When he was studying at Oxford in the early Eighties, John Lanchester had a conversation with his dad that still sticks in his mind. “He worked for the Hong Kong Shanghai Bank, as it was then, and he never talked about money in a personal context, but I do remember him once asking me, ‘Do you have enough money?’ I was a student going about with rips in my trousers but I said to him, ‘I’ve never thought about money.’ He replied, ‘Well, that means you’re rich.’ I think he was right, but the problem is things are different now: we can’t afford not to think about money anymore.”
This realisation was part of what led Lanchester to write a new book, How to Speak Money, a self-helpy title that belies the seriousness of what’s inside.
It’s his second non-fiction work explicitly concerned with economics after Whoops! Why Everyone Owes Everyone and No One Can Pay (2010), about the recent global financial crisis. The machinations of finance also figured in his bestselling 2012 novel Capital (pun intended).
“I didn’t think I was going to write about money again,” Lanchester tells Esquire, in a cafe near his home in south London, “but I kept being asked to write about it, and I still find it incredibly interesting. I decided that maybe you don’t always have to pull against the door marked ‘push’, sometimes you should walk straight through.”
How to Speak Money is a glossary of the names and terms that get tossed about in finance, from “arbitrage” to “zombie banks”. But Lanchester’s gift when it comes to writing about money, and one reason people keep asking him to do it, is that he makes it accessible, interesting and – yes, we said it – fun in a way few others manage (perhaps for this reason he’s often compared to the US writer Michael Lewis).
The new book is full of asides and stories about the people who have created the world economy as we know it today: their genius, their greed, their hubris and their humour (a term Lanchester heard about recently that tickled him is an asset class of silver, wine, art and gold known as “Swag”).
But emphasising the human factor in finance isn’t just a ploy to make it entertaining: it’s the whole point. Because it’s not only bankers who stand to win – or more pertinently – to lose.
“I suppose I do, in a sense, feel a civic duty to write about money,” Lanchester says. “Because the way things are heading, the rich are going to continue to get richer, the poor are going to continue to get poorer and it’s only by understanding what’s actually going on that we start to realise why and how the democratic process can do anything about it. If people read this book and disagree with it, then fine; I’ve had my say. The important thing to understand is that to be uninformed is to condone.”
Your Five Favourite New Financial Terms
1 | Hot-Waitress index
A way of assessing the state of the economy by the attractiveness of serving staff, based on the idea that when times are hard, hot girls have to get crappy jobs.
2 | Chinese Wall
An invisible barrier that stops information crossing between certain departments of a financial institution so as to avoid conflicts of interest. Not in any way like the visible, crossable, Great Wall of China.
3 | Gold bugs
Investors who cling to the – widely considered misguided – idea that gold is the only safe commodity to put your money into.
4 | Fat-finger mistakes
Howling and occasionally devastatingly expensive trading errors that come about through human keyboard mismanagement.
5 | Eddie Murphy Rule
Proposed legislation that would prevent the occurrence of scams akin to the one pulled off in John Landis’s 1983 comedy Trading Places (which, as Lanchester points out, “should really be the Murphy-Aykroyd rule”).
How to Speak Money: What the Money People Say – And What They Really Mean by John Lanchester (Faber) is out on 4 November