THE pharaohs built their pyramids, gigantic tombs to propel themselves into a divine afterlife, colossal and as pointless as they were pointed. The Romans were more practical, and concentrated on useful things like aqueducts and roads, but which still served to remind the common people as they were using them of the greatness and superior nobility of Marcus Agrippa, or Appius Claudius, or whoever. The mediaeval period erected towering cathedrals to the greater glory of God, and to save their souls, while the Victorians churned out factories and railways which suited their mechanical times. Each age builds to memorialise itself and in so doing reflects what made it tick and what it valued. Does anything sum up the twentieth century better than moon rockets and war cemeteries? Together they represent the power of technology and the democratic equality of the graveyard, and the fact that our forebears mainly used the one to create so much of the other.
Our distinctive monuments are not the glass skyscrapers which adorn so many of our cities, nor even the cities themselves, but the markets which paid for them. Our edifices are flexible, electronic and dynamic, a moving wall of money, not rigid, concrete and static. They are open to all. It is possible to share in this monument not as a conscripted labourer or a sight-seeing tourist but as an active participant. Nothing that happened during the financial crisis of 2007 to 2009 alters this fact or invalidates the basic merits of this way of living.
The financial crisis does not prove that ultimately everything depends upon the state being prepared to bail out the capitalist system. What it proves is that if, in response to a developing financial crisis, the state takes certain actions rather than others, then this can effectively commit the state to a path which inexorably leads to it having to bail out the financial system, and bail it out in a particular way. We will never know what would have happened if Northern Rock had been allowed to crash in September 2007 and Bear Stearns to fail in March 2008. What we can say is that by not allowing them to fail at those times, but allowing Lehman Brothers to fail, and blocking the TARP at the first attempt, and announcing the Brown-Darling bailout in the form it took, effectively all governments were forced to follow through and buy large equity stakes in the banks after October 2008.
Civilisation requires the production of a surplus. If not everyone’s labour is needed to produce enough food to keep everyone alive then it frees some people to move into other activities, to produce other commodities, to be spared the need for daily drudgery; in short, to enjoy a higher standard of living than mere subsistence. The more developed and diversified the society, the higher the quality of life. People not working in fields can instead make pots and pans, or washing machines, or paint the ceiling of the Sistine Chapel. If this surplus is expressed in numbers we call it a profit.
It still remains the case that the most efficient way of achieving such a surplus, and hence the enjoyment of civilisation, is through having a banking system.
Surpluses can be accumulated as capital and reinvested to expand production. A system whereby some commercial enterprise has an incentive to sweep up the small surpluses of individuals to provide significant lump sums for reinvestment speeds up the process of development. It allows society to take larger steps forward which require larger capital investments. With the possible exception of the Inca (not perhaps the best example of an alternative model for society) there has not been a civilisation which did not have someone performing the functions of banking.
Excerpted from Monument and Bank: Capitalism and the Anglo-Saxon Mind by William Norton, Social Affairs Unit, 2011