"We're occupying a really interesting moment right now. Let's call it 'between the last financial crisis and the next one,'" said Annelise Riles. "And having spent a lot of time with central bankers in private, I don't know anyone who doesn't think another financial crisis is coming."
Riles, the Jack G. Clarke Professor of Far East Legal Studies and Professor of Anthropology at Cornell, was speaking at a celebration for her new book, Financial Citizenship: Experts, Publics, and the Politics of Central Banking, held in the MacDonald Moot Courtroom on March 16.
Joining her were panelists David Archer from the Bank for International Settlements, Jonathan Kirshner from the Cornell Government Department, and Gillian Tett from the Financial Times. Robert Hockett, the Edward Cornell Professor of Law, moderated.
Speaking first, Archer said, "[This book] is going to make central bankers who read it a bit uncomfortable." Riles points out several problems that central banks need to address, including an erosion of public trust in the wake of the 2008 global financial crisis. Observing that the public has lost trust with institutions and experts across the board, however, Archer questioned whether solutions specific to central banking would be effective.
Kirshner called the book a significant contribution with "constructive implications for the public good" and especially agreed with Riles' observations on the "dysfunctional insularity" of the financial sector.
As a journalist with a background in cultural anthropology, Tett spoke of central banking as a tribe with its own language, customs, and rituals. She observed that currently, "the whole economics religion . . . is being questioned. It's not a full-blown Reformation, a la Martin Luther. It probably needs to be."
Tett expanded on the theme of trust, noting that, while trust in traditional authorities such as the government and banks has decreased, trust in peer groups has increased. Technology, she said, has driven the fragmentation of the public into tribal groups, each with its own epistemologies and vastly different worldviews. The problems facing central banks must therefore be understood in the context of broad challenges to democracy itself.
After the panelists spoke, Riles had a chance to respond. She began by explaining the purpose of Financial Citizenship. Produced in collaboration with the Law School's Meridian 180, which Riles directs, along with Cornell University's Global Finance Initiative, the book is meant to be used as a tool in ongoing conversations between scholars and central bankers aimed at solving the complicated problems facing the sector.
Experts like central bankers, she said, must acknowledge that value judgements are inherent even in technical decisions and that they are political actors obligated to engage with civil society at large - after all, they already communicate extensively with financial executives and other market elites. She also called for the incorporation of social science research into central banking, greater diversity in central bank staffs, and a reexamination of how the media and the academy approach the sector.
Riles concluded that the dialogue she is proposing is really about revitalizing democratic institutions. "When we think about how difficult this is," she said, "I think we need to think of ourselves, humbly perhaps, a little more like we would think about a country that is facing a transition to democracy."