“The other great shakeup in finance, which is in some ways driving the crypto world, is a shift in trust away from institutions and leaders, and towards the peer group, the crowd and technology.”
Gillian Tett is an Editor-at-Large for the Financial Times, where she is chair of the editorial board and editor-at-large, US. She has written about the financial instruments that were part of the cause of the financial crisis that started in the fourth quarter of 2007, such as CDOs, credit default swaps, SIVs, conduits, and SPVs. She became renowned for her early warning that a financial crisis was looming.
As part of her research while earning a PhD in anthropology, Gillian Tett visited and observed customs and rituals at Tajikistan weddings. She applies that same anthropology lens to the world of finance with her new book Anthro-Vision. With the coming AI revolution, Tett stresses the importance of also using a different type of AI, anthropology intelligence, in order to best handle tech disruptions and displacement in finance. Anthropology helps explain how the siloed nature of communities has contributed to the current state of American politics. It also helps explain a shift in trust away from institutions, contributing to the rise of cryptocurrencies and other tech-enabled peer-to-peer technologies.
LISTEN AND SUBSCRIBE
SPEAKER
Gillian Tett
Editor-at-Large
Financial Times
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
TIMESTAMPS
0:00 - Intro and background
6:07 - Anthropology intelligence
8:15 - Anthropology in finance
14:16 - Cambridge Analytica
17:55 - Anthropology and the pandemic
22:28 - Checks and balances
25:15 - Donald Trump’s communication style
29:50 - Social media effects
32:48 - Societal divide around mask-wearing
34:32 - Tech disruptions in finance
38:09 - Cryptocurrencies
40:54 - Societal anxieties
TRANSCRIPT
John Darcy: (00:07)
Hello, everyone. And welcome back to SALT Talks. My name is John Darsie. I'm the Managing Director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy. SALT Talks are a digital interview series that we launched in 2020 with leading investors, creators, and thinkers. And our goal on these SALT Talks is the same as our goal at our SALT Conferences, which we're excited to resume in September of 2021 and welcome our guests on SALT Talks today who'll be speaking at that conference as well. But our goal is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future.
John Darcy: (00:48)
We're very excited today to welcome Gillian Tett to SALT Talks. Gillian today serves as the Chair of the Editorial Board and Editor at large U.S. of the Financial Times. She writes weekly columns covering a range of economic, financial, political, and social issues. She's also the co-founder of FT's Moral Money, which is a twice weekly newsletter that tracks the ESG revolution in business and finance, which has grown to be a staple Financial Times product.
John Darcy: (01:14)
In 2020 and 2021, Moral Money won the SABEW Best Newsletter Award as well. Gillian is the author of The Silo Effect, which looks at the global economy and financial system through the lens of cultural anthropology. She also authored Fool's Gold, which is a 2009 New York Times bestseller and financial book of the year at the inaugural Spear's Book Awards. Her next book, her most recent book is called Anthro-Vision: A New Way to See Life and Business and it was released in June of 2021, again, a fantastic book using Gillian's PhD in anthropology which not every business journalist has and applying that lens to the way we look at business economics and investing.
John Darcy: (01:56)
Gillian has received honorary degrees from the University of Exeter, the University of Miami, St. Andrew's, London University, Carnegie Mellon, Baruch, and an honorary doctorate from Lancaster University in the UK in addition to that PhD from Cambridge in cultural anthropology that I mentioned before. But hosting today's talk is Anthony Scaramucci who is the Founder and Managing Partner of SkyBridge Capital, a global alternative investment firm. Anthony has a couple of nice degrees but not quite as many as Gillian. He also definitely doesn't have a PhD in anthropology.
Anthony Scaramucci: (02:27)
And no honorary degrees. Again, we're too politically toxic for an honorary degree in this woke place, John.
John Darcy: (02:34)
They're trying to take away Anthony's degrees at this point, rather than giving him new honorary degrees.
Anthony Scaramucci: (02:38)
100%. So far Harvard still wants the donations, Gillian, so I'm okay. They're not quite that woke yet but we'll discuss that on another SALT Talk.
Gillian Tett: (02:49)
But I think you have degrees from the School of Life in every possible sense and the school of political life too, Anthony.
Anthony Scaramucci: (02:55)
Well, so the 11 day PhD in Washington lunacy. But Gillian, thank you so much for joining us. Again, another brilliant book, I've read two of your prior books, the one on JPMorgan and Bear Stearns and the derivative markets before the crash well-timed book, The Silo Effect, which I thought was another brilliant assessment of our living in our own little echo chamber. And now you're taking your life's work in study of anthropology, your work as a journalist and you're synthesizing it for us people. But before you get there, why did you decide to become a journalist and a writer? Where did you grow up? What was your inspiration for your life?
Gillian Tett: (03:39)
Well, if I certainly that, it basically explained a bit why I wrote the book because I am fundamentally completely weird by most people's standards, particularly by the standards of anyone working in finance and market. I spent the last 25 years as a financial journalist writing about finance, business, politics, tech, all the stuff that you've swum in all your life, Anthony but I actually started my career as an anthropologist, someone dedicated to the study of human culture, working in a place called Soviet Tajikistan, that's just north of Afghanistan, looking at the practices, symbols, ceremonies, rituals, belief systems of people in Tajikistan. I looked particularly at marriage rituals.
Gillian Tett: (04:24)
And a lot of people were saying "Well, that's really weird. Why would you go from that kind of cultural analysis, exotic stuff into writing about Wall Street?" And essentially I believe they're intimately connected and that's really what I said I was doing the book.
Anthony Scaramucci: (04:40)
Well, they are connected but expound as to why they are connected.
Gillian Tett: (04:46)
They're connected because basically we are all human and humans everywhere in the world, whether they're on Wall Street, whether they're on a trading floor, whether they're in a C-suite or in the White House, or if they are in a Tajik village. We're all human social creatures, we operate according to all kinds of weird cultural practices that we absorb from our environment that always seems strange to everyone else but natural to ourselves. We're all shaped by rituals and symbols and ceremonies and we need to understand these cultural patterns and assumptions to work out what drives us, because if we ignore them, if we think that we are all as logical and rational as robots, then we are liable to be constantly tripped up by nasty surprises.
Anthony Scaramucci: (05:34)
Well, I think that that's a brilliant part of the book. I'm just going to hold the book up for everybody because I like promoting the books of my friends. It's Anthro-Vision: A New Way to See in Business and Life. But I think it's an old way actually. I think that's the most interesting thing about your book. When I read it, it's an old way to look at things. You're basically stripping off the technology, you're stripping off of all the veneer that we put on ourselves today and looking at us from a historical perspective about how we behave with each other. Is that a fair assessment of the book?
Gillian Tett: (06:06)
I think Anthony, if you think on it, in some ways it is a very old way and it suggests that we, ultra modern sophisticated humans aren't that different from our ancestors or from people elsewhere in the world. But although that is in some ways incredibly obvious, it is amazing how often we forget it today, partly because anybody who's working in finance and markets and business has the illusion that they're operating in an ultra sophisticated world shaped by computers, shaped by rational expectations to use the economic framework that's tossed around so much in the markets. And also there's something really important which is the rise of artificial intelligence, big data sets and all the other computerized tools.
Gillian Tett: (06:54)
And one of the core messages in my book is that tools like AI are incredibly important and incredibly useful. They really can revolutionize finance, revolutionize a lot of business processes. But the problem with these tools is that they assume that human beings are rational and consistent, they tend to work by gathering data from the recent past and extrapolating that into the future and assuming that somehow correlation is causation, which of course we all know it isn't and they tend to ignore the context of all the models and all these big data sets. So what I'm really arguing in the book is a world that's being overrun by AI, artificial intelligence, neither another type of AI, anthropology intelligence, just to make sense of the context and consequences and the cultural patterns that shape us all.
Anthony Scaramucci: (07:49)
You mentioned rituals and I want to go there first before I dive into the book. And you've observed Wall Street and business and Western, Eastern business cultures, tell me a Wall Street ritual. Let's say that you were Jane Goodall and this was National Geographic and you had the binoculars on and you were observing the Wall Street primates in their habitat. And I want you to channel Richard Attenborough and... Tell me about those people. What are they like?
Gillian Tett: (08:17)
A lot of people when they think about Wall Street rituals, think about some of the more dramatic events like going to bars or buying things on trading floors or right in the bottom of stock exchange. And those rituals matter. But one of the most important rituals is something that we've not been able to do for the last year and a half, which was the investment banking conference and investment banking conferences are fascinating as rituals because in many ways, they're very similar to the gigantic ceremonial events that were weddings in the Tajikistan location where I did my PhD research. What investment banking conferences do like ritualistic weddings, is unite a scattered tribe of people, enable people to come together to reaffirm their social ties and to not just recreate social ties but also to share a common world view.
Gillian Tett: (09:12)
They have rituals which essentially reflect their shared core worldview and assumptions and then reproduce it amongst that network. And if you look at the ceremonies and rituals that go with your average investment banking conference, including I would imagine something like the SALT event, you can really see that shared worldview and see both the perils and the promise of that shared worldview. And I used that kind of analysis back in 2005 with an investment banking conference. In fact, it was the European Securitization Forum conference. And I analyzed the conference and what I saw then enabled me to predict the 2008 financial crisis.
Anthony Scaramucci: (09:56)
And you did that in your book, more or less that first book that I read, you explained that the derivatives were being layered on top of each other and that the full risk assessment was cloudy at best and that things were being rated AAA and perhaps were not being rated AAA but it was a ritual, meaning there was a-
Gillian Tett: (10:15)
You can sit there and say, well, what went wrong with the 2008 financial crisis? You can look at it in terms of capital flows and numbers and ratings and all that kind of stuff. All you can say, there was a fundamental human process going on. You had a group of banknotes, there was such a tight knit tribe that they spoke in languages no one else understood, no one outside the tribe understood what they were talking about when they talked about things like CDOs and they didn't expect anyone else to understand. It gave them power controlling that language a bit like the priests and the medieval Catholic churches spoke Latin and no one else did, and they expected the congregation just to sit quietly and lap it up.
Gillian Tett: (10:57)
But also the vision they had of finance, that creation mythology, because every group has a creation mythology. The creation mythology essentially implied that they were doing this amazing thing with liquification, creating liquid markets. So, would be good for everyone. But they couldn't see the contradictions in their creation mythology and there were fundamental contradictions there like the fact that the products they were creating were supposed to be making markets more liquid but actually it was so complex and no one could trade them.
Gillian Tett: (11:32)
They couldn't see those contradictions precisely because they were in such a ghetto or a silo and also none of the PowerPoints in their ritualistic events had any faces or people that written people, the end user out of that financial creations. And that reflected a mentality that was absolutely beset with tunnel vision and had no sense of the consequences of what was happening in terms of risk-taking. And there's a wonderful scene in the book, Michael Lewis's book, The Big Short in the movie where the hedge fund trainers go down and meet a lap dancer in Florida who has actually taken out subprime mortgages. You're nodding, Anthony, because you probably remember that scene.
Anthony Scaramucci: (12:18)
I do remember that scene, it was one of the better scenes in the book and I read the book 12 years ago, but continue.
Gillian Tett: (12:23)
When the hedge fund traders met that, I think it was a pole dancer or a lap dancer, they realized-
Anthony Scaramucci: (12:30)
That's rituals, John, just so you know, not that I read the book or anything. Okay, keep going.
Gillian Tett: (12:35)
When they met her, they basically said, "Wow, subprime mortgages have been used like that?" This is the kind of shock, this is kind of nuts." And the thing that was nuts was not the fact that the hedge fund traders realized it, it was a fact that no one else did because there were so beset with tunnel vision. So basically my book is simply a call for us to bust out of our tunnel vision, get a sense of lateral vision, look at the wider world like an anthropologist to really get out and meet some real life people, look at the rituals and cultural patterns we normally ignore because that's the only way to guard against risk properly and to get savvy about what could be about to hit us in financial markets or anything else.
Anthony Scaramucci: (13:20)
Listen, I think it's a brilliant assessment of what is going on. You also mentioned in the book that data is effectively the new oil. It has become this very valuable commodity on planet earth, it's manipulated by people like Oxford Analytica, it's used for forces of good but also for forces of evil. Tell us about what you write about oil being... sorry data being the new oil.
Gillian Tett: (13:48)
Well, I think the data is incredibly important. I do tell a story of it's actually Cambridge Analytica, not Oxford Analytica, but it's all posh English colleges.
Anthony Scaramucci: (13:56)
I meant to say Cambridge's Oxford Analytica, my apologies to Oxford Analytica, I'm sorry, but I meant to say Cambridge first. You know, the great thing about me, Gillian, because I'm an Italian kid from Long Island, nobody cares. I don't even bother pronouncing the names right because no one assumes I'm going to pronounce them right anyway, I leave that up to John Darsie to figure out.
Gillian Tett: (14:17)
Well, funnily enough, the reason why the data company was called Cambridge Analytica was precisely because the name Cambridge sounds very auspicious and got a lot of credibility for an American audience. Strangely enough, someone else tried to copy Cambridge Analytica the data company and they based it in the city of Oxford down in Mississippi to try and create the same aura. So your mistake, Anthony, was exactly the same kind of idea that they were trying to capture in the marketing. But Cambridge Analytica was one of the breed of tech companies that arose starting from about 2012 to use data to predict the future through bringing up enormous amounts of information about what we're doing in cyberspace. And not just predict the future, to also try and manipulate people by sending out targeted messages.
Gillian Tett: (15:10)
In some ways, no different from advertising but what Cambridge Analytica did was to apply these tools into the political space, creating some incredible controversy in the 2016 election as you know, Anthony. And one of the things I argued in his book is that what's happening in this world of data is incredibly important not just in political times but also in economic times because this type of activity does not easily fit into any economist models nor into investors models when they're trying to value companies. And the reason is really simple, money is not involved. Money is not involved.
Gillian Tett: (15:53)
And economists are trained to think about everything in terms of money. It's one of the big shortfalls of the whole profession that they can't count things unless it's expressed in monetary forms. And the problem with data is actually what's going on is a back to trade in the sense that every day in cyberspace, we're giving up information in exchange for getting back services like Gmail or Google Maps or anything like that. And we normally express this in terms of a negative, i.e it's free, there's no money involved, but I argue in the book to often use a concept that's very common anthropology which is barter, which is basically what's going on. And so we need to start counting the barter trade, we need to start recognizing it because if nothing else, if you don't start talking openly about barter, you have no hopes of building a tech sector that feels more ethical to consumers.
Anthony Scaramucci: (16:49)
Yeah. Listen, I think it's well said and I'm going to now synthesize one of your last books with this book, "The Silo Effect about how we tunnel into our own confirmed biases and we live in our new little news silo or cultural eco centric, if you will silo, our ecosystem is quite narrow despite globalization. And one of the weird things in my observation, last book, I was like wow, we're becoming more globalized, the result of which it makes many people fearful and they were retrenched into a silo. And in this book, what I love is that you basically now are explaining because of that, we get a lot of fear related to information, conspiracy theory, disinformation, fake news and this manifested itself with the COVID-19 pandemic and the tragedy of that. So tell us a little bit about your observation of how our society in most, the global society and us as individuals handled the tragedy of COVID-19.
Gillian Tett: (17:56)
Well, in many ways, my book Anthro-Vision tries to provide some answers to the questions I raised in the book of The Silo Effect because the Silo Effect says that we're all incredibly prone to silos, we're all retreating into tunnel vision and tribes and Anthro-Vision says well, yes, as a way to bust out of it and to actually act and think more like an anthropologist and to try and get a sense of lateral vision, to try and look at the entire picture and above all else, what I'm calling for in this book is an effort to try and think yourself into the minds and lives of people who seem different from you, not just so that you can empathize with other people but that you can also flip the lens and look back at yourself with more clarity, because there's a wonderful Chinese proverb which is that a fish can't see water.
Gillian Tett: (18:45)
We can never see ourselves clearly unless we actually make an effort to jump out of our fish bowl, go and swim with other fishery bed or even ask the other fish what they think about our fish bowl and then look back. So it's a kind of win-win having the anthropology mindset, you both understand others better and you understand yourself. And that sounds really abstract, but let me just give you two examples of how this would have played out in the pandemic if we had more policymakers who thought like anthropologists.
Gillian Tett: (19:13)
Firstly, we would not have ignored what was happening on the other side of the world in a strange, weird place called Wu Han, because guess what? Most people did ignore that, it seemed long way away and they just turned their eyes away from it. Most people thought like Donald Trump when he said that African countries were "shitholes" people went, "Ooh, that's horrible, that's terrible." But actually most of us have the same instinct to shy away from places like Africa when they find the epidemics, rather than feel empathy to try and understand what's going on."
Gillian Tett: (19:47)
So a bit of empathy for other experiences would have helped us a lot to understand what to expect with COVID. It would have also shown us some of the possible solutions for how to respond. There's a lot of anthropologists who have studied mask culture, the use of face masks in Asia in relation to the Asian pandemics. I made the point that the reason why masks are useful is not just because of medical science, having that fabric stopping the viruses, it's also useful because of behavioral impacts. A mask is a very powerful, psychological prompt, a ritual, you can actually use each day to remind yourself to change your behavior.
Gillian Tett: (20:28)
And it also has a powerful cultural signaling aspect that if you put a mask on, you signal that you're being respectful to other people and thinking about the wider good. So we could have learned all that beforehand if we'd bothered to get some empathy, but also if people had looked at America with outsider eyes before 2020 and asked whether America was ready to cope with a pandemic or not, they would have seen all of these holes and problems in the healthcare system. And just to cite one tiny example, the problems in having federal structures run some things but local structures run another and they're just not joined up at all.
Anthony Scaramucci: (21:13)
Listen, I think it's excellent but if there's a core message that you have in this book is that we have intellectual superiority complexes and we don't listen to people. You tell this great story about Paul Otellini, who was the chief executive of Intel, where anthropologists were brought in to try to shake the minds of the engineers and you write in the book that they were dismissed, ignored or derided and the mindset of the highly trained engineers and executives tended to assume that everyone did or should, and I think that's the operative, they did or should think like them. And I think when I read chapter by chapter, it's more of a bunch of blockheads walled off from each other, is basically what the message is, break the walls down. Am I getting the right gist of it?
Gillian Tett: (22:10)
Yeah. Another easy way to say, Anthony, is to invoke a principle which is fundamental to American political structures and I know that you hold very dear, which is checks and balances.
Anthony Scaramucci: (22:21)
No question and it saved the civilization, saved the democracy actually, and probably saved people's lives at the end of the day.
Gillian Tett: (22:30)
As in the checks and balances in America's great political system are absolutely something which are fundamental. Checks and balances should be part of anybody's thinking at work, on the trading floor, in business, in the C-suite. And what I mean by that is we all have a tendency to assume that the way that we think is natural and inevitable and how everyone should think if they don't already think that way. It's just part of being human, just like being angry is being part of human. But we don't think that actually just succumbing to anger as a good thing, we realize we have to get over it. And so we have to get over this idea that we can assume that everyone else thinks the way that we can. And in a company like Intel where I cite the Intel engineers who actually brought in an anthropologist to help them, it was a shock for the 25 year old Silicon Valley geeks to realize that the rest of the world didn't think like they do when it came to products.
Gillian Tett: (23:27)
And actually if you're trying to design a device or gadget that might work for an 80 year old Indian grandmother, you cannot have the same assumptions that you have when you're a product designer sitting in Silicon Valley. But that same point is played out over and over again in business. And the simple message of anthropology is, if you have checks and balances, if you have a diversity of views inside a structural office, if you have ways of exposing yourself to the minds of others, if you simply have a way of getting some common sense into your thinking, and by that, I mean a common view of people who are not exactly like you, you will have a better chance of managing risks and also seeing new opportunities and that's as true in the financial world as it is in tech sector, Silicon Valley or anywhere else.
Anthony Scaramucci: (24:22)
Before I turn it over to my erstwhile cohost who I was told earlier today should have his own show, John Darsie, that's what I was told. He was like stabbing me in the chest, but I do-
John Darcy: (24:35)
I spoke to my mom earlier because I don't know [crosstalk 00:24:37]-
Anthony Scaramucci: (24:36)
No, no, but I begrudgingly agreed with your fan, I said yes, he's extremely talented and he deserves his own show. Before I turn it over to John Darsie, I want to go to bigly, which is a chapter in the book about understanding Donald Trump. And there are some brilliant insights there. One of them is Mr. Trump's language, the use of his language and the appeal of it. And then secondarily, obviously this whole silo effect where people have these reinforced biases Mr. Trump's very adeptly preyed upon. And so I want you to comment on that before I turn it over to the new television star.
Gillian Tett: (25:15)
Well, I should congratulate you, Anthony, for getting through a whole 20 minutes of conversation without mentioning the T word, Donald Trump.
Anthony Scaramucci: (25:22)
Well, I couldn't avoid it actually because it was such an important, I thought a chapter in your book.
Gillian Tett: (25:29)
Yeah, I do have a chapter all about bigly and Trump. And actually I should stress that the chapter actually is not just about Trump, it's actually about journalists and myself, because one of the things I should say upfront and strengths is that journalists are prone to tunnel vision and tribalism as anybody else.
Anthony Scaramucci: (25:45)
You do point out that a lot of journalists missed the appeal of him, but I don't mean to interrupt, but I thought that was another brilliant assessment.
Gillian Tett: (25:52)
Well, I would put myself in that category. Hey, I'm human too, like everybody else, I can't always see the water in which I swim in as a journalistic fish. We're all shaped by cochlear assumptions and biases, myself included. And one of the things I think fascinating about journalists is that I tell the story that when Donald Trump said the word bigly during the 2016 campaign, the banks, all the journalists I knew instinctively laughed because we found it funny. And that's like okay, so we find it funny but the question to ask is, why do we find it funny? And in that moment of laughter, we basically all collectively portrayed the fact that we had this in-built arrogance and assumption that the only people in America who have the right to have power are those who have command of words and language.
Gillian Tett: (26:45)
That's one of the few acceptable forms of snobbery in America has been around having to monitor words and education. And that is so baked into us as journalists because guess what? We sweeten words every day, that's our craft, that we assume that everyone else thinks like us. Well, newsflash, they don't. The story of 2016 is actually, there's a lot of people who resent the arrogance or elitism of the educated people who control words. And the type of communication style that Donald Trump was using was very much based on non-verbal forms of communication as much as anything else.
Gillian Tett: (27:21)
I tell the story in the book that I went along on the advice of a friend to see a wrestling match. And of course Donald Trump had originally become well-known to many television viewers in America, not through the apprentice but through wrestling and until you've experienced the wrestling match and seen how visceral and nonverbal the communication is, you see the stage managed aggression and conflict and the name calling, which is so similar to crooked Hillary or Little Marco Rubio, and the chanting and the fact that the audience takes what is happening seriously, but not literally. Until you've seen that, you don't realize that that was a performative style that Donald Trump borrowed lock stock and barrel for his own political campaigns. It worked really well because it connected very deeply with a lot of voters.
Gillian Tett: (28:11)
And the key point is this, most educated links didn't even realize that was going on because they were in their own fishbowl and had never been to a wrestling match. So frankly, journalist like everyone else is a jump out the fishbowls, go and see the world more widely. And frankly, we all need to show a bit more humility to recognize our way of looking at the world thinking is not the only way.
Anthony Scaramucci: (28:36)
I think it was brilliant. Of course I also fell prey to it when he was attacking me, I called him the fattest president since William Howard Taft, Gillian. And that knocked me off of Twitter for 12 hours. And that wasn't even inspired by you, John Darsie, that was my own editorial commenting. So I'm going to turn it over to you now. Go ahead, Darsie.
John Darcy: (28:58)
Yeah, I can't take credit for that one, but you did get put on Twitter suspension, I remember that was interesting time. But Gillian, thanks so much for joining us, I'm always fascinated by your work. You talked a lot about human nature, obviously the study of anthropology is about human nature and social constructs and our role has obviously been changed by the internet and by the advent of social media. I'm curious your view on how much of social media and the echo chambers that we find there are a reflection of our human nature, they just found a new outlet for which to create these silos or these echo chambers, and how much have we been changed? How much has our society been changed by the internet, by social media, which a lot of people like to refer as is anti-social media where human interaction, especially during the pandemic has waned? How has it changed us or is it merely just a reflection of the ingrained DNA that we always experience?
Gillian Tett: (29:49)
Well, John, I think that's such a fantastic question. And what I think has happened is this, when the internet was started and social media was started, it held out the promise of connecting us all and breaking down silos and giving everyone access to everyone else and information. But what actually happened was that when we went online, we had such information overload that we automatically started re-congregating in silos and tribes just to manage this information overload. And there's something very important about the internet, which is that it creates the ability to customize our individual experiences. We really live in a world of generation scene, generation customization, where we don't just think that the world revolves around us, that where the center of the world, not that we're fitting into the world, but increasingly that we can customize the world using these digital tools.
Gillian Tett: (30:46)
You go back 50 years ago or so when people like myself or Anthony were growing up and we had vital records or cassettes of music which were preselected by someone else. Today's kids want their own playlist. And the same is true about how we get information online and how we present our identities. We customize it all the time and the more we do that, the more we tend to not just reflect the tribalism we have in the real world, we actually intensify it. And we go down these rabbit holes of customized information and customized identity and customized tribalism.
Gillian Tett: (31:22)
And in many ways, the internet, the COVID-19 lockdown has made it worse because not only have we been physically trapped in small spaces, we've been trapped with people who are just like us, i.e our social potable family. We haven't been colliding with different people every five minutes on the street or out and about. And also many of us have actually been more trapped mentally in cyberspace too as a result. And one of the other great messages I really want to stress is after COVID, we need to seize every opportunity we possibly can to bust out of our fishbowls, out of our ghettos, out of our rabbit holes, and go out and encounter the real world and other people who are not like us.
John Darcy: (32:11)
And I think COVID-19 in a number of ways was a manifestation of people's ingrained biases and the echo chambers that they tend to live in or the silos they tend to live in. And you write about the pandemic in the book and you and Anthony talked about it briefly earlier, but in your view, why is there still such a divide? It's almost a political divide between mask wearing, between vaccines, and then on the other side, the vaccine hesitant people that even at the height of the pandemic, viewed wearing a mask is sort of insulting to their own dignity that they would be forced to or asked to wear a mask. Why is there such a divide there? And what does that tell us about human nature?
Gillian Tett: (32:48)
Well, it's partly an issue of misinformation. As Anthony said, there's been tremendous amount of echo chambers and misinformation often deliberately planted. It's partly a question of political tribalism and symbols. For a long period of time, mask wearing became a symbol of your political allegiance, and that is just tragic. And it's partly because there are simply aren't a lot about glitz to enable people to collide with each other in the unexpected and this is really alarming. And we're seeing the very tangible implications and impacts of it. And one of the things that we've learned in COVID is that we are all interconnected, we're all exposed to each other but we don't understand each other, and that's very dangerous.
John Darcy: (33:33)
You talked about investment conferences. Obviously we run a big one, the SALT Conference, there's all kinds of other rituals and constructs that exist in the financial system in the financial industry that are being heavily disrupted by technology FinTech. I listened to a recent podcast with Marc Andreessen from a16z, he was making the analogy of blacksmiths. We used to get around on horses, the blacksmith put horse shoes on horses, they were an integral part of our society. As soon as the automobile was invented, those people either lost a significant portion of their income, lost their jobs, had to reinvent themselves. How much of that do you foresee in the financial industry? We obviously have things like crypto digital assets, blockchain that are reducing number of intermediaries we need for certain financial transactions and elements of the economy. How much of the financial system do you think is just going to shrink and people are going to have to adapt to the times, and what does that do to the psychology of our society?
Gillian Tett: (34:33)
Well, I think the financial industry is indeed undergoing quite a big shake up and change. And ironically back in 2008, everyone thought the financial crisis was going to be this massive shakeout moment. And it shook things up for a bit, but not dramatically. In some ways, the rapid rise of digitization which has been accelerated during the COVID-19 pandemic in many ways may end up being more important than 2008 for the shakeout process. So what you are seeing right now is that a number of intermediate jobs are being knocked out, you are seeing rising use of digitalization and AI and other forms of robot finance coming into the markets. You're not seeing a complete dash online into digital. One of the other parts of my book talks about the fact that offices don't exist just because they bring people together to clearly delineate tasks, they're also very important as social spaces.
Gillian Tett: (35:30)
And it's a great irony that anthropologists have studied that although financial traders have had the ability to trade from home on a Bloomberg terminal since the year 2000, in reality, banks are built bigger on bigger trading floors, physical trading floors because they know there's merit in people being in the office together and interacting. And it's no surprise that banks like JPMorgan and Morgan Stanley and others are all saying that their employees need to come back into the office face-to-face now because they know there's value and also the human creatures being together and interacting in nonverbal ways.
Gillian Tett: (36:07)
But in spite of all that, I think the other great shakeup in finance right now which in some way is driving so much the cryptocurrency world is a shift in patterns of trust away from institutional trust and trust in people, trust in institutions and leaders into trust in the peer group, the crowd and trust in technology. And that's really at the heart of a lot of the rise of Ether, Bitcoin and other cryptocurrencies right now and that's also incredibly important. And also frankly, best understood from an anthropological perspective rather than an economist perspective.
Gillian Tett: (36:43)
Another message in my book is if you want to understand how money works, don't treat it like a branch of Newtonian physics. As Richard Feynman once said, the great physicist, if Adams items talked to each other, we couldn't do physics. The reality is if traders and finances talked to each other, you can't treat it like a branch of Newtonian physics, you have to look at how social science and social patterns interact with economics and finance.
John Darcy: (37:09)
And your compatriot, Neil Ferguson has written a lot about this, the history of money and there's a lot of great writings about Bitcoin, bullish cases for Bitcoin about just the evolution of what money has been historically. As a species, we've always collected trinkets and rocks and precious metals and totems and things like that to represent and store value. So if you look at Bitcoin or cryptocurrencies as just the latest evolution of that that's tailored for an internet age in a digital age, and it's not so ridiculous, but Bitcoin is such a polarizing topic and cryptocurrencies are such a polarizing topic. You see a certain group of people that are very obstinate and very resistant to the idea that this is a legitimate asset class and a legitimate part of the future and you see other people that are so rapidly bullish on Bitcoin, that it defies any level of logic. Why do you think those two camps exist and who are those two groups of people and what shapes their view of cryptocurrency?
Gillian Tett: (38:10)
Well, it's partly a question of whether you think that digitalization and technology is good and trustworthy or not, and that's just something that divides people, but it's also frankly about power. And it's very important to recognize that the current system we have is based on trust in institutions as much as anything else, is based on trust in central banks, and to a lesser extent, trust in private sector banks as well. And it's really based on a vertical axis of the trust which is what underpins most of our current society. But there's always been another axis of trust which is a horizontal axis of trust.
Gillian Tett: (38:43)
You can trust in the crowd, trust in your peer group. And that used to just operate on a very small scale in small face-to-face communities where everyone could eyeball everyone else and trust each other, but digitalization has brought around ways of building trust across large groups in terms of trusting either in online peer reviews and ratings systems and that's what drives things like Uber or Airbnb, you get in a stranger's car because you trust that the crowd has rated this person. Or you have trust in collective competing technology and that's really what is driving a lot of cryptocurrency at the moment.
Gillian Tett: (39:24)
So you have this clash between institutional trust and peer group trust, or if you'd like to use Neil Ferguson's metaphor between a tower or the type of towers that used to dominate, medieval European cities or squares, squares where crowds would congregate. And it's a inevitable aspect of human nature that people who benefit from institutional trust, who wield it, control it, shape it, never like being challenged by crowds or by horizontal trust because guess what, they're going to lose power. So that's part of what's going on at the moment as well I think.
John Darcy: (40:01)
That's fantastic. Last question I want to ask you, and it's about anxiety, a feeling of anxiety that feels to be gripping the world right now. And I'm curious whether that's something that as someone who's living in the present day, we feel that anxiety and assign a higher value to it than anxiety has existed throughout civilization. There's anxiety about the levels of debt we have on a national level, on a household level about central banking and all the money they're pumping into the system and what implications that has for the future, the rise of technology, the implications of that on our dignity as workers, whether we're going to be displaced by machines and also about things like terrorism and advanced weaponry and what does that mean for our world? Is that something that throughout history, there's been these levels of anxiety about change and about technological growth, or is it something that today based on your studies, it feels like it's above and beyond what it's been historically?
Gillian Tett: (40:55)
Well, I think that's such a great question, John. I think the issue is this, that profound uncertainty has beset every community in history. The difference today is that we think that because we have these wonderful computers and modeling techniques, that we have the ability to somehow muster the future, muster time, predict what's going to happen. And in many ways, that is exactly what has happened the last few decades. We collectively have developed these fantastic intellectual tools like economic models, big data sets, like corporate balance sheets, medical science, all of which tries to not merely help us navigate where we're going right now but predict the future too. And we put trust in these tools over and over again. And what we realized in the last decade ever since 2008 is they're not perfect, they break down, the world is a lot more uncertain than people expect.
Gillian Tett: (41:51)
We are prone to what the U.S. military calls VUCA, standing for volatility, uncertainty, complexity, and ambiguity. And one of the other messages of my book is that if you rely just on those tools like economic models, big data sets, or corporate balance sheets to navigate the world with without recognizing the wider context and consequences and culture, you're like somebody walking through a dark world with a compass. Your compass can be brilliant and navigating, you don't want to throw your compass away, but if you just walked to that world and look down at your compass all the time, staring at the dark and never lift your eyes, you will trip over a tree root or walk into a tree.
Gillian Tett: (42:35)
And so an appeal for Anthro-Vision is really an appeal for people to look up, look around, see the context and the culture in which they're operating, in which they create those tools and see the consequences of what they're doing to get lateral vision instead of the kind of tunnel vision that has so marred so many of us in recent years.
John Darcy: (42:57)
Well, that was very comforting for my anxiety that humanity is still going to play a role in our world despite AI, despite the growth of big data, despite all this technological innovation we're seeing around us. So Gillian, thank you so much for joining us today on SALT Talks. Anthony, hold up her book one more time. It's called Anthro-Vision: A New Way to See in Business and Life.
Anthony Scaramucci: (43:18)
It's another brilliant book and a great assessment of what's going on in our world. Gillian, thank you for joining us and we'll see at the SALT Conference in a few months.
Gillian Tett: (43:27)
Absolutely. Well, thank you both very much indeed for your interest. Thank you.
Anthony Scaramucci: (43:32)
Okay, we'll see you soon.
John Darcy: (43:32)
Thank you, Gillian and thank you everybody for tuning in to today's SALT Talk with Gillian Tett of the FT, fantastic newsletter, I can't recommend highly enough Moral Money that's published twice a week that Gillian leads that team over the Financial Times. But just reminder, if you missed any part of this talk or any of our previous SALT Talks, you can access them on our website, it's salt.org/talksondemand, as well as on our YouTube channel which is called SALT Tube. We're also on social media at SALT Conferences where we're most active. We live tweet all these episodes and broadcast them there. So please follow us on Twitter, follow us on LinkedIn, Instagram and Facebook as well. And please spread the word about these SALT Talks. We love featuring great authors and we think Anthro-Vision is a book that has to be on your must read list for 2021.
John Darcy: (44:16)
But on behalf of Anthony and the entire SALT team, this is John Darsie signing off from SALT Talks for today. We hope to see you back here again soon.