Opinionist: London Pride

By Jonn Last edited 101 months ago
Opinionist: London Pride

canarywharf.jpeg The Mayor of London, we've noted, is a man who seems a little vague on the average wage, has shown scant interest in bringing down the city's stratospheric housing costs, and seems to think that buses exist primarily to make the whole place look like a Richard Curtis movie. So it's a little uncomfortable to watch him jolly off to Brussels to fight tooth and claw for the rights of - drum roll, please - hedge funds.

This seems an odd set of people to be worried about right now. Jobs are disappearing, poverty is rising, and we're being asked to fret about the welfare of guys with millions in the bank and a history of screwing up the world? Should we man the barricades for their right to pay less tax than their cleaners as well?

Except, the more we think about it, the more we worry he might have a point.

We get a slightly smug glow every time we come across a headline like ‘London to steal Wall St crown’, or read a Frenchman describing London as the ‘most international city in the world’. In the last twenty years, London has turned from being a grey, English sort of a place into a serious candidate for the capital of the world, the kind of melting pot that makes fin de siècle New York look WASP-ish and dull.

And the single biggest factor in this transformation is the arrival of those hedge fund managers and their mates. The City provides about a tenth of London’s jobs. Other industries - lawyers, accountants, journalists et al - cluster near it in the hope that someone will let them touch the money. It’s this that’s made the city rich again. And it’s that wealth that pays for the galleries and restaurants and bars and regeneration… all the things that make London actually worth living in.

If the money men up sticks and leave, they might take all this other stuff with them. London would stop being the world city we’re used to, and go back to being the drab English place familiar from repeats of Minder. Ken Livingstone realized this, and spent much of his mayoralty playing against type to protect London’s status as a place where the rich get richer.

And yet... there's still this nagging worry about what else the bankers are doing to us. They give London its culture of greed, in which people can pay top rate tax and still think they’re poor. They bid up house prices, by being willing and able to pay £300k for a shoe box in zone 2. They pushed up drink prices so much that you can pay £5 for a pint and not even blink.

There’s a contradiction here. The City wrecks our quality of life, but it also makes it worth living here. Perhaps Boris is right on this one: we may not like them, but that doesn’t mean we don’t need them.

It’d just be nice if they paid those cleaners a bit better, that’s all.

Image courtsey of harshilshah100 under a creative commons licence

Last Updated 09 September 2009

Luciobuffone

I can see where you are coming from, but you miss the central point of the 'crunch'. The problem is that you can't have a sustainable economy based on financial services. We need to start producing stuff again. Not just plastic things, but useful things for society. Home insulation materials, Wind Turbines, High Speed Trains.
You can't get real wealth from 'nothing'. The house price boom is always going to crash, as it's funded on credit, and an artificial shortage of supply. We need to move away from this kind of economy, which values paper wealth creation, over decent goods and services that are of value to everyone. IF London wants to lead the world, we should kick them all out of the square mile and launch a Green Economy, which values our well being and our environment over raw financial gain.

John B

@Jonn, excellent piece.

@Lucio, the only problem is that 'sustainable' and 'useful' are meaningless concepts. If we can do something, it's sustainable; if people want something, it's useful, and any measure to ascribe value beyond that is ridiculous quasi-religious nonsense. Now, a world where *everyone* did finance wouldn't work - but in a world of six billion people, a city of 10 million that focuses on finance is perfectly sustainable and useful on any sensible measure.

Jonn

@Lucio - thanks for your comments. I agree we could do with more green industry, but I disagree with the statement that you 'can't get real wealth from nothing'. Or rather, I disagree with your characterization of finance as nothing.

Bits of it may be fairly described that way - speculating on currency movements, for example. But is venture capital, which offers much needed investment to new companies? Or insurance? Or the mortgage industry?

Finance is a service industry. A business doesn't have to involve actual physical objects to generate wealth.

BethPH

A good article, Jonn. Personally, I think the knee-jerk reaction against the banking industry in London is short-sighted and encouraging its departure would be detrimental.

Luciobuffone

John B - Sustainable means living within our and the planet's means, it definitely does not mean 'if we can do something'. In fact it means the opposite of that.

John (Author) I am talking about Hedge Funds more than the City as a whole. Hedge Funds use Leverage to borrow huge amounts of money against relatively small investments, to in effect gamble on performance of the stock market and other aspects of the financial markets, especially the debt markets. Borrowing money (electronically ie money that doesn't exist) to gamble on debt (the cause of the credit crunch) debt which in the vast majority of cases is money that only exists electronically (ie doesn't actually exist). This is NOT sustainable. It's the equivalent of gambling on your credit card . Add to that, that hedge funds are legally exempt from other regulations that govern financial services. Do you really think this is the way of securing London's prosperity and well being for future generations of Londoners?? Boris is wrong, hedge Funds MUST be regulated.