The economic history of Britain is a story of the many ingenious ways in which our respected financial institutions have defrauded the public. After the South Sea Bubble, numerous nineteenth century bank crashes, the bankrupting of Lloyds names, the collapse of BCCI, and the mis-selling of insurance policies and investment bonds, we now have payment protection insurance (PPI). This has involved selling spurious insurance policies (with or without the consent of the purchaser) to people taking out loans and mortgages. The ostensible purpose of the insurance was to meet the cost of loan repayments should the purchaser fall ill or become unemployed. PPI proved a big earner for financial institutions: only 15% of income from PPI was paid out in claims. This was because insurance payouts were often refused. As with unregulated health insurance everywhere, liability for illness could be denied because of ‘pre-existing conditions’. Once this fraud was exposed, the banks fought a long campaign to block repayment. However, this seems to be coming to an end, as some are now making provision for repayment - £3.2 billion in the case of Lloyds and £1 billion for Barclays.
This raises the question of what are banks for? A conventional answer is that they are safe depositories for our cash which banks use to advance loans to individuals and businesses. These should be low-risk investments which are repaid with interest. Income from interest is in turn used to pay a smaller rate of interest on depositors’ accounts, a reasonable dividend for the banks’ shareholders, and to meet the staffing and other costs of the banks themselves.
If banks have tried to defraud their depositors, they have hardly been favourable to their other main stakeholders. Banks have lent £2 billion less to small and medium enterprises than the government target, and many small businesses have been forced into receivership or have been unable to borrow money to meet the costs of orders. Shareholders have hardly benefited either. RBS and Lloyds TSB have been partially nationalised, while Barclays’ shares are 35% of their peak value in January 2007. So who has benefited from the frauds perpetrated by our banks? The answer of course is their senior managers, who, despite the exposure of fraud, bankruptcy, and nationalisation, have continued to award themselves huge salaries and bonuses (£2 BILLION for Barclays alone this year). A British bank therefore resembles a galleon full of treasure that has been captured by pirates, who sail around the high seas robbing all they encounter.
There is a general lesson here. People who rise to the top, whether in business or politics, tend to be more egoistic, more ruthless, and less moral than the rest of us. This egoism can generate the energy to achieve great things, but it is essential that we regulate their actions and watch them carefully for our own protection. Of course, the senior managers of the banks argue that restricting their bonuses and regulating their activities would only encourage them to move their operations overseas. But this is an unconvincing threat - rather like the Mafia threatening to leave Italy.
Wednesday 25 May 2011
Saturday 7 May 2011
What we ate and what we called it
In Jack Vance’s wonderful science fiction story The Killing Machine, his hero Kerth Gerson visits an area of a city inhabited by a people called the ‘Sandusk’, notorious for their cuisine:
The air of Ard Court smelled richly indeed, with a heavy sweet-sour organic reek that distended the nostrils. Gersen grimaced and went to the shop from which the odours seemed to emanate. Taking a deep breath and bowing his head, he entered. To right and left were wooden tubs, containing pastes, liquids, and submerged solids; overhead hung rows of withered blue-green objects the size of a man's fist. At the rear, behind a counter stacked with limp pink sausages stood a clown-faced youth of twenty, wearing a patterned black and brown smock, a black velvet headkerchief. He leaned upon the counter without spirit or vitality, and without expression watched Gersen sidle past the tubs.
"You're a Sandusker?" asked Gersen.
"What else?" This was spoken in a tone Gersen could not identify, a complex mood of many discords: sad pride, whimsical malice, insolent humility. The youth asked, "You wish to eat?"
Gersen shook his head. "I am not of your religion."
"Ha ho!" said the youth. "You know Sandusk then?"
"Only at second-hand."
The youth smiled. "You must not believe that old foolish story, that we Sanduskers are religious fanatics who eat vile food rather than flagellate ourselves. It is quite incorrect. Come now. Are you a fair man?"
Gersen considered. "Not unusually so."
The youth went to one of the tubs, dipped up a wad of glistening black-crusted maroon paste. "Taste! Judge for yourself! Use your mouth rather than your nose!"
Gersen gave a fatalistic shrug, tasted. The inside of his mouth seemed first to tingle, then expand. His tongue coiled back in his throat.
"Well?" asked the youth.
"If anything," said Gersen at last, "it tastes worse than it smells."
The youth sighed. "Such is the general consensus."
The general consensus is that English food was in the past not far removed from that of the Sanduskers, although things are thought to have improved in recent decades with food introduced by South Asians, Europeans and others. My memories of food from the 1950s are different - there was certainly a lack of variety, but the food (at least that cooked by my mother) was tasty and nourishing. When I was at primary school, each day began with porridge and milk. At lunchtime, I would walk home and have dinner, which usually comprised meat and two veg, followed by a pudding such as apple pie and custard. I would then walk back to school. After school, I would have tea, which might be poached eggs on toast. A bit later, my father would cycle home from work, and would sit in the kitchen having his dinner (the main course of which he flavoured heavily with brown sauce). We would all eat supper together. This was a snack just before bedtime, and always comprised toast and a cup of tea.
Sundays were different. We would start the day with a vast fried breakfast. This would be followed in mid-morning with coffee (the only coffee we had all week). This was made from instant coffee with milk. At about 1pm, we would have our dinner, which was usually roast meat with roast potatoes and sundry boiled vegetables in season. My father would have sausages instead because he disliked the appearance of meat. Pudding might be a sponge or apple pie with custard. In the evening, tea would be a salad. This was never chopped or dressed, although there might be a sweet salad cream available. Supper was as usual.
Despite considerable amounts of food, we did not become obese or otherwise unhealthy. This was probably because we walked everywhere, played in the street until it got dark, and watched very little television. The state rations of orange juice and cod liver oil probably also helped.
Since those days, I have led a less healthy lifestyle. I do, however, eat food from many different cuisines, much of it frozen, processed, or transported long distances. I have, like many English people, also become utterly confused about what to call the meals I eat. Words like ‘dinner’, ‘supper’, ‘tea’ (including its ‘high’ or ‘afternoon’ variants), ‘lunch’ and ‘luncheon’ seem to mean different things to different people.‘Dinner’ now seems to be any sizeable meal whenever it is eaten, although this rule does not apply to Sundays, when local pubs advertise a ‘Sunday lunch’ of roast beef and Yorkshire pudding. In despair, I now use the phrases ‘midday meal’ and ‘evening meal’ in conversations to enhance mutual understanding. Everybody seems to understand what a breakfast is, although what we eat at that meal varies greatly. Still, on Sundays I still eat a big fried breakfast with a roast dinner later. Some traditions never die.
Vance J (1967) The Killing Machine. Glasgow: Grafton Books.
See also Dining in Yuppieland
The air of Ard Court smelled richly indeed, with a heavy sweet-sour organic reek that distended the nostrils. Gersen grimaced and went to the shop from which the odours seemed to emanate. Taking a deep breath and bowing his head, he entered. To right and left were wooden tubs, containing pastes, liquids, and submerged solids; overhead hung rows of withered blue-green objects the size of a man's fist. At the rear, behind a counter stacked with limp pink sausages stood a clown-faced youth of twenty, wearing a patterned black and brown smock, a black velvet headkerchief. He leaned upon the counter without spirit or vitality, and without expression watched Gersen sidle past the tubs.
"You're a Sandusker?" asked Gersen.
"What else?" This was spoken in a tone Gersen could not identify, a complex mood of many discords: sad pride, whimsical malice, insolent humility. The youth asked, "You wish to eat?"
Gersen shook his head. "I am not of your religion."
"Ha ho!" said the youth. "You know Sandusk then?"
"Only at second-hand."
The youth smiled. "You must not believe that old foolish story, that we Sanduskers are religious fanatics who eat vile food rather than flagellate ourselves. It is quite incorrect. Come now. Are you a fair man?"
Gersen considered. "Not unusually so."
The youth went to one of the tubs, dipped up a wad of glistening black-crusted maroon paste. "Taste! Judge for yourself! Use your mouth rather than your nose!"
Gersen gave a fatalistic shrug, tasted. The inside of his mouth seemed first to tingle, then expand. His tongue coiled back in his throat.
"Well?" asked the youth.
"If anything," said Gersen at last, "it tastes worse than it smells."
The youth sighed. "Such is the general consensus."
The general consensus is that English food was in the past not far removed from that of the Sanduskers, although things are thought to have improved in recent decades with food introduced by South Asians, Europeans and others. My memories of food from the 1950s are different - there was certainly a lack of variety, but the food (at least that cooked by my mother) was tasty and nourishing. When I was at primary school, each day began with porridge and milk. At lunchtime, I would walk home and have dinner, which usually comprised meat and two veg, followed by a pudding such as apple pie and custard. I would then walk back to school. After school, I would have tea, which might be poached eggs on toast. A bit later, my father would cycle home from work, and would sit in the kitchen having his dinner (the main course of which he flavoured heavily with brown sauce). We would all eat supper together. This was a snack just before bedtime, and always comprised toast and a cup of tea.
Sundays were different. We would start the day with a vast fried breakfast. This would be followed in mid-morning with coffee (the only coffee we had all week). This was made from instant coffee with milk. At about 1pm, we would have our dinner, which was usually roast meat with roast potatoes and sundry boiled vegetables in season. My father would have sausages instead because he disliked the appearance of meat. Pudding might be a sponge or apple pie with custard. In the evening, tea would be a salad. This was never chopped or dressed, although there might be a sweet salad cream available. Supper was as usual.
Despite considerable amounts of food, we did not become obese or otherwise unhealthy. This was probably because we walked everywhere, played in the street until it got dark, and watched very little television. The state rations of orange juice and cod liver oil probably also helped.
Since those days, I have led a less healthy lifestyle. I do, however, eat food from many different cuisines, much of it frozen, processed, or transported long distances. I have, like many English people, also become utterly confused about what to call the meals I eat. Words like ‘dinner’, ‘supper’, ‘tea’ (including its ‘high’ or ‘afternoon’ variants), ‘lunch’ and ‘luncheon’ seem to mean different things to different people.‘Dinner’ now seems to be any sizeable meal whenever it is eaten, although this rule does not apply to Sundays, when local pubs advertise a ‘Sunday lunch’ of roast beef and Yorkshire pudding. In despair, I now use the phrases ‘midday meal’ and ‘evening meal’ in conversations to enhance mutual understanding. Everybody seems to understand what a breakfast is, although what we eat at that meal varies greatly. Still, on Sundays I still eat a big fried breakfast with a roast dinner later. Some traditions never die.
Vance J (1967) The Killing Machine. Glasgow: Grafton Books.
See also Dining in Yuppieland
Thursday 5 May 2011
Osama Bin Laden’s prison
Osama bin Laden is dead, but he spent the last five years of his life in a home-made prison. The ‘compound’ in Abbotabad was surrounded by 12 foot high walls topped by barbed wire. There was no garden, just a dusty exercise yard. Bin Laden never left the compound, but spent all his time in one room of a crumbling ill-equipped house, without air conditioning, phone or internet. He could see little from his room of the pleasant town or the lovely hills that surround it.
The death of Osama bin Laden has generated the usual plethora of ingenious conspiracy theories. But the key issue is not who has died, but what has died. A man so isolated could only communicate by couriers, perhaps carrying computer discs. It is difficult to see how he could have actively led his organisation in such circumstances, beyond the rare message intended to inspire its members. His location also made him and Al Qa’ida vulnerable. Couriers are relatively easy to track, and, if detected, would have made the whole al Qa’ida network more open to surveillance. If Pakistani intelligence services did know of bin Laden’s whereabouts, they may have preferred him alive than dead, particularly since they would well understand the power of martyrdom.
The urge for martyrdom combined with mass murder has of course been the chief weapon of al Qa’ida. The urge to destroy others, whether family members, workmates or random members of the public often culminates with the suicide of the murderer. This phenomenon occurs in all countries and religions, and participants have usually led unexceptional and conformist lives until that point. The skill of Al Qa’ida, like the Tamil Tigers (who invented this form of warfare), is to provide a reason for and to reinforce the desire for martyrdom that occurs in many people who are depressed, or idealistic, or disoriented.
The great personal tragedies that have resulted from this barbarism have not advanced the purported cause of Al Qa’ida whatsoever. But they have had a profound effect on the countries it opposes: security services in North America and Europe have been massively empowered to override human rights; some politicians in the USA enthusiatically support torture (and some of those in Europe collude with them); travellers are now everywhere regarded as potential terrorists, screened, X-rayed, and frisked; armies, human and financial resources have become committed to multiple forever wars; and cheering crowds have gathered outside the White House to celebrate the execution of an unarmed man by a state death squad.
The death of Osama bin Laden has generated the usual plethora of ingenious conspiracy theories. But the key issue is not who has died, but what has died. A man so isolated could only communicate by couriers, perhaps carrying computer discs. It is difficult to see how he could have actively led his organisation in such circumstances, beyond the rare message intended to inspire its members. His location also made him and Al Qa’ida vulnerable. Couriers are relatively easy to track, and, if detected, would have made the whole al Qa’ida network more open to surveillance. If Pakistani intelligence services did know of bin Laden’s whereabouts, they may have preferred him alive than dead, particularly since they would well understand the power of martyrdom.
The urge for martyrdom combined with mass murder has of course been the chief weapon of al Qa’ida. The urge to destroy others, whether family members, workmates or random members of the public often culminates with the suicide of the murderer. This phenomenon occurs in all countries and religions, and participants have usually led unexceptional and conformist lives until that point. The skill of Al Qa’ida, like the Tamil Tigers (who invented this form of warfare), is to provide a reason for and to reinforce the desire for martyrdom that occurs in many people who are depressed, or idealistic, or disoriented.
The great personal tragedies that have resulted from this barbarism have not advanced the purported cause of Al Qa’ida whatsoever. But they have had a profound effect on the countries it opposes: security services in North America and Europe have been massively empowered to override human rights; some politicians in the USA enthusiatically support torture (and some of those in Europe collude with them); travellers are now everywhere regarded as potential terrorists, screened, X-rayed, and frisked; armies, human and financial resources have become committed to multiple forever wars; and cheering crowds have gathered outside the White House to celebrate the execution of an unarmed man by a state death squad.
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