Financial Times

It is a stunning reminder of the habitual ways in which we, as a nation, meet the intellectual and physical challenges confronting us that we have thought it fitting to appoint as the governor of the Central Bank (CB) a man whose foundational training is sited in a trade school – in accountancy.

There is much talk of designating a businessman, who is an accountant by training, to be in control of central banking in the country, but hardly any public discussions of his suitability, in the sense of his knowledgeability, to direct such a specialized activity.

Perhaps the spirit of egalitarianism is spreading widely here and penetrating the souls of even the many exclusivists among us. After all, the better-informed voters of the country, having concluded it to be an expedient measure of some respectability, did collaborate with the single most powerful political party in the country to get a tuk-tuk driver elected as the mayor of Colombo.

But the present criticism of the appointment of an accountant to head the CB is not conceived out any opposition to the egalitarian attitude.

Indeed, the increasing role that the egalitarian attitude plays in personal conduct and social policy is a profound achievement of modernity, if by such an attitude we mean the belief that a man, regardless of the circumstances of his birth, could rise to the summit of human achievement as either a knower or a doer or both.

The yearning for human greatness that such a belief inspires appears to be deep seated among those who live in freedom under the rule of law, and whose awareness of the experimental nature of all thought and action animates them with a readiness to risk failure.

Moreover, in those societies where the egalitarian attitude has found a permanent home, we witness the emergence of a meritocracy – a true natural aristocracy of intelligence, of either practical or theoretical wisdom, with an enormous capacity for boldness and a grand scale concern for pride or honour that are historically said to be characteristic of the nobility.

But the incoming governor is no aristocrat, either of intelligence or for that matter of anything else.

It would be plainly unfair to single him out for criticism as a doer, in his case as a businessman, for mediocrity, when Sri Lankan business is largely mediocre anyway. Yet even when he is judged by our own meagre standards, he hardly embodies ‘the virtues of the road not travelled or the road less travelled’.

Nevertheless, by all accounts he is an accomplished accountant. However, the question is, is accountancy a sound foundation for scholarly endeavour, since a large part of central banking involves such endeavours – especially when the issue is the achievement and maintenance of stable prices and its outcome depends on the sound judgment of economic trends and the use of a broad range of monetary policy guides?

Accountancy deals with the mechanical details of business management; and mechanical minds are able to reach the summit of accountancy.

Moreover, accountancy might graduate a man to a world of riches, but it would not necessarily graduate him even to a limited world of assimilated facts from the history of ideas. Yet it is by living in such a world, and through study expanding it by degrees that a man becomes knowledgeable and hopefully wise.

In other words, leaving wisdom aside, without at least the semblance of a comprehensive view of philosophic traditions and cultural developments, which the study of the history of ideas would give, one would be ill equipped to be engaged in an intensive study of anything – including the study of economics. And one has to be guilty of supreme vanity to think that one could be a central banker without being an economist.

The incoming governor might well be a self-taught economist. But there is no paper trail for us to discern the scope and depth of his learning and his approach to economics. And the public have a right to know who their chief central banker is. For they assume, although in our case mistakenly, that the key function of a central bank is to set the nation’s monetary policy which seeks “to promote the goals of stable prices, maximum employment and moderate long-term interest rates”.

The public may not understand why the Federal Reserve says, “Stable prices are a precondition for maximum sustainable output growth and employment as well as moderate long-term interest rates”. But they see an inherent value in stable prices.

They know that inflation robs them of their savings and increases the cost of their wealth accumulation, thereby enslaving them to the routine of necessary and exhausting work, which leads to atrophy of the mind – thus reducing their natural status as rational animals to mere animals.

In a word, for the general public central banking is tantamount to policing – policing to prevent the state from robbing the public of the fruits of their labour through inflation.

The CB has played but a marginal role so far in influencing the price levels and the flexibility of the financial system. The president, while undermining its role further, is also sending a dangerous message to the youth: it is enough to be an accountant with overweening ambition.