Capitalism: Money, Morals and Markets

John Plender Biteback, 334 pages, $31.17

Worries about the impact of economic inequality on social cohesion lend new urgency to moral questions about markets. But, as John Plender points out in his new book, "Capitalism," discontent about its effects are as old as the world's most powerful -ism itself.

Plender, a columnist with the Financial Times, has written incisively for decades on the excitements, oddities and disasters of financial markets. He approaches the quandaries of capitalism with a shrewd eye for detail. The reader discovers, for example, that Voltaire turned up at the court of Frederick the Great as a pet Enlightenment intellectual, only to run a bond-market scam that could have bankrupted the Prussian exchequer. In the mid-1980s Japanese fund managers visited the shrine of Madame Nui, a restaurateur whose porcelain toad delivered tips on stocks, until they collapsed when the Japanese bubble burst in 1990. If free markets emerge from this survey as dynamic, their claim to be rational is suspect indeed.

But Plender is wise enough to realize that for all its faults, capitalism has raised the living standards of billions of people since the 18th century and improved their life expectancy.

Plender fears that another great financial crisis is inevitable. But he also thinks that the world will muddle through; capitalism will adapt as it has so often in the past.