The best financial fiction

Those three novels - plus others that we will encounter over the next couple of pages - give us a ripping good yarn, just as the best fiction should. In addition, they shed light on the Investors Chronicle's core subjects: investment, finance and business. And they do it so well that it’s surprising there isn’t more financial fiction on the nation's bookshelves. After all, finance - and all things connected to it - is such a great format against which to set tales that shed light on human nature.

As Francis Spufford, a senior lecturer in English and comparative literature at Goldsmiths, University of London, says: "Finance lends itself so readily to all those vital values that run through human relations - trust, betrayal, treachery. And none of these is more important than trust. Trust is at the heart of the finance industry, and trust - or sometimes the lack of it - is at the centre of human relations.

"Not just that, novelists are drawn to the way that finance and business - because of its importance to everyday lives - help to define our age and our sense of what's modern. And, arguably, there is no better way of examining this sense of modernity than through the mirror of historical financial fiction."

True, Mr Spufford may be biased. His first novel, Golden Hill, which has been shortlisted for the 2016 Costa Book Awards, is just such a piece. Set in mid-18th century Manhattan, it is the tale of an Englishman who pitches up at a New York counting house with a bill of exchange for a fabulous sum. The question is, can he be trusted?

Appropriately enough, historical financial fiction has a fair provenance. As far back as 1850, Alexandre Dumas used 17th century Holland's mania for tulip bulbs as the backdrop for one of his ripping yarns, The Black Tulip. Much more recently, Deborah Moggach - best known for the novel that was filmed as The Best Exotic Marigold Hotel - chose the same Dutch setting for a love story, Tulip Fever; the film version, with a screenplay by Tom Stoppard, is due for release later this year. And then there is a much-loved eight-volume slab of historical financial fiction, The House of Niccolò, by Dorothy Dunnett, which is set against the expansion of merchant banking in 15th-century Renaissance Europe.

What all these novels have in common is that they use some aspect of business or finance as the backdrop. However - and this is the important distinction - finance is not central to the story. So, if we are engaged in the pursuit of the best financial fiction ever written - and, in case you hadn't realised, that's our aim - then it is vital that an element of the 'money' industry is at the heart of the story.

To illustrate the distinction, let's return to Joseph Conrad. The Anglo-Polish author wrote two 'financial' novels - Nostromo and Chance. Nostromo is about the history of a silver mine in a fictional South American republic. Chance, which was Conrad's greatest commercial success, is about a wheeler-dealer whose phoney business collapses. Yet, as Professor Robert Hampson, a research fellow at Royal Holloway, University of London, says: "Chance is a great novel where finance is incidental to the plot. Nostromo is a great novel where finance is absolutely central. The whole work revolves around the fortunes of the silver mine."

More on Nostromo in a moment, but the distinction means that, while Trollope's The Way We Live Now can be among the very best financial fiction, Chance cannot; and, for that matter, other great pieces of fiction must be excluded.

Three exclusions are worth mentioning, if largely because of the tragedy of rejecting them. First, there is Hard Times by Charles Dickens, which is set in the northern industrial city of Coketown and adds Thomas Gradgrind to the list of Dickens' outstanding characters. Although Hard Times was rated by the great 20th-century critic FR Leavis as Dickens's only masterpiece, it is not really about business but an attack on the 19th century fashion for utilitarianism.

Second - and forward by 50 years - we must reject The Great Gatsby, F Scott Fitzgerald's novel that examines 1920s Jazz Age America. True, Gatsby, the novel, dealt with a period of excess, when fortunes were made no one knew quite how; much like the wealth made by Gatsby, the man. But all that is incidental to a story where the dream of love founders on reality and new money - however refined - finds that it can't compete with old money, however coarse.

Tom Wolfe's The Bonfire of the Vanities does for 1980s New York pretty much what Gatsby did for the 1920s version, though not quite so brilliantly. Sure, the anti-hero, Sherman McCoy, is a bond trader whose sense of entitlement is in keeping with the ridiculously rich. But only the sense of entitlement is relevant to the story. Indeed, in the original version of the book, which was serialised in Rolling Stone magazine, the McCoy character is a writer. It is only in the thoroughly revised - and overly long - novel version that he morphs into a bond trader.

What these novels - and almost all works of financial fiction have in common - is that they are critical of the financial anti-heroes their authors create and, by implication, critical of the process of business and finance.

That can't simply be because novelists envy the wealth of the lords of finance. After all, the notion of impoverished novelists eking an existence in damp basements with frayed mittens to keep away the chill just doesn't wash. Karl Marx may have threatened that "the bourgeois will regret my carbuncles", but his Victorian contemporaries, Thackeray, Dickens and Trollope, all became affluent thanks to their writing. And in contemporary times, a hugely successful writer, such as Robert Harris, is as wealthy as the hedge fund managers he fictionalises.

Rather, the clue lies in Anthony Trollope's reason for writing The Way We Live Now. In his autobiography, Trollope said: "There seems to be reason for fearing that men and women will be taught to feel that dishonesty, if it can become splendid, will cease to be abominable." Thus he created Augustus Melmotte, a mysterious central European financier who arrives in London and quickly conjures wealth and political influence via a phoney project to build a railway in southern USA.

As the template for the career and the eventual death of Robert Maxwell, Trollope's Melmotte is uncannily prescient. So it was a striking coincidence that, when BBC TV serialised both Trollope's novel - in 2001 - and a dramatised version of Maxwell's last days - in 2007 - the same actor was chosen to play both roles: David Suchet (he of Hercule Poirot fame).

Goldsmiths' Francis Spufford again: "The people who make fortunes are almost always fascinating. Novelists especially tend to notice them during times of economic boom. That's when there seems to be an almost limitless potential to make money and the potential of wealth, once created, also seems to have no boundaries. In the event, it does not work out like that and novelists tend to be critical because, put simply, it cannot be good for someone's character to have so much money."

However, there is one striking exception to that rule - the Russian-American novelist-turned-philosopher, Ayn Rand. Her 'business' novel, Atlas Shrugged, is so fashionable among America's libertarians that it regularly tops polls for the most influential book ever. For example, take the contrast offered by Modern Library, a US publisher with a long track record of popularising classic fiction. The publishing house is famous for its editorial board's list of the '100 Best Novels of the 20th century', which is currently topped by James Joyce's Ulysses with The Great Gatsby in second place. None of Rand's novels figure in the top 100. In parallel, Modern Library also runs a readers' list of the best 100, chosen by a poll of about 200,000 voters. This list is headed by Atlas Shrugged and Rand has four novels in the top 10; although it's hardly a ringing endorsement of her work that three novels by L Ron Hubbard also figure in the 10.

Yet to read Atlas Shrugged is a Herculean task - it weighs in at 1,184 pages in its Penguin Modern Classics edition. True, the prose is hardly difficult, but it's dull and Rand's characters are lifeless. For those to whom Rand's notion of 'objectivism' instinctively appeals, that may not matter. Atlas Shrugged depicts a dysfunctional US where "parasites" and "looters" - Rand's words for agents of a corrupt and overmighty state - confiscate the earnings of those who produce wealth. Ultimately, the response of the wealth producers - the Atlas figures who carry the spongers - is to shrug off their burden by going on strike.

It is easy to understand why the novel was described as "execrable claptrap" on publication. Its message hardly accorded with America's view of itself in the 1950s and 1960s. By the 2000s - and especially after the 2008-09 financial crisis - that changed. Suddenly, both Rand's views and her status as a figure marginalised, even ridiculed, by the academic mainstream appealed to the rightwing constituency that first found a voice in the Tea Party movement. The prophet had found an audience, but that does not make Atlas Shrugged a great - or even a good - financial novel.

Works that definitely do rank among the best are The Money Game by George Goodman, Liar's Poker by Michael Lewis and Reminiscence of a Stock Operator by Edwin Lefevre. However, they pose a different problem: no doubt these are pieces of creative writing, but are they fiction?

Take The Money Game, where Goodman writes under his pseudonym of 'Adam Smith'. It was a revelation when it was published in 1968. Before this, no one had written so entertainingly about business and finance. Instead of being populated by homo economicus, who talked in mathematical symbols, Goodman's money game is inhabited by 3D people in all their fallibility, arrogance and doubt. He gives us folk from fact - such as 'Mister Johnson', who built Fidelity, the fund manager, and Phil Fisher, the legendary investor who was a big influence on Warren Buffett; he gives us ones who may be fictional - The Great Winfield and Scarsdale Fats. Then he mixes these with the dialogue and prose you might expect from a writer who went toe to toe with Tom Wolfe and Hunter S Thompson as the best that 'gonzo' journalism could offer.

True, if you are not convinced that The Money Game qualifies as fiction, you can dump it in favour of The Wheeler Dealers. That’s definitely a novel, which Goodman wrote in 1963, and it's sort of about stockbroking. The challenge may be to find a copy. No matter. You can always turn to the film version. Perhaps wanting to follow in the footsteps of F Scott Fitzgerald, Goodman did a spell as a Hollywood script writer where he turned The Wheeler Dealers into a romantic comedy starring James Garner and Lee Remick. Used DVDs are still available via Amazon.

Almost 30 years on, Michael Lewis was writing in the same gonzo tradition when he produced Liar's Poker in 1989. This account of bond trading in London and New York exposed financial markets - or the beta males trying to establish themselves - as a continuum of aggressive, puerile and sexist behaviour. If the characters, almost without exception, lack sympathy, at least Lewis offers real insight into the fear and loathing that stalk financial markets and adds memorable catchphrases that have entered the oral lexicon of finance, such as "big swinging dick" or "blowing up a customer".

Reminiscences of a Stock Operator, published 65 years earlier, does nothing so original; even so, it's an outstanding piece of financial fiction largely because the emphasis is so squarely on the word 'finance', or on 'investment' even. The point is that Reminiscences is both a story and a work that offers serious advice about the art of trading.

It is a fictionalised account of the early career of Jesse Livermore (1887-1940), where Livermore becomes 'Larry Livingston'. There is no doubting that Livermore is worth writing about such was the scale of his successes and failures. He made and lost three fortunes in a career that reached its peak when he sold short ahead of Wall Street's 1920 crash. Despite that, Livermore was broke again by the mid 1930s. Thereafter, decline and despair set in as his alcoholic wife, a former Ziegfeld Follies showgirl, left him for an FBI agent. Livermore's final act was to kill himself in the men's room of Manhattan's Sherry-Netherland Hotel.

Written as a monologue by Livermore (aka Livingston), Reminiscences zips along at the pace of a Raymond Chandler. Granted, it lacks Chandler's turn of phrase. Yet it compensates by dealing candidly with Livermore's trading mistakes (learning from these is vital for a trader's education), offering some useful rules and dealing up some memorable one-liners: "a stock operator has a lot of expensive enemies within himself", or "I never argue with the tape. Getting sore with the market doesn't get you anywhere".

In the foreword to the latest edition of Reminiscences, Jack Schwager, a contemporary high-profile trader in the futures market and author, says: "If I had to bet on which financial books will still be around at the end of the 21st century, Reminiscences would be at the top of my list."

And it would surely have Conrad's Nostromo as a contender. Perhaps Nostromo is fortunate because it is very much a novel of our times. As Royal Holloway's Robert Hampson, an acknowledged Conrad expert, says: "Nostromo anticipates globalisation and all the contending issues about globalisation are in the novel - the potential for capitalism to do good; the way it can ride roughshod over local feelings and sensibilities in its propensity to homogenise everything it encounters; its susceptibility to corruption from forces both within itself and from the outside."

The struggle to control and to exploit the riches of the silver mine in a borderline failed state is a microcosmic study of the best and worst of capitalism. As to the best, the mine's owner defines the liberal capitalist's dream when he says: "I pin my faith in material interests. Only let the material interests get a firm footing and they are bound to impose the conditions on which alone they can continue to exist. That's how your money making is justified here in the face of lawlessness and disorder. It is justified because the security which it demands must be shared with an oppressed people. A better justice will come afterwards."

Maybe, but not according to the novel's resident cynic who says: "There is no peace and no rest in the development of material interests. They have their law and their justice. But it is founded on expediency and is inhuman; it is without rectitude, without the continuity and the force that can only be found in a moral principle."

And there, in those two quotes, you have the dilemma that global capitalism forces on the world today. So many of the forces that attracts today's headlines - and not just in the financial pages - are all encountered in Nostromo; and you get a great story thrown in for nothing. Read it.