I have never been good at facts, understanding and absorbing them and placing them in their cultural context. I kid myself that I am better at relationships and values, though of course the two are related. I have just read the journalist and novelist John Lanchester’s remarkable book ‘Whoops – Why everyone owes everyone and no one can pay’ . It’s an expose of the crashed financial system under which all of us live, and from which so many innocent people are now suffering. One critic says of the book that it is ‘virtually a miracle to my mind – a comprehensible account of the credit crunch’. It was the comprehension that I found so difficult!
I suppose I can see it now, and should always have realised that the financial sector operates by some people using other people’s money to make money for themselves. But what has for ever been the norm, became in recent years a sort of madness that had rules of its own –consisting effectively of no rules at all, says Lanchester.
By an extraordinary system of shared insurance, loans were loaned out to other sources so that if there was a crash the original lender would be partly protected. Risk was (is) the name of the game. To most of us, says Lanchester, risk is a bad thing; at its best it might be dangerous and exciting. ‘In the world of money risk is different, it’s desirable’. It’s the way the system works – and the way it crashed, when the bankers inaccurately calculated what Lanchester calls the pseudo- mathematics of risk.
The financial industry caused the crises says Lanchester, but it couldn’t have happened without governments allowing the bankers to ‘write their own rules – or lack of rules.’ Similarly the utterly unrealistic mortgages which were sold by the lenders couldn’t have happened without the thoughtlessness of householders pretending that their homes belonged to them.
What has this got to do with ageing? Everything. Most older people live on limited incomes. Although they may have a mortgage on the house they live in, their home represents much if not most of their wealth. They may receive a regular pension from their previous employment and must therefore rely on the responsibility of their pension fund (or the government) for a policy of safe investments. All this is dependent on the State regulating the financial industry so that it exists rather less than at present for itself, and more for the common good. For it is not just the financiers’ wealth that is the issue; the money they hold and manipulate represents the wealth of a nation.
When will the generality of the financiers see it that way? The ‘banksters’, as Lanchester calls them.