Some years ago I was at a round table discussion on the plight of British farmers. One of the participants – who came from a farming background – spoke from experience, using various bits of agricultural terminology that had the rest of us struggling. For instance, one of the terms he used was ‘hogget’ – meaning a sheep of between one or two years of age (or the meat from such an animal) and not, as one might guess, a small pig.
Within agriculture or any other field of human endeavour, there will be hundreds, perhaps thousands, of words that are not in general use, but which allow the fine detail of an area of expertise to be communicated. This may be confusing to the layman, but it is unavoidable. When outsiders need to get involved, as on matters of public policy, it’s just a case of learning the lingo – which, in the internet age, isn’t so difficult.
More problematic is another kind of jargon – one that uses common words, but not as outsiders would understand them. The phenomenon is explored in an article by John Lancaster for the New Yorker – his subject being the mystifying world of financial language:
“In The Economist, not long ago, I read about a German bank that had some observers worried. The journalist thought that the bank would be O.K., and that ‘holdings of peripheral euro-zone government bonds can be gently unwound by letting them run off.’ What might that mean? There’s something kooky about the way the metaphor mixes unwinding and holding and running off, like the plot of a screwball comedy.”
The kookiness becomes downright sinister when you consider the ability of financiers to take a word and twist its meaning through 180 degrees:
“What often vexes the language of money is something I’ve come to call ‘reversification’—a process by which words take on a meaning that is the opposite of, or at least very different from, their initial sense.”
His first example is that of the ‘hedge fund’, where the ‘hedge’ refers to the limiting of risk, as in ‘hedging your bets’:
“A hedge is a physical thing. It turned into a metaphor; then into a technique; then the technique became more sophisticated and more and more complicated; then it turned into something that can’t be understood by the ordinary referents of ordinary language. And that is the story of how a hedge, setting a limit to a field, became what it is today: a largely unregulated pool of private capital, often using enormous amounts of leverage and borrowing to multiply the size of its bets. This is reversification in its full glory.”
Another prime example is ‘securitisation’:
“In the credit crunch, securitization fuelled both ‘predatory lending,’ in which people were loaned money they couldn’t possibly pay back, and the uncontrollable dispersal and magnification of the risks arising from those bad debts. There’s no way of knowing any of this from looking at the word ‘securitization.’ That’s reversification at its least appealing.”
Lancaster overstretches when he tries to present ‘austerity’ as a further example. Yes, there is the question of austerity for whom, but the essential meaning of the word is pretty clear. A much better example – though it won’t be to the liking of the left – is the way in which Tony Blair and Gordon Brown used the word ‘investment’ to describe the precise opposite, i.e. their borrow-and-spend policies. As a piece of terminological inexactitude this is right up there with the use of ‘credit’ to mean debt.
Nevertheless, Lancaster’s underlying argument is a powerful one. Words matter – especially when it comes to the political oversight of something as important as financial stability.
The reform of financial regulation shouldn’t just be concerned with the technicalities of finance, but also with the words employed to describe those technicalities. When those words are used to mean the opposite of what’s really going on, then this should be punished for what it is, i.e. fraud.