the high-tech innovation which set off waves of computerised selling as soon as the market fell below a certain level, prompting a downward stampede and foiling any attempts to recover equilibrium. Meanwhile, the risk-free yield on thirty-year government bonds had risen to an unprecedented 10.22 per cent, only slightly below the risk-heavy 10.6 per cent return from the stock market. Some investors wondered why they bothered to buy shares at all.
The economic tsunami of 19 October 1987 –‘Black Monday’ – began with panic selling on the Tokyo stock exchange and then surged through Asia and Europe, following the sun, before engulfing Wall Street. The Dow Jones plummeted by 508.32 points, losing 22.6 per cent of its total value – almost twice the 12.9 per cent plunge during the crash of October 1929 which precipitated the Great Depression. ‘Of all the mysteries of the Stock Exchange,’ J. K. Galbraith had written in his history of the 1929 disaster, ‘there is none so impenetrable as why there should be a buyer for everyone who wants to sell. 24 October 1929 showed that what is mysterious is not inevitable. Often there were no buyers.’ Sure enough, on the morning of 20 October 1987 (‘Terrible Tuesday’), with no one willing to purchase stocks at any price, there was a full hour in which trading ceased altogether: it appeared that the world’s dominant financial system had simply curled up and died. What saved it from extinction was not the ‘invisible hand’ but the new chairman of the Federal Reserve Board, Alan Greenspan, who flooded the market with cheap credit shortly after midday and strong-armed the big banks to do the same, thus preventing Wall Street from dragging the whole US economy into recession. Meanwhile, the regulators of the New York stock exchange also intervened to ‘preserve the integrity of the system’.
Did chastened right-wing triumphalists notice that capitalism had been rescued only by swift action from the federal government and the regulators, precisely the kind of ‘interference’ they would usually deplore? Apparently not. Ronald Reagan signalled a return to business as usual by dismissing Black Monday as ‘some kind of correction’, and magazines such as Success continued to glamorise the casino culture. Neo-liberals applauded the ‘creative destruction’ of manufacturing industry, old work practices, public institutions and anything else that stood in their path. In Washington and London, right-wing institutes and foundations proliferated like bindweed, fertilised by the enthusiasm with which Thatcher and Reagan greeted their crackpot schemes. The bow-tied young men in these think-tanks prided themselves on ‘thinking the unthinkable’, coming up with ideas such as privatisation – which would later become an unchallengeable gospel, spread everywhere from Russia to Mexico. ‘We propose things which people regard as on the edge of lunacy,’ Dr Madsen Pirie of the Adam Smith Insitute boasted in 1987. ‘The next thing you know, they’re on the edge of policy.’ By a blissful irony, it was one such ‘unthinkable’ scheme – the poll-tax, dreamed up by the Adam Smith Institute and recklessly adopted by Thatcher against the advice of her colleagues – which helped to bring her down in November 1990.
By then, however, her task was effectively accomplished anyway. The demise of the Marxist states in Eastern Europe seemed to vindicate all that she and Ronald Reagan had done: both socialism and Keynesianism had been pronounced dead, and unrestrained turbo-capitalism installed as the new orthodoxy. ‘What I want to see above all,’ Reagan said, ‘is that this remains a country where someone can always get rich.’ And there was no shortage of hucksters willing to explain, for a fee, just how this could be achieved.
There is an universal tendency among mankind to conceive all beings like themselves, and to transfer to every object those qualities with which they are familiarly acquainted, and of which they are intimately conscious. We find human faces in the moon, armies in the clouds … In proportion as any man’s course of life is governed by accident, we always find that he increases in superstition, as may particularly be observed of gamesters and sailors, who, though of all mankind the least capable of serious reflection, abound most in frivolous and superstitious apprehensions … All human life, especially before the institution of order and good government, being subject to fortuitous accidents, it is natural that superstition should prevail everywhere in barbarous ages, and put men on the most earnest inquiry concerning those invisible powers who dispose of their happiness or misery.
DAVID HUME, A Natural History of Religion (1757)
Money is power, and power is the ultimate aphrodisiac. The logic is inescapable: rich people are sexy.
Logic has seldom been applicable to the mysteries of desire, and five minutes in the company of a typical tycoon should be enough to deflate this particular syllogism. The sheen of narcissism, the indiscriminate smile, the fawning gaggle of sycophants – what could be less alluring? One of the most resonantly repulsive images from the 1980s is of Michael Douglas, in shirtsleeves and braces, playing the snake-eyed corporate raider Gordon Gekko in Wall Street. Yet the fact that Oliver Stone’s film was a moral fable with a message as old as the Bible (love of money is the root of all evil) eluded many moviegoers, mesmerised as they were by the seductive energy of sheer wickedness, and Gekko’s ‘greed is good’ mantra soon became the catchphrase of every Big Swinging Dick in New York and London – Masters of the Universe, as Tom Wolfe called them in The Bonfire of the Vanities. For ambitious young things who had yet to join the club, there was one urgent question: I’ve got the red braces, I’ve got the attitude, I’ve got greed in abundance, so how can I grab some of the loot?
Help was at hand. In 1982 a young management consultant from McKinsey & Co., Thomas J. Peters, co-wrote In Search of Excellence, a relentlessly optimistic primer which celebrated America’s best companies and sought to identify the secrets of their success. As the Economist noted, Peters had ‘a knack of saying the right thing at the right time’: In Search of Excellence was published in the very week when unemployment in the US reached its highest level since the 1930s, and it found a ready audience in a nation worried about declining competitiveness but sick of hearing about the Japanese miracle. (Perhaps Peters had learned from the precedent of Dale Carnegie, whose equally cheerful and vastly popular How to Win Friends and Influence People had appeared in 1936, in the depths of the Depression.) In Search of Excellence sold five million copies, and Peters used the proceeds to buy a 1,300 acre farm in Vermont, complete with cattle and llamas.
After that, the deluge: The Seven Habits of Highly Effective People by Stephen R. Covey, The Fifth Discipline by Peter Senge, The One-Minute Manager by Kenneth Blanchard and Spencer Johnson, Awaken the Giant Within by Anthony Robbins … The New York Times list of non-fiction bestsellers soon became so clogged with inspirational tracts that the paper established a separate category for ‘Advice, How-to and Miscellaneous’. Even men who had already made their fortune hastened to cash in: the Chrysler boss Lee Iacocca, the gloriously vulgar property developer Donald Trump and the rebarbative media mogul Al Neuharth all dashed off inspirational, ghost-written blockbusters that sold by the ton. (Neuharth’s title, Confessions of an S.O.B., perfectly evokes its rancid flavour.) Victor Kiam – the tiresome self-publicist who liked Remington razors so much that he bought the company – passed on the ideas which had propelled him to plutocracy in Go for It and Keep Going for It. ‘Turn those negatives into positives!’ ‘A little bit of courtesy and caring. It goes such a long way.’ ‘Business is a game. Play it to win.’ ‘When you’re an entrepreneur, you don’t look a gift horse in the mouth.’ ‘When opportunity knocks, the entrepreneur is always home.’ ‘Any job worth doing is worth doing well.’
The authors of the American declaration of independence had prefaced their statement of human rights by announcing ‘we hold these truths to be self-evident’. If Thomas Jefferson and his colleagues didn’t flinch from stating the obvious, why should Victor Kiam or his rivals? Had the founding fathers only thought of copyrighting the text, they too could have enjoyed huge royalty cheques. One man who certainly understood how to profit from ideas that had hitherto been regarded as common property was Benjamin Franklin, whose Poor Richard’s Almanack (1733) is a pot-pourri of similarly banal yet uplifting mottos –‘early to bed, early to rise,