PARC Forum presents: Why did the financial crisis of 2007 erupt, and take so many people by surprise? Why did so few people spot the problems that were developed in finance before the crash -- and blow the whistle?These days it is often popular to blame the problems on banker greed or political failure. But alongside those issues, another factor was also at work: the way that information circulates around the modern world, via the media.
In the years leading up to the crisis, many parts of the financial system were operating in a state of obscurity, because they were deemed too boring -- or technical -- to merit wider debate in a competitive and crowded media world. And a pattern of structural and cognitive silos further impeded information flows, contributing to these areas of "social silence" (to use a concept developed by the French anthropologist Pierre Bourdieu).
These failings matter -- not simply in terms of the financial world -- but for the non-financial system too. Many of the problems with silos and social silences that occurred in finance can be seen elsewhere, from government bureaucracies, medicine, the energy industry, and so on. And while recent changes in the media -- and the shift towards electronic communication -- could theoretically counter this silo problem, the rise of electronic forms of communication is also reinforcing silos (and social silences) too.
In essence, what's needed in today's media and much of the wider world is an "anthropological" prism: namely, an analytical approach that tries to connect the dots, explore power structures, and deconstruct not only what society says about itself... but also the "social silences" that tend to be ignored with such fatal consequences.
Gillian Tett is the U.S. managing editor of the Financial Times, leading the editorial development of the paper’s U.S. edition and of U.S. news on FT.com. Previously, Tett was assistant editor responsible for the FT’s markets coverage. She also served as capital markets editor, deputy editor of the Lex column, Tokyo bureau chief, Tokyo correspondent, London-based economics reporter, and a reporter in Russia and Brussels.
An anthropologist with a Ph.D. from Cambridge University, Gillian wrote about the financial instruments -- such as CDOs, credit default swaps, SIVs, conduits, and SPVs -- that partially contributed to the 2008 financial crisis, famously predicting the collapse of the financial markets two years ahead of the curve.
Gillian is the author of New York Times bestseller Fool’s Gold: How Unrestrained Greed Corrupted a Dream, Shattered Global Markets, and Unleashed a Catastrophe (Little Brown, UK and Simon and Schuster, US, 2009), and Saving the Sun: A Wall Street Gamble to Rescue Japan from its Trillion Dollar Meltdown (Harper Collins, 2003). Fool’s Gold won Financial Book of the Year at the Spear’s Book Awards in 2009.
Gillian has received numerous prestigious awards for her work. She was named Journalist of the Year (2009) and Business Journalist of the Year (2008) by the British Press Awards, and Senior Financial Journalist of the Year (2007) by the Wincott Awards.
In her younger years, Gillian lived the life of a nomad -- leaving home at 18 to live in Pakistan, followed by Tibet, and later with stints in the Soviet Union, Japan, and other locales. A mother of two and an avid hiker and backpacker, she speaks French and Russian, as well as some Japanese and Persian.