Used anthropology to predict the financial crisis
She spent a year in Tajikistan during her PhD, looking after goats. Two years ago, she predicted the current financial crisis. “I happen to think anthropology is a brilliant background for looking at finance,” anthropologist Gillian Tett, assistant editor at the Financial Times, says in an interview with The Guardian:
Firstly, you’re trained to look at how societies or cultures operate holistically, so you look at how all the bits move together. And most people in the City (financial district of London) don’t do that. They are so specialised, so busy, that they just look at their own little silos. And one of the reasons we got into the mess we are in is because they were all so busy looking at their own little bit that they totally failed to understand how it interacted with the rest of society.
But the other thing is, if you come from an anthropology background, you also try and put finance in a cultural context. Bankers like to imagine that money and the profit motive is as universal as gravity. They think it’s basically a given and they think it’s completely apersonal. And it’s not. What they do in finance is all about culture and interaction.
“(Anthropology is) a weird background to have. But it’s helped me in covering the financial crisis. Having seen the Japanese financial crisis, I’ve always known that banks can fall apart. We never imagined that the Soviet Union would break up. And then in Tajikistan there was a horrific civil war. So that whole experience taught me that extraordinarily unexpected things can happen.
Tett was Japan correspondent for the Financial Times during the country’s financial collapse, and wrote a book about it, “Saving the Sun”:
The behaviour and the psychological mood of the markets in late July was almost identical to what happened in the autumn of 1997 in Japan. I was busy cancelling holidays and things. But it came out of the blue for many people - investors, policymakers, bankers, our readers were suddenly completely at sea, at a loss to make sense of it. The financial system is so dysfunctional, so tribal, that people just don’t communicate with each other.
More non-economics should be interested in finance, she says:
People who come from a background of arts and humanities and social studies tend to think that money and the City is boring and somehow dirty. But if you don’t look at how money goes round the world you don’t actually understand the world at all. When you try and join up the dots about how money can be linked to politics, can be linked to culture, then it’s electrifying.