Stories of Economics, Finance, and Money from an Industrial Translator (1)

Introduction

I have spent over 40 years working primarily as a professional translator in the fields of economics, finance, and accounting. During that time, I have translated numerous English texts on these subjects into Japanese. As I struggled with these English texts, I feel that I have, albeit very gradually, begun to see the true nature of economics, finance, and accounting. Since I am not an academic, I cannot call myself an expert in the true sense, but as the saying goes, "the bystander sees more than the player," and there are aspects that are easier to understand when viewed from the outside.

This book presents the basics of economics, finance, and accounting from the perspective of such a professional translator. Although it was originally written for students in the professional translation courses I teach, I hope that others will also find it interesting to read.

Three characters, N, F, and Y, appear in the text, all of whom are my alter egos. Because translators are constantly facing two different worlds or people, they develop a habit of viewing things from multiple perspectives. This seems to be reflected in this writing as well.

The task of portraying the various personalities lurking within myself was very interesting, and my pen moved with ease. I only hope that this interest and comfort are well conveyed to the readers.

Please note that this manuscript was written in 2007, and while some factual details may be outdated, there is no problem in using it to learn the basics of economics, finance, and accounting.

Yukio Naruse

1. Perspectives, Theories, and Techniques

Economics is a truly difficult subject to approach. For me personally, it has only been in the last ten years or so that economics has become interesting. Until then, even though it was for work, I was always dissatisfied, wondering why I had to study such a dubious discipline. No matter which book I read, I was always accompanied by the feeling that it was somehow suspicious and that I could not like it.

I did not understand well at the time why I disliked economics so much, but now I understand it well. It was because I held a strong repulsion toward the view of humanity and society that economics is based on. So, let us first consider the view of humanity and society upon which economics relies.

When thinking about something, I believe it is best to divide the basic way of thinking into three stages: "Perspective," "Theory," and "Technique." Let me explain briefly. However, in the reverse order: "Technique," "Theory," and "Perspective." First, "Technique" refers to concrete matters, such as "if you do this, that will happen." In economics, this would be something like, "if you move interest rates in this way, prices will move in that way." Next is "Theory," which is thinking about why things move in that way and what kind of invisible mechanism causes that phenomenon. In economics, for example, the construction of economic theoretical models corresponds to this. Then, what is "Perspective"? It is the very way of looking at humanity and the world that supports such "Techniques" and "Theories" from the roots. And I believe that if you do not clearly understand the thinking behind this "Perspective" part, you cannot truly be convinced from the heart, no matter how much you understand the "Technique" and "Theory" parts. Some scholars seem to have completely forgotten this point and continue endless discussions in the "Theory" part, but that is a waste of time. Understanding the "Perspective" that forms the basis of the discussion is the start of the discussion; otherwise, everything will end without being understood.

However, there are almost no economics books that start from this "Perspective" part. At least, I have only encountered a few so far. Most books dive into the "Theory" part from the very beginning. And the representative example of that "Theory" is the "market mechanism" model.

The explanation of the market mechanism itself is not an explanation of a "Perspective." It is an explanation of one "Theory" against the background of a certain "Perspective." And there is almost no explanation given about the "Perspective" that serves as the background for that "Theory." Therefore, for someone who does not yet share that "Perspective," they are being told about the "Theory" of the market mechanism without understanding the "Perspective" that supports it. No matter how much they listen, there is no way they can be convinced. "Prices are determined where supply and demand intersect in the market? And that is the state that produces the most wealth for society? Hmm, it's hard to accept such sophistry all of a sudden..." I think that is about how it goes. And there is no other way than to think, "In short, economics is a discipline done by people who are completely different from me."

To avoid such a situation, it is my firm belief that economics books, especially introductory ones, must begin with an explanation of the view of humanity and society that lurks in the background of the discipline of economics. However, in reality, that is not the case. And because of that, economics has become a very difficult subject for ordinary people to approach. I think this is a major negligence on the part of Japanese economists. Or perhaps, in truth, they have never thought deeply about "Perspective."

The Human Image of Economics—The Philistine

Nevertheless, economics certainly has a view of humanity and society that supports it. In the first place, for any "Theory," there is a "Perspective" that supports it. So, what is that "Perspective" in economics?

Let us first look at the "Perspective" of humanity. The view of humanity upon which economics stands is, above all, extremely "secular." Economics ignores all phenomena that are outside this world, such as gods or Buddhas. In other words, it observes the existence of humans only from the perspective of this world. For most Japanese people, this "Perspective" is very easy to accept. You are probably the same. I doubt there are many people who would strongly object, saying, "What! Then it is impossible to analyze humans!" when told that economics only views humans in a secular way.

This is because the Japanese themselves only view the existence of humans from the perspective of this world. The Japanese are very indifferent to religion. One could call them ultra-secularists. Incidentally, it is a complete lie that the Japanese are Buddhists or Confucians [1]. However, from the perspective of people who place religion at the center of human existence, this "Perspective" of secularism would likely be unacceptable. For example, for a devout Muslim, economics would be nothing more than a defective product. After all, it lacks the most important concept of "God." Well, I think it is normal to try to make good use of only the parts that can be used, even if it is a defective product.

The second important human perspective in economics is that humans are beings who always aim to acquire "wealth." The "wealth" referred to here is at least not something like "nature's bounty" or "virtue." It is something more worldly. Specifically, you can think of it as delicious food, a fine house, a luxury car, diamonds, overseas travel, well, things like that. To put it more directly, it might be called "desire." On the other hand, economics decides not to consider things like "kindness," "compassion," or "righteousness." In other words, humans in economics do not need to be moral or ethical. Economics removes the afterlife from the existence of humans, and at the same time, it also removes morality.

Unlike being worldly, I suspect that almost all Japanese people feel an extremely strong repulsion and disgust toward this. And they settle on the thought, 'What, in the end, economics is just a study that thinks only about satisfying one's own desires. How trivial!' I think much of the suspicious nature attributed to economics stems from this part. However, regarding this suspiciousness, it seems to have improved slightly worldwide after a famous sociologist named Max Weber strongly stated in his book 'The Protestant Ethic and the Spirit of Capitalism' that no, that is not the case, and that capitalism (which is the subject of economic research) is actually very ethical in a certain sense. But that has nothing to do with us Japanese, does it?

The third important view of humanity in economics is that humans are fundamentally 'rational' beings. As mentioned earlier, humans in economics act to pursue wealth in the secular world, but in doing so, if, for example, wealth of the same value is sold for 100 yen in one place and 99 yen in another, they will always take the action of buying the 99 yen one. They do not take irrational actions, such as being driven by mysterious passions in their hearts or buying the other one despite knowing they will lose money in order to protect culture or tradition. The view of humanity in economics is that being rational is ultimately what is good as a human being. Therefore, economics basically does not deal with love, adventure, culture, or tradition. Of course, if love, adventure, culture, and tradition are treated as secular wealth, that is a different story[2].

Not fearing gods or Buddhas, ignoring cultural traditions, not caring about spiritual nobility or the richness of nature, and acting rationally to satisfy secular desires—this is the image of humanity depicted by economics.

☆☆☆

F: Teacher, I have a question.

N: Yes, what is it?

F: I still can't accept it.

N: What is it?

F: That view of humanity in economics. It's just wrong. Because, they don't fear God, ignore cultural traditions, don't aim for spiritual heights, neglect nature, and act to satisfy their own desires, right? Isn't that just a terrible person? It's true that I also satisfy my own desires, but I think culture, tradition, spiritual things, and nature are just as important. I might be the kind of philistine you're talking about, Teacher. But at least I'm not the kind of economic human you've described.

N: No, that's not it, F-san. 'Economic man' is merely a model for theory; it doesn't mean such a person actually exists.
In short, it's a fiction, or to put it another way, it's a 'fabrication.' It is true, as F-san says, that humans are complex creatures with various facets. That is precisely why, when trying to analyze them academically, one has no choice but to simplify and model them in some way. But this is not limited to economics; it is the same for any academic discipline. Physics and medicine also simplify and model the material world and the human body, after all.

Y: Even so, why did economics choose such a so-called philistine as a model for humans?

N: That's a good question, Y-san. It is because economics is a discipline that was born out of modern Western society. The view of humanity conceived in an era when absolute monarchy was collapsing in the European world and the bourgeoisie was becoming the center of society instead of the aristocracy is the image of economic man. Let's discuss this in detail next time when we talk about the social view of economics.

Y: That means the economic model of humans is a model created by modern Western society, right? Then, in a different society, it should be possible to create an image of economic man based on a different view of humanity.

N: Yes, that's exactly right. For example, economics is not useful in a religious society. For instance, the social view of an Islamic nation is very different from the social view of economics. Therefore, it is extremely difficult to apply economics to Islamic society. Conversely, there should be economic thought in Islamic society that matches its own social view. In fact, current Islamic nations have Islamic banks that do not charge any interest in accordance with Islamic doctrine, and they function well within society.

Also, economics does not function very well in societies in Africa or Asia that protect culture and tradition and live in harmony with nature.

Y: Then why do we study economics? Shouldn't we be studying a 'real' economics that F-san could also accept?

F: Yes! That's right. We should study a more human economics!

N: Disregarding gods and Buddhas, ignoring cultural traditions, not caring about spiritual nobility or the richness of nature, and acting rationally to satisfy secular desires—this is the image of humanity depicted by economics. Certainly, there are many people who cannot like such a view of humanity. But please think about it calmly. Is this such a bad model of a human being?

I myself despised this image of a human being when I was young. I also thought that the study of economics, which thinks about such people, was trivial. But as I went out into the real world and was tossed about by the rough waves, my thinking gradually changed.

It is true that we are philistines busy satisfying our immediate desires. But what's wrong with that? Isn't it very important that such philistines can also live happily? And economics is about thinking about the mechanisms for how to make such philistines happy. And I think this is where the significance and limitations of the study of economics lie.

Certainly, economics has its limits. Economic thinking is not a necessary and sufficient condition for humans to be happy, is it? But even so, I believe that humans must first be happy as philistines. Look at North Korea. Do you think the citizens of that country are happy? Do you think people in the Edo period were happier than modern Japanese people? It's fine to think so nostalgically, but at that time, when a great famine occurred, many children in rural villages were killed or sold off. I don't think such a society was a better society than the one we have now.

I believe the attitude required of us today is to properly evaluate the capitalism and economics that have built our current society, while simultaneously considering how to overcome their flaws and limitations.

F: Professor.

N: Yes, what is it?

F: I feel like I understand what you are saying, but I just cannot bring myself to like that kind of person. Besides, I feel like something is wrong somewhere. I cannot explain it well, though.

N: F, I think that is fine. After all, economics itself is a fiction, or to put it more bluntly, a fabrication. It is certainly 'wrong somewhere.' So, I think it is natural to have such doubts. It would be strange not to have them. In fact, even among economists, there is a growing number of people who question this view of humanity known as 'Homo economicus.' This seems to be especially true among experts in environmental economics.

While holding onto your doubts, you should continue your studies. If you do, things that were previously invisible will gradually begin to appear. I believe that is the most honest way to approach any kind of study.

[1] I will not explain the relationship between the Japanese people and religion in detail here, but for those who wish to know more about this point, I recommend reading something like Naoki Komuro's 'Principles of Religion'.

[2] For example, it is the world of the television program 'Nandemo Kanteidan' (Anything Appraised). That show is designed to judge all art and tradition by economic standards. It assumes that even when it comes to art and tradition, things with economic value are good things.