Bankers Were Stupid to Take Bailout, Lanchester Says
John Lanchester’s banker father hated talking about money. His career advice? Do what you love while you’re young; worry about earning a living later. And so Lanchester junior became a writer -- a successful one.
Yet in midlife, he’s taught himself the language of finance. In 2010 he published “Whoops!” (called “I.O.U.” in the U.S.), a layman’s attempt at unraveling the credit crisis. Now comes “Capital,” a novel set just before the crisis and focused on a fictional street in the London neighborhood of Clapham, where he lives.
On a recent morning, Lanchester tossed a denim blazer over a chair at his local Starbucks and sat down with a double espresso to talk about the bailout, London’s relationship with the City and the British obsession with real estate.
Anderson: How did “Capital” begin for you?
Lanchester: I started thinking about it at the end of 2005. I wanted to write about London. The first time I heard somebody in the world of money describe it as the capital of the world I was slightly taken aback. That wasn’t reflected in anything anyone wrote outside the financial press.
That was the germ of it -- that, combined with the feeling that there was a property boom and the bust would come.
Anderson: Lehman Brothers collapsed just as you finished your first draft. How did that affect the novel?
Lanchester: It didn’t change its architecture -- the shape of a boom-bust narrative is identical even though the specifics are really different. But I wanted to understand the credit crisis.
Obviously you can stash money under your mattress, cut down on hazelnut lattes, but in terms of the larger economic frame of our lives, we have very little agency. About one of the only things you can do is understand it.
Anderson: You weren’t tempted to fold your research back into “Capital” rather than write another whole book?
Lanchester: You can’t explain collateralized debt obligation in a novel -- it’s too draggy. Also, there are so many things about the crisis that are only interesting because they actually happened. Fact doesn’t have to be plausible; it just has to be fact.
Anderson: The looming crisis barely impinges on most of the novel’s characters.
Lanchester: People then didn’t know what was coming. I’m not sure they still fully do, actually. They talk about the recovery as if it’s like getting over a cold.
Anderson: Your father was a banker at HSBC, right?
Lanchester: Yes, in a different age. Dad was a very, very principled man and he hated any kind of story where the baddies get away with it. That’s part of my outrage.
Anderson: Is that how you view the bailout?
Lanchester: I think the banks won 2008 at an incredibly high price. By allowing themselves to become so unpopular and losing control of the narrative, they did something incredibly, stupidly damaging in the medium term.
It’s strange that they’ve changed the bonus rules so much and that’s had no effect on the debate. It’s very difficult to shift those narratives once they’ve got to a particular place.
Anderson: How do you see that debate progressing?
Lanchester: It might be that in terms of an accommodation between the financial sector and the rest of society we never reach one, but at least now we know what the City does roughly, and the contribution it makes.
That’s more grown-up than mutual ignorance, where the City consciously tries not to disturb the natives, to walk as quietly as it can through the Underground.
Anderson: How has the City responded to “Capital’s” banker and his shopaholic wife?
Lanchester: A couple of people asked whether Arabella is based on their ex-wives. I’ve had a variety of responses to Roger. Some say he must have been modeled on their ex-boss, others say someone like that wouldn’t last ten minutes. A lot of the City is still in love with this version of itself as a uniquely meritocratic and competitive culture, which in my view is balls.
Anderson: “Capital” is partly a story about real estate. How will our national obsession translate in foreign editions?
Lanchester: Americans get it but the Europeans by and large don’t. It’s evidence-free my theory about that, but I do wonder if it’s linked to the fact that America and Britain are the countries that have the most liberalized markets and are physically mobile, and whether that causes people to be obsessed with owning a home.
It is obviously mad. There’s a sense in which the British are a tribe, dancing around houses going wa-wa-wah.
(Hephzibah Anderson is a critic for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are her own.)
To contact the writer on the story: Hephzibah Anderson in London at Hephzibah_anderson@hotmail.com.
To contact the editor responsible for this story: Manuela Hoelterhoff at firstname.lastname@example.org.