Money, money, money … in a rich man’s world

A while back Richard Seaford addressed a pressing topic: Money and the Early Greek Mind: Homer, Philosophy, Tragedy. Developing on such  wise saws and modern instances, especially Grecian ones and woes, Peter Jones did a column for The Spectator:

At the centre of Aristotle’s thinking lay a concept dear to him — the purpose for which something was designed (its telos). So, the purpose of a shoe was to wear it. That was its ‘use-value’. Bartering it for something else did not change that: the shoe was still a shoe, with a specific use. If you did not wear it, someone else would. In return for the shoe, you would be receiving a commensurate item — a cloak, a pot, a mattock — which you would also put to the use for which it was made. Aristotle agreed there was a problem about the commensurability of any barter — how would you equalise the use-value of a shoe/bed/house? — but that did not affect the principle.

Now bring money into the equation. Aristotle’s point here was that it added a further dimension to the idea of use. Take medicine. Doctors used it to provide health. But if the doctor also used it to make money, health, a good per se, was no longer the sole aim: it was also a means to a further end — making a profit. So what were the priorities?

Further, the fact that anything from health to education could be turned into money suggested that the stock of wealth was infinite; believe that, and making money became life’s goal. But how ‘good’ was the activity of generating profit by compromising the use of something good in itself?

So far, so capitalistic good.

Yet, consider …

The Duke of Bridgewater has a problem. He has coal, but needs to shift it to Manchester. He gets James Brindley to build him a canal. This meant Bridgewater could now retire to his estate at Worsley and wax rich. And build more canals, which make him even richer.

Richard Trevithick turns up at the mine his dad managed, uses the new steam engine and radically improves the technology of pumps and transport. He doesn’t get instant recognition; but the world is changed forever. Cornish tin is extracted from previously-inaccessible seams. Employment is improved. Costs are reduced. Squoodles of money are made, though precious little by Trevithick.

William Armstrong saw that killing was more profitable than lawyering. He turns Tyneside into the armoury of the world. Spotting a further opportunity in the market of mass-destruction, he creates an integrated one-stop shop for warships. As a result he becomes the most celebrated engineer of his age, fêted by royalty looking for mates’ rates, and he retires to his small country lodge and one-and-a-half square mile of Coquetdale (Cragside, above).

Even more recently, when Sir Jonathan Ives packages the umpteenth iteration of a tablet computer, so that it finally becomes marketable, wealth beyond the dreams of avarice floods in …

All of which suggests that, with the right product, the right patronage, and decent double-entry book-keeping, money can be invented — the stock of which is, indeed, infinite.

It also suggests, one way and another that there are other ends to the making of money than just the making of money. The Cornish tin-mines may have been hellish work-places, but it was work, and the excess population didn’t starve. Similarly, however Engels decried the stupendous squalor of industrial Manchester and Salford, it produced the modern world. And the iPad gives millions instant gratification.

On the other hand …

Leaf through today’s Times, all the way to page 37, and find this:

A leading expert on Japan’s “lost decade” has warned Britain and other Western nations that they are entering a “dangerous vicious circle” as they aggressively reduce both public and private sector debt.

Richard Koo, chief economist of the Nomura Research Institute, told The Times that slashing public spending at the same time that families and companies were paring back borrowing was self-defeating. He drew parallels with Japan in 1997, when the Government torpedoed the economy by tightening policy prematurely.

Sam Fleming’s article, titled Osborne ‘must rein back austerity cuts or follow Japan into stagnation’ hardly supports the usual Times adulation for Osbornomics:

The yield on UK ten-year gilts slumped in December to the lowest level since the 1890s, a phenomenon that George Osborne has argued is a reflection of high market confidence in his tough fiscal plans. The yield traded as low as 1.922 per cent on Friday.

But many analysts argue, however, that super-low yields are a reflection of investors’ bearish assessment of Britain’s prospects. Last month, economists at Standard Chartered predicted  that the economy would shrink by 1.3% in 2012, a much bleaker outlook than that painted by the Government’s Office for Budget Responsibility, which expects growth of 0.7 per cent, after o.9% expansion in 2011.

Malcolm has no tarot pack and is not in the prediction business, but the OBR’s record of soothsaying has consistently been adrift. Standard Chartered do rather better in the Mystic Meg stakes. And this is no time to be wasted, burnishing the slightest sliver of a silver lining among these darkest of clouds.

In effect, what Osborne is doing is the precise opposite of Brindley’s, Trevithick’s, Armstrong’s and Ives’ wealth-generation: he is poisoning the well, destroying wealth and any potential for its creation.

Elsewhere in today’s Times (this is a Bank Holiday “thin” edition), Roland Watson, Political Editor, does a page-filler of Dos and don’ts for 2012. His advice to David Cameron is:


  • Take the Conservatives out of their comfort zone and confront the excesses of “crony capitalism”.
  • Grab the flag for the Diamond Jubilee and harness the enthusiasm for the Olympics for the Government (as long as both go well).
  • Cross fingers, and everything else, that UK credit is not downgraded by ratings agencies.


  • Allow Ed Miliband to claim concerns over the rising costs of living as Labour territory.
  • Let Labour gain a hold on power by ousting Boris Johnson as Mayor of London.
  • Become sidelined in Europe.
Hmmm … what with those knighthoods for political bankers and CBEs for city criminals, the “crony capitalism” thing stinks already. And the whole point of Cameron’s recent rapprochement with his ultras has been about being willingly sidelined in Europe. So Dave Bullingdon isn’t doing too well, even two days into the New Year. The rest (jubilees, Olympics) look like bread and circuses.

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Filed under banking, Britain, broken society, David Cameron, economy, Ed Miliband, Europe, George Osborne, History, politics, reading, Times, Tories.

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