If I prang your car, we can swap insurance details. In the past, it would have been necessary for you to kill me. That’s the great thing about money: it makes liabilities payable and blood feud unnecessary.
Spare a thought, then, for the economist Robin Hanson, whose idea it was, in the years following the attacks on the World Trade Center, to create a market where traders could speculate on political atrocities. You could invest in the likelihood of a biochemical attack, for example, or a coup d’etat, or the assassination of an Arab leader. The more knowledgeable you were, the more profit you would earn — but you would also be showing your hand to the Pentagon.
The US Senate responded with horror to this putative ‘market in death and destruction’, though if the recent BBC drama The Night Manager has taught us anything at all (except about the passing trend of tomato-red chinos), it is that there is already a global market in death and destruction, and it is not at all well abstracted. Its currency is lives and livelihoods. Its currency is blood. A little more abstraction, in this grim sphere, would be welcome.
Most books about money stop here, arrested, whether they admit it or not, in the park’n’ride zone of Francis Fukuyama’s 1989 essay The End of History. Adam Kucharski — a mathematician who lectures at the London School of Hygiene and Tropical Medicine — keeps his foot on the gas. The point of his book is that abstraction makes speculation not just possible, but essential. Gambling isn’t any kind of ‘underside’ to the legitimate economy. It is the economy’s entire basis, and ‘the line between luck and skill — and between gambling and investing — is rarely as clear as we think’.
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