idiosyncratic book about the properties of money. It is part history, part personal reflection, part sermon and part an erratic tossing of verbal and intellectual firebrands. Some dazzle, and some smoke.

Buchan also quotes Aristotle, who pointed out that a person can consume only so much, but there is no limit to human desire. Naturally, this brings us to Bill Gates’ reputed $40 billion. “Grotesque,” Buchan calls it, and we can muse how much more grotesque it would be if, absent money, Gates owned 200 $200-million mansions or 200,000 $200,000 Rolls-Royce limousines.

Buchan began thinking about his subject much the way this review begins: with a stack of bills. It was two packets of Saudi Arabian 100-riyal notes tied in twine; his month’s wages as a reporter for the English-language paper in Jeddah. A month of heat, sandstorms, professional constriction, intellectual isolation and no female companionship: all for this grotesque mound of greasy paper.

“Frozen Desire” keeps the whirligig person of the author before us: an eccentric, preening guide who lobs provocative thoughts at his subject, registering palpable hits or bruising his toes. There is a lot of history in a short space; instead of simplifying, he flowers into witty complexity, which sometimes leaves his point half-explained while he hastens on to the next one.

There is John Law, his fellow Scotsman, an adventurer and financial manipulator who advised the Duc d’Orleans, France’s regent after the death of Louis XIV. Using his “System,” he turned the banking system upside down and made a vast fortune before everything collapsed around him.

Buchan teases and tweaks, but we never quite learn what the System was, though we get the prophetic theory behind it: that the value of money rests not on gold but on the wealth of the nation as a whole. His pages on Michael Milken and junk bonds are written with such bravura compression as to be quite baffling.

Buchan notes the earliest appearance of coinage in Asia Minor in the 7th century BC. It was a frontier between different peoples; he suggests that among strangers, trust in money could serve where there was no basis for trust in people. Eventually, he adds, it would entirely displace such trust.

Buchan has many ingenious comments and striking examples, but they do not quite tie his ambitious subject together. Tying of a sort comes at the end when he shifts into a money sermon, calling for higher values and unspecified resistance to the tyranny of price and profit.

The sermon is not very good, though it comes in a winning context. Buchan’s great-great-grandfather, a Scottish lawyer, came to near ruin when the City of Glasgow Bank, its solidity built on wild speculation, crashed in 1878. The next day old Buchan’s son, a clergyman, preached fulmination against money and those who lived by it. It was, James Buchan writes, a family turning point. Businessmen gave way to preachers, travelers and writers. His grandfather, John Buchan (later Lord Tweedsmuir), was a famously successful thriller writer, as well as governor-general of Canada.

An abrupt, minatory voice, the Rev. John Buchan is heard among the other voices as the author, teetering between brilliance and disarray, writes in a currency that, though it buys us quite a lot, risks hyper-inflation and panic.