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The New Depression

The business and political elite are flying blind. This is the mother of all economic crises. It has

We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.

Crises that change the course of history and transform political assumptions are rare events. The last came in the second half of the 1970s, triggered by the Opec oil price spike and a dramatic rise in inflation, which marked the end of the long postwar boom. Its political consequences were far-reaching: the closure of the social democratic era, the rise of neoliberalism, the discrediting of the state, the embrace of the market, the undermining of the public ethos and the espousal of rampant individualism. For the next 30 years, neoliberalism - the belief in the market rather then the state, the individual rather than the social - exercised a hegemonic influence over British politics, with the creation of New Labour signalling an abject surrender to the new orthodoxy.

The modalities of this present crisis are entirely different. Extreme as they may have appeared to be at the time, the economic travails of the 1970s were progressive rather than cataclysmic. The old system did not hit the wall, but became increasingly mired and ineffectual. What swept the social democratic era away was not the force de frappe of an irresistible crisis but that it was accompanied by the steady rise of a new ideology and political force in Thatcherism - and Reaganism in the United States - and its victory in the 1979 general election.

In contrast, the financial meltdown of 2007-2008 demolished the neoliberal era and its assumptions with a suddenness and irresistibility that was breathtaking. The political class, from New Labour to the Conservatives, is standing naked. They are still clinging to the wreckage of their old ideas while acknowledging in the next breath that these no longer work. The financial crisis is a matter of force majeure; political ideas and discourse change much more slowly, even when it is obvious that the old ways of thinking have become obsolete. Meanwhile, there is no political alternative waiting in the wings, refining its radical ideas in think tanks ready to storm the citadels of power as there was in the 1970s, notwithstanding the fact that think tanks are now far thicker on the ground. Instead, it has been the mainstream which senses that neoliberalism no longer works, fatally undermined by events and, ultimately, the author of its own downfall. This crisis will have the most profound and far-reaching political consequences and will in due course transform the political landscape, but it remains entirely unclear in what ways and when that might be.

In all these senses the financial meltdown has far more in common with the Great Depression than the Great Inflation. When the financial crisis consumed Wall Street in 1929 and proceeded to undermine the real economy, engulfing Europe in the process, it was not accompanied by a radical shift towards Keynesianism, but rather a reassertion of sound finance orthodoxy, followed in due course by the adoption of protectionism. The political mainstream as represented by Labour's Ramsay MacDonald and Philip Snowden and the Conservative Stanley Baldwin all sang from the same hymn sheet. Only Keynes and a faction of the Liberal Party enunciated a plausible alternative. Eventually a programme of fiscal deficits and public works was pursued by Franklin D Roosevelt in the United States, but in Britain Keynesianism was not properly embraced until rearmament and the approach of war. Indeed, it was not until 1945 that the combined legacy of war and the Depression belatedly resulted in a fundamental political realignment and the birth of the social democratic era.

The Grim Reaper has finally spoken:

a boom pumped up by credit steroids and a bust that takes us back to the 1930s

Since the financial meltdown dramatically intensified in September 2008, Gordon Brown has managed to ride the economic storm rather more successfully than the Conservatives, or, for that matter, than Tony Blair would have done. It is Vincent Cable, the Liberal Democrats' econo­mics spokesman, however, who has indubitably emerged as the political sage, unafraid of confronting neoliberalism's shibboleths, demonstrating a clarity of mind and the political courage to tell things as they are, in a way that has escaped all other prominent politicians. Although Brown was the economic architect of the past decade and was responsible, more than anyone else, for its excesses and was shaping up to be a rather disastrous Prime Minister, he displayed last autumn, at least initially, an agility of mind and nimbleness of foot that defied the expectations of those who believed he was capable of neither. He revelled in the sense of purpose and vision offered by the crisis, seemingly prepared to jettison the thinking that had imbued his previous decade as chancellor.

But Package Part I, widely hailed at the time and imitated elsewhere, proved woefully inadequate, and the financial system remains frozen. Meanwhile the waters are rising up the Good Ship UK, threatening to transform the banking crisis into a fiscal and currency crisis. It seems unlikely that, if that should happen, Brown will survive the next election.

Even if it does not happen, Brown faces a serious problem about his own past role, because Britain’s crisis has been greatly exacerbated by the soft-touch regulation, easy credit, runaway house inflation and overexpansion of financial services over which he presided and for which he is accountable. So far he has refused to admit or accept responsibility for his actions – he initially had the temerity (or foolhardiness) to argue that the UK was better placed than other countries to deal with the credit crunch, even though it has become abundantly clear since that the very opposite was the case. So while Brown remains in denial, the plausibility of his new turn, and his understanding of what is entailed, must be seriously doubted.

Indeed, after its initial boldness, the government now seems trapped by its past actions and its former ways of thinking. Brown's failure to accept the need to nationalise the banks suggests the limits of his new-found political courage, and his inability to embrace the logic and imperatives of the new situation. He is still a prisoner of his old timidity and his conversion to the neoliberal cause. It is his good fortune that the Cameron Conservatives have been hugely wanting in their response to the financial meltdown. Having spent his first years as leader of the opposition seeking to reassure the country of his centrist credentials, David Cameron, at the first whiff of gunfire, has turned on his heels, rejected Keynesianism and, at the very moment when events have shown Thatcherism to be deeply flawed and historically out of time, headed back to the Thatcherite womb of sound finance, arguing that a government must balance its books and that deficit financing, Keynesian-style, is reckless and irresponsible.

But all this, it must be said, is the small change of politics. The crisis threatens in time to sweep away the political world as we know it and those who fail to grasp its magnitude and meaning. Far more is at stake than the fortunes of a few leaders, be their name Brown or Cameron. Who knows where things will be this time next month, let alone next year or, indeed, in 2012? The financial meltdown now rapidly plunging the western world into what increasingly looks like a depression is the first great crisis of globalisation. There was plenty of warning. The Asian financial crisis of 1997-98 proved a salutary lesson about the dangers posed by huge capital movements that were subject to precious little regulatory control. Three economies capsized (South Korea, Thailand and Indonesia) and others stood on the brink.

There were other earlier warning signs, notably Mexico in 1995, when GDP fell by 9 per cent and industrial production by 15 per cent, following a run on the peso. These crises were blamed on the immaturity and fecklessness of national governments - in the case of east Asia on so-called crony capitalism (which, incidentally, prompts the question of how we should describe Anglo-American capitalism) - which the International Monetary Fund obliged to engage in swingeing cuts in public expenditure as a condition of their bailouts.

Yet what if such a crisis were to be no longer confined to the peripheries of global capitalism but instead struck at its heartlands? Now we know the answer. The crisis has enveloped the whole world like an uncontrollable virus, spreading from the US and within a handful of months assuming global proportions, at the same time mutating with frightening speed from a financial crisis into a fully fledged economic crisis. In so doing, it has undermined the foundations on which the present era of globalisation has been built, namely scant regulation, the free movement of capital, a bloated financial sector and immense reward for greed, thereby bringing into question the survival of globalisation as we now know it.

Enormous international flows of unregulated capital have capsized the international financial system - with disastrous consequences for the real economy - in a manner akin to the effect of a roll-on, roll-off ferry shipping too much water. We can now see the cost of free-market capitalism and light-touch regulation. Iceland may provide an extreme example of the consequences of the credit crunch but it also illustrates the dangers facing the more vulnerable economies, the UK included, in a deregulated world where the market rules: a small, open economy; a large, internationally exposed banking sector; an independent currency that is not a serious global reserve currency (of which there are only three); and limited fiscal strength. These propositions have constituted the core economic beliefs - from Thatcher and Lawson to Blair and Brown - that have informed policymaking over the past three decades and without which, it was claimed ad nauseam, an economy could not succeed. Heavy-handed regulation and an overbearing state would serve only to frighten off capital and condemn a country to slow growth, stagnation and global marginality. Now we know the fallaciousness of these claims and the consequences of "letting the market decide".

Like Iceland, albeit not as extremely, Britain has been living in a fool's paradise. A failure to regulate the banks and other financial institutions in any meaningful fashion allowed bankers to behave in a grossly irresponsible and avaricious fashion; a boom that was made possible only by a government-enabled credit binge in which people borrowed recklessly; a bloated financial sector that grew to represent over 8 per cent of the total economy and which was found to have been built on foundations of sand; an overvalued currency that made manufacturing exports uncompetitive and thereby resulted in an unnecessary and counterproductive contraction in the manufacturing sector which must now be reversed; an absurd belief that boom and bust had been banished for ever, allowing the banks to turn a blind eye to the inflating of various asset bubbles and display a profound ignorance of the history of capitalism; a persistently chronic current account deficit that can no longer be compensated for by inward capital flows; monstrous salaries for those at the top of the financial and corporate tree, which were justified in terms of a trickle-down effect that remained a chimera, and as the reward for risk which was, in fact, a reward for greed and failure; growing inequality, which was justified in the name of a more competitive economy accompanied by declining social mobility in the cause of an open and flexible labour market; and, finally, the mushrooming of what can only be described as systemic corruption on a mega-scale as the state ignored the gargantuan abuses of those who ran the banks and other financial institutions, while regulatory authorities willingly colluded in their excesses.

This is the sad story of the New Labour era.

The ultimate cost of this debacle as yet remains unknown. What began as a financial crisis is threatening, as the government seeks to bail out a bankrupt financial sector, to become a currency crisis, with foreign investors concerned about the effects this might have on the value of sterling, and perhaps even worse, ultimately a sovereign debt crisis, with growing doubts about the UK’s financial viability. Until there is some end in sight to the financial crisis, and a line can be drawn under the banks’ indebtedness, we will not know the answer to these questions. One thing is clear, however: whatever the limitations of the social democratic era, it was never responsible for such an all-enveloping and cataclysmic crisis as the one that the neoliberal era – and the Thatcherites and New Labour – have managed to produce. After all the boasting about the virtues of the Anglo-American model of capitalism, the Grim Reaper has finally spoken: a boom pumped up by credit steroids and a bust that takes us back to the 1930s.

There are two key aspects to this crisis: national and global, with the latter promising to be rather solutions are concerned, we are in uncharted territory, with close to zero interest rates, a Keynesian-style fiscal boost that may prove inadequate to the task and could well fail, a hugely indebted financial sector that threatens to leave us with an enormous future tax burden and a greatly expanded national debt. All of this, furthermore, must be addressed in the context of an open-market regime which is very different from those of previous eras, and which could render Keynesian-style national solutions ineffectual. What would greatly assist any national recovery is a co-ordinated global response to the crisis; in other words, global co-operation at the highest level. This cannot be ruled out, but it would be a brave person that would bet on it. It was exactly the lack of international co-operation that bedevilled recovery in the 1930s and eventually led to the Balkanisation of the world into regional currency and trading blocs.

The most important single question in this context is the relationship between the US and China. Will the Obama administration be able to resist the slippery slope of creeping protectionism? Will arguments over the revaluation of the Chinese renminbi be resolved amicably? If the answer is in the negative, then the global outlook will be very bleak indeed and so, also, as a result, will be the prognosis for national recoveries. Indeed, the prospects would look disturbingly like those of the 1930s, with growing international antagonism and friction and a continuingly intractable crisis at a national level, with only the very slowest of recoveries.

Around the world there is growing evidence by the week of a resort to national solutions at the expense of others: measures to subsidise industries that are in severe difficulties; the Buy American clause that was inserted by the House of Representatives into Barack Obama's latest package (though since weakened); the industrial action in Britain against foreign workers; the withdrawal of banks to their national homes; the attack by Timothy Geithner, the US treasury secretary, on China as a currency manipulator. No Rubicon has been crossed but the warning signs are clear. A retreat into protectionism and beggar-thy-neighbour policies will deliver the world into a second Great Depression.

So what will be the political effects of the financial meltdown? Some are already evident. Just as the Great Inflation of the 1970s played to the tunes and concerns of the right, with its invocation of the market, the New Depression suggests the opposite, the inherent limitations of the market and the indispensability of the state. Indeed, the speed with which the neoliberal refrains and invocations have unravelled has been breathtaking. The single most discredited aspect of the social democratic legacy was nationalisation, and yet the government, with the most extreme reluctance, has been obliged to nationalise Northern Rock and partially nationalise the Royal Bank of Scotland and the merged Lloyds TSB and HBOS. Who would have ever imagined, at any point during the past 30 years, that no less than the financial commanding heights of neoliberalism would have ended up in the hands of the state, with precious little opposition from anyone except a few disgruntled shareholders? Even now, however, the Labour government, still trapped in the ideological straitjacket of New Labour and displaying extreme timidity in the face of powerful vested interests, which has always been a New Labour characteristic, is running scared of the inevitable logic of the situation, namely that all the high-street banks should be taken into public hands until the mess is sorted out. Anything else leaves the public responsible for all the debts and risks, while the banks continue to be answerable to the very different interests of their shareholders. But such is the fury and depth of the crisis that this scenario is highly likely.

The state is experiencing an extraordinary revival. The credit crunch is the most catastrophic example of market failure since 1945. It became almost immediately obvious to wide sections of society that there was only one institution that could potentially sort out the mess: the state. Far from being a rational distributor of resources, the market had proved the opposite. Far from bankers and financial traders embodying the public interest, they have been exposed as irresponsible and dangerous risk-takers whose primary motivation was voracious greed. If trade unionists and the nationalised industries were the demons of the 1970s, bankers and the financial sector have assumed the mantle of public enemy number one in the late Noughties. In fact, the irresponsibility of bankers, and the damage they have inflicted on the economy, hugely exceeds anything that the unions could possibly be held responsible for in an earlier era. Meanwhile, the fallen heroes of the pre-Thatcher era, most notably Keynes, are duly being exhumed, restored to their rightful position, and pored over for their ability to throw light on the present impasse and what might be done; if the recession turns into a depression, Marx will once again become required reading.

This political shift is not just a British phenomenon, but a more general western one. The most striking feature of President Obama's inaugural speech was the way in which it embraced and legitimised African Americans for the first time in American history. But it also had another powerful theme, namely its invocation of the public interest and public service. After decades during which American political discourse has been dominated by the language of individualism and the market, it came as a shock to hear a US president articulate a very different kind of philosophy, renouncing private greed in favour of the public good. Obama's election can in part be seen as a response to the failure of the neoliberal era, as well as of Bush's neoconservative agenda; certainly his election represents a remarkable shift to the left in US politics, in contrast not just to Bush, but every recent US president, including Reagan, Bush Sr and Clinton. That Obama is the first African-American president also represents a remarkable redrawing of the political landscape. There is no more powerful - nor difficult - way of redefining society or to embrace a new form of representivity than to include a racial minority that has been excluded.

This brings us finally to what might be the longer-term global consequences of the crisis. Again, we are inevitably stumbling around in the dark because so much depends on whether the recession metamorphoses into a fully fledged depression and in what way and shape the world eventually emerges from the debacle. That said, two key points can be made. First, the credit crunch signals the demise of the Anglo-American, neoliberal model of capitalism, which has exercised a hegemonic influence over western capitalism and been the blueprint for globalisation since 1980. Because of its catastrophic failure there seems very little chance of its resurrection. The process of recovery - whenever that might be - will be accompanied by an overriding concern to ensure that the events of 2007-2009 are not repeated in the future, just as happened in the US in the 1930s with the strict regulatory framework that was introduced for the banks after their comprehensive failure in 1929. This will include the search for a new global regulatory framework that controls and constrains international movements of capital, as well as strict controls over the financial sector at a national level. A new set of political priorities - and with it a new political language - will be born.

Meanwhile, the influence and prestige that the US, and to a far lesser extent Britain, have enjoyed will vaporise in the same manner as their neoliberal model. Their 30-year project has failed and they will be obliged to pay the price in their reputation and the esteem in which they are held. The countries of the former Soviet Union and the casualties of the Asian financial crisis that were forced to swallow the neoliberal medicine will have good reason to feel aggrieved and resentful. The west has been forthright in accusing the non-western world of corruption. The financial meltdown suggests that the west has been guilty of huge hypocrisy. Systemic corruption has lain at the heart of the western financial system. An entirely disproportionate and extortionate level of bonuses has ensured the enormous enrichment of top executives in the financial sector, all in the name of reward for success, when in fact it was the reward for failure. In addition, we have had the collusion of the credit-ratings agencies; a regulatory system characterised by its failure to act as any kind of constraint; and governments that ensured the continuation of this web of relationships and applauded its achievements. The corruption was on a breathtaking scale as evidenced by the size of the bailouts required to rescue the banks. It will be difficult for western governments to make these kinds of accusations of others in the future. That Obama represents such a voice of hope will help to mitigate the inevitable ill-will towards the US, but this should not be exaggerated amid the euphoria surrounding developments in Washington.

The second point is more far-reaching. It is doubtful whether we can still describe ourselves as living in the American era or, indeed, the Age of the West. If not yet quite over, both are certainly drawing to a close, and it seems likely that the effect of the financial meltdown will be to accelerate the rise of China as a global power. The contrast between the situation in China and that in the US could hardly be greater, even though it has been partially obscured by the depressive effect of the western recession on Chinese exports and on China’s growth rate. While the US economy is contracting, China’s grew at roughly 9 per cent in 2008 and is projected to grow at about 6 per cent in 2009. Its banks, far from bankrupt like their US counterparts, are cash-rich. China enjoys a large current account surplus, the government’s finances are in good order and the national debt is small. This is a crisis that emanates from the US and whose impact on China has been essentially indirect, through the contraction of western markets. It is the American model that has failed, not the Chinese.

One of the factors that intensified the Great Depression, and indeed was part cause of it, was Britain's growing inability to continue in its role as the world's leading financial power, which culminated in the collapse of the gold standard in 1931. It was not until after the war, however, that the US became sufficiently dominant to replace Britain and act as the mainstay of a new financial system at the heart of which was the dollar. The same kind of problem is evident now: the US is no longer strong enough to act as the world's financial centre, but its obvious successor, namely China, is not yet ready to assume that mantle. This will undoubtedly make the search for a global solution to the present crisis more difficult and more protracted.

Martin Jacques's new column will be published fortnightly in the New Statesman. His book "When China Rules the World: the Rise of the Middle Kingdom and the End of the Western World" will be published in June (Allen Lane, £25)

the global downturn in numbers

    0.5%

    IMF prediction for global growth in 2009 - worst since WWII

    Up to 40 million

    Number of people who will lose their jobs this year, according to the International Labour Organisation

    $9.7trn

    Total pledged by the US alone towards solving the crisis

    3.6%

    Proportion of GDP pledged by the G7 and BRICs countries towards fixing the crisis (1.5% this year)

    2.3m

    Number of US properties that received a default notice or were repossessed in 2008. In the UK, 45,000 homes were repossessed - another 75,000 are expected to be taken in 2009

    14

    Number of major global banks which collapsed, were sold or were nationalised during 2008

    200,000

    Number of European companies expected to fail this year; an additional 62,000 are expected to fail in the United States. These figures represent record levels of insolvency

    52%

    Increase in UK company failures between late 2007 and late 2008

    14%

    Drop in level of Chinese exports during January

    1%

    Current UK interest rates (down from 5% in October 2008). In the US, rates have fallen to between 0 and 0.25%

How the crisis unfolded

13 September 2007 Run on Northern Rock begins when it is revealed that the bank has requested emergency support from the Bank of England

21 January 2008 FTSE suffers worst falls since 11 September 2001

February 2008 Northern Rock nationalised

17 March 2008 JP Morgan Chase takes over the US investment bank Bear Stearns

12 July Mortgage lender IndyMac collapses - second biggest US bank in history to fail

9 August 2007 European Central Bank pumps ?95bn into banking market

7 September Financial authorities step in to rescue Fannie Mae and Freddie Mac

9 September Bradford & Bingley becomes second British bank to be nationalised

15 September Lehman Brothers files for bankruptcy

16 September AIG, biggest insurance firm in the US, receives $85bn rescue package

3 October 2008 US government announces $700bn Troubled Assets Relief Programme

8 October UK launches its first bank bailout plan, making £50bn available

October 2008 Iceland's banks collapse. IMF extends £1.4bn ($2.1bn) loan a month later

24 November Alistair Darling announces a temporary cut in VAT from 17.5 to 15 per cent

23 January 2009 UK enters recession

28 January US Congress passes Barack Obama's $819bn stimulus package

5 February UK Monetary Policy Committee votes to cut interest rates to 1 per cent - the lowest in over three centuries

Michael Harvey

Martin Jacques is a journalist and academic. He is currently a visiting fellow at the London School of Economics Asia Research Centre and at the National University of Singapore. Jacques previously edited Marxism Today and co-founded the think-tank Demos in 1993. He writes the World Citizen column for the New Statesman. His new book on the rise of China, When China Rules the World, will be published in June.

This article first appeared in the 16 February 2009 issue of the New Statesman, The New Depression

DAN BURN-FORTI FOR NEW STATESMAN
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Ralph Steadman: The gonzo marksman

For six decades, the Welsh artist's savage cartoons have thrilled, angered and shocked readers. He is not done yet.

IIn the summer of 1970, a 34-year-old Welsh artist with a shock of prematurely white hair and a thick, moustache-less goatee was asked by the Times to draw political cartoons during the general election campaign. Idealistic and mistrustful of authority, Ralph Steadman saw little that was likeable or even distinguishable in the Conservative Party’s Edward Heath and Labour’s Harold Wilson. But he had four children to support from a recently ended marriage and needed a steady income, so he accepted the assignment – and got on with causing offence.

Steadman’s first cartoon for the newspaper, featuring the diminutive Mr Weath and Mr Hilson, as he named them, along with the Liberal Party leader, Jeremy Thorpe, was titled Happiness Is a Small Politician. Another used the three faces to form the undulations of a landscape, which he called The Wasteland. Most memorably, he portrayed Enoch Powell as a fly sitting on a heap of shit, with the Northern Irish unionist Ian Paisley buzzing in from the side. “Go find your own heap, Paisley!” Powell says, as Mr Weath approaches from behind with a fly swatter.

The then Times editor, William Rees-Mogg, worried that the drawings were inflammatory, but others on the paper liked Steadman’s strange, savage style. After the election, he was offered a three-month trial as a staff cartoonist, which he took. As the letters of complaint from readers began to pile up at the newspaper, Steadman was receiving another stream of correspondence from the United States, which often started like this:

 

Dear Ralph . . .

You filthy twisted pervert. I’ll beat your ass like a gong for that drawing you did of me . . .

 

The author was Hunter S Thompson, a renegade journalist who had achieved renown in America for his book about living and riding with the Hell’s Angels. The two men had met earlier that year, when Scanlan’s Monthly magazine commissioned Steadman to join Thompson at the Kentucky Derby horse race and provide pen-and-ink illustrations for his article.

The collaboration started badly – Thompson greeted Steadman with the line, “They told me you were weird, but not that weird” – and got worse. Steadman showed some of the locals the grotesque portraits he had drawn of them and came close to being beaten up. Thompson, who was six foot three, drunk and ill-tempered, sprayed Steadman with Mace. Yet when the magazine published their work, under the headline “The Kentucky Derby is decadent and depraved”, it caused a sensation in literary journalism circles. Bill Cardoso, an editor at the Boston Globe Sunday magazine, wrote to Thompson praising the piece, which he called “pure gonzo”. Gonzo journalism – in which the reporter becomes the story – was born.

Now, a few months later, Thompson was eager to capitalise on the success by taking on more assignments with Steadman. In what he described as a “king-bitch dog-fucker of an idea”, he suggested that they travel around America and produce a series of articles “so weird and frightful as to stagger every mind in journalism”.

Steadman knew that he was not cut out for a long-term career in newspapers and so, that August, he took leave from the Times and flew to Newport, Rhode Island, to cover the America’s Cup yacht race for Scanlan’s. Though they lacked accreditation, Thompson had hired two berths on a boat – the other occupants were members of a rock band – so they could sail out and observe the contest. But the wind was mild and the racing boring.

With just a day of the competition left, they had no story and Steadman was seasick. He asked Thompson, who had shown no sign of discomfort on the water, for one of the little yellow pills that he had been popping. It was a bad mistake. Steadman had little experience with drugs – hallucinogens, in this case – unlike his companion.

“Hunter had no fear of the effect of drugs on his body,” he tells me, when I visit him in October. “People would come to him and say, ‘Have one of these.’ He’d eat it and then say, ‘What was that?’”

The yellow pill made Steadman feel weird and brave. That night, when Thompson produced two cans of spray paint and suggested that they row out in a dinghy to deface the racing boats – Australia’s Gretel II and America’s Intrepid – Steadman was game. As the artist, it fell on him to decide on the graffiti. He suggested spraying “FUCK THE POPE” on one of the multimillion-dollar yachts. As they approached the vessels in the darkness, Steadman shook one of the cans of paint. The clicking noise alerted a guard on the jetty, who pointed his torch and shouted at the trespassers.

“Ralph, we must flee!” Thompson said, and frantically rowed the dinghy away from the yachts. To distract the police, he fired two flares towards the harbour, one of which landed on the wooden deck of a boat. He and Steadman caught a lift on a passing fishing boat and escaped the scene.

“It was just a schoolboy prank,” Steadman says. “But if I had managed to spray the graffiti and got caught, I may never have been allowed to leave America!”

 

***

 

Nearly half a century has passed and Steadman is now 80, but the details of the escapade are still fresh in his mind. “Ralph, we must flee!” he says, chuckling as he imitates Thompson’s deep voice. It’s autumn and he is sitting on a stool in the kitchen of his large Georgian house in the village of Loose in Kent. With him is his second wife, Anna, and their daughter, Sadie, who lives with her husband and their two sons on the property. They are having a breakfast of boiled eggs, Marmite on toast and tea.

Steadman wears two fleeces over his grey-and-white-striped shirt, a necklace with several shiny pendants, navy trousers and black leather slip-on shoes. He’s still warming up after spending 15 minutes in the pool in his back garden, swimming a few lengths and then jogging through the water, as he does most mornings, even through the winter.

He dislikes sport (one of his reporting assignments with Thompson involved shouting, “Run, you bastards!” at competitors in the Honolulu Marathon in Hawaii), and being out in the elements is more important to him than the health benefits of the exercise.

“At one point in my life, I did wonder, ‘Why does the human heart keep beating?’” he tells me. “But I am over that.”

Seeing my notebook, he takes his own out of his pocket, a small, soft-cover version that he always keeps with him. He thumbs through it and shows me what he has written: “Gonzo-koala – DRAW! . . . Senet – old Egyptian game . . .”

“How did I find that out?” he wonders. “I don’t know. I’m properly ill-informed.”

He is not, of course. He may be best known for his brutal ink-blot cartoons, which have appeared in many of the world’s leading English-language newspapers and magazines, but he has also written and illustrated books about Leonardo da Vinci, Sigmund Freud, fine wine and God, among other things.

And though his most famous collaborator is gone – Thompson, depressed and struggling with chronic medical problems, committed suicide in 2005, aged 67 – Steadman has shown no sign of laying down his nib pen and paintbrush. His output in recent months includes the poster for Louis Theroux’s new film on Scientology, the artwork for the indie musician Ed Harcourt’s latest album and dozens of paintings of real and imaginary creatures for his own forthcoming book Critical Critters.

He also continues to produce for the New Statesman his political drawings that reflect his dismay at the state of the world and the role of the powerful in its decay. Sometimes it’s a commission, such as the drawing of Nicola Sturgeon with tartan horns, or Nigel Farage with a braying donkey grin. At other times, it’s something that he sends in unprompted to the NS creative editor, Gerry Brakus, who joins me on the visit to Steadman’s house: for instance, Donald Trump as a pig wearing Stars and Stripes underpants. Titled Porky Pie, it ran in the paper exactly a year ago and now seems highly prescient.

“I don’t know what else to do,” he tells me, when I ask him why he keeps working. (He does not need the money.) “It can be hard to fill the hours, so I try to make a mark every day.”

 

***

 

Ralph Steadman was born in the town of Wallasey, near Liverpool, in 1936. His mother was a Welsh coal miner’s daughter who had dreamed of being a teacher but ended up as a shopgirl at a branch of the T J Hughes department store. His father was a commercial traveller
who sold ladies’ costumes out of a van but wanted to build cars.

When war broke out and the German bombs started falling, Steadman’s mother would rush him and his sister to an Anderson air-raid shelter, where she knitted to try to stay calm. Eventually, the danger became too great. “Father drove us out in the middle of the night in his Rover car. I was four and my sister was eight. We ended up in Abergele in Wales and stayed with one of my father’s customers, Mrs Hudson. My mother did not like it, but we could not go back,” Steadman tells me.

As a child, he showed little sign of rebellion or artistic talent. He was a choirboy and a Boy Scout, neither of which especially pleased his father, “a lovely fellow” whose experiences in the First World War had left him mistrustful of God and anything militaristic. Steadman liked to build model planes and hoped to become an aircraft engineer. After leaving Abergele Grammar School at 16, he was taken on as an apprentice by de Havilland Aircraft Company in Broughton, Flintshire. He learned technical drawing – circles and straight lines would later mark his art – but hated factory life, and quit within a year.

Unsure of what he wanted to do with his life, he took a job at Woolworths in Colwyn Bay, in north Wales. One day, while sweeping outside the entrance to the shop, his old headmaster walked past. “He was a vicious bastard, who would cane boys whenever he could,” Steadman says. “He sneered and said, ‘Look at you – you could have been something if you had stayed on at de Havilland. Now you are sweeping the streets in Colwyn Bay.’

“I was mortified. I should have said, ‘At least it’s honest work.’ Authority is the mask of violence – I believe that.”

His next job was as a tea boy at a small advertising company, where he saw in a brochure an advert for Percy V Bradshaw’s Press Art School that said: “You, too, can learn to draw and earn pounds.” The correspondence course cost £12 for 12 lessons and an extra £5 to study cartooning. That second part especially appealed to Steadman, whose father had introduced him to Giles cartoons years earlier.

His parents paid for the course, which he completed while doing his two years of national service as a radar operator in the RAF. “I would sit on my bed, drawing pictures of my boots,” he says. Soon, he was proficient enough to start sending off his work to regional newspapers, such as the Manchester Evening Chronicle, which published his first cartoon – about Gamal Abdel Nasser and the Suez crisis – in 1956.

After moving to London to find work, he was hired as a cartoonist for a group of newspapers distributed in the north of England. In the evenings, he took classes at East Ham Technical College, where the art teacher Leslie Richardson became his mentor.

“I wanted to learn to draw properly,” he says. “We would go to the museums of ­science and natural history and the Victoria and Albert, and draw for hours. That’s when art evolved for me into a fixation, or a conviction, or a compulsion.”

Who did he draw inspiration from? “They are all dead now,” he says, mentioning the French cartoonist André François and his British friend Ronald Searle, as well as the German artists George Grosz and Otto Dix, who were prominent members of the New Objectivity movement in 1920s Germany. His daughter Sadie chimes in: “Dix’s portrait of the journalist [Sylvia von Harden], with the monocle . . .” and Steadman nods.

In the early 1960s, at Richardson’s urging, Steadman studied further at the London College of Printing and Graphic Arts while pursuing a freelance career, publishing in Punch and Private Eye. He also started illustrating books. He takes down a couple of them from a shelf in his living room, including his first one, Fly Away Peter (1964), about a short-necked giraffe and a bird that cannot fly, and The Yellow Flowers, from 1968, about the children of immigrants in Islington, north London, a subject that seems even more relevant today. He reads a few pages aloud and says approvingly, “Isn’t that sweet?”

The artwork is tame by his later standards – these are children’s books – but all the while, his style was developing. As he drew with his William Mitchell 0565 steel-nib dipping pen and Snowdon 300-grams-per-square-metre paper, his work became edgier, more instinctive, and his confidence grew. He seldom felt the need to sketch out a picture before inking it. “I always say a mistake is just an opportunity to do something different.”

Among his peers and those who followed him, Steadman’s work has been recognised as groundbreaking. “It was all about the ­potency of his line,” says Martin Rowson, the cartoonist and writer, who regards Steadman as one of the most brilliant illustrators of the 20th and 21st centuries. “Very early on, Ralph found the courage not to care about the niceties of the line. It was so rough – like dirty sex, not airbrushed pornography. He’s a true artist.”

We are meant to be going for an early lunch at a pub, and Steadman’s wife, Anna, and Sadie are trying to hurry him along. But he keeps brushing them off, saying, “This is part of the story.”

In an adjoining sitting room, he picks up a black box that looks like a walkie-talkie and a smaller box with a button. He presses it and the larger box emits a loud fart sound. And then another, with a different pitch. He keeps pressing the button on the Fart Machine No 2 – Boom Box Blaster, a gift from a friend in the United States. Now he is laughing uncontrollably, his eyes watering, as he dances a little jig, poking out his bum. “You have to get one, it’s the best,” he says. “There’s nothing funnier than a fart.”

I’m not sure how his mother-in-law feels about that. When she came over to the house one recent Christmas, the fart machine was hidden underneath the couch where she sat, to the delight of the great-grandchildren – and Steadman.

 

***

 

We all squeeze into ­Anna’s car for the drive to the nearby Chequers Inn, which sits beside a pretty stream. Anna and Ralph, who have been together for 46 years, have been ­coming here since they bought their house in Loose in 1980. The pub recently hosted Steadman’s 80th birthday party, at which the festivities were enlivened by magic mushrooms (“brought by some Americans”) and fistfights between some inebriated guests. Hunter S Thompson would have approved.

“I once brought Hunter here,” Steadman says, as we sit down. “I said to the barman: ‘Give him a Chivas, double.’ So he does, and Hunter looks at him and says, ‘What’s that? A sample?’”

Steadman doesn’t usually drink in the day, but he allows himself a half-pint of Rockin Robin, a local ale.

Despite the disaster of the America’s Cup story, his partnership with Thompson flourished. Their best-known collaboration is “Fear and Loathing in Las Vegas”, which was first published in Rolling Stone magazine in 1971, and then as a book. That style of reporting and writing, with its fuzzy distinctions between non-fiction and fiction and its subjective focus, became a significant part of the New Journalism movement in the US, whose other practitioners included Tom Wolfe, Norman Mailer and Joan Didion.

Steadman did not accompany Thompson on his drug-fuelled road trip to Las Vegas – he did the illustrations from London, after reading the manuscript. But they were together three years later, in 1974, when Rolling Stone sent them to Kinshasa, Zaire (now the Democratic Republic of Congo), for the “Rumble in the Jungle” boxing match between Muhammad Ali and George Foreman. After spending weeks in the city, and many thousands of dollars in expenses, Thompson decided that the fight wasn’t worth seeing and gave away his and Steadman’s tickets. On the day of the bout, he took a huge bag of marijuana from his hotel room and poured it into the swimming pool. “He put whiskey in a bucket by the pool and then dived in, swimming in the grass,” Steadman says.

It was gonzo taken to its extreme – Steadman thinks that the term means “unhinged”, after the Portuguese word for “hinge” – and beyond. Their article about one of the seminal sporting events of the 20th century was never printed. “It was the biggest fucked-up story in the history of journalism,” he says.

Even so, it did not do their careers much harm. “You could do a bit in those days, have some fun,” Steadman says. “Today, journalism has become more robotic. People don’t do things so experimentally, and news­papers have lost their idiosyncratic nature. The media is in a more controlled, restricted state – more like an assembly hall full of schoolchildren.”

In the US, he also covered the Watergate hearings, which confirmed his deep dislike for most politicians. He continued to savage them with his pen, drawing political cartoons for the New Statesman from 1976 to 1980. By the late 1980s, however,
his disillusionment with Margaret Thatcher’s Tories – and the money-obsessed British society that they had created – was so great that he resolved to stop drawing politicians altogether.

When he resumed in 1997, while covering the election campaign for this magazine, he refused to draw any politician’s face, only their legs. Today, he does the whole body, though not because his opinion of them has changed. If anything, it has sunk even lower. “Back in the Seventies, they were real politicians, even if they were crooked, like Nixon. Now it’s all fatuous,” he says.

He holds Nigel Farage in special contempt for his role in getting Britain out of the European Union, “our biggest mistake”. “He’s a bastard among them. He said he wants his life back [after the Brexit campaign]. Fine, but you’ve buggered it up for everyone else. We were part of something great. Now we are an offshore island.”

Are there any politicians he has admired? “Denis Healey. What a lovely man. A good man and a good politician,” he tells me. “A consummate human being.”

And of the current crop? “Owen Smith pissed me off. I like Hilary Benn. Chuka Umunna is interesting.”

Labour has “had it”, he says. “[Jeremy] Corbyn has a passive approach to leadership. I wish he would assert himself in a left-wing way. Do something for the workers.”

When I meet him, the US presidential election is still a few weeks away, and Steadman has faith that the American people will do the right thing. “Hillary [Clinton] will be all right. Trump is unthinkable. A thug and a molester. Who wants him?” he says.

In late November, I call him on the tele­phone and I ask what he thinks about President-Elect Trump. Steadman pauses and then says: “Where is Lee Harvey Oswald when you really need him?”

 

 

***

 

Steadman’s work may be searing, and his opinions strong, but in person he is warm-hearted, funny and generous. At the pub, he tips the staff on the way out even though I’ve already left a tip when paying the bill.

Back at the house, he insists on going into the garden to pick some apples for the New Statesman’s Gerry to take home. On a table in the living room, he keeps a Lamy fountain pen and a bottle of ink so he can write a dedication in the books that he gives away to visitors, his tongue out, flicking his wrist to send the black liquid splattering across the page.

“My mother always said, ‘I don’t want to be a bother.’ I like that. I’ve only ever been a bother to people doing my drawings,” he says. (The America’s Cup security guard and the marathon runners in Honolulu may dispute that.)

Asked if he has any regrets, he thinks for a moment and then asks for the name of a British-Scandinavian broadcaster. Sandi Toksvig? “Yes, that’s her. When I spoke to her once, I said: ‘Pity about the voice.’ She has a slightly masculine voice. That has always stayed with me. It was a very rude thing that I should never have said to her.”

The walls of his home are covered in his original art, which he resolved not to sell after being burned early in his career when his agent advised him to let Rolling Stone’s owner, Jann Wenner, buy some of the Fear and Loathing drawings for $75 apiece.

The largest artwork in his home is also the one that took him the longest: a one-third-size replica of Leonardo da Vinci’s 15th-century mural The Last Supper, which Steadman painted on to his bedroom wall using egg-white paint. “I started in 1984 and it took me 18 months,” he says.

Below the painting, next to his side of the bed, is a pile of paperbacks that is as tall as a side table. Hunter S Thompson’s novel The Rum Diary is near the top of the stack. After Thompson shot himself in the head in 2005, Steadman flew to Colorado to help instal a monument that the two of them had agreed on in the 1970s – a 47-metre-tall silver “cannon” topped with a double-thumbed fist clutching a button of peyote, a cactus with psychoactive properties. Thompson’s ashes were fired out of the top. The actor Johnny Depp, a friend of Thompson and Steadman, picked up the bill.

Among the ornaments hanging from Steadman’s necklace – which also include a silver toothpick, an animal tooth and a silver-and-turquoise Navajo piece that he bought in 1973 – is a tiny clay head that Thompson gave to him.

“He told me, ‘Wear it Ralph: it will ward off evil spirits.’” Later, looking at a photo of Thompson in the living room, he says: “I miss him.”

Besides reading, Steadman enjoys watching television: the news in the morning and some light entertainment in the evening, such as Strictly Come Dancing. “I was quite interested in Judge Rinder [Robert Rinder, a contestant on the show]. He did a somersault.”

Yet the studio is still the place he feels most content. “It’s a mess at the moment,” Sadie says, before we go there.

“Most of the mess is your tidying up!” Steadman replies.

The studio is set away from the house and looks out over a field of apple trees. On the walk there, I spot a porcelain toilet that has been repurposed as a flowerpot. “It’s a beautiful toilet! It came out of my house,” Steadman says.

The studio, which has several rooms, is more clutter than mess, though it is true that there is paint splattered everywhere – on the walls, on the photocopier and the hairdryer. His large drawing table has a fresh sheet of paper on it, numerous bottles of Winsor & Newton ink, a tin of Caran d’Ache watercolour pencils, paintbrushes, nib pens, glue and scissors.

Besides the digital camera positioned over the table, it’s all low-tech. Steadman still works in the manner he did in the 1970s. “We live in such a self-contained electronic community now. People do things on the computer. There’s no wet ink any more.”

He’s not a technophobe, though. Around the corner, in a narrow office, is a desktop computer, which he uses to answer email and send digital copies of his work to publishers. He enjoys using Skype, because he can see the person he is talking to. But he has no interest in social media, which he views as enabling malevolence, or smartphones.

“I’m worried about the world for my grandkids. People spend all their time looking at their phones with their headphones on,” he says.

He prefers to be alive to the world and its creatures. “When I am in the pool, I listen to the birds. I blow my bird whistle and you can hear the birds calling.”

In his studio, he does not have to look far for inspiration. On the wall are pictures of the American comedian W C Fields and printouts of Dylan Thomas’s poem “Fern Hill” and Oscar Wilde’s “Phrases and Philosophies for the Use of the Young”. Behind his drawing desk is a mini-shrine to Picasso, who Steadman calls a “huge influence” – he once made a triptych called Gonzo Guernica – for his artistic genius and his work ethic. Picasso made art into his nineties.

Steadman’s legacy is assured, even if he has not received all of the accolades that some feel he deserves. “Ralph is not just a cartoonist, he’s an artist, and he’s been hugely influential,” says Dave Brown, the Independent’s political cartoonist. “But satirical artists don’t get the plaudits – you won’t see them winning the Turner Prize.”

Sometimes, when he’s working, Steadman breaks off to play music; a penny whistle, pan pipes and a ukulele are part of the clutter. But mostly he listens. He has a rack full of audio cassettes, a turntable and albums stored digitally.

On his computer, he clicks on iTunes and calls up a nine-minute rock song called “Weird and Twisted Nights”, which he wrote the lyrics for and recorded in the late 1970s. The track alludes to Thompson’s frightening habit of driving along the highway with the headlights off so the police couldn’t see him:

 

Drive your stake through a darkened heart

In a red Mercedes-Benz

The blackness hides a speeding trap

The savage beast pretends . . .

 

Steadman is the lead vocalist and has a surprisingly good, clear singing voice. Thompson contributes a single line, a gruff refrain that goes “It never really happened anyway”, before a saxophone solo by a session musician who Steadman asked to play “as if the devil has just entered the church”.

As the late-afternoon light filters through the window, Steadman leans back in his chair, lost in the music. When Thompson’s voice comes in, he smiles as he sings along: “It never really happened anyway . . .” 

Xan Rice is Features Editor at the New Statesman.

This article first appeared in the 15 December 2016 issue of the New Statesman, Christmas and New Year special 2016