The Fear Index
Title: The Fear Index
Author: Robert Harris
Not a business book as such, but a great novel about business in the modern age. The plot follows a brilliant mathematician who has created an algorithm which allows his hedge fund company to play the stock market. The algorithm works on the principle of measuring the amount of fear present in financial markets, which then effects buying and selling behaviour. Following a break-in at his home, the mathematician’s life begins to descend into a chaotic downwards spiral. (If spirals can be chaotic!).
At one level the book is simply a rip-roaring yarn, and because it is set in current times of harsh economic conditions, it also seems highly relevant, so it’s a hard book to put down once you have started to read. One could argue that it is another book on ‘machines rule humans’ but Harris takes this theme and put a new twist on it. He balances the main plot (that of the growing influence of the algorithm) by frequent references to Darwinian theory on evolution and to the biology and creation of the individual (as played out through the life of wife of the main character). Furthermore, the rule of machine over Man is not the only question we are asked by the author. We are challenged to think about whether it is morally right for our best scientific talent to ‘sell their souls’ – instead of working in the pursuit of science it is for the pursuit of riches. There is the constant tension between the ‘virtual world’ of digital financial trades and the consequences they have in the ‘real world’. Likewise contrasts are created between the rich elite or the intellectually superior and the ‘ordinary person’. On the one hand, we are shown the fabulous lifestyle that financial success can bring, but Harris also talks about the persecution complex of the rich and the paradox that with financial freedom comes a greater desire for security and a growing sense of paranoia. Another theme is the interconnectedness of modern society, and how business transcends traditional geographical and political boundaries. We are also asked to consider the creation of wealth versus the creation of value.
All in all, a fabulous book, well-researched and a totally believable plot. One to get you thinking!