Trading futures and the descent of capitalism

Matthew Oxenhay, the protagonist of Trading Futures, couldn’t make sense of it. How had he managed to spend a working life in the City, more or less guessing what would happen to the future prices of commodities, and earn millions of pounds from doing it? And how had he managed to do it while continuing to vote Labour?  

You can call Matthew a hypocrite, which is what he calls himself, but perhaps that is too harsh. He is not the only one who can’t make sense of it. I can’t make sense of it. And maybe you can’t either.

Capitalism is an amoral system. Not immoral. Amoral. It doesn’t pretend to offer a moral view on society, or on anything. It offers a view on the best means of creating wealth. What is then done with that wealth, and whether it is redistributed or remains concentrated in the hands of its possessors, is immaterial to capitalism, as long as what is done does not obstruct the creation of further wealth.

Yet capitalism, especially in its early days, can lay claim to moral virtues, if not to a moral system. The theory was simple, and the cornerstone of it was risk. Capitalists took risks. They used money to start business ventures, or to invest in them. If the venture succeeded, they made a lot more money. There was a downside, though: if it failed, they lost money, and sometimes everything. It was always a form of gambling.

But it was a form of gambling that was essential to the creation of jobs and wealth. It built all the most successful companies in the world. And for every Rockefeller and Getty, there were dozens who failed, and who are not remembered. Nothing could, or can, be created without risk. Some people have always been prepared to take those risks. To those that succeed, I think that most of us would say “good luck”.

When the Eastern bloc collapsed in 1989-91, together with the credibility of the diluted Marxism of western social democracies, this was presented – and is still regarded – as the triumph of capitalism. It was not. Capitalism, as defined above, had started to erode many decades earlier, and has continued to erode ever since.

In the early 1970s, I was involved in writing and producing a pilot comedy series for the BBC with an eccentric genius called Noel Picarda Kemp. It never aired. Amongst our characters was an ‘alternative entrepreneur’, who was devoted to undermining capitalism by removing the element of risk. If only we’d known. Well, I suppose we did know, which was why we came up with the idea.

Risk has now been removed from the commanding heights of the so-called capitalist world. The scandal of the 2008 banking crisis was not that western financiers were greedy, nor that they showed unbelievably poor judgment, although both of those things were self-evidently true. The scandal was that there was no downside to the risks they took. If the risks came off, they made millions. If they didn’t, they still made millions. They gambled with other peoples’ money, and in the end with our money – without our permission.

In the 19th century, if a British bank made unwise investments, it went bust. There were multiple banking failures throughout the century. A bank was not necessarily a safe place to keep money. A bank may still not be a safe place to keep money, but banks are now said to be ‘too big to fail’, so they’re not allowed to fail.

It is impossible to separate this development from the growth of democracy, or from the spread of wealth through the community. In the 19th century, few people had bank accounts, and those who did mostly understood the risks they were running. There were no political consequences if a bank failed. Now, the repercussions are immense and no government can afford politically to let a major financial institution go to the wall, as we saw in 2008.

Old-style entrepreneurial capitalism still exists, of course. It still throws up a Bill Gates or a James Dyson, who have taken the risks and reaped the rewards. And it still throws up a thousand others, like me, who have taken the risks and lost everything. Which is perhaps why we are angry when we look at people in the City, like Matthew Oxenhay, who take no personal risks whatsoever and continue to earn millions.

The system under which we now live is not capitalism, as our forebears would have understood it. It could go under any number of names – perhaps corporatism is as good as any. It consists of a global elite, implicating governments, financial institutions, law firms and major companies around the world, where unimaginable sums of money are endlessly recycled, mainly for the benefit of the participants.

Holidaying in Sri Lanka in 1980, I came to see that there were two economies there: the tourist economy, of which I was a part, and the economy in which everyone else worked and lived. The two had nothing in common, least of all the prices. They didn’t belong in the same country. Now, we all live in a two-tier world. Yes, I am a relatively well-off member of the world of the majority. But I am no closer to the upper echelon of money than the average Sri Lankan was, and still is, to the tourist economy.

Some day all this will change. It will have to. There is, strangely, more in common between otherwise wildly opposing political views than one might imagine. There is much in the analysis of Jeremy Corbyn and Bernie Sanders with which I agree, although not in their proposed remedies.

‘It is generally assumed,’ says Matthew Oxenhay in Trading Futures, ‘that the surrealist movement never reached Barnet. Wrongly so, in my opinion. In this argument, I appeared to be defending crooked capitalist practices on behalf of the Labour Party, while the brave Captain Ahab spoke for the downtrodden masses on behalf of the Tories. Something was wrong…’

Something is wrong.