Review of “The Wealth of Shadows” by Graham Moore

The Wealth of Shadows is a historical novel based primarily on attempts at the U.S. Treasury Department to kneecap Germany economically in 1939 and 1940 and to enshrine the U.S. dollar as the linchpin of the global financial system at the end of World War II. It is based on real events, but it reads as a thriller, though there are no violent scenes. The main characters are real, including senior U.S. Treasury official Harry Dexter White, Treasury Secretary Henry Morgenthau Jr., and John Maynard Keynes. The book is narrated from the perspective of a Mr. Ansel Luxford, a tax lawyer who works for White. Though little known, Luxford is a real person who was involved in White=s efforts against Germany and his successful besting of Keynes at the Bretton Woods Conference in New Hampshire.

For those interested in this historical period, this novel is not only good entertainment but interesting history, along with ruminations about what money is. There is even a side trip to a used car dealership which provides the author an opportunity to discuss Pareto optimality and the importance of reading the fine print. This foreshadows how White manages to trick Keynes at Bretton Woods. Mr. Moore has helpfully provided endnotes which detail what is historically accurate in selected chapters and what he imagined, made up, or changed. 

Secretary Morgenthau[1] is well-known for having tried, not all that successfully, to get the Roosevelt Administration to do more to help European Jews. He is, therefore, supportive of White=s unconventional and sometimes extra-legal maneuvers against Germany at a time when the United States was officially neutral. However, White is opposed by a faction at the State Department led by Breckinridge Long, an antisemitic senior State Department official, whom White eventually manages to sideline.

For those with even a passing familiarity with the period, it does not give anything away to mention that at the end of the novel Luxford discovers that White has been providing classified information to the Soviet Union. This is a subject about which I know little, not having read the various books and articles about White=s espionage activities. According to Moore, most historians believe he did spy for the Soviet Union. Assuming they are right, it is unclear how much harm to U.S. national security or interests White=s spying did. White apparently received information from the Soviets in exchange for the information he provided. It is probable that White thought he was smarter than the Soviets and that he was using them. The Soviets most likely thought they were using White. (Pareto optimality? I don=t know.) It is probably true that White did not consider himself a traitor.

Moore does not pass judgment on White and says in his endnotes that information on White=s espionage remains murky. White died before he could be tried for spying.

Much of what happens in the novel and in reality, in addition to White=s espionage activities, is morally ambiguous. Moore does not hammer this point, but he does leave it to the reader to ponder the ethics of what people did.

For those looking for an engrossing summer read, I recommend this book. It may even motivate some to learn more about this period, perhaps by looking at some of the books Moore said he consulted.[2]

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[1] Secretary Morgenthau deserves praise for his efforts to help the Jews. However, as Secretary, his record is mixed. For example, the journalist Diana B. Henriques, in her book Taming the Street: The Old Guard, the New Deal, and FDR=s Fight to Regulate American Capitalism (2023) writes: AFDR=s conservative Treasury secretary, his Hyde Park neighbor Henry Morgenthau Jr. was a decent but limited man with vague economic ideas firmly rooted in the Victorian era. Even as the market slump worsened, he argued that only a balanced budget would provide the big dose of >business confidence= the economy needed.@ Also, after the war he proposed that Germany be deindustrialized and made into an agrarian economy, the AMorgenthau Plan.@ Fortunately, President Truman opted in 1948 to implement the Marshall Plan.

 [2] Among other recommendations, the author notes that The General Theory by Keynes is Ahis most accessible book.@ However, reading and understanding that book is a challenge.

Brief Book Review: New Cold Wars: China’s Rise, Russia’s Invasion, and America’s Struggle to Defend the West by David Sanger with Mary K. Brooks

David Sanger, a long-time journalist for the New York Times, has written an interesting book with his researcher, Mary K. Brooks, about major global issues confronting the U.S. Most of the focus is on Russia’s invasion of Ukraine; the economic and political relationship of the U.S. with China, including Taiwan; conflicts in the Middle East (e.g., Iraq, Iran, Israel); and cyber warfare. The narrative jumps around from issue to issue and location to location, but the main point is that the world has become an exceedingly dangerous place with multiple players, any of whom might make a catastrophic mistake. Also, the three main countries (U.S., Russia, and China) have made policy and judgement errors and have had to deal with internal problems with implications for foreign policy. The book recounts fascinating, though selective, recent history.

The analytical points, though, are less well-developed than the stories of recent events. Analysis gets a bit lost in the skipping from story to story and also seems not to be completely formulated. Key questions are sometimes only tangentially addressed. For example, the original Cold War was characterized as both a power and an ideological competition. The new cold wars (plural), as Sanger points out, includes one power, China, having important economic relationships with the other two main antagonists. Is this global state of affairs the result of policy mistakes or was some kind of dangerous competition among these three countries inevitable?  How should policymakers deal with this new, more complicated configuration? Are there policies that can reshape the current relationships among great powers or are we fated to ad hoc reactions to crises as they arise and hope that we can muddle through?

It is unfair to be too critical. The questions, such as the ones I have posed, are difficult, and they and others will generate debate among political scientists and historians. Sanger is right to conclude that recent history demonstrates the dangers we are facing and that the great power relationships are challenging. Fortunately, rationality triumphed to bring an end to the most dangerous episode in the Cold War, the Cuban missile crisis. There can be hope, but not assurance, that rationality would triumph once again if the world again faces the abyss. Sanger concludes with more aspiration than prediction that the current great powers can continue “an eight-decade-long streak” of avoiding “direct conflict,” no matter their differences.