I have been reading a bit more fiction this summer and recently finished Iain Pear’s new novel Stone’s Fall. The reason that I reference the book here is because, in addition to being a good novel, it is replete with references and lessons in economics. The book is centered around the story of John Stone (Lord Ravenscliff), a wealthy English businessman who dies after falling out a window. His will leaves a substantial sum to a child that his (much younger) wife knows nothing about. This leads her to hire a newspaper reporter with a knack for getting to the bottom of a story to find this child. The story is told in three parts by three separate narrators in three separate time periods in three different locations (London, Paris, and Venice).
While the book is quite good in and of itself, I think that I enjoyed it much more because of the references to economics. The book takes place during the end of the 19th- and the dawn of the 20th-century and is filled will a discussion of the changing economic landscape as a result of the Industrial Revolution. The first narrator is the reporter, Matthew Braddock, who initially is quite skeptical of capitalism. However, there is a great Hayekian moment in which the reporter visits a vertically integrated shipyard (p. 174 – 5):
“I stared in utter amazement, and with emotions verging on awe. The yard was gigantic, so big you could not see the end of it, whichever way you turned, it was simply swallowed up in the haze of sunlight through smoke. A vast mass of machinery, cranes, yards, buildings, storage areas, assembly sheds, offices, stretching out before my eyes in every direction. Plumes of thick black smoke rose from a dozen chimney, the clanking, thudding, scraping and screeching of machinery came from different parts of the scene. It seemed chaotic, even diabolical, the way the landscape had disappeared under the hand of man, but there was also something extraordinarily beautiful in the intricacy…”
“And you run it all?” I asked, genuinely impressed.
“I run this plant.”
“How? I mean, how can one person have the slightest idea what is going on in that — chaos?”
He smiled. “That is where Ravenscliff was a genius. He developed a way of controlling all this, and not just this, but all of his factories, so that any moment you can find out what is going on, where it is happening. So that chaos, as you call it can be tamed and the hidden patterns and movements of men, and machinery and capital and raw material, can be forced to act in a way which is efficient and effective.”
“Elegant?” I suggested.
“That is not a word a businessman often uses, but yes, it is elegant, if you wish…”
Later the plant manager even explains the insights of Adam Smith’s “invisible hand”, telling the reporter that, “[t]he job of any company is to make as much profit as possible. As long as that is the main aim of the managers, then there is no need to direct them. They will, collectively, take the right decisions.”
The second part of the book was likely my favorite as it is narrated by Henry Cort, a British spy. Without giving away too much of the plot, Cort discovers a plan orchestrated by the French and the Russians to weaken (and perhaps ruin) the Bank of England by draining its gold reserves. This story line is excellent, with a discussion of banking and the role of the international gold standard.
The third section is told from the perspective of John Stone and succeeds in filling in the gaps of the mysterious businessman as well as the main story arch. It is in this section that we get my favorite quote from the entire book (p. 427):
“A few months ago I read a book by Karl Marx on capital. Elizabeth gave it to me, with a smile on her face. A strange experience, as the author’s awe exceeds even my own. He is the first to understand the complexity of capital and it subtlety. His account is that of a lover describing his beloved, but after describing her beauty and the sensuality of her power, he turns away from her embrace and insists that his love should be destroyed. He could gaze clearly into the nature of capital, but not into his own character. Desire is written in every line and paragraph of his book, but he does not see it.”
In short, Pears has written an excellent novel. While the main plot, as described above, seems rather simple, the book is anything but. The subplots, the richness of the characters, and, of course, the economic references make this a great text for the average reader and econ nerd alike.