News and reviews, in hindsight.

Mouthsful of Obols

The Greek Debt Crisis, 5 years later.

by Christopher Shen — May 2015

No one really cares about Greece. Five years ago, a lot us said that we cared about Greece insofar as you care about someone who’s ruining your day: who is this guy, what’s his deal, and why is he involving me? Since that time, our attempt to answer those questions have highlighted two personal observations: first, that no one really cares about Greece. And second, in trying to explain how the financial troubles of a relatively minor nation could have global implications, it’s clear that the language of finance really, really sucks. We are living in a world increasingly defined by the increasing relevance of financial trends to the common citizen, yet the increasing complexity of those trends make explaining that relevancy to such a citizen increasingly difficult. When it comes to communicating the workings of wealth, we are starkly, desperately poor.

The language of finance has never been particularly accessible in the first place. Most of us still can’t explain what a credit default swap is, or the difference between, say, financial policy and fiscal policy. And when the European sovereign debt crisis hit, a whole raft of curious terms popped up. There was, for starters, the phrase “sovereign debt crisis,” but also concepts such as an orderly default, austerity packages, currency unions versus fiscal unions, peripheral economies versus core economies, balance of payments, the troika, and the Grexit. Such things are all familiar to those in the profession or those with a mind for the matter, but most of us—regardless of intelligence—simply don’t have the time or background to understand. The fact that most financial reporting assumes that the reader has a fairly robust understanding of these concepts is resulting in a news media that is doing far too little to meaningfully inform its audience on financial crises despite doing far too much to convince that very audience that such crises are a very direct threat to their own livelihood.

But the problem with the language of finance is even more basic than that. Its chief dysfunction is that, for a language fundamentally built to explain the economic interactions between communities of people, it is now no longer about people at all. Because somewhere along the way, the focus of financial talk shifted from how to use wealth to better our people, to a focus on how to manage wealth to better our politics. This isn’t to say that finance hasn’t been politicized historically, but rather that at least in the past, leaders communicated financial policy in terms related to the wellbeing of the populace they depended on. The European debt crisis, in contrast, has underscored how finance is no longer about individuals in the aggregate, but about the aggregate regardless of individuals. No one really cares about Greece, certainly not the world of finance. Its only concern for the past five years has been survival of alliances and structures built on past financial architecture. Financial policy centered on the wellbeing of a citizenry disappeared long ago when finance’s priority became safeguarding its own interconnectedness.

But when it comes to explaining all of this, few people know how. Even fewer know how to explain the more important topic of why any of this is happening. Since finance is now so far removed from people, there are no good options in its reporting. If we try to write about topics such as the European debt crisis as accurately as possible, it simply falls flat; the numbers are so high that they’re cognitively meaningless, and the concepts and schemes are so abstract that they defy comparison to anything in our day-to-day lives.

If we go the other way, though, to simplify the topic as aggressively as possible, we fall into the traps of generalization and reductionism. It makes us more likely to declare, and to believe, statements such as “all of our problems come there,” or “everybody wants this changed,” or “no one really cares about Greece.” It makes us more willing to use finance to moralize, to make these complex situations more relatable through heroes and villains. Because in the time spent explaining the basics of a credit default swap, a group of talking heads can deliver a far livelier conversation designating entire groups of people as virtuous, or slothful, or cowardly. The language of finance is increasingly disconnected from people, but the real danger emerges when, in our inability to effectively use that language, we instead resort to words that only serve to alienate ourselves from one another.

I don’t know how to write about finance. I’m not sure if any of us really do, and for that, we all deserve each other’s sympathy and compassion. Because we are all massing on the shores of a strange liquidity, one that’s viscous and vicious, flowing with odd waves and tides tied to the arcane. Neither words nor pictures quite capture it, as though some part of it always remains hidden. Our desire to understand it and perhaps harvest its wealth prompts us to pay great sums to ferrymen who claim they are familiar with it, have comprehended it. But in truth, they’re probably just as likely as we are to unwittingly navigate into a bubble rising hard from below.

I don’t know how to change the language of finance. I’m not sure if there’s anyone else who’s given it much thought (there’s not much financial incentive to do so). But someday, I think people will want better words to explain this growing part of our world. The language won’t be more complex, more abstract, or more bizarre. Rather, it will have what we find most useful in meaningful discussion and education: honesty, clarity, brevity, and pertinence to human inclinations.

So maybe we should start here: no one really cares about Greece. But now is a good time to start.

Photo by Xuan Che, redistributed under Creative Commons.