Limits of transparency

Finance, the Modern-Day Babel

In “The limits of transparency”, Jacqueline Best shifts the focus from economic “uncertainty”, by emphasizing the importance of the term “ambiguity” in the determining of past and present financial institutions. Though she agrees on the importance surrounding the concept of uncertainty, she stresses that ambiguity is one of the main factors behind the dissolution and evolution of financial structures. Financial regimes have changed over time in their measures of choice that sought to minimize ambiguity, such as in the postwar era where it was regulated through managing capital and exchange rates. In recent decades, economists have argued for a more liberalized take in the quest for stability. Transparency and liquidity are believed to increase stability, as the market self-regulates and rids itself of ambiguities. The current state of affairs, stems from policy maker’s argument that the lack of information has been to blame for financial instability. Crisis has come about due to a lack of transparency and circulation of precise information. Best agrees with the paucity of information, but insists that transparency isn’t the “solution” to ambiguity. She proposes that the acknowledgement of ambiguity can contribute significantly to financial improvement.

She divides ambiguity into three categories:

·       Technical ambiguities

·       Contested ambiguities

·       Intersubjective ambiguities

Each one of those confirming different aspects inherent in the concept of ambiguity. Mostly they comprise a political and cultural spectrum, which create ambiguous policy’s. One aspect is the intersecting of finance with politics. Many fiscal policies are based on multiple interests, who fail to accommodate political differences. Best argues that there isn’t a simple solution and answer to economic issues, therefor understanding ambiguity can prove to be an asset. However, politics need to be considered, otherwise imbalances cannot be treated. This proposition is paradoxical to the neo-liberal point of view that separates the economy from politics. The neo-liberal point of view deems the economic machine rational enough to self-regulate itself and firm enough to rebuttal a crisis.  To resolve these ambiguities is a constant process of renegotiation. A swinging pendulum between temporary rigidity and looseness. Best is able to shed light on the true complexity behind international economic proceedings, which will continue to increase through further expansion and growth. It is important to see the big picture but details are able to clarify financial misuse and misunderstandings.