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Guided by an invisible hand

The bank meltdown marks a turning point in our thinking about how the world works writes the Nobel L

Make no mistake: we are witnessing the biggest crisis since the Great Depression. In some ways it is worse than the Great Depression, because the latter did not involve these very complicated instruments - the derivatives that Warren Buffett has referred to as financial weapons of mass destruction; and we did not have anything close to the magnitude of today's cross-border finance.

The events of these weeks will be to market fundamentalism what the fall of the Berlin Wall was to communism. Last month in the United States almost 160,000 jobs were shed - making more than three-quarters of a million this year. My guess is that things will get considerably worse. I have been predicting this for some time, and so far, unfortunately, I have been right.

There are several reasons for my pessimism. The extreme credit crunch is a result of the banks having lost a lot of capital. And there is still uncertainty about the value of the toxic mortgages and other complex products on their balance sheets. The US economy has been fuelled by a consumption binge. With average savings at zero, many people borrowed to live beyond their means. When you cut off that credit you reduce consumption. This, in turn, will dampen the US economy, which helps keep the global economy growing. The American consumer has not only sustained the US economy, he has sustained the global economy. The richest country in the world has been living beyond its means and telling the rest of the world it should be thankful because America fuelled global economic growth.

There are further reasons for my pessimism about short-term economic prospects, in America and Europe. In the second quarter of this year, growth in the US would have been negative were it not for the growth in exports. But with the slowdown in Europe and problems in Asia it is difficult to see how we can maintain net export growth. The strengthening of the dollar - due not to greater confidence in the US but to reduced confidence in Europe - will make matters worse. The fall of energy prices will help a little, but not enough.

Treasury Secretary Hank Paulson has now come up with a new bailout scheme. The original plan - buying up the thousands of "troubled assets" (read: bad loans and complex products based on them that Wall Street created) - was badly designed and rife with problems. How would they have been priced? Call in the same Wall Street experts who got us into the mess and mispriced risk before? It is a heads I win, tails you lose situation.

The worry is that the taxpayer will be left holding the short end of the stick.

The British approach, which Paulson seems to be following, is far better, involving capital injections into banks, with preferred shares to protect against losses and warrants to share in some of the upside potential. This is the approach that I - along with most US economists and people with good street sense, like George Soros - had been saying America should adopt.

Ironically, though Paulson wouldn't listen to us, he seems to have listened to Gordon Brown.

Many of the problems our economy faces today are the result of the use of misguided models. Unfortunately, too many took the overly simplistic models of courses in the principles of economics (which typically assume perfect information) and assumed they could use them as a basis for economic policy. Many central banks use the notion of inflation targeting - that they should focus exclusively on inflation, raising interest rates when inflation increases. But I would argue that central banks have a broader responsibility; they are supposed to ensure the stability of a country's economy. While monetary authorities in the US and elsewhere focused on price stability, they allowed the financial system to undertake risks that put the whole economy in jeopardy.

This crisis is a turning point, not only in the economy, but in our thinking about economics. Adam Smith, the father of modern economists, argued that the pursuit of self-interest (profit-making by competitive firms) would lead, as if by an invisible hand, to general well-being. But for over a quarter of a century, we have known that Smith's conclusions do not hold when there is imperfect information - and all markets, especially financial markets, are characterised by information imperfections. The reason the invisible hand often seems invisible is that it is not there. The pursuit of self-interest by Enron and WorldCom did not lead to societal well-being; and the pursuit of self-interest by those in the financial industry has brought our economy to the brink of the abyss.

No modern economy can function well without the government playing an important role. Even free marketeers are now turning to the government. But would it not have been better to have taken action to prevent this meltdown? This is a new kind of public-private partnership - the financial sector walked off with the profits, the public was left with the losses. We need a new balance between market and government.

Professor Joseph E Stiglitz is chair of the Brooks World Poverty Institute at the University of Manchester and a 2001 Nobel prizewinner

This article first appeared in the 20 October 2008 issue of the New Statesman, My year with Obama

Tate London 2014
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The good daughter

The truth is I don’t want to be a full-time carer, any more than I wanted to be a full-time mother. And I don’t want to live with my ma any more than she wants to live with me.

In Tate Britain is a painting by the Victorian artist George Elgar Hicks of a woman ministering tenderly to her invalid father. It is called Comfort of Old Age. The work is the final panel of Hicks’s triptych Woman’s Mission. The first part, Guide of Childhood, in which the same figure teaches her little boy to walk, has been lost. But the second panel also hangs at the Tate in London: Companion of Manhood shows our heroine consoling her husband after ghastly news.

Hicks depicted “woman” in her three guises – mother, wife, daughter – and in her ideal state, the selfless provider of guidance, solace and care. Her life has meaning only in so far as it nourishes and facilitates the lives of others, principally men.

Domestic and emotional labour, we call it now. Feminists have long campaigned both for this to be acknowledged as real work and for men to do their share. Women cannot reach their potential at the office, notes Facebook’s Sheryl Sandberg in her book Lean In, until men pull their weight at home. But this has always been the toughest, messiest fight, because it is about domestic harmony, varying standards of personal hygiene, nagging, sulking and love. Besides, there is an enduring sense, little changed since Hicks’s day, that not only are women better at caring duties, but it is their natural lot.

I have spent a long time in the first two panels of the triptych: a partner/wife for 30 years, a mother for 21. (My two sons are grown and pretty much gone.) And I have seen, in the course of my adult life, enormous progress in those two domains. Men no longer assume that wives will dump their careers to follow them on foreign postings, for instance, or that mothers cannot work. According to research by the Office for National Statistics, women still do 40 per cent more household chores than men but, growing up, I never saw a man make dinner, let alone push a pram. Marriages are increasingly equal partnerships and each generation of fathers is more engaged.

Now I have reached the third panel, the trickiest bit of the triptych. My 93-year-old mother is 200 miles away in Doncaster, and since my father died, five years ago, she has been living alone. She is – I must stress – admirable, independent, uncomplaining and tough. A stoic. Someone who doesn’t mourn her every lost faculty but relishes what she can still do. Yet almost everyone she ever knew is dead, and I am her only child: her principal Comfort of Old Age.

For a long time, the landscape was a series of plateaus and small dips. Her little house acquired rails, walking frames, adaptations; she wears an emergency pendant. But until she broke her hip four years ago, she wouldn’t even have a cleaner. (“I don’t want strangers in my house.”) She managed. Just. But since Christmas the terrain has shifted. A persistent infection, two collapses, three ambulance rides, tachycardia (in which your heart beats to the point of explosion), but then, after three weeks, back home. Finally I persuaded her to have carers – nice, kindly, expensive – for an hour five times a week. (She demanded days off.) A slightly lower plateau.

Then, a few weeks ago, a neighbour called to say that my ma’s curtains were still closed at 4pm. She was found dehydrated, hallucinating. (She hadn’t pressed her emergency button; it was a non-carer day.) I hurriedly packed my bag for God knows how long, then scrambled north to sit by her bedside believing, for the third time this year, that I was watching her die.

For three weeks, on and off, I slept alone in my teenage single bed, in the house where I grew up, weeping every time I opened a cupboard to see her cake tins or Easter eggs for her grandsons. That week, I read a news report about how having children makes people live two years longer. Of course! As her daughter, I was her advocate, hassling doctors for information, visiting, reassuring, making sure she was fed, washing her soiled clothes (even long-stay units won’t do laundry), trying to figure out what to do next. God help the childless! Really, who will speak for them?

Finally, having wrestled her into (almost) daily care – she is very stubborn – I returned to London to find a letter. I am a Times columnist and write a weekly notebook slot, occasionally featuring my mother. I am used to harsh reader critiques of my life. But this, I must say, stung. It was from a man who lives in Cheshire (he had supplied his name and address), and he wanted me to know what a terrible person I am. “I have been puzzled when reading your column over the past months how you have been able to leave your mother – whose serious health issues you have used as copy . . . to holiday in Mexico, East Anglia and Norway.” I was “selfish and self-regarding”, and I should be ashamed.

He was not the first. Online posters often chide me for maternal neglect, and otherwise kind letters sometimes conclude: “But I do think your mother should move in with you.” Anyway, my egregious Mexican holiday had been long delayed by her illness and although she was well when I left, I was braced to fly back at any moment. The Norway trip was to visit my son on his 21st birthday. No matter. How dare I have a life.

I was reminded of when my children were young and I was a magazine editor. The guilt-tripping, the moral judgement: the looks from full-time mothers, the pursed lips from older relatives. Why bother having kids if you work full-time? Back then, I was “selfish and self-regarding”, too. My husband, who worked vastly longer hours, was blameless.

So let me warn you that just when you’re free from being judged as a mother, you’ll be judged as a daughter. It is the last chance for reactionary types who resent women’s career success, or just their freedom to live how they choose, to have a dig. Look at this selfish bitch, weekending in East Anglia when she should be a Comfort of Old Age.

When we say someone is a Good Dad, it means he turns up to football matches and parents’ evenings, gives sensible advice, isn’t a derelict alcoholic or a deserter. I know many fathers do much, much more. But that is the bar to Good Dadhood. It is pretty low. To qualify as a Good Mother, however, a woman must basically subsume her entire existence into her children and household and may only work part-time, if at all.

So, what is a Good Daughter? A US report showed in 2014 that daughters were twice as likely as sons to care for their elderly parents. In a survey of 26,000 older Americans, Angelina Grigoryeva, a sociologist at Princeton University, discovered that daughters provide as much care as they can manage, while sons do as little as they can get away with. If they have sisters or even wives, men are likely to leave it to them. I can find no equivalent UK study, but I’d bet the same is true here.

I know many sons who help out with ageing parents: Sunday care-home visits or a spot of DIY. Some do the truly grim stuff, such as washing and toileting a frail, dementia-patient father. And all sons – unless they are estranged, or cruel, or in prison – are Good Sons. Being a Good Daughter is a much tougher gig. However often I go north, sort out bills, buy new ironing boards, listen to my mother’s worries, take her shopping, organise her Christmas presents and stay awake worrying, it won’t be enough. A friend visits her disabled mother every day, despite her family and career, sorts out wheelchairs and carers, runs errands. Her three brothers drop by for ten minutes once a fortnight: so busy, so important! Yet my friend’s care is a given, and her brothers are “marvellous”. A truly Good Daughter would quit her job, have her old mother move in and tend to her alone.

The truth is I don’t want to be a full-time carer, any more than I wanted to be a full-time mother. And I don’t want to live with my ma any more than she wants to live with me. Now that I’ve served out my motherhood years, I want to do other things with my life besides looking after people. Is that a shocking admission? Men wouldn’t give it a second thought.

Yet politicians of left and right are always telling us that the solution to our screwed-up social-care system is the family. To socialists, the “care industry” is further evidence of marketisation and the profit motive taking over the personal sphere. Jeremy Hunt, the Health Secretary, has said that he favours the “Asian model” and the care minister David Mowat said recently that we must care for our parents as unquestioningly as we do our children. In practice, these all amount to the same thing: women, chiefly daughters and daughters-in-law, toiling away unpaid.

After Christmas, while my mother was living with me, frail and recuperating from her infection, I hired a private carer so that I could work. This lovely woman was boundlessly kind, calm, patient, unfazed: I am none of these things. Ask me to fix the car, get sense from a doctor, shout at the council: I’m Action Daughter, at your service. But expect me to sit still in a room making nice for hours and I am crap. In Hicks’s Woman’s Mission, I have failed.

A Times reader chastised me for hiring help: “Well, I’d expect to look after my own mother myself.” And I was reminded once more of early motherhood, when I employed a nanny. Yes, a nanny, not a childminder or a nursery. I know the word makes left-wing men crazy: you cold, rich, privileged cow. That nanny, funnily enough, allowed both my husband and me to work, but it was me who got the rap.

Even hiring a cleaner is “problematic”. A good feminist shouldn’t expect a poorer woman to clear up after her, I hear. To which I reply: my mother was a cleaner for thirty years and her meagre wages paid for my new shoes. When a couple hire a cleaner, it is nearly always to compensate for the shortfall in male domestic labour, yet it is the woman, again, who has somehow failed.

In the third part of the triptych, paid help for elderly parents is even more of a dereliction of female duty. My mother’s next-door neighbour has cared for her invalid father, unaided, for 20 years; a friend has remodelled her house to accommodate her elderly parents. Across Britain are millions of people who care for relatives with little respite. When I say that a private carer now visits my mother, I do so with shame because, most days, this is the only company she receives. A nice lady called Sue helps with her jigsaw puzzle, chats to her, does some light housework and fetches her shopping. But what she is paying for is a surrogate me.

It tears up my heart. Yet it is complicated. What if you live far from your home town: should you be expected to return? My unmarried aunt came back after an interesting single life to live with my grandmother until her death. Her siblings didn’t thank her for this sacrifice. Indeed, without the status of marriage, she was treated with disdain.

Last month, as a Nigerian health assistant helped Ma to the hospital bathroom, I remarked that she lives alone. “Why?” came the horrified response. In her culture, this made no sense. But northern European society has evolved an individualism that often transcends notions of family and duty. This applies to the old and offspring alike.

Largely our elderly do not want, Asian-style, to be infantilised by their children, or bossed around by their daughters-in-law. (The claim that Indian parents are “revered” is undermined by rampant elder abuse.) My ma wants to watch Corrie, eat quiche, not feel she is in the way. “I like to please myself,” is her refrain. Her home of almost 50 years is her carapace: her central fear is of being too ill to stay. Despite the much-discussed return of “multigenerational living”, the most popular British solution is the “granny annex”, where an old person maintains autonomy behind her own front door.

Moreover, members of the baby-boomer generation recoil at living with their parents. We spent our teenage years trying to escape. What if your upbringing featured divorce, personality clashes, arguments, abuse? What if, like me, you left your working-class culture for a completely different life – what if you have little in common? Or your widowed father now expects you to run around after him like a skivvy, just as he did your mum? You can reject your roots for your entire adulthood, then your parents’ frailty yanks you home.

Now those Guide of Childhood years seem simple and golden, although the parallels are striking. From stair gates to stairlifts; from pushchairs to wheelchairs; the incontinence provision; the helplessness. But raising children is largely a cheerful, upward trajectory. Elderly care is an uneven descent, via those dips and plateaus, towards some hidden crevasse. There is no compensatory boasting, showing cute snaps on your phone. You learn not to mention geriatric travails. People look uncomfortable or bored: too grim.

But, just as a child shows you the world anew – look, a spider, a leaf, the sea, Christmas! – through clear, unjaded eyes, older people reveal what truly matters in the end. A reader remarked that it was probably best that my mother, at 93, now died. I replied that she gets more joy in M&S than some get from a Caribbean cruise. With age, the world distils down to elemental pleasures: seeing a grandchild, a piece of cake, a sunny day, the warmth of a hand. When my father was very close to death and when recently my ma was at her sickest, both still managed to utter the words “I love you”. Just as when a frightened child cries for you in the night, you are utterly irreplaceable, needed.

And it will be your turn soon, when your parents are old. We are living longer, often fading out in medically preserved decrepitude over many years. I can’t understand why both as individuals and as a society we refuse to plan. Well, actually I can. It’s horrible. As my mother always says: “When it happens, it happens.”

Yet there is so much we could do. Come up with a cross-party agreement on how to fund social care through the tax system. Invest money and imagination in ways that old people can remain in their home, rather than slash home help. Develop friendship schemes and clubs, so the lonely aren’t so dependent on faraway children. Enable the old to use the internet: few are online, though no one would benefit from it more. Rip up the care-home model in which the elderly are objects in a chair: let people be their full human selves until the end.

Above all, we must redraw that final panel of the triptych. Don’t judge daughters more harshly than sons. Don’t let men slink away from their fair share. Don’t wield the family as a glib solution. Instead, acknowledge that it is hard, heart-rending work, being a Comfort of Old Age. 

Janice Turner is a columnist for the Times

This article first appeared in the 18 May 2017 issue of the New Statesman, Age of Lies

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