04 November 2005

Review: The Money Game

I thought this was going to be a boring book. My edition was printed in 1970, and looked it. (You know what they say about judging a book by its cover.) I thought it was going to be a sort of Making Money Made Simple or Economics textbook from the 60s, but it turned out not quite like that.

It is really about the stockmarket and its ilk, and the people who make it up. It is indeed about money and you, but when you recognise you in its pages, you will not like the picture of you that is painted.

Above all it holds that the stockmarket is a big casino where people play for fun, or some other psychological reason. Hence, The Money Game.

I was gripped from the beginning by 'Adam Smith's' witty, light, well-read, very modern style. On the downside, his ruthless insight into the absurdity of the world, the inefficiency of capitalism, and and the cynicism of many of Wall Street's denizens made me mildly depressed.

Quote (opening words):

The world is not the way they tell you it is.

Unconsciously we all know this. The little girl watching television asks will she really get a part int he spring play if she uses Listerine, and her mother says no, darling, that is just the commercial. It is not long before the moppets figure out that parents have commercials of their own - commercials to keep one quiet, commercials to get one to eat, and so on. But parents - indeed all of us - are in turn being given a whole variety of commercials that do not seem to be commercials. Silver is in short supply, and the Treasury is is running out and begins to fear a run. So the Treasury tells the New York Times that, what with one thing and another, there is enough silver for twenty years. Those who listened to the commercial sat quietly,expecting to get the part in the spring play, and the cynics went and ran all the silver out of the Treasury and the price went through the roof.

He goes on to explain how investing is all about mass psychology (a crowd of men acts like a single woman), the psychology of the individual investor (show me your portfolio and I'll tell you who you are and If you don't know who you are, this [the stockmarket] is an expensive place to find out), that the stockmarket is nothing but a casino inhabited by gambling addicts, that most people are not in it to make money (they want to be part of what's going on), and what do you want all that money for anyway?

***** Five stars

Literary works cited or mentioned:

The Wealth of Nations; Adam Smith
The Theory of Moral Sentiments; Adam Smith
The Sophisticated Investor; Burton Crane
Security Analysis: Graham & Dodd
The Battle for Investment Survival; Gerald Loeb
The Razor's Edge; W. Somerset Maugham
The Wisdom of Insecurity; Alan Watts
Life Against Death; Norman O. Brown
The Crowd; Gustave Le Bon
The Ordeal of Change
African Genesis; Robert Ardrey
The Territorial Imperative; Robert Ardrey
Extraordinary Popular Delusions and the Madness of Crowds; David Mackay
Group Psychology and the Analysis of the Ego; Sigmund Freud
The Group Mind; Dr W. McDougall
Wirtschaftsgeschichte des Altertums
The Romance and Tragedy of a Widely Known Businessman of New York; Himself (William Ingraham Russell)
On the Way to Tyburn Gallows
Poor Richard's Almanac
The Functions of the Executive; Chester Barnard
Growth Opportunities in Common Stocks; Winthrop Knowlton
Common Stocks and Uncommon Profits; Philip Fisher
The Random Character of Stock Market Prices; ed. Prof. Paul Cootner
Relative Strength Concept; Robert Levy
The Intelligent Investor; Benjamin Graham
How to Win in Wall Street; Successful Operator
The Protocols of the Elders of Shanghai [this book does not exist]
Peter Pan
Turn, Turn, Turn; Pete Seeger
Ecclesiastes; God
Twelve O'Clock High

Various journals also get a mention, including Foreign Affairs, Forbes, Economic Journal.

There are a few other allusions, to Sherlock Holmes, and Marcus Aurelius.

Lord Maynard Keynes is ever-present, but none of his works actually get named.


Blogger Randy Bentwick said...

Sounds good.


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