Aifric Campbell: Why bankers should have to join book clubs
The financial collapse was being predicted in the pages of novels long before it became reality
Novelists such as Tom Wolfe (above) and Martin Amis offered an eerie forecast of the financial crises that lay ahead. Photograph: AP Photo/Jim Cooper
In November 2008, during the dark days of the financial crisis, Queen Elizabeth visited the London School of Economics and asked: “Why did nobody see it coming?” Her government had just bailed out the banks, and the crash had made a sizeable dent in the royal portfolio, but the question was something of an ambush. She was opening a building, so an architecture question might have been expected, rather than a blunt inquiry about foresight.
The queen’s question triggered a reply from professors Besley and Hennessy, a short plainspeak document that should be required reading for financiers, regulators, policymakers and economics students everywhere. They concluded that the “forecasting failure . . . was principally a failure of the collective imagination of many bright people”.
The royal response is unrecorded, but as an investment banker turned novelist, I like to picture the queen setting out on a quest to find the cure for imaginative failure. Such curiosity would eventually lead her to the library, where she would discover the predictive power of fiction.
The truth is that novelists were picking up on troubling long-term trends in the financial sector long before the strategists. In 1977 Don de Lillo was already examining “the occult theology of money” in Players, where a trader on the floor of the New York Stock Exchange felt “everything seemed to edge beyond acceptability”. Meanwhile his wife, who works in grief management at the World Trade Centre, mused that “the towers didn’t seem permanent.”
It took until 1992 for the president of the Federal Reserve to warn about the complexity of the derivatives market, but novelists had already offered an eerie forecast of what lay ahead. Martin Amis’ Money (1984) and Brett Easton Ellis’s American Psycho (1991) spoke of a darkness lurking beneath the glittery excess.
In Bonfire of the Vanities (1987) Tom Wolfe introduced us to “Master of the Universe”, Sherman McCoy, “a respecter only of performance”, struggling to control his dachshund, his marriage, his lover and a life that is poised to unravel. Ryu Murukami’s In the Miso Soup (2002) offered a vision of bubble Japan that would end in years of deflation.
De Lillo returned to the markets with Cosmopolis (2003) and a billionaire trader who’s losing a fortune, but there’s “only one thing in the world worth pursuing: the interaction between technology and capital”. Stephen Amidon’s “pure, weightless, frictionless money” nudged us towards the precipice in Human Capital (2004). And finally, Anne Haverty’s The Free and Easy (2007) captured a last glimpse of the Celtic Tiger just before Ireland plunged into the financial abyss.
Irrational exuberanceIf you tracked this long-term trend on a graph you’d see fiction was sounding the alarm. Writers could detect a wolf tone beneath the “irrational exuberance”, since the job entails listening in close, scanning frequencies for the drum beat of change.
None of this is surprising if you view fiction writers as a collective of diverse voices with different backgrounds and experiences that together represent a creative think tank. We spend our days trying to observe the world with the eyes of a scientist and the heart of an artist. World-building means imagining how reality might change under certain conditions – bird flu or a terrorist threat. As novelist John Banville remarked, “The artist directs a gaze on the world that the world does not expect.”
Fiction shifts perspective. It catapults us out of comfort zones into the trenches of the first World War or on to the surface of Mars. Fiction invites us to look through the eyes of another, which makes it an excellent resource for organisational cultures where silos of expertise can create the delusion of superior insight and a drift towards complacency and hubris – all of which were key contributors to the financial crisis. A shift point of view is key to problem-solving, decision-making, policymaking, leadership, management, strategic planning, negotiation, customer relationships and teamwork. Imagining different possible outcomes alerts us to danger and opportunity and is crucial to scenario analysis and risk management. Without the ability to shift perspective, we stand like meerkats looking in the same direction who do not see the jackal creeping up behind.
Organisations spend fortunes seeking insight and inspiration from management consultants and psychologists, yet fiction and its writers remain an underutilised resource. Novels and short stories are case studies of characters under pressure – which is why Harvard Business School includes fictional texts on its leadership course, so senior executives can “get inside individuals who are making decisions”. Stories about character pose gritty questions about motive, responsibility and accountability. They challenge us to reflect on who we are and how we do business, to consider our footprint in the organisation and the world.
The ability to question and imagineNeuroscientific research reveals that reading literary fiction fosters empathy and enhances cognitive flexibility. Workshops that focus on reading and writing stimulate critical and creative thinking and develop communication and team-building skills. I observe this first-hand at Imperial College, London where I teach creative writing to our future scientists, engineers, technologists and medics. Writer-in-residence programmes and book festival sponsorship provide a cultural platform for engaging with customers and, since many employees are likely to be book club members, why not fund in-house writer events?
All of which is a compelling argument for nurturing the writer’s role in society and investing in creative think tanks. We need writers positioned outside the bunkers to keep prodding and probing. To quote Manny Roman, chief executive of the hedge fund sponsor of the Man Booker prizes, we need to be “proud to support the novel in all its various, dazzling forms”. Without a robust and vibrant industry of fiction we lose the ability to question and imagine, and we drift further away from who we are and all we can achieve.
Aifric Campbell is the author of On the Floor and a former managing director at Morgan Stanley. She teaches at Imperial College, London