Show Hide image

Forget about looking for “The One” and have fun with the many, says Laurie Penny

The idea that everyone has a soulmate whom they are destined to love for ever is both implausible and cruel.

I've finally done it. A year after first being ordered to do so by a succession of damp-eyed friends, I've finally finished One Day, the bestselling Hampstead duvet novel that has now been made into a slushy Hollywood blockbuster.

I originally put the book down because the two central characters, who meet on the last day of university in 1988, are both so eminently slappable that I didn't care what happened to them over the next 20 years. Emma's "bluestocking" cleverness does not stop her falling in love with a dim, arrogant borderline alcoholic in the way one might fall into, say, an enormous plothole. And Dexter is the sort of good-looking, overprivileged tosspot whom one could well imagine being made "decent", over the course of 20 torturous years of late-night phone calls and missed connections, by the love and loss of one good woman; but a faster, simpler alternative might have been to hold his head down a toilet till the kicking stopped.

Nonetheless, Dexter and Emma are each other's One True Love, and the pursuit of One True Love, as we are doggedly informed by almost every film, book, pop song and cereal packet that deals with adult emotional interaction, can never be thwarted or questioned. So, they marry, move in together and open a little artisan deli that sells "jars of duck confit", and so overwhelming is the weight of expectation that one of them just has to die in a tragic bicycle accident. The savage predictability of this ending, which I could not bring myself to dignify with a spoiler warning, bears out the tendency of the One True Love philosophy to disintegrate in the face of real life, which has an annoying tendency to carry on after the book is closed and the cameras stop rolling.

The relatively recent cultural narrative of The One - the idea that everyone has a soulmate whom they are destined to love for ever, and that your life will always be incomplete if you fail to meet, mate and move in with that person - is not only implausible, but also cruel. It implies that those who do not find their One will somehow never be complete, that those who divorce, who live and raise children alone, or who find alternative arrangements for happiness, have somehow failed as human beings. To my mind, that's a decidedly unromantic idea.

It's not that I don't believe in true love. I've been in it several times, if only for 30 seconds on the night bus home from Hackney. There are, I am convinced, people out there for whom only the girl they met in Year Ten French or the boy they met in the back of the sticky indie disco will ever do, and no other relationship can possibly compare. I know couples like that, and I'm happy for them.

The three Ms

Those people - and I really feel as if saying this might get me shot with heart-tipped Tasers by the love police - are in the minority. Now that we are not obliged to choose between celibate loneliness and yoking ourselves for ever to a person we may grow to despise, most people's lives contain many important relationships, and sometimes those relationships fade or fizzle out. That may not fit in with the dominant ideology - that monogamous marriage is the only possible healthy way to live, love and distribute welfare benefits - but it's a more accurate map of the human heart, which is not a cartoon symbol, but a complicated tangle of meat and blood.

In One Day, every other person with whom Emma and Dexter interact romantically is drawn as an inadequate no-hoper; in real life, however, human love is not a scarce resource. I don't mean to advocate casual sex, polyamory, housing collectives and late nights drinking bad vodka with bisexual activists as alternatives that necessarily work for everyone, though they've always done so for me. The point is that the three Ms - marriage, mortgage and monogamy - do not work for everyone, either, and there's no reason why they should.

The gap between passionate, everlasting, all-consuming romance and meaningless rutting remains relatively unexplored by the publishing and film industries but, to paraphrase John Lennon, a great many people live in that gap. In real life, while we're all busy chasing The One, there is a superabundance of romance, friendship, partnership, sex and adventure to be had - and that's the most romantic thing of all.

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

This article first appeared in the 12 September 2011 issue of the New Statesman, Cameron vs the shires

Getty
Show Hide image

We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?