March 7, 2012
by Annelise Riles
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Launching Meridian 180

One of my early memories of my childhood in 1970s France, with summer vacations in the Midwestern United States, crystallizes why I am an anthropologist, and what I see is the hope of comparative and international law. The memory  is in two scenes. In the 1st scene,  my 4th grade social studies teacher is teaching us about America. America is a country so polluted she tells us that on every street corner are meters that look like parking meters. When a certain alarm goes off, everyone grabs their oxygen mask from their handbags put the quarter in the parking meter like machine, obtains a dose of oxygen and wears the mask until the sirens tell them that it is safe to remove them. The other students are fascinated, and I go into internal tangles. Should I try to protest that this is utterly false? Should I try to point out that the image of selfish hedonists the teacher is painting does not correspond to anyone I personally know? no, everyone is enjoying the story too much to care.   In the 2nd scene a few months later, I join a bunch of American kids on the playground as they throw rocks across the puddle, declaring that  we are quote bombing France unquote. What follows is a chain of stereotypes of French people explaining why they deserve to be “bombed”, all negative of course, and presumably all drawn from popular media sources since none of these kids have ever been to Europe. My own recollection of all these episodes is not so much outrage as utter confusion: how can people I like and respect have so little awareness of how little awareness they have? As I grew older, of course I had plenty of opportunity to learn how that same question applied in so many ways to myself and my own myopias.  The blinders become fancier, more professional, more technologically sophisticated, more entrenched in complex institutional and cultural relationships, but just as hard to notice, let alone remove, as on that fourth grade playground.

A year ago this week, Japan was hit by them massive tsunami and earthquake, and also suffered one of the worst nuclear crises in history. In the terrible days after that incident, as each of us reflected on what we could contribute, some of us began to think that perhaps we  also needed to confront our own personal and professional and cultural myopias,  and  to find new ways to build relationships that would help us think in new and hopefully more transformative ways about the policies and choices of our societies. We wondered if understanding better how, for example, our own policies look for the point of view of another society, might help us to avoid disasters in the future, and also how we might find ways to work closely on problems that are transnational in character.

The question  of course preceded Fukushima: many of us had a longstanding sense that the intellectual conversation across the Asia-Pacific Rim region about law and regulation broadly conceived is far thinner and less substantive than it could be, and needs to be to satisfy the needs of the current moment. In thinking about the causes, it seems that some obvious ones are persisting language difficulties and difficulties reading and writing in particular, the problems and costs associated with getting very busy people to be able to spend substantial amounts of quality time together so that they can reach a deeper understanding of one another’s positions, and some degree of lack of comfort or trust.  And perhaps among some colleagues a lack of a sense that the conversation is worth investing the large amounts of time that it requires in current formats.

At the same time, many of us feel that the existing venues and formats for serious intellectual discussion are not satisfactory.  How do we encourage a far more substantive dialogue between different forms of disciplinary expertise and between thinkers in different societies?

Beginning in March, 2011, we began to pull together a special group of visionary thinkers–scholars, policy-makers and professionals–and to address some of these communication difficulties by creating a closed, online platform where people can write in their own languages and have their text translated within a short period of time by postdoctoral fellows.  Two Postdoctoral Fellows (one Japanese speaking and one Chinese speaking) are available to take any projects, research questions, or interventions that might surface out of these conversations forward. We called  this emerging conversation and community Meridian 180, after the anti-Meridian, or international date line, that divides the Pacific.  The goal of this project is to invest in the cultural and intellectual infrastructure for the next generation of trans-Pacific relations.  Through a long-term multi-lingual conversation, the project seeks to make connections and facilitate the development of relations of trust among individuals who together have the capacity to generate the new ideas and to lead the publics in their respective societies to face the significant challenges of the current moment.

Meridian 180 is a project of the Clarke Program in East Asian Law and Culture at the Cornell Law School.  It is a non-profit, non-political project funded through private donations and with support from Cornell Law School.  It is comprised of Senior Fellows and of Members in law, the academy, private practice and policy circles who meet regularly via an on-line platform supporting multilingual conversation, as well as periodically in face to face conferences.  Ideas that emerge from these conversations are then incubated and developed, with the help of Postdoctoral Fellows based in Ithaca, NY, into forms in which they can make a difference in each individual society–ranging from policy papers to academic books, blog entries, and individual conversations with policy makers.

Our current forum, “How can we bring closure to crises,” marks the anniversary of the earthquake and tsunami in Japan by reexamining this particular disaster and reconstruction project from various perspectives and by putting the issues in the context of other similar disasters around the world.

After a year of work, we are thrilled that Meridian 180 is now finally official! We still have many challenges, from finding long-term sources of funding to finding a way to convince busy elites to make room in their minds and their schedules to broaden their own cultural and disciplinary horizons.  But what is really encouraging is the progress we are making on complex legal and policy questions like “what is the scope of privacy rights in the digital age?” or “what is the role of the central bank in today’s markets?”  What is even more encouraging is the commitment many of our members have to the project and the sense they have that it serves a purpose in their lives.  For more information please see here.

January 9, 2012
by Annelise Riles
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Broadening the field of financial regulation

Stock DataThis morning I participated in a fantastic panel at the American Association of Law Schools organized by Anna Gelpern and Eric Gerding on the state of legal scholarship about financial institutions. The question the organizers asked is, what is the most pressing focus for the field today?
I argued that we need to significantly broaden the field–its subject, its methods, and the range of debates it is addressing at the moment.

 

In this post, I will focus on Broadening the Subject:
  • Research needs to become far more seriously comparative. Dodd Frank is not the only thing happening in the world, people!  Elsewhere, very different solutions, different models of market regulation are being developed–and indeed there are different views of what the key problems are.  American scholars pay lip service to the globalization of financial regulation but too often focus only on US and UK law and assume that issues elsewhere are either pretty much the same, or just behind the US and the UK in development. But the days of US and UK dominance are soon over.  The world is far more complicated and more interesting than this.
  • Research needs to become far more focused on international regulatory problems.  Most regulatory problems are now cross-jurisdictional in some sense or another.  This means that new international regulatory projects–from the Financial Stability Board to efforts to coordinate countries excluded from the Basel consensus–are increasingly important.  Yet how much do most scholars in the field of financial regulation know about international law and institutions? Too often we seem to be reinventing the wheel in that field, without taking advantage of the wealth of knowledge about what works and doesn’t work in international institutions in analogous fields. (Stay tuned for my forthcoming paper on this)
  • We need to pay more attention to forms of regulation outside the purview of traditional state institutions.  As I argue in Collateral Knowledge, most market governance is not state-based. It is initiated and conducted by private parties.  How does this work? When does it work and when does it not? How does it interact with state regulation?
  • We need to focus much more on the politics of market regulation–on the changing political climate in which financial regulation is being produced, the differences in this climate in different jurisdictions, and its impact on the policy options available to regulators, the culture/esprit de corps among regulators, the ability to recruit top talent to the bureaucracy, and indeed the zone of what regulators imagine as possible.  Just as internationalizing the field demands reaching out to international law scholars, politicizing the field means reaching out to political scientists and scholars of law and politics working in other domains of law.
  • We need to pay attention to the ways in which the field of finance is always expanding to include other subjects. For example, markets in energy products bring finance into conversation with environmental law and politics, and financial crises and environmental crises mutually influence each other in many ways.
Tomorrow I will take up how we might broaden the methods we use to study financial regulation and what debates deserve our central attention.

May 1, 2011
by Annelise Riles
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How can we better harness the insights of different disciplines to address market reform?

Last week we convened another meeting of our working group of economists, anthropologists, lawyers, psychologists and policy makers interested in how our disciplines could work together in new ways to solve market problems.  It is a very smart, high-powered group of creative people who truly have the best interest of the national and global economy at heart.  And the policy makers are brilliant, dedicated individuals who know how things work on the inside, and who think broadly about the issues.  Once again, our meeting was supported by the Tobin Project, as well as by the Clarke Program in East Asian Law and Culture at Cornell Law School.

The theme this time was health care insurance reform and we did some hard thinking about what our disciplines could say, practically, about what kind of insurance exchanges might help different kinds of consumers make the best choices possible for them.

 

But there is another running conversation at these meetings about how the disciplines can be reconfigured to work better together in the future. The disciplinary truce worked out in the early twentieth century was a kind of cold war-like division of the territory: anthropologists study exotic others, sociologists study deviant groups at home, psychologists study individuals, economists study markets, and so on. Thank goodness that along the way we learned that all these elements are inter-related and that each of these disciplines has much to say about every aspect of life. So how else could they work together?

 

One model that is emerging from our meetings is a kind of production model, beginning with original insights and moving all the way to the incorporation of ideas into policy.  Eric Johnson, a distinguished psychologist teaching at the Columbia Business School, suggested that anthropologists could provide the insight (based on ethnographic research), economists could provide the models, and psychologists could provide the data (based on experiments)–and that we need data and numbers to convince policy makers.

 

Another model seems to be a model of internal change within fields.  Peter Spiegler, an economist at U Mass Boston and one of the most truly original scholars I have ever encountered, suggested that economics needs to start incorporating ethnography into its own method of research, rather than just taking insights (about trust, or reciprocity or whatever) from anthropology and modeling them in the traditional way.  I argued that anthropologists, conversely, need to learn to value simplicity as well as complexity, and to communicate openly and clearly and generously with people in government and in other fields, as economists and psychologists have learned to do.

 

There are a lot of things that infuriate me about anthropology and anthropologists.  But at the end of the day, some of our most basic insights are sorely lacking in the policy world and could make an enormous contribution to market reform.  Here are just a few obvious ones:

-Asking about the givens: noticing what is so important that it is just taken for granted by everyone, including perhaps even the researcher.  For example, at our meeting, we were deep into how to structure consumer choices about insurance and one anthropologist asked “why do we value choice so much in the first place?”

-thinking about the global dimensions of even the most domestic policy problems, and thinking comparatively about policy problems. For example, what could we learn about health reform from Japan, or Singapore, or South Africa?

-thinking about the range of actors and interests involved in law reform.  For exaple once a law like the health care act is passed the story is not over–it has to be implemented by armies of regulators, interpreted in practice by physicians, drug companies and insurers, used by consumers…how do all these people come together in practice?

-reflexivity–realizing that academics are part of the picture and bear some responsibility for what we advocate for, and its consequences, intended and unintended.

Insight rather than data–ultimately ethnography gives you a picture, and a story, and helps you to to become aware of the aspects of a problem you may have ignored altogether in constructing your model or your policy proposal.  Private companies have grasped the value of this kind of insight and are employing ethnographers in large numbers to do market research and study organizational culture within their companies but we have a ways to go before it is adopted as broadly in policy circles.

 

What do you think are the strengths and weaknesses of each discipline in thinking about market reform? How do you think fields like economics, anthropology and law could better work together to address market reform?

 

November 21, 2010
by Annelise Riles
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When is a silo mentality a problem in financial markets?

Yesterday at the American Anthropological Association’s annual meeting I went to hear Gillian Tett, a journalist for the Financial Times, talk about how her own training in anthropology (like me, she holds a doctorate from Cambridge) had shaped her reporting on the derivatives markets and the financial crisis.  Tett eloquently explained how anthropologists’ attention to the difference between what people say and what they do, and how the ethnographic method–of observing people intensively over the long run rather than simply relying on public statements or even one to one interviews–had helped her to see the importance of credit derivatives before other newspapers began reporting on them and to sniff out problems in the credit derivatives markets ahead of the crash.  Tett argued that anthropologists’ holistic perspective, and their interest in rituals, in social and institutional practices, in latent hierarchies and in all that gets glossed as “irrational” in economics had an invaluable contribution to make to our understanding of modern finance and to policy debates.

Tett’s own diagnosis of the financial crisis focuses on what she calls “silos”–the way different financial institutions, and different teams within each financial institution, prevented anyone from seeing the big picture.  Stuck in their own little tribe’s group thinking, each team could not see the wider effects of their activities, or the way their perspective was only one among many.  Tett says she sees herself engaged in “silo-busting”–breaking down those barrios with a more holistic approach.

Tett is surely right that a silo mentality pervades certain aspects of the financial markets.  This is one of the ways finance is really like the rest of the world–all of us fail to see the limits of our own ways of thinking.  This is certainly true in the social sciences.  Anthropologists for example are for the most part utterly convinced that their own world view is better than others, and that they are misunderstood and under-appreciated by everyone else.  Economists’ self-confidence about their own discipline’s assumptions is legendary.  Paul Krugman has created a stir by asking whether economists’ over-confidence in their models might not have caused them to miss the financial crisis.  Like Krugman, I think Tett’s diagnosis should cause academics too to ask some hard questions about why we did not do more to highlight and critique the problems in the financial markets prior to the crash.  For myself, for example, fieldwork in the derivatives markets had convinced me long before the crash that all was not well in these markets. My husband (also an ethnographer of finance) and I often joked way back around 2002 that our research had convinced us not to put a penny of our own money in these markets.  But our own disciplinary silo made us feel that it was impossible to counter the enthusiasm for financial models out there in the economics departments, the business schools, the law schools, the corridors of regulatory institutions.  There surely was some truth to our sense that no one wanted to hear that markets were not rational in the sense assumed by the firms’ and regulators’ models.  But maybe we should have tried a bit harder; it turns out many other people also had doubts and thought they too were alone. What might have happened if we had all found a way to link our skepticisms?  The silo mentality is not just about a lack of knowledge.  It is also about a lack of confidence in one’s ability to communicate with people outside the silo.  I don’t think this is anthropologists’ problem alone.  When I ask many of my research subjects why they don’t tell regulators the full story, have just shrugged, “they wouldn’t understand.”
With funding from the Tobin Project and the Clarke Program in East Asian Law and Culture, Tom Baker at Penn Law School and I have sponsored a string of workshops aimed at breaking down disciplinary barriers and getting the conversation about markets going between economists, sociologists and anthropologists.[1] It has been exciting to see how much interest there is on all sides. One of the positive outcomes of the crisis is a greater sense of curiosity about perspectives outside our own silos and a greater commitment to building new conversations.
Still, I wonder if it is always and everywhere a good idea to break down specialized ways of thinking and replace them with a holistic approach.  Take lawyers and back office staff inside the big banks.  As I have written about elsewhere, they lack the big picture: there are lots of things about finance they don’t understand and this sets them apart from traders.  But precisely because they don’t think like traders, they can also evaluate the activities of a trading room with some critical distance.  After all, if they were indoctrinated into the same assumptions as traders they probably would not catch the limitations in traders’ logic that can have disastrous risk management consequences.  So having lots of different groups that think differently from one another with a stake and a role in making decisions is also an important component of financial stability.  In practice, dealing with people who think differently can be a huge pain in the neck–traders don’t much like back office staff meddling in their affairs and vice versa.  Collaborating across differences in expertise is laborious, time consuming, and even wasteful of time and resources, and everyone complains about the other guys constantly.  Yet the requirement that different groups with different forms of expertise collaborate in making financial decisions is a kind of sociological fuse box, a way of slowing things down when they start to snowball out of control.  Sometimes waste and redundancy is a good thing.  The benefits of this fuse box would be lost if everyone had the full picture: traders with back office expertise can more easily circumvent regulatory checks; back office staff with too much training in finance begin to buy into the trader’s world view.
So maybe instead of silo busting, what we really need is more mandates that we collaborate, across our differences. This is true in the academy as much as in finance.

[1] The first Workshop on Behavioral and Institutional Research and Financial Services Regulatory Reform took place at Penn Law in the Fall of 2009. The second one took place in Washington, DC in June 2010. The third one will take place at the Cornell University Law School in April 2011.

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