Prior to that week, the biggest American victim of the credit crunch had been Bear Stearns, an investment bank forced to sell out for a derisory $2.2 billion. This week, no one was deriding any sale, no matter how small the consideration. You almost got the feeling that if you’d walked down Wall Street in possession of $10 and a bagful of doughnuts, you could have purchased any bank you wanted. ‘The doughnuts too, sir? You’re too kind.’
In these giddy conditions, a quotation came into my head, one that I couldn’t immediately place but which lingered anyway: ‘All that is solid melts into air, all that is holy is profaned.’ The rhythms were wrong, but the phrase possessed an almost Shakespearean intensity. Sensing that there was more to the fragment than I was remembering, I looked it up:
All that is solid melts into air, all that is holy is profaned…
Modern bourgeois society…a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells…It appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed. And why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce.
– KARL MARX and FRIED RICH ENGELS,
The Communist Manifesto
Marx and Engels were writing 160 years ago, yet their description fits the 2008/9 financial crisis almost perfectly. All that is solid has melted into air – or, to be more precise, has melted into the hands of a number of very surprised governments and furious taxpayers, the Wall Street sorcerer no longer in control of his spells.
Now, it’s probably best to say straight away that I’m no communist. I got a degree in economics from Oxford University, then went straight into the City, where I spent a couple of years working for J.P. Morgan, the same fine bank that went on to buy Bear Stearns for those $2.2 billion.
After two years, I quit. I was an idealistic soul and thought that my talents, such as they were, might be better directed for the Good of Humanity. I’d originally intended to use my training at J.P. Morgan to talk my way into the World Bank, but this was 1989. The Berlin Wall was being torn down. The decrepit Soviet empire was breaking up. The old socialist model had failed, but there was an immense amount of work to be done before the capitalist model could get going properly. In short, Eastern Europe needed help. It needed me. So I took a temporary post offering economic advice to the newly democratic government in Poland (it folded shortly afterwards), then found a full-time post at EBRD, a development bank set up to rebuild the East.
I spent the next eighteen months zooming round Eastern Europe, seeking to invest in the promising private enterprises which were springing up everywhere. It was a time of extraordinarily rapid change and, for those of us lucky enough to be in the right place at the right time, responsibility too. But I became disenchanted. Not with the Easterners, who were turning their countries round with extraordinary speed, but with the EBRD itself. The EBRD was owned by a consortium of several dozen governments from East and West, who encumbered it with a hopelessly top-heavy and bureaucractic approvals process. The longer I spent in Eastern Europe, the more I noticed that it was those greedy so-and-sos from the private sector who were doing all the really amazing work – pouring in money, people, skills, energy and know-how. We poor saps in the Good of Humanity sector were coming a distant and unbeloved second.
So I quit my job again. I interviewed with a number of banks, but ended up back where I’d started at J.P. Morgan, where I spent several happy years as a banker in the mergers and acquisitions department. I made money. I worked with some very nice and able people. I enjoyed huge levels of responsibility and expectation. I might have gone on merging and acquiring for many more years to come but, at the end of the 1990s, my wife, Nuala, became ill, bed-bound, edge-of-life-and-death, terrifyingly ill.
So I moved on once more, from the City to the bedside. I cared for Nuala and wrote my first novel. I got an agent. I got a publisher. I found myself stumbling backwards into a new career, making the move from one of the best paid, most widely loathed occupations in existence to one of the worst paying, but most highly regarded ones.
People often ask me if I miss investment banking. I certainly enjoyed my time there, but enjoyment isn’t the deepest kind of satisfaction there is. Banking always felt like work – enjoyable, demanding, varied, responsible work, to be sure – but nevertheless something that nobody of sound mind would ever do for fun. Writing has never felt like that. For the last ten years or so, I’ve put in plenty of hours at the keyboard, and almost none of those hours have felt like work. I feel as though I’ve found some important part of my essence as a writer. That’s the good part. The bad part is that, for all but a very few authors, writing doesn’t provide enough income to live on. Most authors supplement their income in other ways and, as soon as Nuala was strong enough for me to give up my role as full-time carer and part-time author, I too rooted around for other ways to make a buck. In 2005, I set up a company called the Writers’ Workshop. The idea was that we’d offer editorial advice to first-time writers. To begin with there were just two of us, me and a friend, also a professional author. We built a website, advertised our services, and waited for manuscripts to start rolling in.
And roll they did. To my continuing astonishment, the venture’s been a success. Not the sort that buys a private jet and my own holiday island in the Caribbean but, in its own humble way, a success.
My reason for telling you all this is that my own eccentric personal journey through life connects back to that cooking pot. Over the last 350 years, some weird alchemy has taken place, which has utterly transformed the world and our expectations of being human. The Oxfordshire widow who lived in what is now my house seems poor to us today. Her few recorded possessions seem shockingly scanty. No books. No form of entertainment. No form of transport. Nothing mechanical. No complex method of lighting or heating. No soft furnishings. No decorative items that we know of. Nothing to bathe in. No form of time-keeping. No holidays. No health care worth the name. Rudimentary education at best. She’d have had salt, but no sugar, no spices, no tea, no coffee, not much meat. Particularly in winter and spring, her diet would have afforded terribly little variety. Some years, she’d have gone hungry too. She had a few tools for working the land, a few household items, and a minimal amount of furniture. That was all. When Kat encountered a tiny slice of that woman’s life, she instantly recognized it as being utterly, astonishingly different from her own.
Yet that widow wasn’t unusually poor. In 1674, the average Briton subsisted on somewhat less than $4 per day. Just to be perfectly clear, that number, the $4 a day, has been adjusted to give a figure directly comparable with today’s money. The average Zimbabwean today is about as well off as that widow and her peers. They don’t throw away broken cooking pots in Zimbabwe now, and they didn’t throw them out in seventeenth-century Britain.
If you think that sounds awful, bear in mind that Britain was then the second richest country in the history of world (the Netherlands was somewhat richer). Viewed over the entire span of humanity’s existence, seventeenth-century Britain was a place of extraordinary affluence, long lives, comfortable homes, educational and vocational opportunity. The Britain of that cooking pot represented close to the best that humanity had managed in its 199,650 years of existence. In the fifteen centuries following the birth of Christ, the average human lived on the equivalent of about $1.25 a day, an amount now regarded by economists as marking absolute poverty of the most pernicious sort. The kind of poverty that kills and starves, deprives and restricts.
These comparisons are worth hammering home because it’s so easy to lose sight of the miracle that has happened over the last 250 years or so, and which Kat called attention to by her fascinated reaction to that vanished world. Some extraordinary alchemy has transformed the human lot from being one of almost universal, grinding poverty to one of very widespread affluence. For sure the world still has far too many poor people in it, but it has a darn sight more rich ones than ever it used to. The miracle of wealth creation is now so well established, so taken for granted, that we start