While researching my book on debt, I learned many interesting things about money and finance, some of which I vaguely got, some which continue to evade my grasp.
I started writing blogs in which I tried to use simple analogies and thought experiments to think through what I’d learned, and share it with others.
With all the self-appointed expert commentary I’ve seen in on social media and in the mainstream media recently, I’m starting to wonder whether I should have bothered.
Huge numbers of people seem to think they’re already in possession of all relevant knowledge and deep understanding. While I struggle to understand monetary operations, even after devoting considerable time to studying them, other amateur theorists seem to feel so secure in their competence that they’re happy to lecture me and everybody else.
Yes, I have my opinions, and I’m not reticent about sharing them. But I do try to justify them in terms of clear, straightforward models of how monetary operations actually work. If there’s something wrong with my models, someone can see it straight away and tell me. Sometimes this happens, and I find it helpful when it does.
But far more commonly, people reply to me by leaping straight over the model into a free form pontification, throwing words like ‘debt’ and ‘money’ around as though they have clear meanings that are the same in every context, lucubrating with reckless exuberance about institutional credibility, the expectations of the market, the causes of inflation, the global balance of trade, and so on. The jargon is spread so thickly onto such woolly concepts that I can find no way to cut back through to the real issues. Maybe that’s the idea.
I ended my book with an invitation for people to try to think harder and more clearly about debt. I wrote: ‘The real deficit that is reaching crisis levels, the one that we must close if society is to be saved, is a philosophical one.’
I may have underestimated, or misunderestimated, the problem. If people are convinced that they already have all the answers then they aren’t going to recognise the need for thinking better. They don’t recognise the need for thinking at all.
I should have remembered my Descartes:
Good sense is the thing most equally distributed among men; for every one thinks himself so abundantly provided with it, that even those who are the hardest to satisfy in everything else rarely want a larger measure of it than they already possess. (Discourse on Method, Part 1)