Читать книгу: «Waiting for the Etonians: Reports from the Sickbed of Liberal England»

CONTENTS

Introduction—Looking Back at the Ruins

PART 1—The Classless Society

Holding on to Nurse

Class Hatred: A Defence

The Cool Rich and the Dumb Poor

The Moneyed Young Beasts

In Search of the Normal

PART 2—Who is England? What is She?

Celebrity Chefs and Invisible Immigrants

Black on Brown/Brown on Black

Ryanair Migrants

Neo-Fascists at the Village Hall

Shooting the Foxes

Law without Order

Svengali at the Church School

Blowing Britishness Away

PART 3—Oh, Comrades!

Pacifists and the Bomb

Communists and Fascists

Pseudo-Leftists and Real Rightists

Eco-tourists and Islamo-terrorists

Multiculturalists and Monomaniacs

Liberals and Murderers (Part One)

Liberals and Murderers (Part Two)

Social Democrats and Theocrats

PART 4—Tyranny and the Intellectuals

Martin Amis Meets Liberal London

Neoconitis Sweeps Broadcast News

It’s the Jews, Once Again

Vänster Om, Höger Om!

Nicolas Sarkozy Woos Bernard-Henri Lévy

PART 5—The Silence of the Hams

The Rout of the Avant-Garde

Now It’s the Art Galleries

The Broadcasters Bite Their Tongues

A Cartoon Crisis

State Britain

Labour’s Contemptible Election Trade-off

Inequality before the Law

PART 6—Bread without Freedom

Lesser Breeds without the Law

The White Woman’s Burden

Let Them Eat Organic

The Menace of the Quaint

PART 7—Cuckoo Land

Pathologising Everyday Life

The Genetic Revolution (Postponed)

The Clairvoyants

Criminal Crackers

Beware of the Flowers

PART 8—Before the Banks Bust

The World on Your Doorstep

Casino Capitalism

Natural-Born Billers

The Roc’s Egg of Great Ladies’ Assemblies

Primal Screams and Broken Dreams

‘Sub-prime’ (adjective): Insanely Risky

The Skull beneath the Skin

PART 9—Waiting for the Etonians

The Making of the Next Prime Minister?

‘We’re from the Tory Party and We’ve Come to Help’

Breaking the Camel’s Back

All Passion Spent

Attack of the Mulletts

Tory Isolationism

The Retreat to Little England

The Great Leap Backwards

Postscript—The Reasonableness of Ranters

Index

Also by Nick Cohen

About the Author

Review

Copyright

About the Publisher

INTRODUCTION

Looking Back at the Ruins

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their sense slowly, and one by one.

CHARLES MACKAY, Extraordinary Popular Delusions and the Madness of Crowds, 1841

TWO YEARS AFTER the Great Crash of 1929, the American journalist Frederick Lewis Allen looked back on the Jazz Age of the twenties as if remembering a dream. The daring flappers, abandoning their corsets and lifting their skirts ‘far beyond any modest limitation’, the swaggering investors, who ‘expected the Big Bull Market to go on and on’, ought to have been fresh in his readers’ minds. But Lewis knew that the bank failures and mass redundancies of the Great Depression had made the recent past utterly foreign. The optimism brought by prosperity was now as far away as a distant star. Wondering what to call his book, Allen hit on a title which was also a reminder, Only Yesterday.

After a deluge, nothing seems as remote as the day before it came. The thirties and the eighties have more to say to us now than the Britain of eighteen months ago. Across the centuries, historians of bubbles have reached for metaphors from fantasy worlds and lunatic asylums when they have tried to describe how crashes twist the linear progression of past to present out of shape. They talk of manias, lusts, fevers and delusions in make-believe lands that people take to be real until the sound of the roof falling in wakes them to face a bleak new world. Alexander Pope spoke for all sceptical historians when he wrote of the South Sea Bubble that ruined early Georgian England, ‘they have dreamed their dream, and awakening have found nothing in their hands’.

For this generation to think about what it was like before the Great Crash of 2008 will take the same mental wrench as the thirties’ generation needed to see back before the Great Crash of 1929. Only yesterday, level-headed young couples took mortgages of four or five times their joint incomes to buy hutch-like apartments in streets which estate agents described as ‘up-and-coming’ and their friends described as ‘scary at night’. Only yesterday City dealers in nightclubs threw handfuls of notes in the air for giggling girls to catch, as waitresses marching to the theme tune from Rocky brought £500 bottles of vodka and methuselahs of champagne to their tables. Only yesterday, Her Majesty’s Government encouraged speculators from every part of the globe to settle in London by so under-regulating finance capital that NatWest bankers and media moguls involved in scandals as notorious as the Enron affair of 2001 and the collapse of Conrad Black’s empire in 2003 could not be brought before British courts. American prosecutors took the alleged fraudsters to the US for trial, and confessed that Britain’s lenient treatment of serious crimes baffled them. They did not understand that only yesterday politicians and civil servants had boasted that the City’s economy was booming because of their ‘light-touch regulation’ of speculators whose number included potential swindlers. As a few of us noticed at the time, the politicians and civil servants never went on to argue that the inner-city economy might boom if the authorities applied a similarly light touch to the policing of the slums whose inhabitants included potential drug barons.

After the crash, Americans trying to find their bearings could at least hold on to the thought that George W. Bush’s right-wing government presided over the bubble. As was to be expected, it did not intervene when sharks more interested in pocketing commissions than the principles of reputable lending sold millions of Americans mortgages they could not hope to repay. The Bush administration, like Herbert Hoover’s Republican administration in 1929, believed that the market knew best and did not worry when financiers offered derivatives of such obscurity no one understood their risks. The conservatives’ neglect made ideological sense. All of the great crashes occurred under politicians who accepted laissez-faire, such as Hoover, or politicians the moneymen corrupted, such as the Georgian oligarchs of 1720 who took the bribes of the South Sea Company.

Until yesterday, that is, when Britain broke the mould. When the bubble reached its peak in the summer of 2007, Texan oilmen and former investment bankers did not govern this country. Nor were our leaders enriching themselves with bribes from the City. The British dreamed their dream under a relatively honest, social democratic government, many of whose members had been fiercely sceptical of finance capital.

Those from radical families learned the histories of the Great Crash and Great Depression at their mothers’ knees. At university in the seventies and early eighties, moderate leftists clutched the works of Lord Keynes and J. K. Galbraith to their breasts, while the extremists quoted Karl Marx and Antonio Gramsci.

By prejudice and well-grounded conviction, the left had always been wary of ‘funny-money men’ and ‘spivs’. In 1975, while still at Edinburgh University, Gordon Brown edited The Red Paper on Scotland, a collection of essays that dreamed of radical transformation. He endorsed the vision of the early socialists who wanted to abolish ‘the split personality caused by people’s unequal control over their social development—between man’s personal and collective existence—by substituting communal co-operation for the divisive forces of competition’. A better world could come only if the public accepted ‘the necessity for social control of the institutional investors who wield enormous financial power both in fostering privilege in our social security system and in controlling the economy’.

Three decades on, Gordon Brown and his Labour colleagues allowed the ‘divisive forces of corruption’ and the ‘institutional investors’ to engage in an orgy of speculation. For the first time in financial history, one of the great market manias that punctuate the history of capitalism was presided over by a centre-left rather than a centre-right administration. Like the most gullible investors in the Wall Street of the twenties, social democrats thought ‘the Big Bull Market would go on and on’, and did not see the crash coming.

Think back to yesterday, and you will remember that they were not alone.

THE FINANCIERS COULD no more imagine the coming disaster than the politicians. They applauded the hospitality of the Labour government, along with the tax breaks it offered foreign dealers and private-equity buyers, and went on a speculative bender.

Men ‘go mad in herds’, declared the Victorian journalist Charles Mackay, as he looked at the stock-market crashes of the eighteenth and nineteenth centuries. He might have been writing of the twenty-first. Bankers, drunk on cheap money, packaged and traded in supposedly high-yielding, mortgage-backed securities, unaware or unconcerned about the possibility that poor ‘homeowners’ might default and leave them with worthless assets.

Why should anyone be anxious? The bankers said that they had spread the credit risk on the securities they sold to investors by slicing and dicing mortgages, so that good-quality loans were bundled in with riskier debts. Even if the diced borrowers had lied about their income or been bamboozled into debt by commission-hungry brokers, house prices were rising around the world, and politicians and central bankers were saying they had abolished the booms and busts of the business cycle. If individual borrowers fell ill or lost their jobs, they were entitled to sympathy, but lenders could always repossess their homes and sell them for more—often far more—than the value of their mortgages. Property guaranteed profits.

Meritocratic theory holds that the rich are rich because of their keen intelligence and hard work. They are not the beneficiaries of inherited wealth or good luck, but deserve their fortunes. Instead of seeing the potential for catastrophic failure in the financial system they were supposedly managing, the British rich engaged in the most conspicuous consumption since the Gilded Age of the late nineteenth century. The Candy brothers became commercial celebrities for meeting the exacting requirements of the global plutocracy. In 2007, they announced that they would soon be offering properties in a development near Hyde Park, with prices ranging from £20 million for ordinary apartments to £100 million for a penthouse that the press described without exaggeration as ‘the most expensive flat in the world’. The brothers provided luxuries humanity had never known it needed before—a 360-degree ‘memory mirror’,* a purified air system, a tunnel from the car park to a nearby Michelin-starred restaurant, a floor-to-ceiling fridge and a ‘panic room’ (which, I admit, was prescient).

Creative entrepreneurs produced work to match the times. In 2007, Damien Hirst displayed the world’s most expensive piece of contemporary art, a diamond-encrusted platinum cast of a human skull. The memento mori had been a staple of Western art since the Middle Ages, so Hirst won no prizes for novelty. All that concerned onlookers was Hirst’s asking price of £50 million. His work created a sensation because of its saleroom rather than its aesthetic value. The following year, on 15 September 2008, he proved that the triumph of the art sale over the artwork was complete. He auctioned at Sotheby’s pieces he cheerfully admitted his employees had mass-produced in his studios. The buyers did not care, and gave him £100 million. Even the critics did not pretend to be interested in what message, if any, he had for his public, but reported the sale like business journalists covering a soaring stock.

As the buyers made their bids, Lehman Brothers collapsed.

Until then, £50 million for a kitsch skull had not appeared beyond the reach of the richest of the super-rich. The Office for National Statistics reported that annual bonuses in the City had risen by 30 per cent to £14.1 billion in August 2007. The overall level of British bonuses, which included payouts to CEOs, senior managers, the new breed of commercialised public servants and up-market car and property dealers, as well as City financiers, reached £24 billion—a figure that comfortably exceeded the entire British transport budget.

To accompany apartments with secret tunnels to Michelin-approved chefs and objets d’art peppered with diamonds, were ever-more sumptuous versions of traditional luxuries. A Poole-based boatbuilder produced Britain’s first ‘super-yacht’. For £8.75 million the buyer received a 37-metre boat, fitted out with American black walnut furnishings, sleeping quarters for twelve (plus eight crew), a king-size bed in the master stateroom and a bar, dining area and hot tub on the sky deck.

The astonished children of England’s upper-middle class started to talk about the vertiginous gap between the ‘haves and the have yachts’. It was not only that they could no longer keep up with the Joneses—or the Abramoviches or Mittals, as their more successful neighbours were more likely to be called—they could no longer keep up with their parents.

Sebastian Cresswell-Turner remembered that when he was a child in the seventies almost everyone he knew ‘lived in a large house in the country or in one of the better parts of London’. His father was a moderately successful architect and his mother did not have a career, but they could still afford to buy a converted rectory and send their children to private schools. When he was growing up, ‘London’ to Cresswell-Turner and his school friends meant Kensington, Chelsea or Hampstead. ‘Battersea and Clapham were entirely off our radar, Stockwell another country, and Brixton, Peckham and Streatham simply unheard of,’ he wrote. ‘Now, with a few exceptions among those who are notably rich or successful, the next generation of the same families I grew up with is living in just these areas.’

Unless they were working in the City, they could not think of living in the type of homes their parents had brought them up in, or sending their children to the type of schools their parents had sent them to. ‘Career choice is now all-important,’ said Cresswell-Turner, who was a writer and had therefore made the wrong one. ‘Go into the City, where they encourage and feed off the very process that is putting such pressure on the rest of us. As my host at an Oxfordshire dinner party said the other day: “A generation ago it didn’t make much difference what one’s chums did, whether they went into the army or the City or publishing or whatever; but now it’s a make-orbreak decision.”’

Couples from the old bourgeoisie worried about how much they needed to earn to become like their parents—an ambition which would have appalled them when they were teenagers but was now looking more desirable by the day. What was the cost of a house in a sought-after area, a manageable mortgage, regular foreign holidays and places in smart schools for their children? The breathtaking annual income of at least £250,000, and preferably £500,000, the Sunday Times told them in early 2007. If they wanted to be truly rich and afford the central London town house with Britart bric-a-brac on the walls, holiday homes in exotic resorts, access to a private jet and accounts at the chi-chi stores, they would need to make at least £2.5 million—preferably £10 million. Rachel Johnson, who reported the findings, wasn’t exactly a poor little match girl, she was the sister of Boris Johnson, who became the first Tory mayor of London in 2008, but she concluded:

When I look around my normal, as in non-City, contemporaries they are all working their socks off, hamster-wheeling, both the husband and the wife (only one in 10 women of working age can now afford the luxury of staying home unwaged to raise her children). They are raiding their parents’ nest eggs to keep their heads above water, remortgaging their houses to pay the school fees and, if they go abroad at all, they head off to eco-turismo communities in Sicily where several families share a swimming pool (if there is one) and all eat pasta together. As the super-rich are getting richer all the time, they are driving up the prices of the things that we middle classes used to be able to afford on one income, but now can’t manage with two.

In a wicked world full of suffering, the complaints of the shabby genteel were not pressing concerns for busy people with limited supplies of compassion. Nevertheless, I thought them worth listening to because I have found that spectators on the edges provide the best descriptions. They have the access to a privileged milieu, and can see what outsiders cannot; but unlike the truly privileged, who socialise only with fellow insiders, they are not lulled by routine into thinking that the freakish is normal. In the case of the bubble world of 2007, the dazzled and envious commentaries of those on its margins also performed the essential public service of blowing away consoling illusions.

THE GREATEST PROPAGANDA success of its rich men was to convince the rest of society that they were not plutocrats but ‘middle class’. Indeed, not only were the rich meant to be middle class, so was everyone else. The working class, once the object of implausible hopes on the left and unreasonable fears on the right, and the upper class, once the object of surly contempt on the left and abject deference on the right, disappeared from the national conversation. ‘We’re all middle class now,’ declared the media, and hardly anyone noticed that it was talking twaddle.

The proletarianisation of manners explains why. The old ruling class was almost a caste. It had separate schools, separate tastes, separate newspapers and, occasionally, separate countries when its members were sent to govern the Empire. When the Empire fell, so did its legitimacy. The last upper-class prime minister was Sir Alec Douglas-Home. Educated at Eton, he was the only British prime minister ever to play first-class cricket. He ruled briefly from 1963 to 1964, before being shoved aside by Harold Wilson, a new man, who had not been born into privilege, and promised to forge a meritocratic Britain in the ‘white heat’ of technological revolution. The Tory Party responded by promoting meritocrats of its own. Margaret Thatcher, a provincial grocer’s daughter, so preferred clever Jews to the landed gentry that traditional Conservatives moaned that she had ‘more Estonians than Etonians’ in her cabinet. When her colleagues deposed her in 1990, they decided that Douglas Hurd’s Eton education made him too aristocratic to be her successor, and elected John Major, the son of a former trapeze artiste. Educated at Rutlish Grammar School, he was the only British prime minister ever to run away from the circus to become a politician.

The producers of popular culture confined aristocrats to the society pages or pilloried them as embodiments of all that was devious and dangerous. In a time of multiculturalism, they supplied the solitary stock character Hollywood felt it could denigrate safely. The Germans were long gone and the Soviet empire had fallen. The West was under attack from radical Islamists, but writers and directors worried that it was ‘Islamophobic’ to be beastly about them. The English upper class filled the gap in the market. You only had to hear a cut-glass accent in a Hollywood film or British television thriller to know it belonged to the villain.

The new rich never aroused the same class hatred as their predecessors because they lacked caste distinctions and seemed more at ease with the modern world. The bombastic figure of Philip Green, the shopping tycoon, exemplified their ordinariness. His fortune was beyond the imagination of most—in 2005, he paid himself a dividend of £1.17 billion, the largest payout to an individual in British corporate history. As impossible for the masses to emulate was his ability to avoid paying the same taxes as the little people who shopped or worked in his stores by ferreting away much of his wealth in the Monaco tax haven. But his tastes, like those of most of the rest of the new elite, were those of the common man. For his son’s bar mitzvah in 2005, he spent £4 million on a three-day party for his guests and hired Destiny’s Child to serenade them. A few years before, for his fiftieth birthday, Sir Philip had hired Tom Jones and Rod Stewart to perform at another three-day party, a toga one this time. On his fifty-fifth in 2007, George Michael and Jennifer Lopez did the honours. Given the same resources, the overwhelming majority of his compatriots would have paid to have Stewart, Jones and Michael croon for them if they were old, or to have Lopez and Destiny’s Child impress their friends if they were young. Culturally, the rich were no longer different from you and me. With the exception of the intelligentsia, ‘we’ could all seem the same.

To pretend, however, that ‘we were all middle class’ was wishful thinking when anyone who looked at Britain could see that ‘we’ were more segregated than at any time since the early twentieth century. At the bottom were the poor. Journalists and economists put much effort into maintaining that poverty no longer existed in Britain. The argument’s propaganda value lay in its ability to persuade the wealthy that they need not allow twinges of guilt to spoil the enjoyment of their riches—a remote possibility, I grant you, but one which free-market enthusiasts felt the need to warn against.

But although widespread hunger had been unknown since the thirties, the bottom 25 per cent of households, who could not afford to save £10 a month or pay for an annual holiday, were hard up. Those at the very bottom of the heap, living on an income of £8,600 or less, and unable to afford even £3 for a school trip without cutting back on food or heating, were poor by the standards of the rest of society.

The poor appear in these pages cooking the dinners and looking after the children of the wealthy, or cleaning up after the bankers and journalists of Canary Wharf. Inevitably, their role in the crash was to be its victims when their jobs went—assuming they had jobs, that is: the government was content to leave many vegetating on unemployment or incapacity benefit.

On the next rung up was the 50 per cent of the population which Danny Dorling, a cartographer of the English class system at Sheffield University, described as the ‘normal’ British. They had single incomes of £13,400 to £29,600 and joint incomes if they were in couples generally running into the forty thousands. They could afford school trips for their children and annual holidays. They also had the money to play the apparently unlosable housing lottery. For all their desire to be owner-occupiers, no previous generation would have described them as truly middle class. They were what we used to call the respectable working and lower middle classes.

The top 25 per cent of society was wealthy: couples with a joint income of more than £60,000, and a mortgage on a house whose price was rising faster than their salaries—faster, indeed, than they dreamed possible. As the complaining upper-middle class proved, even couples bringing in £100,000 to £150,000 did not feel rich, although those who complained about how hard it was to pay school fees were among the richest in the land. (A mere 7 per cent of parents educated their children privately.) Only the super-rich surpassed them. They did not worry about paying school fees, but, as Dorling nicely put it, ‘worried about being kidnapped’.

With China pumping out cheap goods, the standard rate of retail price inflation, and the interest rates that tracked it, stayed low. With Chinese savers pouring their capital into the international money markets, anyone who could make a half-credible case for a loan found a receptive audience among bank and building society managers.

A glut of cheap money produced rocketing asset prices, and a new generation of investors discovered the wonder of leverage. Everyone from bankers to young house-hunters could borrow cut-price to play the financial or property markets. When they sold, their asset had shot up in value while the size of their debt had merely increased with its interest rate. Few thought about the possibility of their assets shrinking in value while the size of their debt continued to increase with its interest rate. The horror of deflation was yet to come. For if the politicians, the speculators in the investment banks and the rich did not see what was about to hit them, neither did the once staid high-street bank managers—or all the eager customers who grabbed their loans.

THERE WERE PROPERTY and credit bubbles in America, Australia, much of Europe and Russia. Britain’s was up there with the best of them. Although everyone wanted to blame the Americans for the crash when it came—blaming Americans was what Europeans did best, after all—house prices rose faster in Britain than in the US, as did personal debt. While American household indebtedness reached 140 per cent, British indebtedness grew to 169 per cent of disposable income—every £1 coming into the average home had to service £1.69 of debt.

In August 2007, Britain passed a grim landmark. Consumer debts in the form of mortgages, loans and credit card bills totalled £1.35 trillion and overtook the entire gross domestic product of the country, which stood at £1.33 trillion. To put it another way, the British owed more than the value of the output of every office, factory, farm, quarry, mine and fishery in the land—and that was before economists included the immense debts of the public sector and business, which took the sum of Britain’s borrowings to three times annual economic output.

We were a bankrupt nation.

Don’t fret, said conventional economists, most personal debt is secured against homes whose prices are heading heavenwards. It is not folly to borrow to secure a piece of the action. Nor were existing ‘homeowners’ adding to their burdens if they went back into the debt market by remortgaging to pay for holidays or cars or their children’s stay at university. They were ‘releasing equity’ in their property, as the jargon of the day had it: receiving a share of profits that were rightfully theirs.

You can understand why heads were turned. By the peak of the bubble, the price of the average home was six times the average wage. Britain had never seen the like before. Even at the top of the last housing boom in 1989, average prices peaked at 4.8 times average salaries.

If they already had a halfway reasonable job, or were university students who looked to the bank as if they would have one soon, the British were flooded with offers of loans, credit cards and store cards. The managers of Northern Rock, whose roots lay in the mutual and self-help values of the building society movement of the Victorian North-East, abandoned prudential principles and hosed their customers with money.

Those who did not have the £250,000 income they needed to be truly wealthy in 2007 had no need to feel hard done by. They could still take a mortgage of up to five, six, seven, eight times their income, add in credit card and bank loans and live as if they were wealthy in executive homes with Porsche Cayennes in their drives.

Lending at this level was fantastically reckless behaviour for creditor and debtor alike when the few building societies, which had not taken advantage of Margaret Thatcher’s offer to turn themselves into banks, stipulated that three times salary was the safe upper limit. Like other lenders, Northern Rock also gave mortgages on 125 per cent of the value of a property. The banks’ generosity had the advantage of allowing borrowers to pay off credit card bills and have money left over to kit out their homes. It had the disadvantage of immediately placing debtors in negative equity.

Few cared. Houses had provided a phenomenal rate of return for a phenomenally long time. The Halifax bank estimated that between 1996 and 2006 the average house price rose by 10.6 per cent per annum (from £62,453 to £179,425). Investing in homes was more lucrative than investing in the stock market, which grew at 4.6 per cent per annum, and the returns outstripped the 2.6 per cent rise in retail price inflation four-fold.

Acquiring the capital to lever yourself on to the escalator seemed the wise option. And without doubt it is always wise to jump in and out of a bubble market, as long as buyers get the timing right and remember the cynical investor’s advice to sell on to ‘the greater fool’ before it is too late. It was not only the rich who benefited, many ordinary families made large profits that transformed their lives and status by playing the property market and cashing in before the crash came.

The media trumpeted their good fortune, but paid less attention to the casualties, whose number was growing long before the markets turned. Journalists, entertainers and artists were hopeless at dramatising their suffering, and many revelled in it.