John Cunningham reviews Private Island: Why Britain Now Belongs to Someone Else, by James Meek (Verso Press) and How To Speak To Money by John Lanchester (Faber and Faber).
Both these books perform a valuable service to those concerned with mounting a sustained critical analysis of how capitalism in its present day forms actually works. Although neither author draws any radical conclusions from his analysis, there is rich material in these pages to learn from.
Much of what James Meek has to say about the state of the British economy will probably come as no surprise to readers of Solidarity. He relates in some detail the now familiar and sordid tale of how whole swathes of British industry were flogged off, often at rock-bottom prices, to a cabal of free-marketeer carpetbaggers who were then bailed out by the taxpayer (me and you) when the shit hit the fan in 2008.
What is much more interesting, I think, are the details of what this neo-liberal car boot sale entailed.
Thatcher’s policy of dismantling state-owned industries was, at the time, often described by her political opponents as “madness”, although this ignores the fact that, to neo-liberals, it was logical (remember, “There is no alternative”) and undebatable.
As a political project it was, undoubtedly successful (depending of course on which side of the barricades you are standing) and, indeed, much of it came to be accepted as “common sense”, as the bedrock of the economic terrain of the UK. Certainly Tony Blair and Gordon Brown accepted it as such and embraced it with enthusiasm; this was possibly Thatcher’s most enduring legacy. Yet, when the dust has settled the epithet of “madness” sticks and this is what shines out in much of Meek’s book.
I will draw the attention of the reader to the chapter on the railways, “Signal Failure”. Here fantasy and the quite frankly bizarre congeal to provide a narrative which at times reads like a marriage of Franz Kafka and The Mad Hatter’s Tea Party.
Meek centres his account on the attempt to construct HS1 “...the single most expensive non-military task ever undertaken by Britain alone” — the modernisation of the West Coast Mainline railway between Glasgow and London. Starting in 1997 and finally abandoned in 2005. HS1 was originally budgeted at £1.5 billion but finally cost £9 billion, much of it from the taxpayer.
After much huffing and puffing all there was to show for this huge expenditure was some upgrading of the track between Rugby and Crewe. It is worth noting, as Meek points out, that the title West Coast Main Line (WCML) is a misnomer and is actually a complex network of railway lines connecting numerous cities and towns between Glasgow and London. It is the oldest inter-city railway in the world and had not been updated since the mid-1960s. By the time of privatisation (1993) it was falling apart.
How exactly do you throw away £9 billion on a project that was, by any standards, an utter failure? Your first step into the rabbit hole is to sack all or most of your technical experts, planners and engineers and contract out all the specialised work.
You then let your “team” be led up the garden path by accountants and people who often had no experience in the railway industry. People like Robert Horton, chairman of the newly privatised railways, who had established his reputation at BP (until he was sacked in 1992) or Rod Muttram, the new director of electrical engineering who had been ‘headhunted’ from the arms industry.
As Meek points out “Of the eventual core team of eight consultants [on HS1], only two had experience of British mainline railways, one a very junior level. Four of them were American or normally based in the USA”.
Most importantly, none of the consultants had any experience of the proposed new technology around which HS1 was to be built — moving block signalling. In fact very few people in the world had any experience of moving block signalling, for the very good reason that it did not exist. This is simply mind-boggling: an entire, extremely complex, railway network was to be modernised and rebuilt using a technology that was not tried and tested.
Some preliminary research was underway in mainland Europe and a version of the technology is used on the Docklands Light Railway and on the Shanghai metro. An attempt to implement the technology on the Jubilee Line was an unmitigated disaster. Today, twenty years on, the picture remains the same — “there is not a single main-line railway anywhere in the world, no matter how sophisticated, that uses moving block”.
The technical details of moving block signalling need not concern us here. What is important is that the privatisation of the railways, driven as it was by the desire to make a fast buck and equally driven by the suspicion and irrational distrust of any state enterprise, meant that advice from the people who actually did know what they were talking about was ignored.
The outsourcing to numerous contractors coupled with the sacking of its many in-house specialists meant that Railtrack (British Rail’s privatised successor) had few if any staff to oversee the project and it ran out of control. All that was compounded by awarding a contract to Richard Branson’s Virgin Rail, putting further pressure on Railtrack to deliver on its fairytale, while its two consortia for developing a signalling system failed to work together, making disaster look even more certain. Railtrack went into receivership in 2001. Meek doesn’t mention the new proposals for HS2 currently being energetically pushed by both the government and the Labour opposition.
If, as I suggest, the HS1 fiasco looks like a chapter from Lewis Carroll, then the language used by neo-liberals, financiers and “global economists” can appear equally bizarre, though mercifully Meek spares us this extra pain and his book is extremely readable.
This linguistic zone, where the world of big money encounters the English language, is where John Lanchester steps in. How many of us have scratched our heads, when listening to the inevitable “something in the city” grey suit on TV and wondered what the hell is he talking about? What on earth is a “hedge fund”, what’s the difference between “shares” and “bonds” ... and so on. Lanchester does a sterling job explaining these terms and in the process revealing that, for example, “Quantitative Easing” does not, as commonly thought, mean printing money — it is in fact money that is generated electronically and then sold as government bonds.
One aspect that I found interesting was the way that financiers and speculators will actually try and invent new ways of making money. So, to take one example, someone somewhere had the bright idea that if there was nothing currently to speculate on, then why not gamble on “futures”, where the proceeds from, say, next year’s groundnut harvest (or the year after) in Ghana are sold on many times over? Even the proceeds from David Bowie’s future royalties can be treated in this way.
Lanchester is also very good at explaining the way that property and mortgages (even dud mortgages) are now central to financial strategy as the opportunities for exploiting new areas of the planet (e.g. mineral resources) become harder to find.
These are two useful books to have on your shelf, to learn from and refer to when some Blair-clone on TV starts jabbering on about “GDP per capita” or “credit default swap”. They will also be good to have around when the WCML finally conks out and you’re stuck in Crewe.