Tiago Mata

Over the last year I have taught briefly about the origins of modern finance, a topic that has fascinated Edinburgh sociologists, and magazine writers. In one of the courses I used excerpts from the recent book by Justin Fox, The Myth of the Rational Market. What surprised and pleased me in this book was the balance between the academic and the practitioner in making sense of the academization of finance, something that Donald MacKenzie does well, as does Peter Bernstein before anyone else. Fox starts with Irving Fisher and for his cast of characters the book is a history of economics.

Looking at the references, not many since this is a popular book, I could not find any many mentions of historians of economics, which worried me more than it bothered me. I emailed J. F. about it and he replied:

I read Ingrao and Israel’s ‘Invisible Hand’ (and I’m pretty sure I cited it in the endnotes), a few articles by E. Roy Weintraub, parts of Mirowski’s books and parts of economic histories/biographies of Jevons, Marshall, Hayek and others. But I’ve got to say I was often frustrated with these works; they would usually start off interesting but then veer off in directions that I didn’t see as important.

This, I think, is rather good. Even though there are no tips of the hat to us historians of economics in the preface or anywhere else, even though we go off on tangents that don’t seem to interest the journalist and the wider public, we are read, we are considered.

I’ve been making notes on the media debates about the economic (formerly financial, and credit) crisis. My plan was to write down in notecards: themes, characters, positions, and narratives. Then cover a large table with the color coded cards. Shuffle them. And rearrange them in sequences and distances, taking photographs of each setting. With no pretension of making an art installation. This is my native, Ven diagram, way of thinking through the thematic patterns of popular discourse.

Regrettably I am too slow. My speed impairment is expressed in my street running, my pool swimming, my football striker instincts and my paper writing. Worse still, I don’t usually win games: chess, checkers, Go, Unreal Tournament, Fifa 07. Picking last week’s New Yorker I notice how I lost another race. I feel cheated, my notecards stacked mercilessly into one single paragraph.

Please take a deep breath, and read the following:

This crisis is the culmination of events and trends reaching back, depending on your perspective, four, seven, seventeen, twenty-two, twenty-seven, thirty-eight, sixty-five, or a hundred and two years. (…) The causes are technological, mathematical, cultural, demographic, financial, economic, behavioral, legal, and political. Among the dozens of contributors and culprits, real or perceived, are the personal computer, the abandonment of the gold standard, the abandonment of Glass-Steagall, the end of fixed commissions, the rating agencies, mortgage-backed securities, securitization in general, credit derivatives, credit-default swaps, Wall Street partnerships going public, the League of Nations, Bretton Woods, Basel II, CNBC, the S.E.C., disintermediation, overcompensation, Barney Frank and Chris Dodd, Phil Gramm and Jim Leach, Alan Greenspan, black swans, red tape, deregulation, outdated regulation, lax enforcement, government pressure to lower lending standards, predatory lending, mark-to-market accounting, hedge funds, private-equity firms, modern finance theory, risk models, “quants,” corporate boards, the baby boomers, flat-screen televisions, and an indulgent, undereducated populace.

(Friends, family, and fans, worry not, I will pull through and have already a new paper idea: to expose the New Yorker as meta-journalism.)