Bernard Ginns: There is no such thing as a stupid question

Fortunately I have found myself in good supply over the years.

The ability to field an inquiry based on apparent total ignorance can be of great benefit, particularly in the field of business reporting, as it encourages high-powered senior executives off the corporate script to explain something in terms that I can understand.

Happily this can also reveal uncomfortable truths lurking behind the bland jargon of business speak. It might be an effective approach, but it is certainly not a new one.

I was reminded of this on Thursday when I interviewed the best-selling author John Lanchester about his latest book, How to Speak Money.

Lanchester used to be best known for works of fiction, but he became very interested in the way that finance works when writing a post-crash novel about London.

That novel became Capital, but before it was published came the marvellously titled and well-received Whoops! Why Everyone Owes Everyone and No One Can Pay, a non-fiction exploration of what went wrong in the lead up to the financial crisis.

“If you are interested in London, you end up being interested in finances because the City is so central, it is one of the main drivers of change, it is one of the things that has caused London to be such a different place,” said Lanchester.

“I realised there was this very important subject running through modern life that I didn’t really know that much about. I was taken aback at how uninformed I was.

“I came to feel there was a big gap between the people who understand finance and economics and the rest of us. There is a gap between insiders and outsiders.

“The first step to bridging that gap is to get hold of the language.”

I asked why the gap was created. Lanchester said: “Partly because the subject is difficult. I noticed that economists talking to each other tend to slip into private language. They talk about the effect of QE2 on M3.

“For them, that’s a very efficient way of communicating. For the rest of us, we are scratching our heads and saying ‘what?’

“It’s not exactly deliberate but some of it is easier to only talk to the other people who already understand.”

For the record, QE2 refers to the second round of money printing while M3 is the measure of money supply.

Lanchester said he learned more things than he could count in research for his new book. Most useful, he said, is that he can follow the story as it happens.

“It’s the difference between being able to follow a debate in real time and lagging behind and always having to catch up; you are always slightly off the pace and the people following it are galloping off into the middle distance,” he said. (Quite often with the loot, I might add.)

Lanchester claims, perfectly accurately, that ordinary people are disadvantaged by not being able to “speak money”.

The man or woman in the street knows that the interest rate going up or down affects his or her mortgage payment, but they do not comprehend the large set of interlinked ideas related to the cost of money, the rate at which it is lent, the consequences that has for companies when they borrow and invest, the impact on equities, currency, balance of payments and inflation.

“All are linked together and pressing on each other and all just packed into two words: interest rates,” said Lanchester.

As a general rule, the better informed you are in the lexicon of lucre, the less likely you are to be ripped off by individuals and institutions, often in an entirely legal and regulated way.

It is important too that our elected representatives know how to “speak money”. If they don’t understand it, the finance sector writes its own rules. And we all know where that leads.