<http://www.wired.com/news/print/0,1294,63050,00.html> Wired News Clearing Up The Confusion By Paul Boutin? Story location: http://www.wired.com/news/culture/0,1284,63050,00.html 02:00 AM Apr. 15, 2004 PT Science-fiction author Neal Stephenson's latest 800-page dispatch, The Confusion, arrived in stores this week. But Stephenson fans hoping for another brain-wracking, cryptographic puzzle to solve will find a surprise instead: A central scene in the book provides a long, detailed description of the mechanics of 17th-century bills of exchange. Pivotal themes in the book involve the emergence of a cashless market at Lyon, France, and Sir Isaac Newton's 30-year stint at England's national mint. The Confusion, which consists of two 400-page novels interleaved (literally "con-fused") with one another, is the second of three volumes in The Baroque Cycle, a nearly 3,000-page opus that fictionalizes the exploits of Newton and the Royal Society of scientists to which he belonged. In an interview with Wired News, Stephenson, who rose to fame on cyberpunk-themed novels including Snow Crash and Cryptonomicon, said his interest in money and markets dates back to 1994, a time when crypto hackers and Citicorp/Citibank CEO Walter Wriston were equally likely to expound on the concept of money as an information technology. Wired News: Why the shift from cryptography to money and markets? Neal Stephenson: Cyberpunk has been over for a long time. Some would say it was already over by the early '90s. It's over because it became part of the main current of science fiction. One way of thinking about cyberpunk is that it was a process by which SF belatedly came alive to the importance of information technology, and re-evaluated not only the future but also the past in that light. Similar things have been going on more recently with nanotechnology and biotech. Anyway, for the last 10 years or so, money and markets have been inseparable in my mind from other themes that are of great interest to contemporary SF writers. WN: What does this have to do with The Confusion? Stephenson: To fuse means to melt; "con-fuse" means a melting together. When you say "I'm all mixed up" you're saying the same thing in simpler words. At least as far back as Chaucer, "confused" was being used in its current sense of being muddle-headed. The older, technical meaning of melting things together has become obsolete, but alchemists of the 17th century would have been comfortable with it. Confusion de Confusiones is the title of a book written in 1688 by Joseph de la Vega about the Amsterdam stock market. It takes the form of a very long letter written by a Spanish Jew living in Amsterdam to his country cousins who are thinking about moving to the city. He describes the amazingly diverse tactics and schemes used by investors playing the market there. Even though there was only one stock being traded -- the Dutch East India Company -- they had bulls, bears, panics, bubbles and most of the other features of modern bourses. (There is a de la Vega family in The Baroque Cycle, but they are not meant as historical depictions of Joseph and his cousins. I just used the family name as a way of paying homage to this author.) In The Baroque Cycle we have got confusion of a few different sorts: Not only alchemists melting things together, but also pandemonium in the markets, a re-coinage in England (which means gathering together and melting all the old coins) and the confusion of a war between France and her enemies. Prior to the time I'm writing about -- let's say, 1618 to 1650 -- England and the Continent were in a Hobbesian state of war, chaotic and frozen at the same time. Starting around the mid-1650s, things settled down and there was a time of astonishing creativity and flux, which I attempted to capture in the first volume of this series, Quicksilver. What I'm trying to depict in The Confusion is its aftermath: a time when so much has changed, so fast, that things are all unsettled and out of whack, and settling, in a chaotic way, toward a new equilibrium. WN: In a central scene in The Confusion, the entrepreneurial heroine, Eliza, conducts a lengthy parlor game among idle rich Frenchmen and women of Versailles to explain how they can transfer silver safely across the English Channel using a bill of exchange. Did you think your readers also needed the concept explained in detail? Stephenson: This passage is admittedly an expository one, but it's meant to work on a couple of levels. Partly there is a need to acquaint readers of the book with the basic principles of a bill of exchange. But what's much more alien to modern readers, I think, is the notion that the upper crust of that society tried to avoid having anything to do with commerce. Bills of exchange weren't a new concept. They had been around for centuries at the time the book takes place. They were the basis for the medieval economy and the rise of the Italian banking houses. It is, however, a new concept to the nobles to whom Eliza's explaining it, because according to the code of behavior of the noble class, they're not allowed to dirty their hands with commerce. Nowadays, we take it as a given that the most powerful people in any given society will be the ones who have mastered the art of making and holding on to money, but it was different back then. From our point of view, it seems obvious that this was a crazy situation and such a system was bound to fall apart. How it began to crumble is part of the story I'm telling here. WN: In the book, a huge financial crisis hits Western Europe in the early 1690s, driven by a lack of available coinage, as well as the entire French government losing its credit rating. Did that really happen? Stephenson: It really happened. It would take a better economic historian than I to explain why. At some level, trying to explain such events is a little like trying to explain the weather. Very generally, it has to do with the flow of metal around the world. That's important because money is a sort of medium for the exchange of information. When the price of cloth went up in Antwerp, it was because the system of international trade, in some fashion that's too complex for us to understand, was transmitting information about the supply/demand balance. Money makes that kind of information flow better. Nowadays money is electronic and there's plenty of it. Back then, money had to be silver or gold. In those days silver came from the Spanish colonies of Mexico and Peru, and gold came from the Portuguese colony of Brazil. It was transported across the Atlantic to Europe, though English and other privateers did their best to intercept it en route. Some of it circulated in European markets, some was hoarded in the vaults of wealthy families and institutions, and a lot of it flowed east toward India and China. China was notoriously hungry for silver. It was a complicated flow pattern, with any number of sources and sinks and eddies and feedback loops, and like any other such system it was capable of chaotic behavior. If enough people hoarded their metal, a money shortage would develop, which would make it very difficult to conduct trade on any level beyond that of a village market, and throttle the flow of information. The English coinage had been reformed a century and a half earlier, under Elizabeth. Thomas Gresham is rightly or wrongly given credit for this. At any rate, he got rich and endowed Gresham's College in London, which became the clubhouse of the Royal Society. And after the Royal Society luminaries had achieved a foothold in London, and helped rebuild the place after the fire, many of them turned their attention to problems relating to money. John Locke and Isaac Newton debated how much silver should be in a pound sterling, and what the exchange rate ought to be between silver and gold. The Bank of England was founded in 1694 at a time when the economy was almost stopped because of a currency crisis, and a general re-coinage got under way at around the same time. You asked about France's credit rating. This had its ups and downs, which make for a pretty long and complicated story unto itself. I had to set at least a few limits on how much detail I was going to include about such things in this project, and so I've given a highly simplified, streamlined account of it here. The real crash of the old Lyon system occurred some years later, in the early 1700s. In The Baroque Cycle, I have depicted a major crash during the 1690s. This is not far off the mark since the French economy was profoundly screwed up during that period owing to war, famine, hoarding and messed-up coinage. But as always if you want the full story, you need to read some real history. The third volume of Fernand Braudel's Civilization and Capitalism trilogy covers this pretty well. WN: In the novel, Isaac Newton agrees to join the mint in hopes of recovering a legendary horde of special gold that had been scattered around the globe. Is that true? Stephenson: This is altogether fictitious. No one knows why he decided to work at the mint, but there is zero evidence that it had anything to do with recovering some stolen gold. No one can really know what was going on in Newton's head. In trying to get some understanding of why he was interested in alchemy, I've had to rely on scholars who know more about it than I do, like Richard Westfall and Piers Bursill-Hall. And if I state their views wrongly, I apologize in advance. But the gist of it seems to be that Newton was trying to achieve some specific goals with alchemy. Some of those goals might have been religious, but many were clearly scientific. As a scientist, he knew that he could only explain so much with the tools that he was using, and that to advance beyond that point he was going to need a different toolbox. He recognized that a lot of alchemy was nonsense, but he thought that by going about it in a systematic and rational way he'd be able to solve some scientific problems. He would have rejected the label of magician because it might have had dark connotations to him. WN: Any parallels between the economic crises in The Confusion and today's U.S. economy? Stephenson: That's not what I'm aiming for here. I'm not trying to say that this epoch was interesting because it was somehow analogous to the way things are today. I'm saying it was interesting in its own right. Part of what makes it interesting is just how different it was from today's world. This might sound funny after all that I've said above, but I hope that readers won't be conscious of any of the abstract themes that I've been talking about here. This book is meant to work as a yarn. I hope that readers will take it as such. If they also want to go think deep thoughts about currency fluctuations during the 1690s, then there's plenty of that in here for those who want to read it on that level. Everything I've talked about above took place in a world full of pirate ships, sword fights, seductive courtesans, picaroons and other staples of the bodice-ripping and swashbuckling genres, which I have not been above putting into these books. Neal Stephenson will serve as toastmaster for the Nebula Awards in Seattle this week, and will appear at the Los Angeles Times Festival of Books on April 25. -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'