About EW JOURNAL

In a lecture hall, a model of discounted cash flows stood on the screen. It was correctly derived, and its denominator did exactly what the textbook had promised. I could reproduce it, and I could explain which term moved when the rate rose. The room had fallen into the particular silence of students who have understood the formula and not the thing, and for some time I was one of the more reliable sources of that silence. What I could not have said was why any of it existed. Nobody said that a discount rate is a small confession: we prefer the present, reliably and somewhat irrationally, and we have agreed to put a number on that preference and charge each other for it.

This journal grew out of the distance between those two ways of knowing.

I came to finance late, and from the side. Before it there were years of law, then the humanities, then the Italian Renaissance, though less its paintings than the practical life underneath the frescoes: the merchant guilds, the Lombards, and the bill of exchange that travelled between cities carrying nothing but the standing of the house that had written it. No gold stood behind that paper, and no army. There was a reputation, and a stranger far away who chose to believe in it. It seemed to me then one of the most extraordinary things our species has done, and it seems so to me until today. The longer account of that path belongs on another page.

When I returned to university to study finance properly, the textbooks were excellent and the examinations were fair, and I passed them. Something still refused to settle. I was being taught the discipline correctly, in a dialect I did not yet think in, and anyone who has learned a foreign language as an adult knows the gap between hearing it spoken well and being able to dream in it.

So I began to translate. By this I did not mean simplifying, which is what the verb usually means in this vicinity, but translating into my own terms. A concept sat in my notes as a formula, and I would turn it slowly until it became something I recognised: a paradox, an old argument in new clothes, a dispute somebody had already conducted in the seventeenth century under another name. Leverage became ambition borrowed from a future that had not consented to lend it. Aristotle’s unease about money breeding money turned out to be alive; it is quietly decided again every time a central bank sets a rate, and we have stopped noticing that the matter was settled by assertion rather than by argument. The Dutch tulip trade, read closely, teaches remarkably little about tulips.

The method of EW Journal has two steps. First comes the financial category, in its exact and proper form. Then comes the human question underneath it. Debt is a liability with a repayment schedule, and it is also the present bargaining with a future that has no vote. Liquidity is a property of markets and a temporary agreement among strangers that tomorrow somebody else will be willing to hold the thing. In each case the financial description is true, complete on its own terms, and still insufficient.

Five themes organise the journal, five doors into a single building. Value concerns how an object acquires meaning, and where that meaning goes once the price has been paid. Capital concerns what ownership permits a person to do, what it obliges him to do, and why the instruments that build a fortune so often threaten its survival. Time treats the future as something that can be bought and borrowed against, until compounding reaches the edge of a finite life. Risk begins with measurable probability and ends with the older problem of how intelligent people behave once the future becomes frightening. Power concerns the quiet authority to define the units, borders and hierarchies within which everybody else must decide.

A reader will not find market commentary here, nor investment advice, nor news, nor the motivational cadence of five lessons learned. There is no display of wealth, for the sufficient reason that none exists to be displayed. I claim no authority in the discipline. I began as a reader, became for a long time an interlocutor asking questions in a conversation I was not qualified to lead, and somewhere in the accumulation of those hours became the author of a way of looking at finance, which is a far more modest thing than authority over it. What the project hopes for is narrower and harder to obtain than reach: a voice that a reader recognises before the name appears.

One more thing seems better said here, once, than discovered later.

Much of the translating happened in dialogue: with books, with people, and over several hundred hours with artificial intelligence. The models were a patient interlocutor that allowed me to ask the same question eleven ways, at two in the morning if necessary, until one answer arrived that I could feel as well as verify. Thirty attempts before an idea could stand unassisted were not unusual. A formulation came back academic and I pushed; it came back glib and I pushed harder; sometimes it came back elegant and hollow, the most tempting failure of all, and I threw it away. On some evenings the only product of an hour was the discovery that an analogy I had defended for three days was false. The machines supplied fluency and breadth of reference, and a tireless willingness to reformulate. Whether a sentence was true to the thing, whether it illuminated finance or only decorated it, they could not judge. That judgement remained mine, exercised badly at first and then a little less badly.

Editorially, therefore, the line falls in one place. Every essay is selected, argued, cut and signed by one person, who carries the responsibility for each claim and each historical reference, misjudgements included, and shares it with no system. The images follow the same arrangement: the allegories, the composition and the decision about what is shown and what is only suggested are mine, while the rendering is the work of machines, and I see no reason to pretend otherwise.

Whether writing made in dialogue with a machine can belong to anyone is an older question than it appears. Montaigne thought among his library and argued at length with dead Romans, sometimes unfairly, and the arguing was the essay. The letter writers of the eighteenth century reached, across weeks of correspondence, conclusions few of them could have reached alone. A footnote is a technology, and so is a tutorial. In every age the real question has been whether a mind was doing the choosing. Here there was one, and there is.

Somewhere near this position, I suspect, stand others: humanists who found the vocabulary of finance alienating long before they found it beautiful, and people inside the industry who read poetry on the morning train and would prefer it not to come up in their annual review.

The bridge is real. It had more than one engineer, and only one of them must answer for whether it holds.

– Elveander Welfendorff