The Billion Dollar Sure Thing, by Paul E. Erdman, New York: Scribners, 1973, 248 pp., $6.95.
When it comes to a question of money, there are two types of people to be found within libertarian circles—the wheeler-dealer-entrepreneur-investor, and the gold-coins-buried-in-the-backyard-saver. The former likes libertarian ideas because of the promise of freedom of action, and the latter subscribes because of the promise of solid economic value, secure from taxation and depreciation of net worth.
Both types ought to read this novel.
The action of the book revolves around the attempt by the United States government to fix the price of gold at a high level and thereby make the greenback dollar more in demand. Of course, the news leaks out about two weeks in advance of the date this financial maneuver is scheduled and the scene shifts to the Swiss banking community, the Russian foreign trade bank, and the adventures of cops and robbers attempting to cover up the fact that there was a leak, and find the source.
This novel seems to have a strong procapitalist bias, which sneaks through once in a while—usually very subtly. The libertarian reader will find himself cheering at the events inside Russia, since it reinforces our opinions of the party bureaucrats (who almost make a couple of billion and cause great harm to the dollar at the same time, but who get tripped up by internal politics and lose a billion instead).
The dynamics of the Swiss banking houses are portrayed in detail, with special digressions by the author to explain to the reader exactly what is happening in non-technical terms. For this information alone, the book is worth checking out of a local library. For the whole plot, however, the book is worth ordering from one of our noble libertarian book services.
The author, Paul Erdman, ought to know enough about this sort of operation, inasmuch as he was president of the United California Bank in Basel, Switzerland, until it landed him in jail. His bank had been speculating in cocoa futures, and lost; and then his staff decided to doctor the books to hide the loss. During the 10 months which Erdman spent in jail, he wrote this novel. Naturally, one of the characters ends up in jail—so we benefit from a real-life description of Switzerland such as a tourist would never learn.
The wheeler-dealer-entrepreneur-investors among us will find themselves fascinated by the developments in the gold market as the word spreads about the coming devaluation. The mechanics of how these markets work is true in the story, only the names have been changed to protect the men behind the scenes. Interestingly, only one man in the market really knows the secret U.S. Treasury plan—all the others figure it out by shrewd guessing and the observation of market movements.
The gold-coins-buried-in-the-backyard-savers among us should appreciate the portrayal of the banking community as a gang of subtle swindlers using other people's money to pile it up for themselves. The best part of the whole book, in this reviewer's opinion, is when the little guy who really figured it all out by himself gets shafted by the police and has his fortune stolen by the banker, who simply "cancels" all transactions of the previous day (in which a fortune had been made). An episode like that pushes my cynic button—you know that's how things really turn out all the time anyhow.
From the standpoint of an economist, the events in the book are all correct and logical. There is none of the hokum which occasionally crops up in science fiction and other speculative fiction, to assume some contradiction of the laws of human action. This reviewer found himself hoping all along that the dollar would crumble, as all of the government-characters in the book feared. Alas, the Russians goof it up. Yet the story should be instructive to people who naively believe that (1) government-managed money is a safe and secure system; or (2) that having a fixed price for gold in terms of dollars (and so-called redeemable dollars) is the way to prevent the problems caused by government-management. Obviously my own pet scheme of the Anti-Inflation Constitutional Amendment is the answer, but enough axe-grinding.
Probably because he was writing the novel during a jail term, Paul Erdman lets justice triumph in the end. If you enjoyed NONE DARE CALL IT CONSPIRACY, you will love the ending of THE BILLION DOLLAR SURE THING.
J.M. Cobb is the author of "What You Should Know About Monetary and Fiscal Policy" which appears elsewhere in this issue.