On Friday 22nd August 2014, the Scottish Herald newspaper carried a report on a speech made by the chairman of the HSBC bank, Douglas Flint, in which he reinforced the Better Together criticisms of the Scottish Government post-independence currency proposals. The key idea in Flint’s statement, which was picked up not only by the Herald, but also by the BBC and other media outlets around the world, was that investor confidence would be undermined, leading to ‘capital flight’. The title of the Herald piece was “Uncertainty over currency in iScotland could lead to ‘capital flight’, says HSBC chairman”.
Subsequent media discussion of this item seems to have focused mainly on the economic argument. I would like to look at it from an alternative perspective, and offer a psychological analysis.
There are two aspects of this news item that are significant from a social psychological perspective: the use of language, and the way that the speaker is discursively ‘positioned’.
The Herald article quotes the actual words used by Douglas Flint:
“…the transition from the existing currency union would be complex and fraught with danger….at the extreme, uncertainty over the Scotland’s currency arrangements could prompt capital flight from the country, leaving its financial system in a parlous state…”.
This kind of statement can be categorised as an ‘extreme case formulation’ – the speaker uses an extreme example of what ‘could’ occur as a means of supporting their case. To understand how this particular way of talking operates, it is necessary to imagine other ways in which the same idea might have been conveyed. For example, the speaker had the option of referring to an ‘expected’ or ‘most likely’ scenario alongside the ‘worst case’. The speaker might have offered a balance sheet of possible outcomes. The speaker had the option of referring to specific previous scenarios, for instance examples of post-independence currency outcomes in countries such as Slovakia. Imagining these other possible ways in which the topic might have been addressed makes it possible to see what is happening when an ‘extreme case’ formulation is being deployed: it has the effect of triggering fear and alarm in the reader/listener. In addition, the extreme scenario becomes associated, in the mind of the reader, with a specific situation (in this case, Scottish independence).
Looking more closely at the way that Douglas Flint formulated his argument (in terms of an extreme case) makes it possible to see his basic message in a new light. What is he saying to us? He is saying that post-independence currency arrangements will be complex and will need to be handled carefully. He is saying that if the financial markets are not satisfied with how this is handled, they will respond by refusing to buy government bonds, etc. We know all this already.
What is he not saying? He is not saying that his bank (one of the largest and most powerful financial institutions in the world) would wish to work closely with the Scottish government to ensure that the risk of capital flight was minimised. He is not saying that it is easy to imagine scenarios in which any of the major Western currencies could be hit by capital flight. War in Ukraine, deterioration of the situation in the middle east, a further Fukishima, tension between China and the USA, a shift in investor perceptions of the sustainability of the UK debt level, UK withdrawal from the EU – any of these events could bring about a run on the pound sterling, US dollar or the euro within the near future.
A second social psychological aspect of the ‘HSBC chair currency warning’ item concerns the way in which the speaker – Douglas Flint – was ‘positioned’ in various media reports. The idea of ‘positioning’ refers to the way that a speaker is aligned with certain values and attributes rather than others. In these recent articles, Douglas Flint was positioned as a financial expert, and an experienced and respected banker. The message here is that his words carry special weight, can be believed, and need to be taken seriously, because of his authority and credibility. However, it is not hard to construct an alternative positioning of Mr Flint. He is a leading donor to the Better Together campaign. One might imagine that he is an attractive figure for the BT campaign to have on their side, because he is Scottish. On 4th August 2014, he was reported in the Financial Times (link below) and other media outlets are expressing disquiet over the new banking regulations that had been introduced by the UK government, and making a plea to George Osborne for a relaxation of the new rules. If these pieces of information had been available to readers, they might arrive at a different positioning of Douglas Flint: “HSBC boss looking for less bank regulation curries favour with UK political establishment by disseminating Scottish currency scare story”.
What does all this mean, in terms of the referendum debate? I think that it is important to look beyond this particular episode, to try to draw some wider lessons. For me, the main lesson is a lack of respect for the truth. I am sure that Douglas Flint has a lot of interesting and valuable things to say about how the banking system might respond to various decisions taken by the Finance Minister of a newly independent Scotland. However, the stuff that has been in the papers and TV over the past few days does not get anywhere close to doing justice to his knowledge and experience. I don’t think that this is necessarily because he has an axe to grind, such as mounting a campaign for relaxed bank regulation. Everyone has an axe to grind. Everybody lies. In an ideal world, or a better world, the media would be more active and resourceful in interrogating someone like Douglas Flint, and revealing both the detail of his case, and his motivation. Where this leads me, in terms of a wider lesson, is that for the most part the media have lost their respect for truth. If I can see through the ‘capital flight’ story, then I am sure that all of the political journalists employed by Scottish newspapers and the BBC can see through it as well. But they did not report the story in a manner that reflects a respect for truth. For me, this is a very big issue. Once we lose our respect for truth, where does that leave us? Each time that truth is sacrificed in one arena, it makes it that much easier for people in other areas of life to do the same.
I want to live in a society in which there is respect for truth.