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The Levine question

A picture of Matt Levine with a text overlay which reads: “No StrongFeelings”

Matt Levine read classics at Harvard and then he taught high school Latin for a year. He then went to Yale Law School, and then went to Wachtell to be an M&A lawyer. He then quit Wachtell and went to Goldman Sachs to be an investment banker. And then he quit Goldman and became a finance blogger, first at Dealbreaker and now at Bloomberg. He writes a wonderful newsletter called Money Stuff.

So, I don’t actually want to talk about how nice Matt Levine’s writing is.1 To me, the key feature of Matt Levine is a general refusal to be reflexively judgmental about people’s intentions. It’s a willingness to examine motivations with a charitable (and somewhat skeptical) lens. Look at this all-time hit from a great piece for DealBreaker about nepotism at JPMorgan Chase:

It is pleasant to imagine that investment banking is the sort of business for which only a few people are qualified via innate intelligence and rigorous training, but fundamentally it - like a lot of businesses - is about convincing people to pay you money. Doing that with spreadsheets and PowerPoint is - well, one, it’s not that difficult, lots of people are qualified to do it, probably including the Stanford-educated scions in this Times article - but, two, it’s a distinctly second-best approach. Maybe seventh-best. The best way to convince people to pay you money is to, like, go to them and be all “hey, dad, could we have some money?” But also playing golf with them, or being a former NFL quarterback, or just general handshakefulness and bonhomie are probably more effective than spreadsheets. Qualified!

Now, this is hard to categorise, as a mood. This is not exactly warm to the idea of nepotism — it just happens to see it as a natural consequence of societal and human structures in a way that doesn’t come across as cynical. Reading this, I’m not entirely sure that Levine thinks that innate intelligence and rigorous training are that much better than “general handshakefulness and bonhomie.” In fact, I don’t think he spends a lot of time aspiring to a world where things don’t run on handshakefulness. Handshakefulness makes the world go round. Or, to put it in, like, a fancier phrase, ‘trust is the coin of the realm

Let’s dig deeper. Here’s Levine from a conversation about debt markets hosted by the U. Penn Law Review:

I come to this from the perspective that the world is interesting. When I started as a writer, I had just been an investment banker, and this is 2011. And the world that we lived in was basically everyone, all of financial media, being like, the one thing to take away from this article is that banks are evil. And I was like, ‘I’m not evil! I just worked at a bank!’ And in particular — I worked on complicate derivatives, and often, you would read news coverage and they were like ’this bank did a complicated derivative, and the goal of this complicated derivative was to hose its clients and steal their money.’ And I was like, ‘No, I do complicated derivatives, and the goal of these derivatives, is to evade taxes for the client!’

And I’m like, one, that’s arguably a less evil story. And two, it’s a more interesting story. If I could get the reporters in a room and sit them down and be like ‘It’s actually much more scandalous than you think, but it’s more interesting! So, that is sort of like the mindset that I came to it with, which was just like “it’s not as evil as you think, but it’s interesting”

And I think that’s sort of like carried through ever since, where my goal is to like — so often you read stories about financial things and like the implicit point is that the people doing these things are evil and I’m like, ’they didn’t get up in the morning and be like “let’s do some evil,” right?’ They had some reason for doing this transaction. Like, let’s figure out what the reason was and just describe it in neutral terms, because, that’s what they’re thinking, and if you understand what they’re thinking, you understand more about the world than if you’re just like “AH! Those banksters are evil!”

Formulating the Levine question

The Lucas question is “Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia’s or Egypt’s?”

The analogous Levine question:

“If there is some action a government of India can take that would lead the Indian economy to grow faster, why don’t Indian policymakers take that action? Surely, they want the Indian economy to grow faster.”

But more generally, the Levine question is “Why do people do the things that they do?” And consequently, the Levine commandment should be “thou shalt not ascribe motivation without understanding the structural incentives that gird the action.”

The next time you see some action by a policymaker, or a corporation, or an individual that seems easy to characterize as “neoliberal scum”, “evil banksters”, “anti-national protestors”, “apathetic bureaucrats”, or “a symptom of the savagery that is late capitalism,” maybe consider that those people did not wake up in the morning with the intention of doing evil. Sure, evil exists in the world. But there’s far less of it than you think, and it’s not always where you expect it to be found.


  1. Actually, I do. Levine is good partly because he understands, like other great long-form internet bloggers (See SlateStarCodex), that people don’t have an attention span problem. Sure, in some concrete ‘I check Twitter thirty times a minute’ sense, people have an attention span problem. But there isn’t an “audience for long-form content” that has suddenly disappeared. Clearly, what has disappeared is an audience for content that doesn’t entertain the reader. If you can write about derivatives with enough style, people will read you. If you’re funny, people will read you.  Money Stuff arrives every day and is several thousand words long. It’s pretty easy to read. ↩︎