Jaipur Diaries 3: Niall Ferguson on The Ascent of Money (Part 1)

I’ve always thought of Niall Ferguson as an economist and, like many others, have stereotyped him as one: an intense looking Harvard professor wearing thick-rimmed spectacles always talking about numbers, policies, currencies, growth rates, cartels, oligarchies, fiscal deficits, stimulus packages…you get the drift.

But I was wrong on both counts. Firstly, Niall is not an economist; he is a historian who specialises in financial as well as the history of colonialism. Secondly, he is extremely good-looking and one of the wittiest speakers I’ve ever heard. He is the author of 13 books including the much-acclaimed Pity of War, Empire and The War of the World. But at the Jaipur Literature Festival, Niall spoke about his latest work The Ascent of Money: A Financial History of the World. Read on.

While introducing his book, Niall said that a few issues which he examines, among others things, the globalisation of the current financial system. Niall said that the international financial system is a part of “everyone’s lives”. “It’s a story of where this thing came from: Planet Finance; this giant, extraordinarily complex system which will affect your life, that will give and take our money, whether you like it or not!” quipped Niall. But who we blame, asks moderator Omair Ahmad. “Not me!” replies Niall, amidst peals of laughter from the audience. According to Niall, it’s easy to come up with simplistic explanations for a crisis of this magnitude. “For a time, there was a fashion to blame Greenspan, former chairman of the Federal Reserve. Then, we decided to blame Goldman Sachs and its rebranding as a giant vampire squid was one of the remarkable phenomena of the past year. In some ways, it resembles those Russian trials of the late 19^th century when the jury would refuse to convict a murderer because, as the Russian Tsar said, we are all guilty” added the Harvard professor. “In some ways, we all are complicit – at least in the Western world – because the financial crisis couldn't have happened if it hadn’t been for the reckless behaviour of millions and millions of house loans that run up debts in excess of anything you’ve ever seen!” Niall exclaimed.

“Countries like Britain, Ireland, the United States, Spain and Iceland achieved unprecedented levels of indebtedness – and in a relatively short timeframe. So, I think before anyone says ‘it’s all the fault of Greenspan or Lloyd Blankfein (Goldman Sachs CEO) or some ruthless investment banker, I think one has to step back and realise that, the financial system is a highly complex one and involves decisions by millions of individual actions” explained Niall.  He adds that he went to Michigan in the United States to study the subprime mortgage crisis and found the process “fascinating”. “It’s absolutely fascinating to get inside the process whereby, a relatively low-income American family takes on an amount of debt that everybody knows is unsustainable” said Ferguson. In his assessment, “ignorance” was the cause of the subprime crisis. 

“Ignorance of financial history and elementary things like interest rates.  We (need to) educate people who really matter in this stuff. And our courses on economics and finance, at close suspection, turn out to be really bad” lamented the Harvard professor. Niall added people who worked on Wall Street and were closely involved in the financial system knew “very little” about financial history. “That’s why they find it so hard to imagine that a great depression might happen to them.”

“Most people who are operating based on their personal experience did not know much about financial crises before the early 1980’s. And they had no idea that, in 2007, they were close to as big a crisis as 1929”. And that, Niall said, was the main reason for him to write The Ascent of Money.

Omair went on to suggest that money is a way of educating people as it attaches a value to something (in this case, a stock) and helps a prospective buyer judge the stock based on the value. So isn’t the financial market screwed up in educating us, in a manner of speaking enquired Omair.

“I would put it slightly differently. It’s the process (of buying and selling) which is educational. The money is a relationship between buyer and seller, between a creditor and a debtor.  The earliest money, which dates back to 4500 years in the form of clay tablets – the size of credit cards – states that X promises to pay Y, the bearer, a specified amount on a certain commodity on a certain date. He (X) crystalises that relationship that transcends time and space because you can settle the debt hundreds of miles away from where you are. So, the money really is just a relationship between the debtor and creditor. Even today, the money that you carry around with you or that you imagine is in your bank – it’s not there!” gasped Niall. “That’s called fractional reserve banking – a 17^th century Swedish invention – which means that when you deposit money in the bank, they take that money and lend it to somebody else. Don’t be fooled; if we wanted all the money at once, banking systems around the world would crash; that’s something that investors at the British bank, Northern Rock discovered not so long ago” Niall quipped.

According to Niall, prices are just signals which “express value”. “But these prices, in a free market, are only arrived at by our collective expectations of what something is worth right now and what it’ll be worth in future” Niall went on to explain that as human beings, our collective mood-swings help determine the value of a commodity in future. “Human psychology, which is very volatile, is magnified when we act collectively and financial markets reflect them; they reflect that there’s been this extraordinary switch from greed to fear. The same people who worked in investment banks and hedge funds in late 2006 and early 2007, bet with me that there will never be another recession in the United States.  So, the relationships which money crystalises are as volatile as the ones we forge in our emotional lives” added Niall.

Veering the discussion towards an Indian context, Omair remarked that since India’s political and economic cisterns remain fragile; we may not be able to afford these mood-swings. What does Niall makes of this? The Harvard professor replied “India’s experience over the last twenty years has been fascinating because unlike many Commonwealth countries, India’s economic miracles – and I think we can call it an economic miracle – have been based not on trade or on foreign direct investment or on globalisation. India’s growth has been primarily a result of a significant increase in savings and investment within India itself. Also, a growth of demand for domestic goods in India; that means India is much less exposed to crises of globalisation than China is where trade has played a much larger role in generating growth.  India has run a modest current account deficit while China has the enormous and ever-growing surplus. In some ways, India hasn’t attempted to grow as fast as China; it’s a little bit like the story of the tortoise and the hare”.

Niall added that China’s reform process started in 1978 which is why it’s economy is now three-and-a-half times larger than India and, by 2021, that figure will go up to four-and-a-half. In essence, India isn’t running as fast as it should be.

This is part 1 of what is a really long recording. Due to time constraints (and long hours of transcribing), part 2 will go up either tonight or tomorrow. Do comment on what you thought of this post. Hope you enjoyed reading this and the other Jaipur diaries as well. 

Jaipur Diaries 2: Decoding Diana; Tina Brown talks to Vir Sanghvi

This was a session I was really keen on attending because, just before the literature festival, I had read Tina’s biography of Princess Diana, The Diana Chronicles, and wanted to talk to her about it during the event. Alas, that never happened because Tina was, literally, mobbed by the media. I do plan to send her the questions over email but before that happens, l’ll write about the session at Jaipur which was about the book.

Moderated by the venerable Vir Sanghvi, ‘The Diana Chronicles’ session was – quite obviously – a discussion about the book. It was published in 2007 and is a fascinating account of, not just Diana’s life, but also of the Royal family and of British society through the 80’s and 90’s. Meticulously researched and written with a trademark irreverence and panache, The Diana Chronicles is a revelation of just how complex the late Princess was.

But the question to be asked is ‘Why Diana?’ and that’s exactly how Vir Sanghvi started the discussion.

“The Diana story is one of the most compelling that one would ever have read. Beauty, vulnerability, fragility, ambition, loved, rejected, royalty, monarchy…is it death, is it murder? I mean, come on, there is every single element you could possibly imagine (in her life). So it’s just too interesting for it not to be re-examined”.  But was she worried that she was writing her book after all the principal characters – Diana’s secretaries, security officers etc – had written their versions?

“One of the things I’ve learnt as an editor is that, just when everybody’s had their say is when you don’t know anything at all; because so much information is recycled and rewritten thanks to journalism and so much garbage gets written. And there’s always more to find if you go back, re-interview everybody and those who’ve never talked before. So, I think it’s these big stories which get so much coverage that need to be re-examined.”

In India, Diana is seen as a tragic figure who married a man who just wanted an heir and was having an affair with his mistress. But the Diana in Tina’s book comes across as a much more complicated person.

“Well if Diana were to be canonised soon after her death, she’d be far less interesting than the vain, mysterious, scheming yet tender-hearted, yet very sexual. She was a very empathetic girl; there was no question about it. Her desire to help people was absolutely authentic; her connection to people was authentic. She could look in a crowd and identify a person who was lonely or sad and connect to him on a one-to-one basis; that was absolutely real. But on the other side, she was also very troubled and that’s what made her appealing.”

A startling revelation of the book was that Diana had an affair with Barry Mannakee, her protection officer, quite early on in the marriage. “Yes, she did. And it was quite early on in the marriage; within one and a half years of it.”

Talking about Charles, Tina said that he did get married in “good faith” but that his “heart belonged to Camilla and, from Diana’s point of view that was something she couldn’t take.” So is that the reason why Diana had so many lovers? Could she have been faithful to Charles if he had resisted Camilla? “I think that Diana was a highly starved and a very needy woman and it’s possible that no one husband could have ever been reassuring enough for Diana” she said. “Diana tended to stalk them (her lovers) while she was involved with them to the point that she drove them away. She would call them a 100-times-a-day, demand constant reassurance and men got really freaked out by this” added Tina. “She freaked out Gulu Lalvani, who was one of her lovers later in life, because she couldn’t stop calling him, going to his house, checking on him all the time. And she did the same with Hasnat Khan; calling him a 100-times-a-day in the middle of his operations. So there was this tremendous insecurity and it’s possible that no man could’ve been enough for her” Tina added that had Diana married a man who was “tender and re-assuring, it’s possible that she would’ve settled down.  But she married into the chilliest family in the world. She was looking for an elder woman to be a mother figure because her own mother had left her when she was six and who did she find? The Queen of England, who wasn’t the kind of mother-in-law you could say ‘let’s have a cup of tea and talk about the problems.’ She was quite aloof in a sense. So there was this massive insecurity which only made her very much worse.”

Diana’s choice of Gulu Lalvani and Hasnat Khan – both Asian men – is intriguing. “I think Diana wanted to be with someone who was outside the Royal family. She felt, at that point, that because she had alienated the Royal family, most of the people she might have been involved with from the outside world (Englishmen), believed she was from there (the Royal family).  And although the Royal family doesn’t have the same powers it feels it does and you are the sort of person Diana wants to be involved with, you just don’t want to alienate the Royal family” said Tina and added “the celebrity she hung out with wouldn’t give her the neediness. So, in a way for her, the Asian men provided her with a new culture to explore; also the kind of men who were more willing to respond to her without the anxiety an Englishmen would”. Her choice of Lalvani was understandable – a playboy, rich and a member of Anabelle’s – but Hasnat Khan seemed to be an odd choice.

“Hasnat Khan for her was the ultimate person. As a doctor, he was a good listener, patient; Diana was inspired by his selflessness. Khan, in turn, loved the fact that Diana wanted to be associated with humanitarian causes and was quite proud of her. And that was the best thing about him” Tina said it was “rather tragic” that they broke up because “he was the best thing to ever happen to her”. “But then, like so many good things that happened to Diana, she drove them away. Also, it was very demeaning for a man to be the boyfriend of Diana; pictures in the papers, can’t lead a life without being hassled. Hasnat couldn’t take it and very few people can” claimed Tina.

But did Hasnat like her, asked Vir

“Yes, I think he loved her very much and perhaps loved her more truly than anybody did” said Tina. “But he also had his career and wanted to be a real, professional doctor and did not want to be Diana’s boyfriend. When I met her in July 1997 in New York, she said ‘everybody thinks I’m the most glamorous woman in the world but for me, it’s so hard to get a man in my life to put up with the celebrity status that I have and it makes me very lonely’”.

Tina added that Diana “dreaded” the following month because her children, William and Harry, were going to their summer retreat at Balmoral and that she would feel very “lonely”.

On the subject of Dodi Al-Fayed, Tina said that Diana was with Dodi because of the protection he offered her. “Diana kept referring to him and said that ‘he has all the toys’. By toys, she meant all the accoutrements of glamour, wealth and protection.”

Contrary to what Mohammed Al-Fayed said, her love affair with Dodi was very short and one which she embraced when she was very “vulnerable” according to Tina. “Dodi for her was a great blessing and at the time he invited her to the south of France, she was at her most vulnerable; it was a very tough time for her because she had to deal with the fact that Prince Charles had thrown a 50^th birthday party for Camilla Parker-Bowles at their former marital home in Highgrove. And that really, really upset her”.

Tina added that when she met Diana in New York, Diana was “obsessed” with the fact that she didn’t lose Charles to Camilla but that Camilla had had him. “Here was this woman who had always been there (in Charles’ life) and this is what irked her most.”

Tina said that while Dodi might have been a “sweet” fellow he was, essentially, “stupid”. But, Vir asked, did 

Diana seriously contemplate a future with Dodi? “She may have considered that as a many-solution option for her; slap in the face of the Royal family, the only person who could take them head on, slap in the face for Hasnat Khan. He (Dodi) was a good option in a sense but ultimately, it was only romance which would’ve helped”.

However, in the same breath, Tina also talks about Diana’s “other side”: as a professional who took her role very seriously. “She was a terrific executive and her secretarial staff loved her because she was decisive and organised. She did what she set out to do, never ever let anybody down, super committed and performed when she was asked to do it. And, she connected with people in a very real way. Dodi, on the other hand, never showed up anywhere on time. His staff said he functioned on ‘Dodi time’ which was nine hours later. He would drop into a restaurant any time he felt like it; Diana wouldn’t have been able to stand that.  So many, many reasons why the relationship would’ve ended soon”.

So there was a certain tension between the humanitarian Diana and the one who was on a yacht in the south of France?

“Well, that’s what made her interesting. Diana’s need for love and attention always interfered with her good side and that was the problem. Her marriage was so loveless that she had to keep looking for validation outside it. What she never got tired of was the attention so, in a way, the press became her lovers. She would treat celebrity coverage to believe that she was somebody of worth. And that’s a disaster because it (press coverage) was all fickle and invasive. In the end, she became very distraught, fragile and frightened”

But why would any man who married Diana want to leave her for someone like Camilla? Tina said that Charles’s marriage to Diana was “agony from the beginning”. She added “Here was a man raised as being the centre of attention; from the day he was born he had flunkies, courtiers and sycophants dancing around him. I mean, he would make a serious comment and people would roar with laughter and you’d think ‘that wasn’t particularly funny’. But how would he ever know? And then he marries Diana who he is enchanted by at first; this nice little, lovely girl whom he loves very much. But very quickly, it turned to rage and it began on their very first trip (a tour of Wales).  They were walking on a path and split up – Diana goes to the left and Charles to the right. Everybody on Diana’s side screamed, shouted and waved; people on the side were cold and seemed to be saying ‘we got him!’. By the time they finished their walkabout, he was in a rage”.

Among the many other things that were discussed at this session were the infamous “tampon transcripts”, Prince Harry’s paternity issue (Charles is understood to have said “I didn’t know what she was doing at the time!”), Camilla’s mistressy ways and Diana’s sexual inabilities. But I guess those are bits of salacious gossip that we’ve heard a lot about in the past and were injected into the session to add some spice to it . What really emerges out of the book and this session is that Diana was a very complicated person and that she remains an enigma till today.

Until next time, Ciao!

(Note: The statements which are not attributed to Tina Brown are either comment by me or by Vir Sanghvi, unless otherwise specified. The same statements have been rephrased and rewritten for this blogpost and every attempt has been to report them without diluting their meaning or accuracy.)

Jaipur Diary: Short Note On The Litfest

- Recently attended the Jaipur Literature Festival and I have to say it wasn't as fun as it was last time round. That doesn't mean the festival was bad; it's just that this year it was insanely crowded and I hadn't heard of or read the works of most of the speakers. Also, I didn't interview anybody this time round. However, what I did was attend a lot of sessions so that I can blog about what was discussed as opposed to posting one Q&A after another (as it is, the blog has too many of them). 


 - So anyway, that apart, I seriously think Sanjoy Roy & Co. should move the festival out of Diggi Palace. As scenic and traditional as it may be, it simply cannot accomodate the hordes of people who come there.  And going by the popularity of the event, it's size will only increase in the years to come.  


 -  Felt slightly bad for the organisers because a lot of the speakers, authors and invitees were stuck in Delhi and/or in their respective cities due to the dense fog and visa-related issues. Which meant that a lot of the sessions had to be rescheduled (especially on the first two days) and a lot of speakers had to double up as moderators of other sessions.


- By far, the most popular speaker at the festival was - not surprisinly - Chetan Bhagat who was mobbed by schoolkids and fans and was the subject of much discussion amongst presswallahs, delegates and every second attendee. That some not-so-nice things were said about him is another matter, but it was quite evident that most people were envious of the life he led. Even the session which he moderated had to be moved out of the Durbar Hall to the front lawns. And this, when he wasn't even discussing a page of his works!


- However, the showstealers for me were Vikram Chandra, Niall Ferguson, Lawrence Wright, Tenzin Tsundue (whose session had to be scheduled keeping in mind his court appearances!) , Geoff Dyer, Alexander McCall Smith and Tunku Varadarajan. Can't describe how brilliant they were. You just had to be there to understand what I'm talking about. Suffice to say that it was these gentlemen which made the trip paisa vasool


Will start blogging about the sessions as soon as I've filed my freelance assignments in the next few days.  


P.S. Overheard at the festival: Two very popular authors discussing the finer nuances of masturbation. And that Chetan Bhagat's 'Teen Deviyan' session should've been renamed  'murder by Anjum Hasan' :)

In Pictures: The Jaipur litfest

Since I've already written a short summary about the literature festival, I thought it wise to do a photo-feature of the event. And as it is, the blog is very...umm...texty so I think a photo-feature will provide the much needed balance. Enjoy!

Sonia Falerio in conversation with Vikram Seth.

An amusing and lively start to the proceedings. Seth joked about how unfair mum Leila was when she threw him off the bestseller list with her debut novel. As he sipped red wine, Seth also recounted how neighbours were perplexed when told that Seth would spend most of his time just writing! His friends called him a "gregarious hermit" and, as he sipped his red wine, Seth recounted how his parents were a bit worried when he wanted to quit studying at Stanford and become a full-time writer ("Son, why don't you first finish studying and then think about writing?"). However, next day, the local press wasn't amused about his wine-drinking traits!

William Dalrymple, Siddharth Varadarajan, Malise Ruthven and Basharat Peer discuss the fundamentals of fundamentalism.

A profound and engaging session which opened with Dalrymple introducing the panelists and Ruthven making the opening remarks. Peer talked about how women in the Kashmir valley live under the fear of the Dukhtaran-E-Millat - a radical Islamic organisation - known to deface women who are clad in western clothes. During the post session Q&A, Varadarajan said that the phrase "one man's terrorist is another man's freedom fighter" holds no meaning.

Chetan Bhagat in conversation with Jai Arjun Singh and Namita Gokhale

Sometimes, an author's popularity can be judged just by the number of people who are in attendance to hear him/her speak. I reached the venue half-an-hour before Chetan's session was scheduled to start and was surprised to find half the seats filled up. Within the next 15 minutes, I saw people jostling for space and squatting on the floor. No doubt, Chetan got a rousing reception as he arrived, and went on to speak on a range of issues - being panned by critics, how 'literary' he actually is, the audience he caters to, the 'real' India which is often neglected by the media and his growth as. But the real fun started during the Q&A session, when school kids - clearly in awe of Chetan - stuttered while asking him questions. Even better were his replies. The lady sitting next to me exclaimed  "Touche!" or "Soooo Cute!" after his smart one-liners. The session was anything but literary and proved to be a great hit. In the end, it took us 15 minutes to get out of the hall as crowds gheraoed Chetan for autographs and photographs. His reaction? "Well, if such huge crowds have turned up to see me, you can very well imagine what'll happen when Mr. Bachchan arrives!"

William Dalrymple in conversation with Vikas Swarup

Firstly, whoever called this a 'session' had got it completely wrong. For, it seemed as if two long lost buddies were bantering around before an enthusiastic audience. Sample this: Willy to Vikas "If you, Navtej Sarna and a few others have started writing books, who's running India's External Affairs Ministry?". And this: (Vikas Swarup) "After the film was made, I never saw it for a long time. Suddenly, the media is scrambling for interviews and I don't have a clue. So I decided to see what the hell this movie is about!" Peppered with a generous dose of bollywood, Slumdog Millionaire and hilarious one-liners ("A diplomat will tell you to go to hell in such a manner that you actually look forward to the trip!" Vikas Swarup) the last session was a perfect way to wind up the first day. And lit up the evening which was filled with music, food and booze.

(L to R) Mohammed Hanif in conversation with Basharat Peer

Wit. That's the only word which comes to my mind when I think about this session because it was so full of it. It was also one of the few sessions where the author (in this case, Hanif) read out lengthy paragraphs from his book. That could be because Basharat's public speaking skills were pretty disappointing. But, Hanif more than made up for them as he read out passages from A Case of Exploding Mangoes (The "There is no god but Allah" one is a favourite) with the most deadpan of looks on his face. And it didn't stop here. In fact, his most quotable quote was reserved for the Q&A session. "You know, you guys should have invited Pervez Musharraf here. His autobiography is a good work of fiction!"

(L to R) Pico Iyer in conversation with Patrick French

I was very very apprehensive about attending this session. In fact, I had all but skipped it. I remember that, when I told my ex-boss about the subject of discussion, she exclaimed "Oh God!!". Clearly, not a very encouraging reaction. But, I am glad I did attend it for it was a riveting and engaging discussion about V.S. Naipaul - a man who's known for his literature yet, remains so reclusive. French read out passages from his book The World Is What It Is, Naipaul's authorised biography, leaving people bemused and curious about the Nobel laureate. Another reason why I attended the session was because I really enjoyed French's piece in Tehelka as he accompanied Nawaz Sharif on his return journey to Pakistan. 

(Lto R) Hari Kunzru in conversation with Jai Arjun Singh

By far, the most profound session of the festival.  Apparently, Hari is one of the most underrated writers of Indian origin (since I haven't read his books, I can't say for sure) and, as Jai informed us at the start of this session, My Revolutions is of very high quality but, surprisingly, didn't get due attention in India. Anyway, I started losing track of the rather 'heavy-duty' discussion soon after Hari mentioned that he was in the process of writing something which is set in the 16th century. And I'm pretty sure the audience was bored as this was perhaps the only session where the compere was looking for eager questioners!

(L to R) Shashi Tharoor in conversation with Shoma Chaudhary

A casual mention of Shashi Tharoor's session elicited an amusing response from somebody at the festival. "You know, words drip out of his mouth like oil off a baby's bottom!". And that's exactly what happened. Lucid, articulate and profound, Tharoor not only spoke about his latest book, but also about his vision for India. Be it relations with Pakistan and China or India's domestic concerns such as Naxal violence, education and poverty, Tharoor's eloquent argument held his audience in a trance. Quotable quotes? Yes, many, but his speech was so profound that I can only recall one about Pakistan. "In India, the State has the army whereas in Pakistan, the army has the State." However, the flip side of such a profound session was that the audience didn't get enough time to ask him questions. During the one hour session, Tharoor dominated proceedings for 45 minutes after which Shoma used her prerogative as moderator to ask a question. Hence, only 3 members of the audience could ask questions. 

With that, the photo feature comes to a close. Sadly, I couldn't attend the clash of civilizations debate the next day as I left for Delhi; exhausted - yet thrilled - from the experience.

P.S. A small anecdote. When the Kashmir session was about to begin, Patrick French realised that the hall was full and couldn't find a seat. I sacrificed my front row seat for his comfort in exchange for an interview ("It's a deal!" were his words). So if anyone out there has Mr French's email address/other contact details, please do let me know. :-)