Books: A Week in Books: Capital's high interest

Serious novelists used to understand serious money. They should try to do so again

"THIS IS the time of year when wars break out," wrote Cyril Connolly in Enemies of Promise, during the late-summer dog-days at the panicky close of the 1930s, "when Europe trembles and dictators thunder". Instead of the dictators, we now watch the hamstrung buffoons of Washington and Moscow locked in their no-hopers' clinch. And in place of those rumours of war, the blips, dives and wobbles of the stock markets remind the global middle classes that their idyll may be built on shifting electronic sand.

For much of the 19th-century, the novel-reading strata of society could find the financial matters closest to their heart mirrored in the greatest fiction of the age. From Balzac through Trollope to the Thomas Mann of Buddenbrooks, serious writers kept a keen eye on serious money. All that changed, and for the worse, with the advent of Modernism. Ambitious fiction largely turned its back on social scrutiny just as capitalism itself grew more abstract and intangible. It became far less easy to depict the power of cash through the cigar-chomping robber-barons and feuding dynasties who now turn up more often in soap opera than in actual business life.

So, in A S Byatt's Babel Tower, an adult literature student complains that plenty of prized modern novels dwell on "sex and love and God and food" but very few embrace the world of "commodities and machinery and property". For that reason (among others) a horde of critics will be sinking their fund of hope into Tom Wolfe's forthcoming panorama of the way we live now, A Man in Full.

Yet Byatt's student, as her novel proves, voices a false polarity. The canniest novelists will know how to connect sex, love (and even God) with the realm of commodities and property - or "telegrams and anger", as Forster put it in Howards End. While we wait for Wolfe, readers who believe that the fictional imagination need not rule out economic literacy could do much worse than invest some time in Elliot Perlman's first novel, Three Dollars (Faber, pounds 9.99).

Perlman is a Melbourne barrister whose impressive debut follows the fortunes of a modest yuppie household as the late-Eighties boom turns to bust. Aged 38 and with a sick young daughter, its decent narrator finds himself with just those three bucks to his name. This cautionary tale of "the last convulsions of the middle class as the sun set on the second millennium" requires no Maxwellian ogre, no Leesonesque shark, to make its case. It features no braying brokers or champagne-swilling speculators. And, most perceptively, it frames the break-up of its hero's overmortgaged paradise within the very public sector that would once have kept a distance from the market and its fickle moods.

Eddie is a nice guy who wants to play by the rules, despite his borderline- depressive fixation on those doomy rockers Joy Division. Trained as a chemical engineer, he sets up home with idealistic Tanya. With the usual prompting from families and banks, they buy heavily into an Australian suburban dream that differs not a jot from its counterpart in Surrey or Long Island - itself a telling political point.

Neither does the couple step aboard the market rollercoaster of their time. He chooses to work as an environmental inspector for the civil service; she teaches politics in an untenured post.

Then the rules change. Both come under the cosh as the let-it-rip fashions of the late Eighties subvert the institutions of the State. (In Australia, remember, it was a Labour government that did the dirty work.) Eddie is downsized into redundancy when he blows the whistle on a corrupt deal that his boss has struck with a muck-spreading mining magnate; after all, "deregulation is the only game in town". Tanya forfeits her fragile job as her university opts for the catchpenny delights of what she terms "Hospitality and Tarantino Studies".

Soon, debts multiply and snap around their heels "like terriers". Friedrich Von Hayek, concludes Eddie as the market fever does its damnedest to destroy him, "never addressed the purchase of a little girl's overcoat or a mortgage repayment".

Three Dollars has more than one first-novel fault. Perlman shows a weakness for lavish, lyrical monologues where plausible dialogue might serve his characters just as well. Elsewhere, it's hard to tell if the frequent rapt excursions into Kant or Kafka belong to Eddie or his author. And the novel ends in an evasive fantasy: a Dickensian routine in which Eddie samples destitution with a chummy down-and-out as the pair blag barbequed chickens out of a posh department store. Then, the gate of opportunity seems to swing open once again.

No matter: few novels ever dare to fuse emotional and economic life with the passionate intelligence of this one. Read it as a razor-edged satire, a slice of history, a bitter warning - or simply as a reminder that "hard landings" happen to people and not to graphs.

Tanya's prediction of "the fall of the Weimar Republic revisited" might still apply to Moscow more than to Melbourne. Yet even lucky Australia now has its home-grown fascist movement ("One Nation") and a jittery election looming in a month. Our anxious autumn will be their suspenseful spring. Hold on tight.