Fear & Greed
Perhaps it was because a Friday afternoon coffee had turned into a beer, or perhaps it was because I was on my way out of my job as a reporter, that a contact was being unusually honest.
As we sank our pints and rued the barren economic climate that had cost this senior property agent his big-bonus lifestyle and me, in part, my job, he volunteered a very simple truth in honest language.
“Ben,” he said resignedly, “our system exists in one of only two states: fear or greed”. Speaking for himself and his Mayfair colleagues, he explained how when things are good the industry grossly overvalues property and clambers all over itself to make as much as it can while it can, and “when the chips are down” the opposite occurs. Values are distorted downwards, credit becomes like a puddle in a desert, and frantic survival becomes the only concern.
After we had finished our meeting and shaken hands for the last time, I left the Mayfair bar and headed to Oxford Circus, mulling over this very blunt portrayal of a financial culture. And it didn’t take long – given that this was July 2009 and the world had recently only just not ended – to see that same basic blueprint repeated throughout the current economic structure.
The banks had been rescued by the taxpayer from self-induced oblivion. Why had the need come about? Because greed had blinded them from the dangers of grasping every apple on the floor and bagging them up, including the rotten ones.
Why had the banks been allowed to do this? Because at some point in the 1980s some bright spark decided that building an economy on manufacturing British goods, or fuelling a country with its own natural resources, or trusting in a culture that produced world-class engineering, technological innovation, scientific genius, unrivalled academic achievement and a powerful national work ethic was too expensive, too risky, too bulky, too slow, too old-fashioned or too much like socialism.
No, now it was the turn of the financial sector to be taken off the leash. No need for thousands of jobs in factories or warehouses, no messy, costly supply chains of bulky raw materials, no exports, shipping, waste management or tedious efforts for industrial harmony. No hassle. Just profit. The rule books were torn up, the slips flung open and a brave new era of paperless money and never-ending profits began.
So now, some 30 years later, where has this epiphany brought us to as a nation? What are the untold benefits to the economy, and the people? Around the time my erstwhile contact was sighing into his beer about the state things had got to and the grim prospect he was facing, the banks were fresh from the mother of all bailouts.
The last decade had been the ultimate exercise in hateful greed; now had come the fear. The ugliest type of benefit scam ensued. The banks had huffed and puffed into number 11, a begging bowl in one hand and a letter of blackmail in the other.
The undignified position: bail us out now or we will all be for it. Forcing a government that had allowed them to keep digging themselves deeper, to then hoist them out of their holes with the threat that the whole ground would cave in.
The rot that had finally began to consume started with Thatcher’s blood-lust against manufacturing and mining, unionisation and collective work ethics. When that government began vengefully dismantling the very structure of everything the hated left stood for, it saw only evil in its enemies’ eyes.
The major failure was in being too blind to see that in destroying certain socialist sectors of the economy which, admittedly, needed reform, they were also attacking the purest part of socialism; the essential driving force that is for creating equality and fairness.
The fear and greed capitalism that took its place has now proved itself to be rife with defects.
Conservatives believe that capitalism is corrupted by states. They advocate letting loose an unmuzzled beast that can keep its accountability, methods, and profits as insulated from the nation and the public purse as possible. If you want to see how that model works, look no further than its quintessence, its holy land, the City of London.
Without any odious restraints from either Thatcher and Major’s Tories, or Blair and Brown’s Labour, the City has been granted total freedom to show its true nature. But there is a problem. Anybody looking at the facts can see that this experiment in fear and greed has not been a vindication of doing away with state intervention. Quite the opposite has happened – the disease that was growing inside the City has spread and reached epidemic levels throughout the country.
If it weren’t enough that two of the most desperately worrying factors in any economy – inequality and poverty – have risen under the reign of the unleashed market economy, the fact that the system itself was hours away from a fatal arrest should be proof.
Even more alarming is how far and wide the epidemic has spread.
A soulless, detached culture of unaccountable, ruthless management guided exclusively by profit has taken seed in almost every industry we have left. Dreary chains of insipid supermarkets, coffee shops, restaurants and fast-fashion clothes shops offering staff only the minimum pay or stake in the company have flooded into every town and city in the country, set in motion from indifferent boardrooms hundreds of miles away pushing for faster, cheaper and wider expansion, watching profits pile up with every new unit acquired.
There is something ugly about the way these vast corporations operate. A brutal, greedy approach to property expansion has allowed chains to browbeat local authority planning boards. Unwilling to take on the giants for fear of cripplingly expensive legal wrangling wasting millions of pounds needed for public services, even where alternative planning proposals for mixed-use, community geared schemes would do infinitely more for the wider good, they simply acquiesce to their demands.
This gagging of local authorities and bludgeoning of small independent businesses with the consent of successive governments is a form of capitalism claiming the spoils of victory.
Socialism died in the 1980s, along with British manufacturing and much of its industry. And despite my tone, I believe it’s right that that model of ultra left-wing thinking ended. Socialism is not the antidote to this particular disease. Capitalism is the answer – just not the form of capitalism that only knows fear and greed.
What good is capitalism that benefits only a tiny few greedy, fearful individuals and corporations? What good is capitalism that roams unrestrained, feeding on everything it sees? What good is capitalism that leads to extremes of inequality, increases poverty and knock-on social effects like alcoholism, mental health, teenage pregnancy, drug addiction, violence and crime?
Until we as a nation, and the West as a whole, begin to see capitalism, and ourselves in a different light, we will continue to take ourselves to dizzying highs then the point of hellish depression.
But with the chief architects of a pathetically flawed system still sitting proudly at their desks in the City, facing no personal consequences from their chums in the Conservative government and not remotely troubled that a culture they created lead to a £1.3 trillion taxpayer bailout with too many miserable consequences for Britain than can be counted, it’s clear that fear and greed is going to carry on being big business.
The mark of failure in an economy is how many live in poverty within it. With one in five children living underneath the poverty line and even more in the nation’s wealthiest city, something is not working. Simply hunting down profit causes businesses to lose sight of the many other powers and responsibilities they have, which get greater as they grow in size.
True capitalism is about doing what’s in a person, economy or country’s best interest. In that respect the city bankers are the worst capitalists of all. They have proved themselves to be enemies of their own interests and those of everyone around them.
And now the Tory-led coalition is attacking what it sees as the problem with the same appetite Thatcher’s government did 30 years ago- albeit more subtly and carefully spinned under the ‘Big Society’ banner.
So what is the problem? Apparently not the banks, who are once again enjoying their profit-hunting fun. Nor the corporations and private equity funds that control the high street chains; they are still getting in with a nod and a wink, actively encouraged to bolster profits by using complex tax avoidance schemes to hide as much of it from the taxman as they can.
No, the real problem of course is the public sector and the waste therein. So a brutal final solution has been set in place. Fast and deep cuts have attacked the entire system – hospitals, armed forces, fire stations, youth centres and so on and so on, all have been forced to shed workers and slash budgets.
Many parts of the country, particularly the formerly great industrial towns and cities of the North and Midlands – the ones that don’t vote Conservative – are only recently out of intensive care after a vicious series of attacks in the 1980s. Major depression followed. And as is often the case with depression, it was never completely dealt with.
Stripped of their most vital source of employment and wealth, in a bid to avoid total meltdown, these communities came to rely on the public sector to provide the bulk of the work. Now, even that lifeline is in danger of being cut.
Private companies running public services have proved their ability to do more harm than good. In healthcare, policing and the fire brigade, we’ve already seen how profit-driven companies seek out the projects with the biggest possible returns, and hang the rest. If that mantra is the in the constitution of the Big Society, God help us. Or God help those of us who rely on the public sector, at least.
If we continue to base our economy solely on short term profits, rather than more long term, collective gains and fair wealth dispersion, we will continue to exist only either in a state of either manic greed-driven euphoria or desperately anxious fear.
The holy land of fear and greed, where the financial and commercial giants still reign, is the best place to start, not the public sector.