How do we write about capital?

Q: Economists are not necessarily known as the best writers. How good at economics are most writers?

Did you know that Adam Smith was the first person to teach modern English novels at a British university? One of his goals was to educate the sons of the new Scottish bourgeoisie and his view was that for them to be successful as merchants and participants in Scotland’s new union with England, they would have to follow the mores of the dominant English upper classes. Smith also saw economics as part of moral philosophy, so to him it made perfect sense to use novels to teach about the practice of economics in everyday life.

The more I studied the intersection of economics and literature, the more I realized that writers write about economics all the time. You can’t throw a stick at a 19th-century novel and not have somebody dealing with the consequences of industrialization or imperialism. Or take a look at Jane Austen. She starts out with what people are worth. Across genres, writers are really interested in how money makes a society work. Defoe in Robinson Crusoe, often thought of as the first English novel, is obsessed with the creation of wealth, even though Crusoe’s all alone on an island most of the time.

Q: Was it always this way?

No. Look at Shakespeare, for instance. In his sonnets he uses money as a metaphor for love. It comes across as completely natural, almost incidental. But with the birth of the novel, economics takes a more central role. Literature becomes more immediate, too, and we see writers begin to comment directly on events of the day. This spring I helped put together a conference with SOM and the Beinecke library on the 1720 stock crashes in London, Paris, and the Netherlands. The crash was the first international financial crisis and it’s interesting to look at how these different countries made sense of what was going on.

The use of the word “bubble” to describe a financial crash is used for the first time to describe the 1720 events. In the Netherlands there was a real outpouring of prints and texts dealing with the tumult. The Dutch had a whole set of cultural tools they could recycle and use for this, such as Calvinistic warnings about getting ahead of oneself or accumulating too much wealth. On the other hand, you find very little about the events in French literature. There could have been many reasons for this. The French police state may have clamped down on anything that might have been critical of the government. Also, we may be dealing with a case of the French saying “You don’t speak about rope in the house of somebody who has hanged him- or herself.” More crucially, I think, unlike the Dutch, the French couldn’t refer back to the collective memory of earlier events such as the Tulipmania to make sense of the collapse of John Law’s system. And in England, the events became folded into the intense politics of the day. For the English, 1720 came to be understood in terms of party politics — Whig versus Tory — and of treason and corruption. Interestingly enough, the events of 1720 sort of helped to create a sense of English consciousness and English art. For instance, the first print by Hogarth, considered by many the first great English artist, called An Emblematical Print of the South Sea, is an allegorical take on the fallout.

Q: Let’s jump ahead to more modern literature. How are capital and economics depicted once we reach the Industrial Revolution and the rise of international finance?

There were lots of financial crashes and scandals in the 19th century. Comparatively, though, there is less interest in depicting them. Instead, the focus is more on the trials of individuals caught up in the everyday economy around them. In terms of storytelling, a lot of the stories across different countries and at different times are very much the same — a tale of a person’s rapid rise and a steep fall. Look at Balzac, Trollope, Zola in the 19th century, or Sinclair in the early part of the 20th century — they all tell stories of hubris, of people starting off as decent enough but losing their way. The inevitable happens — the person loses his money, loses his sense of morality, and then has to either recover, as he does in Balzac, or simply gets destroyed in the process, as with Zola. It’s here we see the birth of the financier in fiction, a Rothschild type in Balzac. But the financier isn’t the main focus; it’s as if there is this new world, but people haven’t come to terms with it yet. There’s a sense this is a new breed of people, but they’re not yet the dominant force in society.

One really has to wait for the late 20th century for a new kind of financial novel. Take Tom Wolfe’s Bonfire of the Vanities, or Bret Easton Ellis’s American Psycho. You now have a world where for the first time the people who are at the height of the financial world are also at the height of the social world. Before, there was a wall between those who created wealth and polite society. Financiers weren’t exactly genteel. But that changed. Still, the standard rise-and-fall narrative remained basically the same.

Q: But American Psycho strikes me as more of a change than just whether the creators of wealth have any cultural influence.

No question. A major difference between the more current literature and what we saw a hundred years ago comes down to class. For both Balzac and Sinclair, any discussion of economics depended upon class. Back then, the financier was usually a stock character, a mechanism to move the hero’s story forward. But as capital became more global, and its effects harder to pin down, the Wall Street type became interesting in and of himself. Especially with American writers, the focus is less on a critique of capital than on a comedy of manners. The moral questions around capital aren’t being asked anymore.

Q: Do tell.

David Mamet did an adaptation of The Voysey Inheritance by Harley Granville-Barker. The play was initially written in 1905 and it focused on a corrupt solicitor who embezzles from clients to fuel an extravagant lifestyle and then dies, leaving a heap of trouble for his family. It’s a moral drama with a clear moral ending. In the Mamet adaptation, there is no resolution; it’s more open-ended. In the late 20th, early 21st century, it’s hard for writers, particularly American writers, to deal with capital critically. It’s difficult to criticize something we are all immersed in and that has been normalized to such a great extent. We’re all financiers now.

It’s funny, because the current day strikes me as a great time for writers to focus on the economy in general and financial crashes in particular. We could use a Sinclair or a Balzac. What characters would readers identify with, though? I stumbled upon a Charlie Chaplin marathon on TV the other day and I was struck by how people in the ’30s were expected to empathize with a tramp, because everybody could very easily have been on the bread lines. Now, we’ve reached a point where we find it impossible to culturally address this subject. It seems to have become invisible to us.

Interview conducted and edited by John Zebrowski