Tuesday, 16 December 2008

“Ché saetta prevista vien più lenta.” (Dante)

"The arrow, seen beforehand, slacks its flight."

I was pleased to read John Calder’s piece yesterday. John Calder on the net? It was a weird, almost anachronistic moment, as if I were hearing Jonathan Swift on the radio or seeing William Pitt on TV. His article, and the news of Bernard Madoff’s giant fraud, brought back to my mind an episode I had completely forgotten. It goes back more than twenty years ago, when I still was in Italy.

My best friend came to me with a kind of pyramid scheme, whereby a large number of people at the base of the pyramid were to post ten thousand lire – the equivalent of ten or twenty pounds today – to the address of the person at the top of the pyramid, in the hope of getting promoted to the next tier and eventually, with more players to be actively recruited and persuaded, reach the top and get showered with money. It was obviously a simple but very effective fraud, of the kind you can easily fall for when you are a naive youth of sixteen. But the fact that this opportunity came from my best friend (who was also hit by the con) made me even more willing to part with my money. My family tried to dissuade me, but I thought that it was worth gambling my savings, as the rewards could be huge, and went for it. I never got my money back.

This reminded me of a passage from Gulliver’s Travels, which I am rereading now:

“There are some laws and customs in this empire [Lilliput] very peculiar, and if they were not so directly contrary to those of my own dear country I should be tempted to say a little in their justification… They [The Lilliputians] look upon fraud as a greater crime than theft, and therefore seldom fail to punish it with death. For they allege that care and vigilance, with a very common understanding, may preserve a man’s goods from thieves, but honesty hath no fence against superior cunning. And since it is necessary that there should be a perpetual intercourse of buying and selling, and dealing upon credit, where fraud is permitted or connived at – or hath no law to punish it – the honest dealer is always undone, and the knave gets the advantage.”

Very true in the case of Bernie Madoff. You certainly go to jail if you steal an apple (well, maybe you used to go), but it is more difficult to bring you to justice if you swindle fifty billion dollars. Our laws are funny.

I must admit I have always had a soft spot for conmen and fraudsters of the Madoff or Abagnale type. They are almost romantic figures. A few years ago, I wrote a novel called Grand Tour, and its hero – or rather, anti-hero – was a conman wreaking financial and emotional havoc across Europe and getting away with it. The idea had come years before reading a short article on an American chap who had six or seven wives (and lives, and jobs) in different states. You wonder how exciting the life of such individuals must be… until they are discovered.

But what is really worrying is that many financial (and some non-financial) institutions – as well as entire governments – seem to be run on the same principles used by Bernie Madoff in his colossal scam. Borrowing against what you don’t have should be illegal both for the individual and the State. Good old Napoleon said:

“It is unjust for a generation to be indebted to the previous one; a loan should be limited to fifty years. Why should the people, who are not responsible for the debts of the deceased king, not have the privilege of the crown? A means to preserve coming generations must be found, without having to resort to bankruptcy.” (Aphorisms)

We must accept that the boom-or-bust model of capitalism is not only financially but also morally bankrupt. Rather than borrow and spend more and more, rather than force growth and inflation with debt, we should re-educate ourselves and teach our children to avoid excess and waste of resources. Greed is an animal instinct, and it should be curbed. Then life on our planet may become sustainable again, and possibly fairer.

AG

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