Delve podcast: Constructing Narratives and the International Monetary Fund with Lindsay Holmgren (Read Transcript)

Delve podcast, March 10, 2022, hosted by Robyn Fadden: Constructing Narratives and the International Monetary Fund with Lindsay Holmgren
Robyn Fadden – host: When most of us hear the word “narrative,” we think about literature and storytelling or more jargonistic uses of the word to describe the background and trajectory of a project or even a political talking point. Ask a narratologist about narrative and they’ll describe how it can be used to dig deeper into how we construct our lives and think about our world. A narrative approach not only to literature but to medicine, law, management, and economics, can help uncover why things are the way they are and how they came to be. In the process, this can get us to question and change some deeply established paradigms, and bring about concrete disciplinary, practical, and policy-oriented outcomes.
Robyn Fadden – host: Welcome to the Delve podcast. Delve is the official thought leadership platform of McGill University’s Desautels Faculty of Management. For this episode, I’m your host Robyn Fadden. I recently spoke with McGill Desautels Faculty of Management Professor Lindsay Holmgren, whose research focuses on narrative theory and changing the way we think about the role of narrative in several difference disciplines. Her recent research paper, “Narrative in the Economic Sphere: The International Monetary Fund and the Scripting of a Global Economy,” analyzes the language around International Monetary Fund policies past and present to illustrate the IMF’s role in establishing and covertly disseminating the ideological foundations of a finance-centric, global economic paradigm.
Robyn Fadden – host: As Professor Holmgren put it in our conversation, narrative can be understood as a way of knowing and as a way of doing things in the world. So narrative theory wants to investigate the nature of this powerful mode of human activity – that means diving into how it works and how it can be used to promote a particular agenda, to promote good, or even to promote ill.
Robyn Fadden – host: Welcome to the Delve podcast, Professor Holmgren. Your work in narrative theory started in literature and expanded to cover medicine, law and economics. I can see how a narrative approach is useful in medicine, to better understand patients, but economics as a discipline seems less people-centred on the surface. Could you explain what narrative theory is as an approach to a subject like economics – and what motivated you to apply narrative theory specifically to the International Monetary Fund?
Lindsay Holmgren: Narrative theory is really the study of the formal properties of narrative. We are looking at stories. But what you’ll notice these days is you’ll hear people talking about the narrative: who’s controlling the narrative, who’s trying to change the narrative. When people are using narrative in that way, they’re using narrative interchangeably with story. For narrative theorists, we’re really interested in how the story is produced. We’re trying to understand how the story unfolds, and what sorts of techniques are being used to create and to communicate the story.
Lindsay Holmgren: When I’m thinking about why the narrative approach is important, in the context of economics, it’s important that when we’re thinking about when people are sitting at a negotiation table, for instance, at the IMF, it’s important that we’re thinking about how these narratives are being constructed, how these stories are being constructed, whether it’s the story that the IMF is bringing to the negotiation table, or whether it’s the story that is being communicated, or traces of the stories that are being communicated by the member states, by the finance ministers or whoever the representatives are at member nations at the IMF.
Robyn Fadden – host: Narrative also explores causal relations, that is, people making sense of life events and attributing causal relationships among those events over time. Economists use scientific principles to determine causality or correlation, but most people don’t, and in a broader cultural sense, most nations don’t – it’s much more socially relational and emotional since events and time are understood differently by different people. Why should the narrative concerns of causality and time, and especially who’s controlling the narrative and why, be better understood in the context of economics?
Lindsay Holmgren: In narrative theory, we’re interested in real lived human experience. The kinds of things that determine our actions are not necessarily scientifically proven to be so. So when Jim Phelan, who’s a really important narrative theorist, describes narrative, he has this lovely, straightforward way of describing it. He says, “It’s somebody telling somebody else on some occasion and for some purposes, that something happened.” Built into that is the importance of recognizing the somebody who’s crafting it, why they’re crafting it, and who’s receiving it.
Lindsay Holmgren: I’m interested in the ontology, the world itself, in the narrative that’s being constructed and what its primary organizing principles are in that world. If we take these two things together, we can see that certainly with respect to the IMF, we’re not just interested in something that happened. So it’s not just recounting what happened in the past, they’re also trying to persuade audiences that something will happen, and they’re showing them how. And one of the ways that troubled me, especially about the way the IMF was crafting its narratives is that they’re manipulating time in ways that are problematic.
Lindsay Holmgren: I saw in the language available to me, in annual reports, a manipulation of the way time functions. And time is one of the most crucial aspects of narrative. Why? Because narrative can only occur in time. This was something that concerned me about the way expectations regarding how economic outcomes will unfold. How those expectations are set up and manipulated by manipulating the time it takes for those events to actually take place, the time it takes for money to be made and lost. All of those things are highly problematic. I am concerned with what actually is occurring in a real human being’s life, or what the decisions are the actual nations are making as a result of narratives that are being constructed in ways that aren’t even logically possible.
Robyn Fadden – host: Borrowing from the IMF is a last resort for these nations. The IMF demands a particular kind of financial growth from borrowing nations, a type of growth that in fact might not support more sustainable economic models that could suit these nations better over the long term. As you’ve pointed out in your research, the story of a nation is about its people, its history and its system within a nation’s borders and outside those borders, with other nations and international bodies like the IMF. The formation of narrative is complex and specific – how do policy makers get a handle on using a narrative approach to shift governance policies, such as IMF conditionalities?
Lindsay Holmgren: When we’re looking at narrative, we’re looking at worlds. So we’re trying to understand what governs the world of the story, right? How do the characters in the story if we’re talking about fiction, how do the characters in the story orient themselves? What is the governing principle of this world, whatever this world is, and we can imagine, in science fiction, that world can be radically different from the world that we’re in. But it still has to have coherent, logical governing principles.
Lindsay Holmgren: And if we imagine a world a deistic, world in which sort of the, the orienting governing principle might be a god, and we might imagine a post-Copernican world in which the governing principles of that world change. All of these worlds, the governing principles of these worlds, enable the people who are making sense of those worlds, to live inside of it, to function inside of it.
Lindsay Holmgren: What happens with a global financial culture is that a world that might have been governed by an array of different principles begins to be governed exclusively by a principle of finance or principle of money. And it becomes very nearly impossible for people in that world to understand a world that isn’t governed by those principles.
Robyn Fadden – host: You reference the American economist Joseph Stiglitz, who in his article Globalism’s Discontents, points out that the English, Western, privileged laws of economics were considered universal by the International Monetary Fund. The IMF wasn’t taking the differences of nations into account with its one-size-fits-all monetary model.
Lindsay Holmgren: I was looking at what he was doing there and how he was narrative-izing the relationship between enormous economies and less developed economies. It occurred to me when I read that for the first time that I thought, this is a space for narrative theory. I want to parse how he is understanding the relationship, not just between these two worlds, which can be understood as both part of the same global economy but distinct economies and radically different economies. So I started sort of investigating the relationship between economists who had been interested in the storied nature of economics. And what narrative theorists particularly could offer to that enterprise.
Robyn Fadden – host: Could you provide some background on how the history of the International Monetary Fund contributes to its current limitations in being able to view nations as idiosyncratic?
Lindsay Holmgren: What I write in the article we’re talking about today is that it’s basically a club, and almost every country on the planet is a member of this club. The IMF was formed in 1944. Basically, in the post-war Reconstruction Era at the United Nations monetary and financial conference in Bretton Woods. And at this conference, the IMF and the World Bank were formed. And they were formed, basically, to aid in post-war construction, reconstruction, and to establish a lasting global monetary order on which the United Nations and other nations could depend.
Lindsay Holmgren: And, of course, this was designed especially to help member nations who were significantly destroyed in very material ways. Not just monetary ways. So then then the UK could borrow, Britain could borrow from the International Monetary Fund, because each nation pays into the fund in the form of quotas. So the amount that they pay into the fund basically determines their political power within the fund it the larger your quota. So the more money you pay into the fund, the more votes, the more voting power you have in the fund.
Lindsay Holmgren: It’s very obvious which nation would have had the most voting power at this time, it would have been the United States, and the United States did not suffer the physical manifestations of the war to its own structure in the same ways that other nations did. But above all, the United States had a particular economic ideology that then became the foundation for the IMF’s approach to growth, in part because it had by far the most votes, right, so it had the most power in the IMF and in the world.
Robyn Fadden – host: Having this background on the IMF from you is helpful for understanding how the United States model proliferated, if not necessarily in individual nations but in the popular imagination of capitalist economics, since the US was the most powerful and rich nation in the world at that time.
Lindsay Holmgren: That is a product, not just of economic narratives that we’ve trotted out, but of course of all kinds of fictional narratives that wind up governing the popular imagination, not just in the United States, but then that trickles outward. It becomes a sort of a colonizing force globally, regarding the so-called American Dream, which had its critics from before the Bretton Woods Conference. It had many critics and of course in the 1930s. It’s always had critics, but the criticisms have historically been insufficient to outweigh the power of that ideology, that investment in a capitalist ideology.
Robyn Fadden – host: And that capitalist ideology creates the context in which the IMF helps various nations in times of financial crisis. Are the conditions that the IMF creates for different nations typically reflective of this ideology? Are the conditions themselves a colonizing economic force?
Lindsay Holmgren: They have to implement a range of approaches to a range of fiscal policies within their nations. And those fiscal policies are capitalist. Typically, opening markets and enhancing trade free trade, aggressive growth, basically. The problem with this structure is that the IMF, which has its exceptionally powerful governing structure that privileges the largest economies, and the largest economies, of course, tend to be the capitalist economies. The problem is that these conditions that are put in place don’t necessarily jive and often absolutely do not jive within conflict with the ideologies and the cultural histories of the nations in which they’re expected to be implemented.
Lindsay Holmgren: So the problem here then is a problem of compliance. You might have a nation that agrees to accept these conditionalities, and to put these structural adjustment policies into place. But even if they agree to do that, the degree to which they will comply, is highly questionable. Potentially more importantly, it’s unclear whether they should comply – because as Stiglitz has tried to make clear, their economies are not necessarily poised to be able to implement these kinds of policies.
Robyn Fadden – host: In your paper on the IMF and narrative theory, you write about Julius Nyerere, the former president of Tanzania. He was concerned about how money was becoming what you call in the paper “the orienting referent” of the world, whereas he championed an orienting referent that was social and human-centred in how it addressed national growth. A nation’s governing principal or orienting referent seems like it would be difficult to change since it’s so embedded in a culture – and yet globalism has changed the orienting referent for many nations – and in turn it’s also affected the broader culture of those nations.
Lindsay Holmgren: The danger of an orienting referent is that often it’s invisible to the people who are organized by it. And that is something that my work is trying to bring to light. A capitalist regime is one whose orienting referent is money, this signifier, which becomes a signifier. It’s a symbol, right? And it’s becoming more and more remote from its origin, up during the gold standard, for instance. I tried to sort of remind us that if we if we remove that orienting referent from our experience, then the world shifts dramatically, the world by which we understand through which we understand our actions. And this is something that I’m trying to parse as well, as I tried to understand the formulation of economic models and understand how economic science moved from a word-based science into a mathematically oriented model-based science. Basically, I’m now trying to recuperate the word-based aspects of the science into how we’re approaching economics.
Robyn Fadden – host: A narrative approach seems like such a good fit for economics and for better understanding economic models, almost moreso than a mathematical approach, which is what we’ve come to associate with economics.
Lindsay Holmgren: Economists are already story processors. This is what they’ve done historically. But the mathematical modeling approach to economics, to some extent, pushed those narrative skills to the margins, and sometimes entirely occluded them. So that it became purely a modeling science. Economists are well trained to be able to engage a more narratological approach and to sort of take into account both. Obviously, the models have to be there. But the models are always embedded in narratives, and the models are only as good as their assumptions. The narratives in which they’re embedded, that make clear the assumptions that are that are built into these models, not only enable people who are trying to make sense of the models, it enables them to take into account those assumptions and enables them to understand how that model has been crafted. But it also I suspect would force the economist to take into account the various nuances of the various narratives that she should have that ought to contribute to that model.
Robyn Fadden – host: Looking at the global picture, can we also understand capitalist regimes as “colonizing financial forces” that shift the culture of a place? By extension, we could also talk about decolonizing forces that are not about returning to what was before, in an essentialist or traditional way, but about creating yet another shift in the orienting referent and in the narrative. These terms might sound abstract but when we’re talking about the International Monetary Fund, we’re talking about economic models that affect entire national economies and affect real people within those nations.
Lindsay Holmgren: You’re calling attention to that sort of problematic binary of colonized-decolonize. Why I used the expression that I’d like to recuperate language into it. So it doesn’t mean that we remove these models, these somewhat colonizing models, but that we start to take into account their fallibility, the fictionality inherent in these models, their projections, they can’t be facts, they can be rooted in facts. But the best models are fallible. And this is part of what the 2008 financial crisis taught us. This is part of the reason, I would argue, that there’s this critical reinvestment in the humanities in economics, it’s partly a result of this kind of a comeuppance that we had to face regarding the accuracy of these models. And the importance of understanding the nuances of the various nations to which we’re applying these models.
Robyn Fadden – host: What does applying narrative theory or a narratological approach look like for an economic body like the IMF?
Lindsay Holmgren: Certainly economists are trying to familiarize themselves with the histories of the nations with whom they’re working. And the IMF is, I would hope, and I would assume, is trying to understand the historical policies, fiscal and monetary, so economic policies of the nations to whom they intend to lend to which they intend to lend. Understanding how those narratives came to pass how they unfolded, would help economists to build models, because that how is itself a model.
Robyn Fadden – host: We’ve talked about the IMF and that specific area of economic management. How does the lens of narrative theory apply more broadly to a management or organizational environment? And could applying that lens help spur deeper systemic changes?
Lindsay Holmgren: Can it work to spur systemic change? I would say absolutely. It’s a system of language that we’re looking at. And a system of language is really the system. We understand the world in the context of language. And we understand how language means in the context of its stories, right? In the context of an office or a large organization, it seems as though we can’t take time to have these so called dialogues, where we’re trying to find our common ground. And we’re trying to get at our sort of shared narrative. But all that means is that we aren’t going to come to an agreement, or in the context of the IMF, we’re going to create conditions that are virtually impossible for nations to comply with, and then what happens, everything takes more time.
Robyn Fadden – host: And you’ve said that these manipulations of time are what narrative theory is demanding that people don’t try to do – whether people are at the IMF or a corporation, or a doctor trying to understand a patient’s medical history through narrative, we need to recognize that this will take time to understand each other’s narrative.
Lindsay Holmgren: To me this is to me this is a crucial part of dialogue. Dialogue involves allowing narratives to unfold. And it’s hugely important for the health of an organizational environment, not just because the organization is grounded in a tenable narrative, it’s grounded in something that could actually happen in actual time, in human time. But it also attends to affect, it attends to human experience, it attends to emotion. And these are not areas that can be ignored in a healthy organization. And this is another thing that we are recognizing now, as a global economic community, I’ll say.
Lindsay Holmgren: And in the academy, of course, we’re attending more sufficiently to the lived experiences of human beings. And these lived experiences are what enable formerly marginalized groups to be taken into account, right, without the recognition of discrete narratives, that individuals experience, different narratives that individuals experience, people of different races of different ethnicities, women who are pregnant, people who identify differently, these are all part of lived embodied human experience. And these lived experiences do not necessarily fit into any non-aethetically driven models.
Lindsay Holmgren: In fact, it is this sort of human desire to force things into models that causes these uncomfortable positions to be forced upon individuals who can’t embody them. It forces individuals to accept a model of their existence that isn’t comfortable for them, that they can’t live inside of. Narrative theory has broadly helped to make room for idiosyncratic experience of human beings. I am talking about the experience of difference that narrative theory demands that we attend to. I mean, that’s essentially what it is, it’s looking for an array of possible interpretations of experience.
Robyn Fadden – host: As the world shows signs of moving closer to an investment and political economy that eclipses difference, Professor Lindsay Holmgren argues that addressing the concerns of narrative and increasing narrative competence is a necessity not only for economists in the context of local, national, and global organizations, but for all organizations that aspire to be at the forefront of systemic change.
Robyn Fadden – host: You’ve been listening to the Delve podcast. Delve is the official thought leadership platform of McGill University’s Desautels Faculty of Management. I’m Robyn Fadden, your host for this episode, and our guest was Professor Lindsay Holmgren. You can find out more about Delve at, Facebook, Instagram and LinkedIn. Subscribe to the Delve McGill podcast on Apple podcasts, Spotify and other podcasting apps. Thanks for listening.