THE DEATH OF MONEY

A second, uneven installment of the economic apocalypse according to New York Times reporter Kurtzman (The Decline and Crash of the American Economy, 1988). Earlier, Kurtzman argued that a declining real standard of living among Americans is due to the growth of a service economy. Here, he holds that all our current and future woes—economic slippage, currency volatility, mergers and restructurings, the credit crunch, and the deficit—result from an increasing disconnection between the ``real'' economy (where people make products, perform services, and receive wages) and the speed-of- light electronic financial economy, where traders roam the earth's computer networks in search of minute-to-minute profits. This huge market—comprising all the world's stocks, bonds, currencies, credit instruments, options, and futures contracts on commodities of every kind—trades more ``buying power'' every day than is contained in our annual GNP. Kurtzman demonstrates that it is detached from, and even inimical to, the health of real companies: This market, he contends, craves interest-rate and currency volatility for profit-taking, and entropy—especially in the form of corporate breakups—for new opportunities to trade. It cares nothing for corporate growth or jobs. It has no patience with long- term planning; it treats money not as a storehouse of value (as in the days of the gold standard, to which the author gazes longingly) but as a symbol that will decay on the screen if it is not moved. If not regulated strictly, it will destroy our ability to thrive. Kurtzman has the bad habit of quoting economic extremists and of overstating his conclusions. But his facts, and much of his analysis, will reward the careful reader.