What do Bankers Know about Money?

Short answer:

Not a whole lot.

 
Long answer: 

It’s been a few weeks since I began my career as a capitalist at one of the largest banks in the world.  I find that my economics degree is mostly useless to me as I go about the business of doing my specific job.  This doesn’t surprise me at all; an economist is to a businessman what a biologist is to a hunter.  Sure the biologist might know that most bears die in the wild from an abscess tooth, but the only biology the hunter cares about is which parts of the bear are delicate enough so that when a large caliber bullet rips through them, the bear is unable to place the hunter in any mortal danger.  My economics degree allows me to know the social function of my job, but that doesn’t really help me perform it any better.  On the flip side, of the vast majority of people I’ve met so far, despite fruitful decades of successfully advancing their careers in the banking world, most are pretty clueless when it comes to theories of money or understanding the social function of what it is they do every day.  Most have some sort of passive faith that what they do is necessary, but they say it with all the conviction of a janitor who blithely proclaims that without him nobody would wax the floors.

I bring this situation to light, not in some vain attempt to fix something that I perceive to be a problem.  On the contrary, our society is fundamentally built upon the division of labor, it is the means of our survival and method by which we have made this spinning rock capable of supporting seven billion of our kind where a few thousand years ago it could only support the tiniest fraction of that number.  I could no more hate the ignorance of successful businessmen in an esoteric field like economics than I could hate the reflection that looks back at me in the mirror when I brush my teeth.  The reason that I can reliably procure six freshly slaughtered hens with a scant hour of labor, a feat unfathomable to my grandfather, is that the farmer, meat packer, truck driver, grocer and banker spend their time getting better at their own jobs rather than squandering it on some sort of luxury consumer philosophy called economics.

The problem that I am attempting to fix is the confidence that my average countryman places in those that wield power over him.  I don’t yet know the wellspring from which this confidence in the system bubbles, but I have encountered no shortage of people who think that civilization is still marching onward and upward, guided by either virtuous leaders, effective bureaucracies, or perhaps even the invisible touch of the goddess Democracy herself.  The term social engineering is bandied about casually as if our society could be carved, welded, bored, and tuned with the sort of precision that could only be measured by the most delicate calipers.  Our nation is seen like a powerful locomotive, surging ahead on a carefully laid track with a confident conductor, his steady hand on the controls, his steely gaze ever fixed on the horizon.

Bankers know nothing of money, politicians know nothing of society, nobody is driving the train.

http://research.stlouisfed.org/fred2/series/WCTCL

– Other Steve

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