Ha-Joon Chang’s provocative comparison draws parallels between the seemingly disparate fields of modern finance and medieval scholastic theology. Both systems, the argument suggests, rely on complex, often opaque, frameworks of belief and practice, supported by intricate models and justifications that may not always withstand rigorous scrutiny. For example, the intricate mathematical models used in modern finance, while appearing sophisticated and objective, can be interpreted as modern equivalents to the elaborate theological arguments of the Middle Ages, both potentially masking underlying assumptions and serving to maintain the power structures that benefit from them.
The value of this comparison lies in its ability to expose the inherent limitations and potential biases within established financial theories and practices. By highlighting the parallels with a historical system known for its intellectual rigidity and resistance to critical examination, it encourages a more critical appraisal of modern finance’s assumptions and promotes a deeper understanding of the social and political influences shaping financial markets. This perspective facilitates a more nuanced approach to financial regulation and policy, leading to greater stability and fairness within the global economic system. The historical context provides a framework for analyzing contemporary financial crises and systemic risks.
This perspective provides a springboard for exploring several key topics, including the role of ideology in shaping financial practice, the limitations of mathematical modeling in predicting economic behavior, and the need for greater transparency and accountability within the financial industry. Further examination will delve into the specific mechanisms through which power operates within both historical and contemporary systems, emphasizing the influence of belief systems on economic outcomes.
