Money
James Featherby reviews "Money" by Eric Lonergan, part of the Art of Living series.
This perceptive and succinct book takes a fresh look at our relationship with money, finance and investment. Lonegan, a macro hedge fund manager at M&G Investments, is no Christian, and indeed painfully describes an intellectually sub-prime Alpha course he once attended. Similarly, seekers after economic justice might be disappointed by his scant reference to fairness. However, those of faith will find him addressing with honesty the paradox of better societies, built with the increased inter-dependence that markets and globalisation can bring, sitting alongside the problem of our characters, still locked in a primeval state of insecurity and status seeking.
Lonegan's most insightful observations are on the relationship between money and the future. Lonegan carefully demonstrates how we unconsciously use money as a hedge against future uncertainty, and how, through borrowing, we trade with our own future, often to beneficial effect - inter temporal exchange as he calls it. Likewise he describes the stock market principally in terms of insurance through diversification against the needs of tomorrow, rather than of allocation of capital for investment today. He rightly diagnoses that much of our confusion about money is either because we either think about it too little, and so do not understand its purpose and benefits, or because we think about it too much, and so confuse value with price.
His description of the origins of money are alarmingly clear and simple - the printing press and fractional reserve banking (not as difficult as it sounds!). He argues cogently for a simple prescription to our current financial woes - dropping banknotes from helicopters, as per Friedman, and then turning off the printing press when inflation emerges. I'll leave the economists to fight over that one.
"Money" is published by Acumen, 2009
James Featherby
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