The year is 1719. The scene is London, England. King George I, recently arrived from Germany, sits on the throne of England. Unlike the French, the English have not yet created a local or national police force to protect its citizens. The entrepreneurial class filled the official void, and established themselves as "thief-takers," bounty hunters hired to capture criminals. The most notorious of the thief-takers, Jonathan Wild, exploited his status to form an organized crime gang of thieves who stole property only to be hired by the victim, who would pay for its return, to "find" the same stolen property.
England is suffering financially at this time under the weight of a growing national debt because of the War of Spanish Succession. The South Sea Company, a business organized in the early 18th century as a stock company, buys half of the national debt in exchange for its stock, pursuant to a plan to convert that debt to lower interest debt that would ease the government's financial burden, but also provide the South Sea Company with steady revenue. The South Sea Company then pursued a program to drive up the price of its stock and a speculative frenzy ensued. By 1720, the infamous South Sea Bubble, the first stock market crash, occurred, leading to bankruptcies and other financial problems across Europe.
There is a nascent, unregulated stock market operating out of coffeehouses on and around Exchange Alley, where "stock jobbers" trade in company stocks. Stock jobbers are not held in high reputation, apparently for all the reasons that, over 200 years later, the United States of America established a Security and Exchange Commission to regulate this trade.
All of this is true, and against this background, David Liss' fictional story of a competing thief-taker, Benjamin Weaver, begins in earnest. Weaver, a Jew among the predominantly Protestant community of England, has assimilated reasonably well. He has recently become a "thief-taker," retired from his earlier professional roles as highwayman and competitive boxer. He now competes with Jonathan Wild for clients, but unlike Wild he forswears the unethical practice of stealing only to later "find" the stolen booty for a fee. Weaver is the grandson of Miguel Lienzo, the protagonist of Liss' third novel, The Coffee Trader, a prequel of sorts to A Conspiracy of Paper. Liss' oeuvre, if we want to call it that is not generic historical fiction, but economic historical fiction. The marketplace is as much a part of his work as the cast of characters and the plot.
A murder has allegedly occurred, and A Conspiracy of Paper is essentially a whodonit. The precise "who" is known early on, but the "official" conclusion is that the death was merely an accident. Others, however, suspect foul play --- a "conspiracy." Suspects abound as to who is really behind the conspiracy.
This is the period of the English Enlightenment. John Locke is fifteen years in the grave. David Hume (see February 27, 2011, post) is only 8 years old. But Isaac Newton is in the golden era of his illustrious life. Bernard Mandeville was editing his Fable of the Bees (see January 30, 2010 post), and George Berkeley was active trying to undo Locke's view of a materialist world.
To solve the murder mystery, however, none of these Enlightenment philosophers contributes to a method of investigation. A French mathematician and Catholic philosopher, Blaise Pascal, provides a source of inspiration. Probability theory is invoked. And so is right brain/left brain wisdom. I refer to the mind's right brain capacity to make intuitive hunches, and the left brain capacity to meditate, analyze, and sort through information. Weaver's friend, Elias, advises him, "[Pascal's] thinking is precisely what will allow you to resolve this matter, for you must work with probability rather than facts. If you can only go by what is probable, you will sooner or later learn the truth." Weaver responds, "Are you suggesting I conduct this matter by randomly choosing paths of inquiry?" Elias responds, "Not randomly. If you know nothing with certainty, but you guess reasonably, acting upon those guesses offers the maximum chance of learning who did this with the minimal amount of failure. Not acting offers no chance of discovery. The great mathematical minds of the last century, Boyle, Wilkins, Glanvil, Gassendi --- have set forth the rules by which you are to think if you are to find your murderer. You will not act on what your eyes and ears show you, but on what your mind thinks probable."
The murder victim is Weaver's father --- the son of Miguel Lienzo, who migrated from Amsterdam to London with his brother. Weaver's father is a stock-jobber, and Weaver suspects, as information starts to become available, that his father uncovered a conspiracy to manipulate the value of South Sea Company stock.
Only later in the novel, as Weaver laments how difficult it has become to bring the investigation of his father's murder to a conclusion, and he says, "Your philosophy [referring to Elias] has brought me this far, but I cannot see how it takes me much farther," Elias responds, "If philosophy no longer yields results, perhaps it is not because you have reached your limit to understanding philosophy. I think it is far more probable that philosophy had done what philosophy can do, and you would be wise to trust your instincts as fighter and a thief-taker. . . Trust your instincts." What would Sherlock Holmes say?
In the end the crime is solved, not because of instinct, but because a crucial piece of information suddenly falls into Weaver's lap -- the revelation of a lie that reveals the identity of the murderer. The revelation is not accidental. Jonathan Wild pushed the information in front of Weaver to help him out. The conspiracy behind the murder of his father turns out to be a vastly different conspiracy than Weaver initially postulated and conceived. Probabilities and beliefs did not solve this murder. Factual information did, much in the way that scientific experimentation during the Enlightenment era was undermining long-held beliefs that were products of mental reasoning, faith, and bias.
Decisions are made based on probabilities because we have incomplete information, uncertainty. Hume essentially made the point (see February 27, 2011 post), and he could not have been the first. Some people have access to more information than others and can act on superior information to their advantage. Wild is such a person, and in Wild's version of thief-taking where the taker is also the thief, it is just an early version of what we now call insider-trading. A Conspiracy of Paper was written and published as the 20th century came to a close and the technology stock bubble burst. And stock market manipulation and insider trading have not disappeared either. Liss is an excellent storyteller, and he is very clever at detecting in the annals of economic history, just as he did too in The Coffee Trader, the parallel times of the human past that reverberate in the modern mind.