In an interview on The Death of Empires

Your fourth book?

Frozen Desire. It’s a very unusual book – wonderfully written, amazing prose, generally chronological. James Buchan talks about what money is and its use. But he also adds this extra layer, which is his own experience of money. And you know, bitterness is a flavour and the fact that his reminiscences have a surprisingly bitter flavour add, I think, to the charm of the book.

But it’s specifically to do with empires. I’ve read the story, in different places, of how the great influx of treasure from the New World destroyed Spain – all this silver flooding in. Buchan tells it better than anyone. They had all this pure money and they thought it made them rich, but it didn’t. Its value disappeared with inflation. The money came in and then it flowed out again. It’s perhaps facile, but tempting all the same, to make a comparison with the Americans, and the way that their great wealth has passed on to China, then been borrowed back from China and spent again. The difference is that China is keeping America’s inflation on ice for it.

In an interview on Understanding High Finance

Tell me about Frozen Desire: An Inquiry into the Meaning of Money.

It’s a wonderful book. You don’t have to speak money to read it, but you do have to think quite hard. Buchan has that thing of very intelligent people that there are casual asides that leave you with things to think about for days afterwards. It’s quite compressed and dense, and it’s a very profound book, I think. It’s about our relationship with money, and money as one of humanity’s most amazing, extraordinary inventions: this thing which is so useful, and which is also a form of imagination, that frees us in so many ways, and at the same time enslaves us. One of the things that’s very powerful about this book is the fullness of Buchan’s ambivalence. He absolutely gets money’s extraordinariness and the way that it takes over our lives and is a kind of solvent, which dissolves difference, and place, and art, and craft, and history, until everything stops mattering except money. That’s one of the things that I really admire about it: lots of writers come down entirely on one side or the other in ways that don’t capture the fullness of money, but Frozen Desire is wonderful because it does both sides. If you’re interested in how the world works, and why things are as they are and what’s the story behind the thing you see, you do end up being very interested in how money works. I share something of that view: that money is in a sense the secret order of things. 

Does he look at whether there’s any moral dimension to the markets?

There’s absolutely no moral dimension at all to how the markets work in practice. I think it’s up to society to decide now the extent to which there is a moral dimension, and whether there should be moral constraints. I think that the missed opportunity was after the bail-out, after we the Western taxpayers wrote these huge hundred-billion-dollar cheques. Some of the banks paid back their loans, and even some of the nationalised banks are heading back towards profitability, but the fact is that the rest of the economy is paralysed, and in the longest recession since the 1930s – and that was directly triggered by the banks. The amazing and appalling thing is that none of that has been addressed. It’s been addressed purely through rhetoric, but there’s no legislative instrument anywhere that’s done anything to change that. If Barclays tomorrow were to announce, ‘Really sorry, we’ve just lost a trillion dollars betting on whether the Chinese renminbi would appreciate, and it hasn’t, and can we have our bail-out now?’, the state would have no choice but to say, OK: they’re too big, and too systemically important. The implosion was more than a year and a half ago, and it’s all completely unfixed. It’s as if they’d performed some heroic feat of steering and then immediately fell asleep at the wheel.