Sun Tzu, in the Art of War, argued that war was the most important issue in statecraft, because upon it rested the life and death of nations. But, John Lanchester suggests, economics, and economic policy, which affects the lives of every human being alive and those to come, must be a close second. In spite of this, economics is a remarkably inaccessible subject to most of the people who it so profoundly affects, its language so rarified as to be next to impossible for them to intellectually engage with.
Lanchester blames this on “reversification”, the complex and counter-intuitive nature of financial language. For example a “bailout” of the banks is pumping money into them; “credit” is actually debt; and so forth. So, Lanchester sets about reversing this reversification by providing a lexicon of some of the key economic and financial terms that are current in the contemporary political discourse.
Lanchester is an elegant and witty writer and this must rate amongst the most entertaining books on finance ever written. Here, for example, is part of his explanation of “Nationalisation”: “[it] had entirely gone out of favour in most of the developed world until governments found they had to nationalise banks in order to save the financial system in 2008.” Or on “Student loans”: “A leading candidate for the next big thing to blow up the US, and perhaps the global, economy.”
The importance of understanding the language of money is stressed in the book’s afterword. Here Lanchester outlines some of the challenges and dilemmas posed to social cohesion by the neo-liberal economics of much of the English speaking world. For example a neo-liberal approach appears to be the fastest way to create wealth at the expense of increasingly vast inequality.
Amongst those who speak money and set financial policy in much of the world there is a consensus that this Thatcherite approach is the best model to follow and the growing inequality is the price that must be paid. That a recent study argued that inequality is a principle cause of the collapse of civilisations means that this should be a matter of considerably greater public and political discourse. It is not in significant part because the language of money excludes so many for entering the conversation.
Lanchester himself expresses profound concern about the potential effects of inequality at the conclusion of the book. “When people say: ‘It can’t go on like this”, what usually happens is that it does go on like that, more extendedly and more painfully than anyone could possibly imagine; it happens in relationships, in jobs, in entire countries. It goes way past the point of bearability. And then things suddenly and abruptly change. I think that is where we are today.”
In providing a guide by which ordinary citizens can more readily engage in the politics of economics Lanchester has written an important book. Let’s hope enough people read it before the life and death of our current civilisation is decided by an elite who are too drunk on champagne and coked up to ever feel the effects of injustice or see the signs of crisis.