not merely window-dressing

Adam Tooze, an aside in an account of the unfolding Ghanian debt crisis:

Narratives are not merely window-dressing. They matter, because they fuel optimism and sustain belief, which infuses the assessment of analysts and credit rating agencies. Narratives are amongst the tools with which capital allocators manage the uncertainty inherent in any investment, but which is particularly intense in “frontier market” settings. Every investment implies a narrative. A crisis of the narrative thus puts the future in doubt, in every sense.

All economists know this to be true, though it usually gets hidden behind obfuscatory mystical guff about “market sentiment”, or “animal spirits” as they used to be called. Tooze is interesting for many reasons, but particularly because he’s willing to call this stuff what it is: story.

But there is a limit to how far one should take that understanding of things, perhaps, as suggested by this account at Current Affairs from someone who describes their former job as “crafting the image of the President Of The United States and presenting him to the world”. Narrative is how we understand and relate to the world, certainly, but to go from that realisation to the conclsion that everything should be stage-managed like a PR skit… well, this guy clearly thinks it was a mistake.

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