In the current issue of The New York Review of Books, Michael Lewis writes that John Lanchester’s Capital (published last year and out this May in paperback) is indeed the financial crisis novel we’ve been waiting for—even though it isn’t about the financial crisis at all.
What it is about is a time and a place: 2007-2008, London. It’s also about, according to Lewis, “a fantastic array of London characters … a Polish builder, a Hungarian nanny, a Zimbabwean meter maid, a police detective, a conceptual artist, a little old lady, a Kenyan football player and his father, an Indian newsagent and his extended family, and above all, a British investment banker and his wife.”
And though none of these characters is directly responsible for what happened at the end of the aughts, they show us, says Lewis, “the effects of the world we’ve created, or allowed to be created for us. Capital may open as a story about money, but it ends as a story of the limits of money.”
Lewis, the best-selling author of numerous nonfiction books, including two about the recent financial crisis, The Big Short and Boomerang, calls Capital’s fictional world a place where “the lust for money is a moral disease with an extremely high mortality rate,” a place that’s “plausible and unforced and true, even, I’ll bet, to many people who work in the City of London.”
In fact, Lewis himself lived for a time in London. Not during 2007 and 2008, but during the 1980s. And of that time Lewis writes:
If you had to pick a city on earth where the American investment banker did not belong, London would have been on any shortlist. In London, circa 1980, the American investment banker had going against him not just widespread commercial lassitude but the locals’ near-constant state of irony. Wherever it traveled, American high finance required an irony-free zone, in which otherwise intelligent people might take seriously inherently absurd events: young people with no experience in finance being paid fortunes to give financial advice, bankers who had never run a business orchestrating takeovers of entire industries, and so on. It was hard to see how the English, with their instinct to not take anything very seriously, could make possible such a space. Yet they did.
Lewis later writes of the “net effect of Wall Street’s arrival in London”:
[It] was to get rid of the dole for the poor and replace it with a far more generous, and far more subtle, dole for the rich. The magic of the scheme was that various forms of financial manipulation appeared to the manipulators, and even to the wider public, as a form of achievement. All these kids from Oxford and Cambridge who flooded into Morgan Stanley and Goldman Sachs weren’t just handed huge piles of money. They were handed new identities: the winners of this new marketplace. They still lived in England but, because of the magnitude of their success, they were now detached from it.
Meanwhile, during this time, across the Atlantic, over on Wall Street, Lewis himself was handling piles of money for an investment bank called Solomon Brothers, a firm he famously wrote about in Liar’s Poker.
Although Lanchester’s background is not in finance, he has written extensively on the financial crisis. He wrote a nonfiction book, published in 2010, focused on the crisis called I.O.U.: Why Everyone Owes Everyone and No One Can Pay, about which CNBC’s James Cramer had this to say: “Warning to bankers everywhere in the world. You better buy every single copy of I.O.U. because Lanchester’s painted the target on you that the rest of us so desperately wanted to see.”
And so you can bet that investment bankers don’t get off easily in Capital. Which is perhaps why Lewis writes, “As I read [Capital] I found myself thinking of recent research done by Dacher Keltner of the University of California, Berkeley, psychology department, showing that rich people are less likely than other people to exhibit compassion, empathy, or concern for anyone’s interest but their own.”
And indeed, during his review, Lewis cites a choice passage of Capital that underscores the greed (though not a Gordon Gekko-esque greed, but more of a passive, shoulder-shrugging greed) of the investment banker at the center of Lanchester’s novel. And at the close of his review, Lewis comments on why he believes not much has been done, politically speaking, in the wake of the great financial crisis, which, in part, was caused by the greed (and hubris) of investment bankers (traders, insititutional salespeople, etc.):
If the memory of British socialism wasn’t so fresh—if people didn’t still recall just how dreary London felt in 1980—they’d be pulling down the big banks, and redistributing the wealth of the bankers, and it would be hard to find a good argument to stop them from doing it. The absence of the satisfying political response to the financial crisis is due, at least in part, to the absence of an ideological vessel to put it in. No one wants to go forward in the same direction we’ve been heading, but no one wants to turn back either. We’re all trapped, left with, at best, the hope that our elites might experience some kind of moral transformation.
A high hope, to be sure.
In any case, what Lewis has done here, while highlighting what is perhaps the financial crisis novel we’ve been waiting for, is perhaps written the financial crisis review we’ve been waiting for as well.
The Way They Live Now (nybooks.com)
Obama’s Advice for Would-Be CEOs
Capital: A Novel