Book Review: Non-fiction/Business, Extreme Money by Satyajit Das, Penguin, 514 pp; Rs699 (Hardback)
More than misnomer, it would be a tragical travesty of long standing exercise if someone tries to see the world of finance through a different prism, away from western policy dominance! A long slavery of impure and irreverent economic policies has already stocked abundant flaws in the entire financial system whose risks are being maximised by the unrealistic integration of global trades. However, against that slapped backdrop, some voices have started appearing very resolutely, which are pragmatic, less pontified and chasing the way out of pervasive financial gloom.
Also it must not be considered a sacrilege, if someone defies the non-holy motives of Adam Smith’s texts including little anti-literature of his own basic thoughts “Theories of Moral Sentiments” or naturally opportunist courtesan economist, Kautilya’s “Arthshashtra”. Even beyond these two economic scribes, most of economic theories and its propunders too need a very articulate revisiting, better if much as stern as Jacques Derida demands in “textual rereading” framework. But certainly, this practice should not be sanctified like the way bandwagon tradition, it has confronted.
Satyajit Das, an internationally renowned expert of finance with earthly understanding of actual happenings in the global financial world, has come out with “Extreme Money”-a detailed work on monetary evolution, its rise and now the questionable survival. His views are formed through inside exposures in working with giant financial conglomerates and central banks across the world, especially in advanced western economies which possess capacity to make or mar the potential of financial growth outside of its terrain too.
Before the catastrophe broke at Wall Street in 2007, Satyajit has written celebrated book “Traders, Guns and Money”, as the name suggests, he exposed the unethical and undeserving derivatives trading with insightful inside account. Like Nouriel Roubini, he too sensed the impending financial failures ahead, in tune many others also felt so but alas their apprehensions were succumbed under the heavy acts of sidelining by the greedy financial experts and sadly passive regulators. Rest is history, how black acts drove financial markets initially weird and later over-vulnerable to be in tussle of surviving an unforeseen bizarre “hand to mouth like situation”.
As financial evolution and its rapid growth is a sort of declaration by human race for its supremacy over the rest participants of the whole ecosystem, so its perilous binding over the modern world could be easily conceived. En route this, questionable money games have lead to massive yet incoherent bubbles of fake growth, exotic financial plans like Ponzi and whole allowed gambling of capital markets denounced the all minimum values of business altogether at bay. That affected innumerable losses of jobs, private savings and overall the beliefs of common men from the financial sector. This is very alarming per say, if this sector really wants to rebound gracefully, though its chances are very minimal.
Author of this book has tried very well to encompass how the trap of financialising everything, from home mortgages to climate change have made selected fortunes and affected many. In his judicious conviction, Satyajit Das tells very realistically how “extreme money” is unreal, how still exotic financial instruments are generating huge profits and the exorbitant acceptance of Ivy League trained financial jovial minds leading the stream finance towards black whole from where return would be as exciting and unrealistic as beating the enemy nation in a Bond’s cinema!
It would be wrong to presume Indian economy emerging unscratched through the ongoing financial crisis began with subprime lending failures and now reaching another round of debacle with Euro zone crisis. The governing policies for reckless financial adventurism have still not getting the consideration it deserves, the prolonging of lackluster regulatory overtures further jeopardizing the chances of recovery and making the world truly wary from its havocking affects. The valid question arises, why central bankers are not converging with the actual scenario in western world?
The multilateral organisations are long back stopped performing any rational role to make international financial system harmonic and less risky. So it should be considered by the central banks, including RBI that the dividend of open trade is not restricted for equal sharing among the stakeholders but the downfall is very fairly attributed on them when the economies worldwide touches tailspin. No matter, how much international trade is integrated the role of national regulators and government is as much crucial as they used to before liberalisation wave in 1991.
Unrealistic euphoria may be destined to short-lived like financial bubbles generated by manipulated financial policies, so time is to think with proper imagination rather getting accustomed to be fall thinker and its myopic practitioner. Extreme Money is a serious step forward in this regard with well researched symptoms and solution of global finance within its fold, this work should be essentially read by the enthusiasts of finance and normally timid academic, who teaches finance-with or without real zest!
Atul Kumar Thakur
March 20, 2012, Tuesday, New Delhi