Professor Ian Angell

Department of Information Systems, LSE, London WC2A 2AE    |    +44 (0)20 7955 7655    |    i.angell@lse.ac.uk

We all know what money is, don't we? Money is the notes and coins that governments print and mint to facilitate economic transactions. It circulates as a consensus, a statement of trust in the value that permeates these instruments of exchange. Money even answers the thorny question of just what value is: money is the commodity whereby value is expressed as price. Bearers of monetary tokens believe the promise, that on demand, or even after a period of time, they may exchange amounts of that money for goods and services to the value specified, or for alternative promissory instruments to the same value.

But why do we accept these promises? Because money works! And why does it work? Because everybody else accepts money as having value. In fact the modern world couldn't manage without it. Surely money must be more than mere social convention? It is, after all, underpinned by the whole complex science of Economics. Or is that too just another social convention? So we all know what money is, don't we? Or do we?

This book is a description of a very personal journey of discovery: my recognition that the scientific descriptions of money are not sufficient, because they fail to address that most human and private of issues, namely 'value.' It is an acknowledgment of the intrigue surrounding, and subtle influences on, money - a subject very close to my heart, and my wallet. I contend that in a world of irrational and perverse humanity, any scientific explanation must be complemented by an alchemy of money. Not the nonsense of New Age mysticism, or of Voodoo: not the magic of Harry Potter, rather a sensible age-old sorcery that has its fundamental beliefs fixed by the unchanging human condition. It is an alchemy that has been overlooked in the twentieth century's urge to develop a pseudo-science for everything; an oversight that has led, as we shall see, to acts of hubris on a monumental scale.

Anyone wanting to get to grips with this world of money must give up the naive trappings of a degenerating social science, and instead learn to practice the magical arts. They must first become a Sorcerer's Apprentice. Before we can talk about money, we must talk about magic. Therefore, I want to take you on a journey back in time: back to your childhood. Back to a time before you put away childish things. Back to a time before you were jaded by disappointment, and directed by cynicism. Back to a time when the world was a magical place, a place of wonder, and your role was that of hero at the centre of events.

I want you to discard the jaundice of adult disbelief, and come back with me to a world where that magic still exists. Come with me to a world where, within the realm of imagination, within the realm of chance, within the realm of necessity, the 'improbable' can and does happen. That having been said, I should add that the 'impossible' stays impossible. If you succeed in making this trip, then I hope I can convince you that this magical world of childhood still exists in all of us. Join me and see the world of grown-ups as an alien place, an insane place of denial. For the magical world is the real world inhabited by humanity, and it has always been that way. It always will be. If you can shed the dreary mask of modern social conformity and the delusion of scientific rationality, then you too can do anything - within reason!

I want to re-introduce you to the world of the magician, the shaman, the alchemist, the magus: the sorcerer. I want to convince you that there is world of divination all around us. For my thesis is that magic is the basis of all financial transactions; and we deny its existence at our peril. Many of us vaguely know of this place, but we are too embarrassed to admit it. Of course the Alchemy of transmuting lead into gold was destroyed by science. But what is it but alchemy when governments change paper into gold/money?

We must recognize that the shaman is merely an agent of social change, and Alchemy is the language whereby that change is achieved. By the end of this book I hope, like me, you will answer the question of why you believe in magic by saying "because there is something in it!" Then you will come to agree with me that money has far more to do with magic than with mere sciences like Economics.