COINED

The Rich Life of Money and How Its History Has Shaped Us

Kabir Sehgal



Hachette India;257 pages; Rs 499The author, a former vice-president at JPMorgan in New York, writes in the introduction tothat his interest in money was sparked by the financial crash of 2008, which created in him an obsession to understand money. However, as he began researching the subject, it became apparent to him that to look at money through a traditional economic lens "belies the full range of what money means to us".

That is the reason for Mr Sehgal's approach of coining multiple ways of thinking about money. He brings in behavioural economics (the psychology of people when making economic decisions), neuroeconomics (the examination and interpretation of brain scans of people while they make financial decisions), and even the manner in which organisms conduct exchange to survive (money is a medium of exchange, after all).

The book is divided into three parts - "Mind", "Body" and "Soul". In Mind, Mr Sehgal asks why humans use money, and deploys biology, psychology and anthropology to find answers, even travelling to the Galapagos Islands in search of the origin of exchange. He examines how the "hidden forces" of psychology and neuroscience influence financial decision making, and dwells on claims by some anthropologists that debt, not barter, was the forerunner of money.

Ploughing through Mind's three chapters - during which my eyes often glazed over - brings one to Body, whose three chapters are the only reasonably interesting ones. Body focuses on the material forms of money, starting with metallic coins (in Mesopotamia, Egypt, Lydia, Greece, India and China), going on to paper money (which eighteenth-century France first used to revive an ailing economy) and ending with the future of money. The chapter on the future of money - increasingly digital, intangible and invisible - is the most absorbing.

Mr Sehgal makes the unexceptional argument that money will be increasingly invisible and, in the emerging world, where mobile phones vastly exceed the number of credit cards, these phones will become the preferred mode of payment for billions (they already have to some extent in several countries). But there is the risk that governments and central banks can block mobile-payment technologies if they see them as a threat to their interests - not to speak of security implications such as applications that commit identity theft.

Technology is redefining money, as best exemplified by the digital currency Bitcoin which, though it has seen early success, has experienced volatility too and is not thought to be a firm store of value. But, as Mr Sehgal points out, governments are the greatest impediments to the more widespread adoption of Bitcoin - they can simply decree what is or isn't legal tender within their borders. So, he concludes, it is more likely that Bitcoin will prevail as a technology that enables the transfer of existing currencies rather than becoming a currency in itself.

But, while mobile-payment platforms and Bitcoin are just technologies, the author speculates darkly that "man and machine" could merge one day, eliminating the "middleman" (physical money) altogether: "Surely, if we can embed pacemakers, we could implant payment systems into the body. Instead of a mobile wallet, we can have neural wallets." And trade and exchange could be "authenticated by a decentralised Bitcoin-type protocol" - no matter that people's minds could be hacked into, as in the movie Inception, and their identities stolen.

Soul, the third part of the book, is about how humans should use money. It turns the focus from "value" to "values" and what the world's major religions have to say about wealth, reproducing copious quotations from the Bible, the Torah, the Koran and the Vedas. "In all these scriptures, there seems to be a spiritual logic of less is more or enough is enough when it comes to material wealth," Mr Sehgal writes [italics in original]. Such thoughts, surprising in a former banker, are probably a result of the criticism heaped on the entire tribe in the wake of the global financial crisis.

But then, Mr Sehgal wasn't a typical Wall Street executive either. An American-born alumnus of the London School of Economics, he is a jazz musician and has been a record producer, and has earlier written a book about the relationship between jazz and the concept of democracy, another about civil rights (co-authored by the US pastor, politician and activist Andrew Young), and a third for children. A fourth, also for children, is soon to be published. And he accepted a job offer from JPMorgan (after fortuitously having rejected one from Lehman Brothers) only after an online education company that he had started in India failed, and he needed to recoup his losses.

Mr Sehgal writes candidly that Coined "does not advance a grand theory, nor does it provide completely unique perspectives. It synthesizes the work of others…" Each chapter is "meant to spark your curiosity, not satisfy it." This might appear to be an unambitious approach, but in being unconventional, Mr Sehgal has been ambitious too. The overall effort could leave most readers disappointed. Sticking to the "traditional economic lens" that he consciously decided to eschew might have served him - and the reader - better. The book's subtitle, particularly, creates expectations that the author fails to fulfil.