3 Takeaways - “The last thing a fish would ever notice would be water.” Seeing the “Water” - A Different View of The World: Gillian Tett (#56)

Episode Date: August 31, 2021

Gillian Tett, Chair of the Editorial Board and Editor at Large, U.S. of the Financial Times uses her perspective as an anthropologist to explain a wide variety of business and cultural phenomena. She predicted the 2008 financial crisis. Discover how she sees the world today including new phenomena such as crypto currencies, nonfungible tokens (NFTs), artificial intelligence and gaming. Her new book is Anthro Vision: A New Way to See in Life and Business. Anthropologist Ralph Linton said, “The last thing a fish would ever notice would be water.” 

Welcome to the Three Takeaways podcast, which features short, memorable conversations with the world's best thinkers, business leaders, writers, politicians, scientists, and other newsmakers. Each episode ends with the three key takeaways that person has learned over their lives and their careers. And now your host and board member of schools at Harvard, Princeton, and Columbia, Lynn Thoman. Hi, everyone. It's Lynn Thoman. Welcome to another episode. Today, I'm excited to be here with Jillian Tett. She's chair of the editorial board and editor-at-large of the Financial Times in the U.S. She is unusual in that by training, she is an anthropologist, and she uses her perspective as an anthropologist to explain a wide variety of business and cultural

phenomena, including, for example, how Kit Kat bars became such a runaway success in Japan. It had nothing to do with their taste. She also explains why the best way to sell pet food to Americans is not to emphasize the healthiness of the pet food. And using her anthropology lens, she predicted the 2008 financial crisis. Her new book, which is wonderful, is AnthroVision, a new way to see in life and business. I'm excited to find out how she sees the world today, including new phenomena such as cryptocurrencies, gaming, artificial intelligence, and NFTs, or non-fungible tokens where people are paying tens of millions of dollars for jillian welcome and thank you so much for our conversation today well it's great to be part of your show so thanks for including me jillian what is on your

mind what are you thinking about well i'm thinking that two or three things about the world are very interesting right now. In the short term, we have just collectively been through a massive period of culture shock. And by that, I mean that everyone's lives have been overturned by having to go into lockdown, jump into the digital world, be confined in small spaces with people who are just like us for a period of time. And now, as COVID-19 begins to gradually recede, they're starting to go back into real life. And that is culture shock, forcing us all to rethink many of the micro-level rituals and patterns and social ties that we took for granted in the past, but we can't take for granted anymore.

So that's one thing that fascinates me. The other thing that fascinates me is the march of digitization and the way that that's overtaking so many parts of our lives with innovations like AI. And most of us have absolutely no idea how these work and don't really know where it's going. So we're putting huge amounts of power in a small group of techies, geeks, whatever you want to call them, that for the most part are operating in realms we don't understand. And then last but not least, we're seeing a big power shift across the world more broadly, as we see the rise of China, as we see America scrambling to try and redefine its role on the world stage. And that's also having big implications for how the global political economy

is going to be going in the future. It is indeed a time of enormous change. I am fascinated by your lens of anthropology. What is anthropology? What does it mean to you? Let me say what anthropology is not. It's not about Indiana Jones. Although frankly, that's what many people

who are non-academics assume it's about because they've seen pictures of anthropologists going off to wild and wacky seemingly exotic parts of the world and studying strange peoples and gathering bones and digging up artifacts and getting exotic ritual things and stuff like that and it's understandable that people think that's what anthropology is because that's what it was in the 19th century. It was about a group of white Europeans and Americans, mostly men, going and staring at people in the far flung parts of the British Empire, or Native American Indians, and basically trying to understand how better to control, convert, trade with, or tax them, or in some cases to study them as crucibles in the process of human evolution for clues about

how and why those white men had become superior. 20th century anthropology kicked back against that big time and basically went from being a bastion of racism and imperialism to really becoming a part of academia that was dedicated to trying to argue that all humans are valuable, all humans equal, we're all united in a spectrum of cultural difference. And it's a spectrum, it's not boxes, it's a spectrum, and that it pays to study each other to understand each other. So people like Franz Boas, one of the earliest anthropologists in New York, really went out of his way to argue for tolerance and diversity and cultural relativism. The Nazis burnt his books in protest because they thought that what anthropology stood for was so antithetical to fascism.

But today, anthropology is different from both of those two approaches in a way, because out of this idea of cultural relativism arose the concept that if you go out and study other people with respect and tolerance and humility, you don't just learn something about the diversity of the human experience and cultures, but you also learn something about yourself. Because there's this wonderful Chinese proverb that a fish can't see water. We are all so embedded in our own cultural assumptions that we can't see them for good or bad. And it's only when you jump out of your fishbowl that you realize how odd the water that you're swimming in might actually be. Or if you go and ask fish and other fishbowls to talk about you, then you begin to see yourself clearly. So today, anthropology really

is about both understanding other people's culture to get empathy for difference in a world that we need that, and then flipping the lens and looking at yourself more clearly to understand the peculiarities of your own culture. So it's really a double win, and we need it very badly right now. And it really is much broader and much different than the way, for example, an engineer would look at the world. Anthropology was really very different from most of the intellectual tools that have dominated the 20th century because we developed as a society some brilliant ways of analysing the world, be that with economic models or big data sets or corporate balance sheets or engineering analysis or medical analysis. But all of these fantastic innovations

suffer from a flaw, which is that they tend to be bounded or limited by tunnel vision. They're defined by what you put into that model, or they're defined by the research process, which usually starts by presuming that you know the precise topic or question that you want to answer in your studies. And there's nothing wrong with that. In some ways, that's inevitable. But the problem is that if the context around your model

or engineering algorithm or big data set is changing, you may end up missing a lot of the really important things in life. The analogy I use in the book is that if you walk through a dark wood with a compass, you don't want to throw away your compass. It's very useful in telling you which way to go. But if you walk to that dark wood and only stare down at the dial of that compass and never look up, you're probably going to walk into a tree or trip over a tree root. So what anthropology does by looking at the cultural patterns and frameworks that shape our lives is that it forces you to look up and around and to see the context in which all these intellectual tools like economic models have been created. So it's really about lateral vision, not tunnel vision. It's about paying

attention to the parts of the world that we talk about and also the parts of the world that we ignore, the social silences, because often those silences are very important. I was fascinated by your portrayal of Donald Trump's style from a cultural perspective. Can you talk about that? Well, Donald Trump has always fascinated me, like almost every other journalist. And one of the key moments when I realized how wrong the media was getting Donald Trump, partly because they were looking at him through tunnel vision, was a moment when I was on the news desk of the Financial Times in the autumn of 2016 during a debate when Donald Trump said the word bigly. And everybody on that news desk,

including myself, laughed instinctively because it sounded funny. But the thing about jokes that you need to understand is that they are cultural manifestations. You have to be in part of an in-group to get a joke. You have to have shared cultural assumptions to make everybody laugh. And jokes often work by playing off contradictions and social silences, the parts of the world we don't really want to acknowledge or talk about. If I stopped as an anthropologist and thought about why it was the media all laughed at the word bigly, what I could see was partly that it defined us as journalists in opposition to him, because we were kind of scorning him. And the reason it defined us is that the media works by essentially being in a craft that's all about command of language. There's this unstated assumption that if you want to have power or credibility in America,

you need to have command of words, be educated. And that's so deeply embedded that in some ways being educated is one of the few types of acceptable snobbery. What was interesting about Donald Trump was that he recognized as much through instinct as any conscious thought that there were large parts of the electorate that really resented that, and was tapping into their resentment to get support from them. And he also recognized, again, through instinct, I think, that actually, although we journalists are trained to assume that the only valid communication is with words, taken literally and logically, in real life, many people communicate through non-verbal ways, and those non-verbal cues can be incredibly important. So one of my friends told me early

on in the campaign, if you want to go and understand Donald Trump, go and see a wrestling match, because to many voters, Trump was best known for what he'd done with wrestling on television. He borrowed almost completely the performative style of wrestling in his political campaigns. Wrestling matches are all about manufactured drama and aggression and name-calling, not quite Little Mark Rubio, but that kind of name. And they're about a situation where the audience knows that it's partly for show and dramatic, and yet it still

matters. And all of that was borrowed into the political arena and informed how Donald Trump connected with voters. And the really important thing, which is why anthropology matters, is that most elites, including journalists, didn't understand that because they were used to looking at the world through words. And most of them had never been to a wrestling match because it was largely a non-elite sport. So jumping out of your fishbowl would have actually been incredibly helpful for journalists in 2016, both to understand other people who were different to them, but also to look back at themselves and see their own shortcomings. So jumping out of that fishbowl, you talk about the example in your book about Kit Kat bars in Japan.

Can you tell us about that? One of the arguments in my book is that in a world that's both globalized and polarized, it really pays to get empathy for other points of view, or to recognize, as one anthropologist told Intel repeatedly, that just because it's your worldview, it's not everybody else's. And you need to do that both to see dangers coming down the tracks, or see how other people are misinterpreting what's happening or have different views in a way that could harm you, but also because it can sometimes really generate innovative ideas and

opportunities. And what happened with KitKat in Japan was that they had been trying for years to sell the KitKat biscuit as a British product, because it essentially originated in Britain. It had this British slogan, have a break, have a KitKat. And it seemed to be all about brown chocolate bars. It didn't work terribly well in Japan. And then one day, the owners of the KitKat group, which were then bought by Nestle, a Swiss company, noticed that KitKat bar sales were surging for three months each year in Kyushu, the southern island.

And they realized that some teenagers had started a craze for giving each other KitKats at exam time because the word KitKat sounds like the Japanese phrase, kidoketsu, which means we shall overcome in Japanese. And they were doing that for exams. Now, somebody who had a very superior view of culture and seemed that actually their own culture was correct, might have just said, well, that's kind of weird, we're going to ignore that, and carried on as before. But the Nestle owners had the wisdom to say, this is kind of weird, but let's try ignore that, and carried on as before. But the Nestle owners had the wisdom

to say, this is kind of weird, but let's try and play into it. And they began to try and market the KitKat bar as a good luck token for exams, and then as a prayer tool, so called Omomori, a Shinto shrine token. And it became so popular, that within a few years, 50% of Japanese teenagers were giving each other KitKat bars at exams. Not what people who make British chocolate bars are expected, but becoming a prayer tool. But that happened. And then they really lent into it and started to basically embrace all of these Japanese flavors. So they created wasabi KitKats, bright green, matcha KitKats, sweet potato Kit Kats, soy sauce Kit Kats, you name it. And eventually the brand became so Japanese in its nature that tourists to Japan

began to buy Kit Kat as a Japanese souvenir. And then Kit Kat bars were re-imported back into Britain, green tea flavoured, bright green, actually made in a German factory, to be sold to British consumers as a Japanese delicacy. By which point today Kit Kat is both British and Swiss, because it's owned by Swiss people, and Japanese. And if you like the green tea Kit Kats are made in Germany. So you can't say exactly where it comes from or what it is. Culture is a spectrum, it's not boxes. It's constantly moving like a river with new streams coming in. But the point is this, that vision might seem very threatening to some people, but it's also gloriously creative. if only our politicians could begin to embrace the same kind of mentality towards how they conduct

political affairs and see their identities as a KitKat bar, the world wouldn't be in such a mess today, either inside countries or between countries on the geopolitical stage. If only, if only. Gillian, how were you able to predict the 2008 financial crisis? People sometimes ask me, how did I foresee the 2008 financial crisis? And the key issue was really I used the same tools I'd used in my anthropology research in a place called Tajikistan and applied it to the financial system and the bankers in the city of London and Wall Street. Because humans are all humans. They're all social groups which share creation mythologies and have rituals and symbols that unify them. Those creation mythologies always have flaws. And I realized that investment banking conferences are ritualistic

events that are very similar to the type of ritualistic weddings I'd studied as a researcher in Tajikistan. They essentially unite a scattered tribe, bring them together to both reflect and reaffirm a shared worldview or set of assumptions culture to basically maintain that vision going forward for good and bad. And when I looked at the cultural practices at the Investment Banking Conference I saw in 2004 or 2005, I realized that financiers were a distinct tribe in this particular field of credit derivatives that I was studying at the time. They spoke a language that no one else understood, a bit like the medieval priests in the Catholic Church who spoke Latin, and the congregation didn't make sense of that. The financiers in 2005 spoke banker speak with all these acronyms like CDO and CDS that no one else understood.

And that gave them power and a sense of identity and belonging. They had a shared creation myth about how this innovation was supposed to make financial markets more liquid and good for everybody. And that creation myth was riddled with contradictions, as all creation myths are. For example, they said that these new techniques would share risk across the system to make the system more resilient without noticing that they were introducing a different type of risk into the system. But they couldn't see the contradictions because they were a tribe set apart. And when I looked at their PowerPoints, they were full of graphs and charts and algorithms and numbers, but no faces, even though they claimed they were doing all this stuff in order to serve people. And I realized that what was going wrong in finance was that bankers were

so cut off from the end results of their products, they were disconnected from the actual users, that they couldn't see the consequences of what they were doing or the context. I mean, there's that wonderful scene in the movie, The Big Short, based on Michael Lewis's book, where a hedge fund trader goes and meets a pole dancer in Florida, who's taken out subprime mortgages and realizes the crazy practices happening at the end of the subprime mortgage train. And what's surprising was not that that was happening, but that so few bankers ever actually got out and experienced real life like an anthropologist to see what was happening,

to see the context and consequences. So when I saw all those patterns at the investment banking conference, I went, yikes, this is nuts. This is going to blow up. And I went off and wrote a series of pieces saying how dangerous it was. Eventually it did blow up even more than I expected. But it just showed the point about if you ignore cultural patterns and practices, if you simply try and pretend that finance and human behavior is just driven by numbers and rational thought, you will end up missing the most important developments in life. Julian, I can't wait to ask you about some of the new phenomena that many people are having trouble figuring out. How do you see cryptocurrencies like Bitcoin?

Cryptocurrency is an area which is absolutely something that anthropologists are better placed than pure economists to look at. And I should stress, by the way, that anthropology isn't either or. I'm not saying anthropology has all the answers, but anthropology plus economics or anthropology plus finance or plus medicine is a really powerful combination. And the reason why anthropology helps with Bitcoin is because Bitcoin is not just about value as defined by economists, or even just the law of supply and demand as defined by economists, although that's important. It's also about the fact that a sense of belonging and tribal patterns are defined by things like memes. It's about the idea that there's power structures at the heart of every money system, which often get ignored by economists. And what's happening right now is a shift in the pattern of trust.

Instead of trusting institutions in a vertical way, increasingly money in cryptocurrencies based on horizontal patterns, trust in the crowd and trust in the algorithms that actually exchanges of all sort are what binds communities together not just commerce with money or intermediated by money so i think cryptocurrency is fascinating there's a huge battle going on right now as people who are in institutions and government try and seize control over cryptocurrency when you look at what central banks are doing when you look at the big institutions on Wall Street, that's all about the power structures and the power struggles trying to seize control. But anyone who thinks that memes are irrelevant and don't matter is looking at purely from a narrow economic perspective, not from the perspective of anthropology. And I don't see this disappearing anytime soon. I think it might, or I think it certainly will

evolve. I suspect Bitcoin may not be the main currency of the future or the main asset in the future. Again, I wouldn't even use the word currency necessarily. But the idea of challenging institutions using digital networks and trying to find alternative ways of exchanging value is going to be here for a while. Another new phenomena is so-called NFTs or non-fungible tokens, where people are buying the rights to a digital good and they're spending in some cases millions of dollars or tens of millions of dollars. Can you explain what NFTs are, how you see them and what you think the future will be? NFTs are partly a way of thumbing your nose

and rebelling against a dominant system of the 20th century in that it doesn't make any sense from a classic economic perspective to spend that much money on a digital token, but it doesn't make necessarily any less sense than spending that much money on a piece of actual art whose value is determined in an equally subjective way. LFTs are also a sign that people sometimes regard Bitcoin as being something which is not just about money in a traditional economist sense. They have a lot of it. They want to

demonstrate that they can spend it. It's about display. It's about a sense of power. It's about a sense of testing boundaries. And it's also, in this case, about the idea that if you're losing faith and trust in other assets, why not buy an NFT to actually display that there are other ways of preserving value and status? And last but not least, it's a reminder that not everything in life has a utilitarian perspective. Gaming has become a huge industry, particularly with COVID, and the revenues for gaming, as you know, are greater than the revenues for Hollywood and movies. How do you see the future of gaming and these budding metaverses? sis? I think what it shows is several things. Firstly, that the original creators of social media had this utopian idea that internet was going to connect us all and basically be a kumbaya moment for global society that would basically cause us all to collapse into an undifferentiated mass and be the antidote to tribalism. They couldn't be more wrong. What's happened is that

as people have gone from real life with all their tribal allegiances and creation myths and social boundaries, and they've gone from that into cyberspace, tribalism has actually intensified. Because a crucial thing to understand about digital experience is that it's customized. We can personalize our identity, our news sources, our groups in a way that would seem completely alien to 99% of societies around the world where identity is given to you, you don't create it.

But the idea of personalization and customization is absolutely the core of 21st century society where we're all kind of used to pick a mixed culture where we have a music playlist and extend that analogy onto everything else, including our identities and friendship groups. So what's happened is our people have gone online. They're creating new social tribes and boundaries. And gaming, like Bitcoin, like crypto, is part of that. You're creating means and activities to define your identity and to feel a sense of community, to speak your own little language, if you like. And at the same time, people are increasingly going from one layer of abstract cyberspace to another layer of cyberspace. They're going from being online digitally into being in virtual worlds that they create and they can play.

And they get absorbing thrills and entertainment. But the overarching picture is of a deliberately fractured landscape where people are looking for meaning, group, excitement, entertainment, validation, all the things that people have always looked for in the real life. But now they have this pick and mix power where they can customize it to their own desires. And during lockdown, when we've all been trapped in our physical spaces, and I've been unable to roam and collide and define our identity with groups of people, this has often been one of the biggest outlets. Jillian, you talked about artificial intelligence earlier in our conversation. How do you see the future of AI? The future of AI at the moment is in the hands of a tiny group of geeks, and I don't use that word in this disparaging way, but I mean, highly trained technocrats who are operating in a small ghetto speaking a language that no one else understands. And for the most part, being left

free to do their own development at breakneck speed in a way that people are either ignoring and or simply don't understand, even though it has the possibility of impacting us all. In some ways, it's very similar to what was happening in finance in 2004 or 5, when a small group of geeks were developing financial derivatives, which also had the ability, as we discovered, to impact us all and no one else understood because they spoke their own jargon. So this is worrying. And AI urgently needs to be put into a social context, exposed to more external scrutiny, exposed to common sense in the sense of common view of other people. And having a diversity of perspectives, oversight and views is critical

to getting common sense. People need to look at the social context in which AI is being created, because who the coders are, the programmers are, and the degree of bias they carry is absolutely important. People need to look at the ethical implications and the social context in which AI is deployed, because again, that is critically important. But on a slightly more positive note, people also need to recognize what AI can't do. Because the thing about AI and big data sets is they tend to operate by hoovering up enormous amounts of data about what humans do online or anywhere else. And then scanning that data for patterns and correlations, assuming that equates to causation and projecting what's happened in the very recent past or the near past into the future but as any financial product should tell you if it's worth its salt

the past is not always a good guide to the future context change and also because ai platforms and big data sets tend to pick up areas of noise they don't always pick up areas of silence or the stuff that we don't talk about as well they don't always capture the complexities and contradictions of our existence, our cultural patterns. And these can often be very complex and contradictory. And so if you want to understand the shortcomings of AI that can sometimes crop up, think about this. Although AI platforms can scan medical records, scan financial markets, design bridges, beat humans at go, there's one thing they can't do, or at least one thing yet, and probably will never be able to do, which is to tell a really good joke. And the reason is partly because jokes define groups, you have to be inside a group, the in

group to get a joke. If you're not, you don't get it. And the boundaries of groups are often fluid. But also because jokes operate by playing off the contradictions of our culture that don't necessarily make sense from a rational, logical way. And they also play off silences. And that's hard for machines to capture or predict. So in some ways, the good news is that as long as humans have jokes, as long as they show that culture matters, because jokes are embedded in culture, AI won't do everything. The jobs of comedians are safe, thank heavens. But I'd say that we ought to celebrate this because

actually jokes and the contradictions of culture are what makes us human. And they're also why a world of AI needs another type of AI, anthropology intelligence, to make sense of it, not as an either or, but more as a checks and balance. How can listeners use anthro vision to widen the lens through which they see the world? So they see some of the unseen prejudices and biases, as well as to go back to your example of the fish, the water around them. Well, I basically structure the book around three parts, because I think there are three steps that everyone could and should take. One, embrace a bit of culture shock, however you can in your life. The value of immersing yourself into the lives and minds of people who

seem a bit different from you is really, really important. It's not something most people want to relish or rush towards, because guess what? Culture shock is hard. We're all trained to run away from it. But doing that gives you empathy from another point of view and teaches you that not everyone thinks the way you do and both shows you potential risks and potential opportunities as a result of that. And you don't have to go to the other side of the world to do it. Just going down the end of your street and talking to people who are different from you is really important. So that's the first step. The second step is after immersing yourself in the lines of others to get empathy for others, flip the lens and look back at yourself as if you were a Martian, as if you were a child, as if you were a foreigner, or as if you were basically living in a foreign land and were visiting it as a tourist.

Try to see yourself objectively that way. And then thirdly, try to look at social silences. Think about what the rituals and rhythms and symbols of your life are revealing. And then think about what you're not talking about. The blank bits on the mental map you have to organize the world. the things you never discuss because it seems taboo or obvious. Explore all the ways that you are essentially embedded in your cultural assumptions and not seeing them for good and bad. Before I ask for the three takeaways that you'd like to leave the audience with today, is there anything else you'd like to talk about that you haven't already mentioned? Or

what should I have asked you that I didn't? One thing I'd like to say is this, I think that many people today instinctively realize the importance of getting lateral vision, not tunnel vision, partly because the last 15 years have created shocks over and over again, whether it's a 2008 financial crisis, or whether it's a COVID-19 pandemic we're living with now, whether it's a 2008 financial crisis, or whether it's a COVID-19 pandemic we're living with now, whether it's a rise of AI and tech, or whether it's environmental risks are suddenly overturning all of our ideas about how we're going to live in the future. So the recognition about the dangers of relying on tunnel vision. And I think people generally don't describe this in terms of looking for lateral vision, or looking for anthro vision

they talk instead about the rise of sustainability or environmental social and governance issues but at the end of the day sustainability is anthro vision it's about taking a broader view of the world it's about recognizing that walking through a dark wood at night with your compass your economic models or your corporate balance sheets, or your big data sets, relying on those alone, looking down just at the dial of your compass is dangerous. You need to look up, look around, and appreciate the cultural context we live in. Jillian, what are the three takeaways you'd like to leave the audience with? The three takeaways I have are really driven by lessons I give my own girls. One is that what really matters in life is not what happens to you, but how you react to it. And often adversity happens, but out of adversity can often come the best opportunities.

And most of the greatest breakthroughs I've had in life have been through unplanned surprises coming around as a result of adversity and unexpected events. The second thing I'd say is that it really pays to live your life as if it was a glass half full, not half empty. And we all have a choice about how to live. You can either celebrate what you have, and what you have been lucky enough to enjoy and appreciate it, or you worry about what you don't have. But I really do think that's the secret to a happy life. And the third thing I say is that be curious always, because curiosity is something that nobody can ever take away from you. And when I look at people who are older than me, and I'm now officially middle-aged in the eyes of

my daughters, 53, people who are older than me who live meaningful, powerful lives are driven by curiosity and empathy. But curiosity and empathy, a desire to explore things that seem strange, different, to get out of your box is absolutely crucial to living a vibrant life. And I'd say it's doubly crucial to appreciate that and celebrate it after a year when so many of us have been physically locked down, trapped with our own tiny tribe of people, our pods, to use a COVID language, and all too easily sucked into

mental ghettos in cyberspace. Now, more than ever we'll need to be curious as we all try and build back better. Jillian, thank you. This has been terrific. I really enjoyed your book, AnthroVision, and thank you for our conversation today. Well, thank you for your interest and your own curiosity. If you enjoyed today's episode and would like to receive the show notes or get new fresh weekly episodes, be sure to sign up for our newsletter at 3takeaways.com or follow us on Instagram, Twitter, and Facebook. Note that 3takeaways.com is with the number three. Three is not spelled out. See you soon at 3takeaways.com.