Analysis of The Language of Money
The opening story of the essay, “The Language of Money” by John Lanchester is about the ancient Egyptian priesthood whose members predicted the extent of the flooding by the River Nile. The priests were the most powerful people in the land and would measure each year’s flood in secret chambers to develop techniques to predict the agricultural season that followed. Until the 19th century, other people were forbidden to access these rooms and measurements. The analogy linked to this opening is that people in the financial markets set out to confuse the rest of us and closely protect their understanding just like the priest protected their status. Lanchester suggests that in the world of ...view middle of the document...
For example, a bailout is not about throwing water out of a ship but about putting money into something while hedge fund has nothing to do with a thing that marks out the edges of a field, or with the idea of hedging bets but instead is a pool of largely unregulated money used to take highly-leveraged risks. The term hedge fund is an oxymoron because they actually hedge nothing. He also explains that credit has been reversified into debt; securitization should make you insecure; inflation means money is worth less; austerity cuts are not austere but are simply just cuts; and a non-core asset means “garbage.” These terms, which are largely incomprehensible, are designed to make the "science" of finance sound more like science than it really is. Most people do not know this and the problem is that financiers and bankers do not want the average person to understand this language.
There is a huge gap between the people who speak the language of money and those who do not. The language is designed to facilitate conversation amongst the money people and some of it is deliberately misleading and designed to disempower and exclude. Learning to speak this language is not just about becoming a better manager of your own money but it is about being able to participate in democracy. People who are not experts in the field need to stop expecting not to understand and then resigning to that. Lanchester explains that not understanding is a form of consent, and that means we accept what is happening to us. If we all understood more, we would be in a position where we could better predict financial crises and crashes. The wider the gap of knowledge, the more room there is for harm to society.