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The Age of Entitlement

The new super-rich have no allegiance, obligation or connection to wider society. They live in a mirror-lined bubble – and a legally entitled one. Can anything beyond another crash change things?

Nobody loved Bowater House in Knightsbridge. The demolition of this late-1950s, modernist mess in 2006 was greeted with general relief. Yet it did have one virtue. Through its core was cut a wide opening for a roadway that gave us all a view of Hyde Park and of a sinewy, thrilling Epstein sculpture of a family group, urged on by the god Pan and racing on to the green sward.

There is no such large opening in One Hyde Park, the building that replaced Bowater House. Instead, Pan has been relegated to the end of a much smaller public road that has been intimidatingly designed to look private. The great people’s invitation into the park has been lost. The public realm has not been abandoned altogether, however. At ground level there are shops, punctuated by some very limited planting. So, if the people care to struggle across the hellish confluence of roads that forms the heart of Knightsbridge, they can peer through the windows to see Abu Dhabi Islamic Bank, Rolex watches or McLaren cars. Things they cannot have.

One Hyde Park was developed by the Candy brothers and the Qataris and was designed by Rogers Stirk Harbour & Partners, the current incarnation of the once-idealistic Richard Rogers practice. The 86 flats start at £20m; a penthouse sold in 2010 for £140m. The building is an aesthetic, planning and social catastrophe. An inaccessible, menacing fortress looming over Knightsbridge, it symbolises the dark wealth of the entitled elite who have claimed the boroughs of Westminster and Kensington and Chelsea as their own. But it is just one big sign of a ruthless landgrab among many little ones.

Staff at the Kensington High Street branch of Carluccio’s – a pleasant, neighbourhood place – dread being sent over to South Ken. That’s banksterland. Mothers disrupt service with their giant baby buggies, the children are rude and even the toddlers snap their fingers at the waiters. Then there are the shops. In Knightsbridge’s “golden triangle” of streets and around Brompton Cross are all the “flagship stores” of the highest of high-end retailers. I used to like going there to watch and marvel at the very rich and to see the beauty that money could buy. Once in a while, feeling a bit flush, I might buy something. Not any longer.

Recently, in an idle moment, I wandered in - to the Ralph Lauren shop at Brompton Cross. I noticed a pair of shoes, quite nice, about £300, I reckoned, allowing for the location and the general flagshipness of the place. The shoes were £750, a price that bore no possible relation to either the cost of manufacture or the quality of the design. These people, I realised, don’t care about only fairly affluent me or my class any more. They’d rather I left, because they can sell all their stuff at any price, in effect, to the bonus boys and girls.

“Almost by definition, these things aren’t for you,” John Lanchester tells me on the phone. He is the author of Capital, the 2012 novel that defined the moral climate that led to the last financial crash. “The whole thing about luxury goods is that they’re an inter - national language. The prices don’t track the middle-class, aspirational market; they’re for the super-rich, who don’t really care what things cost. In fact, they want them to cost more, because the price signifies only that most people can’t afford them.” (Lanchester captured entitlement in the character of Arabella in Capital, a woman so ignorant, vain and greedy, she did not even understand the possibility of being unable to afford something. Now I see and hear Arabellas all around me when lunching in central London.)

Perhaps it was ever thus: the rich have always been different. But that’s not true. Some - thing big, something moral, has changed. Driving through Knightsbridge (occasionally one must) I noticed a huge, absurd, orange and, in London, practically undriveable Lamborghini illegally parked. Once, I would have been amused, but now I feel angry because I know – we all know – it was probably bought with stolen money.

“Shocking” is too soft a word to describe the crimes of the financial sector. They are almost thrilling in their creative abundance – laundering money for drugs cartels; defrauding old people, small businesses, investors and shareholders; rigging markets; sugarcoating dud loans to look like good ones; loading the world economy with ever greater levels of risk and throwing millions of people out of work. And so on. All the time, they were enriching nobody but themselves. The banks and their buddies have been on a crime spree that would have glazed over the eyes of Al Capone.

Yet here they still are, with their undriveable orange cars, their buggies, their dark fort - resses and their rancid sense of entitlement because, in short, they don’t get it. Apparently the bonus boys see “casino banking” as a flattering term rather than the insult intended. Furthermore, the use of vast sums taxpayers’ money to save the banks is seen as no more than their God-given right.

“I live near Wall Street,” the economist Jeffrey Sachs said at an event. “The sense of entitlement is beyond quantification. They could not figure out why anyone might be mad at them for having nearly destroyed the world economy, taken home $30bn a year of bonuses, gotten bailed out to the tune of another trillion dollars and then lobbied for no regulation afterwards . . . I don’t think they were kidding anyone except themselves. I think they don’t get it.”

But we get it and we don’t like the rich any more because they all seem tainted. Lanchester points out that real business people – those who do useful things – are as angry as we are, accusing the bankers of wrecking and discrediting capitalism. (I sympathise. I have always regarded myself as a conservative and still do, but these shenanigans have tainted even that gentle world. Like most true conservatives I know, I regard the failure forcibly to end these abuses as a disgrace and a grave threat to the social peace we crave.)

Certainly people’s attitudes to companies in general has changed. Energy suppliers, telcos, retailers are all treated with a grim, resigned mistrust. To be allowed to participate in the society of entitlement, you have to agree to be ripped off. In spite of this, globally, politicians have decided to ignore the insights and sense of justice of their electorates and shown no desire to restructure a failed and still dangerous system, not even to imprison the most egregious wrongdoers. So the Age of Entitlement endures. What does this mean for society as a whole?

First, it is necessary to understand the origins of this psychology of entitlement. Economically, it can be said to be neoliberalism, the cult of free markets and deregulation that swept the world from the 1970s onwards. In neoliberal thought, expressed most trenchantly by Milton Friedman, the job of a company was to obey the law and reward its shareholders; it was not obliged to take on the wider ethical and moral concerns of society. In the 1980s, this became “greed is good”, certainly not what Friedman meant. I witnessed the cult’s apotheosis at the World Economic Forum in Davos in the early 1990s – I sat in on a meeting at which sharky young businessmen more or less said they would trample on their grandmothers for the sake of the bottom line. Viciousness had been validated. That is the enduring view in the financial sector.

“There is no incentive in the financial world,” a very prominent insider told me, “to be moral.” The point is that society rewards company directors with the enormous blessing of limited liability and, in return, should expect them to behave not just technically within the law but responsibly as persons. Failing – or refusing – to understand this underpins the sense of entitlement. Because much of what they did was not tech - nically illegal, the bankers feel that they did nothing wrong. Yet, in our own lives, we know perfectly well that some of the worst things we can do are not illegal. The financiers’ defence is made even more hopeless by the banks having been anything but good neoliberal institutions. Far from believing in free markets, they acted like a cartel and did everything in their power to rig the markets in which they operated.

Coupled with this was a generational change, identified by Jean Twenge and W Keith Campbell in their book The Narcissism Epidemic: Living in the Age of Entitlement. From the late 1970s onwards, they detected a rise in narcissism among the young. Unlike the generation of the 1960s and early 1970s, these young people did not identify their goals as social or political but solely as personal. “There was a big shift in the 1980s away from the 1960s and 1970s,” Twenge told me, “. . . making a lot of money was no longer suspect. In the 1960s and 1970s it was not cool, but that flipped around.”

So, in the 1990s, a socially and politically quietist, narcissistic and self-seeking generation was well prepared to take advantage of the progressive deregulation of the financial system, primarily orchestrated by the then chairman of the Federal Reserve, Alan Greenspan, a card-carrying believer in the doctrines of the hyper-libertarian fruitcake Ayn Rand. After 1997, the British Labour Party drank disgracefully deeply of this toxic, superstitious cocktail. Peter Mandelson declared that he was “intensely relaxed” about people getting “filthy” rich. In the midst of what turned out to be one of the most lethal (and preventable) bubbles in financial history, this was one complacency too far.

Both psychologically and theoretically, therefore, the Age of Entitlement was firmly established by the mid-1990s; indeed, so firmly established was it that it was imper - vious even to the overwhelming evidence of its fragile foundations. The collapse of the hedge fund Long-Term Capital Management in 1998 nearly brought the US economy to its knees – even though it had Myron Scholes and Robert Merton, creators of the critical equations on which financial neoliberalism was based, on its board. The neolibs sailed on regardless.

And still they sail on. Throughout the crisis, the beneficiaries of the criminality and rigged markets into which neoliberalism had descended continued to enrich themselves. In 2012 the 100 richest people across the world grew $241bn richer, taking their total net wealth to $1.9trn. The poor and the middle classes, naturally, got poorer. Levels of inequality of a kind that threaten the social fabric – especially in the US and the UK – are one of the most alarming legacies of the Age of Entitlement. The crisis is not over; in fact, it may hardly have begun.

Part of the problem is the way the wealthy entitled have managed to make their world so easily selfsustaining. They are certainly good at outsmarting our elected leaders. “George Osborne and his friends go down to the City with some idea,” one hugely rich but very politically aware financier told me, “and the bankers blind them with science – saying, ‘Well, you could try that, but we wouldn’t be responsible for the consequences’ – so, nothing happens.”

The new entitled live in a mirror-lined bubble. Also a legally protected one. I was told of a hedge-fund boss so vile that investors withdrew their money but did not sue, because other hedge funds would then refuse to do business with them. On top of that, they are protected in Britain by libel laws and a tax system that, as John Lanchester points out, not only shields our own entitled from scrutiny but also encourages equally entitled foreigners to come here.

“You might as well say, ‘Bond villains, come and live here,’ ” he says. “Our libel laws don’t help. There are a lot of zillionaires about whom we are going to read the truth uncensored only when they are dead. It’s an astonishing situation, when we have such a proliferation of incredibly rich criminals.”

If that is the tragedy, the comedy is almost as alarming. Even the Financial Times last month was stunned to discover that bankers have been invited into schools to teach our children about money. The Royal Bank of Scotland, our most thoroughly disgraced financial institution, was, of course, represented. I can think of many people I could ask for advice about money. None of them is a banker.

Or there is the way the incontinent vanity of the newly entitled spills over into insults directed at their closest political allies. Towards the end of last year, Kevin Maguire reported in the New Statesman that members of the Bullingdon – the clownish club for the cream of Oxford society (the rich and thick) of which Cameron, Osborne and Boris Johnson were once members – had taken to burning £50 notes in front of beggars.

Most comical, but also most sad, are the attempts by the entitled to fit in with and compromise with the ordinary lives of others. In a remarkable piece for the Sunday Times Style magazine published in December, Kate Spicer interviewed members of the entitled generation that will reap the rewards of the wave of criminality that engulfed our financial system.

Goldman Sachs, Spicer reported, runs a course for partners on “how not to f*** up your kids” which encourages them to take the bewildered brats to the supermarket occasionally. (A friend of mine whom Goldman Sachs attempted to recruit in the 1990s was struck by the way, late at night, there were cars waiting to take the employees home, so that they need never see any street life.)

Unfortunately, the lesson “be nice, be normal” often fails to sink it. Spicer wrote of how Nell, the twentysomething daughter of the strikingly unpleasant former boss of Barclays Bob Diamond, defended her dad on Twitter by suggesting that Osborne and Ed Miliband should “go ahead and #hmd” – “hold my dick”.

Spicer also quoted Alexa, aged 17, who thought it “quite funny – people have no understanding, interest or involvement in something and then suddenly get all het up about it. I went on a drama course. I was one of very few private-school kids. This guy said, ‘Your dad f***** up the country,’ but he had a complete lack of understanding of the situation.”

Sorry, Alexa, but that guy was spot on.

The kids are worried about discrimination. Bankers’ brats now account for between 30 and 50 per cent of the intake of private schools, but they run into trouble when they have to talk to egalitarian-minded university interviewers and tell them that Mummy and Daddy paid for their gap-year adventures.

What is striking, reading Spicer’s interviews and copious other evidence, is that the narcissism Jean Twenge identified as having blossomed in the 1980s is still rampant. The children of the bankers do think they are better than the rest of us and that making money is what matters most.

“You commonly hear from companies now,” Twenge says, “that this generation really have new social goals, helping people and so on. Unfortunately, that is not backed up by the evidence from what the young people actually say. There is no resurgence in the idea that we really want companies to be responsible.”

One final feature of the Age of Entitlement must be mentioned. It is the viciously reductionist mindset behind what now happens in finance. In part, this derives from machines. Computers are like alcohol to Homer Simpson: the cause of and solution to all of life’s problems. Computers made the bubble possible and the 2007 crash (and the next one) inevitable. They created high-speed, mechanised trading and enabled the application of mathematics to the markets – bad maths, as it happened, given that the primary equations were derived from physics that dees not apply to human affairs.

But more important is the reductionism that was implicit in neoliberalism as it became in the hands of the entitled. Money, in this view, is the measure of all things. An angry and very serious financial player told me how he had spent 20 years helping build a company; then the private-equity people moved in and told him he wouldn’t get a penny because he had put no money in. “They were saying all you need to make money is money – you can forget about the decades of work that went in before they even joined the party. They were arrogant beyond belief.”

This reductionism is perhaps the most dangerous assumption of the Age of Entitlement. Money, as Bob Dylan sagely observed, doesn’t talk, it swears, and for this swearing to be effective it must be embodied in an ethical, moral, political and social realm that cannot, in and of itself, be reduced to money. That realm is being eroded rapidly, not only by the entitled, but also by the craven worship of cash that now suffuses the culture. It is this that is successfully disseminating the depraved idea that merely to be rich is to be entitled. To sample the idea, go to the Rich Kids of Instagram tumblr, a website of images of the young wealthy swigging from magnums of champagne and posing next to private jets. The site’s tagline is, “They have more money than you and this is what they do.”

Taxation cannot change this, as the French are learning. The next crash might and several hundred – or several thousand – bankers in prison would help, as would the demolition of One Hyde Park to give us all a view of the green sward. What would definitely change the climate of entitlement would be a dismantling of its psychological basis, the mindset that has created a super-rich class with no allegiance, obligation or connection to wider society. The ears of the entitled need to be unstopped so that we can whisper to them, ever so gently, “If you’re rich be grateful and, here’s another great idea, earn it.”

This article first appeared in the 04 February 2013 issue of the New Statesman, The Intervention Trap

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Why Jeremy Corbyn is a new leader for the New Times

In an inspired election campaign, he confounded his detractors and showed that he was – more than any other leader – in tune with the times.

There have been two great political turning points in postwar Britain. The first was in 1945 with the election of the Attlee government. Driven by a popular wave of determination that peacetime Britain would look very different from the mass unemployment of the 1930s, and built on the foundations of the solidaristic spirit of the war, the Labour government ushered in full employment, the welfare state (including the NHS) and nationalisation of the basic industries, notably coal and the railways. It was a reforming government the like of which Britain had not previously experienced in the first half of the 20th century. The popular support enjoyed by the reforms was such that the ensuing social-democratic consensus was to last until the end of the 1970s, with Tory as well as Labour governments broadly operating within its framework.

During the 1970s, however, opposition to the social-democratic consensus grew steadily, led by the rise of the radical right, which culminated in 1979 in the election of Margaret Thatcher’s first government. In the process, the Thatcherites redefined the political debate, broadening it beyond the rather institutionalised and truncated forms that it had previously taken: they conducted a highly populist campaign that was for individualism and against collectivism; for the market and against the state; for liberty and against trade unionism; for law and order and against crime.

These ideas were dismissed by the left as just an extreme version of the same old Toryism, entirely failing to recognise their novelty and therefore the kind of threat they posed. The 1979 election, followed by Ronald Reagan’s US victory in 1980, began the neoliberal era, which remained hegemonic in Britain, and more widely in the West, for three decades. Tory and Labour governments alike operated within the terms and by the logic of neoliberalism. The only thing new about New Labour was its acquiescence in neoliberalism; even in this sense, it was not new but derivative of Thatcherism.

The financial crisis of 2007-2008 marked the beginning of the end of neoliberalism. Unlike the social-democratic consensus, which was undermined by the ideological challenge posed by Thatcherism, neoliberalism was brought to its knees not by any ideological alternative – such was the hegemonic sway of neoliberalism – but by the biggest financial crisis since 1931. This was the consequence of the fragility of a financial sector left to its own devices as a result of sweeping deregulation, and the corrupt and extreme practices that this encouraged.

The origin of the crisis lay not in the Labour government – complicit though it was in the neoliberal indulgence of the financial sector – but in the deregulation of the banking sector on both sides of the Atlantic in the 1980s. Neoliberalism limped on in the period after 2007-2008 but as real wages stagnated, recovery proved a mirage, and, with the behaviour of the bankers exposed, a deep disillusionment spread across society. During 2015-16, a populist wave of opposition to the establishment engulfed much of Europe and the United States.

Except at the extremes – Greece perhaps being the most notable example – the left was not a beneficiary: on the contrary it, too, was punished by the people in the same manner as the parties of the mainstream right were. The reason was straightforward enough. The left was tarnished with the same brush as the right: almost everywhere social-democratic parties, albeit to varying degrees, had pursued neoliberal policies. Bill Clinton and Tony Blair became – and presented themselves as – leaders of neoliberalism and as enthusiastic advocates of a strategy of hyper-globalisation, which resulted in growing inequality. In this fundamental respect these parties were more or less ­indistinguishable from the right.

***

The first signs of open revolt against New Labour – the representatives and evangelists of neoliberal ideas in the Labour Party – came in the aftermath of the 2015 ­election and the entirely unpredicted and overwhelming victory of Jeremy Corbyn in the leadership election. Something was happening. Yet much of the left, along with the media, summarily dismissed it as a revival of far-left entryism; that these were for the most part no more than a bunch of Trots. There is a powerful, often overwhelming, tendency to see new phenomena in terms of the past. The new and unfamiliar is much more difficult to understand than the old and familiar: it requires serious intellectual effort and an open and inquiring mind. The left is not alone in this syndrome. The right condemned the 2017 Labour Party manifesto as a replica of Labour’s 1983 manifesto. They couldn’t have been more wrong.

That Corbyn had been a veteran of the far left for so long lent credence to the idea that he was merely a retread of a failed past: there was nothing new about him. In a brilliant election campaign, Corbyn not only gave the lie to this but also demonstrated that he, far more than any of the other party leaders, was in tune with the times, the candidate of modernity.

Crises, great turning points, new conjunctures, new forms of consciousness are by definition incubators of the new. That is one of the great sources of their fascination. We can now see the line of linkage between the thousands of young people who gave Corbyn his overwhelming victory in the leadership election in 2015 and the millions of young people who were enthused by his general election campaign in 2017. It is no accident that it was the young rather than the middle-aged or the seniors who were in the vanguard: the young are the bearers and products of the new, they are the lightning conductors of change. Their elders, by contrast, are steeped in old ways of thinking and doing, having lived through and internalised the values and norms of neoliberalism for more than 30 years.

Yet there is another, rather more important aspect to how we identify the new, namely the way we see politics and how politics is conceived. Electoral politics is a highly institutionalised and tribal activity. There have been, as I argued earlier, two great turning points in postwar politics: the social-democratic era ushered in by the 1945 Labour government and the neoliberal era launched by the Tory government in 1979.

The average Tory MP or activist, no doubt, would interpret history primarily in terms of Tory and Labour governments; Labour MPs and activists would do similarly. But this is a superficial reading of politics based on party labels which ignores the deeper forces that shape different eras, generate crises and result in new paradigms.

Alas, most political journalists and columnists are afflicted with the same inability to distinguish the wood (an understanding of the deeper historical forces at work) from the trees (the day-to-day manoeuvring of parties and politicians). In normal times, this may not be so important, because life continues for the most part as before, but at moments of great paradigmatic change it is absolutely critical.

If the political journalists, and indeed the PLP, had understood the deeper forces and profound changes now at work, they would never have failed en masse to rise above the banal and predictable in their assessment of Corbyn. Something deep, indeed, is happening. A historical era – namely, that of neoliberalism – is in its death throes. All the old assumptions can no longer be assumed. We are in new territory: we haven’t been here before. The smart suits long preferred by New Labour wannabes are no longer a symbol of success and ambition but of alienation from, and rejection of, those who have been left behind; who, from being ignored and dismissed, are in the process of moving to the centre of the political stage.

Corbyn, you may recall, was instantly rejected and ridiculed for his sartorial style, and yet we can now see that, with a little smartening, it conveys an authenticity and affinity with the times that made his style of dress more or less immune from criticism during the general election campaign. Yet fashion is only a way to illustrate a much deeper point.

The end of neoliberalism, once so hegemonic, so commanding, is turning Britain on its head. That is why – extraordinary when you think about it – all the attempts by the right to dismiss Corbyn as a far-left extremist failed miserably, even proved counterproductive, because that was not how people saw him, not how they heard him. He was speaking a language and voicing concerns that a broad cross-section of the public could understand and identify with.

***

The reason a large majority of the PLP was opposed to Corbyn, desperate to be rid of him, was because they were still living in the neoliberal era, still slaves to its ideology, still in thrall to its logic. They knew no other way of thinking or political being. They accused Corbyn of being out of time when in fact it was most of the PLP – not to mention the likes of Mandelson and Blair – who were still imprisoned in an earlier historical era. The end of neoliberalism marks the death of New Labour. In contrast, Corbyn is aligned with the world as it is rather than as it was. What a wonderful irony.

Corbyn’s success in the general election requires us to revisit some of the assumptions that have underpinned much political commentary over the past several years. The turmoil in Labour ranks and the ridiculing of Corbyn persuaded many, including on the left, that Labour stood on the edge of the abyss and that the Tories would continue to dominate for long into the future. With Corbyn having seized the political initiative, the Tories are now cast in a new light. With Labour in the process of burying its New Labour legacy and addressing a very new conjuncture, then the end of neoliberalism poses a much more serious challenge to the Tories than it does the Labour Party.

The Cameron/Osborne leadership was still very much of a neoliberal frame of mind, not least in their emphasis on austerity. It would appear that, in the light of the new popular mood, the government will now be forced to abandon austerity. Theresa May, on taking office, talked about a return to One Nation Toryism and the need to help the worst-off, but that has never moved beyond rhetoric: now she is dead in the water.

Meanwhile, the Tories are in fast retreat over Brexit. They held a referendum over the EU for narrowly party reasons which, from a national point of view, was entirely unnecessary. As a result of the Brexit vote, the Cameron leadership was forced to resign and the Brexiteers took de facto command. But now, after the election, the Tories are in headlong retreat from anything like a “hard Brexit”. In short, they have utterly lost control of the political agenda and are being driven by events. Above all, they are frightened of another election from which Corbyn is likely to emerge as leader with a political agenda that will owe nothing to neoliberalism.

Apart from Corbyn’s extraordinary emergence as a leader who understands – and is entirely comfortable with – the imperatives of the new conjuncture and the need for a new political paradigm, the key to Labour’s transformed position in the eyes of the public was its 2017 manifesto, arguably its best and most important since 1945. You may recall that for three decades the dominant themes were marketisation, privatisation, trickle-down economics, the wastefulness and inefficiencies of the state, the incontrovertible case for hyper-globalisation, and bankers and financiers as the New Gods.

Labour’s manifesto offered a very different vision: a fairer society, bearing down on inequality, a more redistributive tax system, the centrality of the social, proper funding of public services, nationalisation of the railways and water industry, and people as the priority rather than business and the City. The title captured the spirit – For the Many Not the Few. Or, to put in another way, After Neoliberalism. The vision is not yet the answer to the latter question, but it represents the beginnings of an answer.

Ever since the late 1970s, Labour has been on the defensive, struggling to deal with a world where the right has been hegemonic. We can now begin to glimpse a different possibility, one in which the left can begin to take ownership – at least in some degree – of a new, post-neoliberal political settlement. But we should not underestimate the enormous problems that lie in wait. The relative economic prospects for the country are far worse than they have been at any time since 1945. As we saw in the Brexit vote, the forces of conservatism, nativism, racism and imperial nostalgia remain hugely powerful. Not only has the country rejected continued membership of the European Union, but, along with the rest of the West, it is far from reconciled with the new world that is in the process of being created before our very eyes, in which the developing world will be paramount and in which China will be the global leader.

Nonetheless, to be able to entertain a sense of optimism about our own country is a novel experience after 30 years of being out in the cold. No wonder so many are feeling energised again.

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

Martin Jacques is the former editor of Marxism Today. 

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

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