The new Michael Lewis book about high frequency trading and gaming the system through front-running is all the rage this week. Flash Boys is a good book: Mr. Lewis is perhaps the U.S.’s most readable investment and finance author. Even so, I’ll be contrarian.
Check out Money–The Unauthorized Biography, by Felix Martin (Knopf, 2014). In Money, you meet the citizens of Yap (yes, a real place). In Yap, currency is rocks, big rocks. Some, in fact, are too big to move. If Citizen A has a big two-ton stone on Citizen B’s property, the giant rock is still Citizen A’s property and belongs to A or his or her descendants until is sold. All the citizens of Yap are in agreement about these property rights.
Money gives one a whole new perspective on the whole “medium of exchange” idea. In Yap, for example, there may be little exchange, but there is plenty of money, or, I should say, rocks.