This is another analysis of the fallout from the economic disaster of 2007-08. However, this week’s book – The Establishment: And How They Get Away With It – does not look at the causes or economic consequences of the crisis but instead examines how the very people who were responsible for the tumult consistently emerged unblemished.
Author Owen Jones believes it was the much-fabled ‘Establishment’ – comprising the ruling political and banking classes – that wrought havoc with the global economy. He is not alone in that view.
Why, then, has the financial services industry remained largely unaffected and unchanged in the wake of such a catastrophe?
Prime minister David Cameron receives his share of the blame. Jones notes Cameron’s early political promises to match the Labour government’s spending plans, only to make a U-turn following the collapse of Lehman Brothers in September 2008.
Once that event had kickstarted the rapid decline of almost all financial markets, Cameron quickly reversed his own position and began to blame the “bloated state” – not the out-of-control financial services industry – for the economic ills being felt in the UK.
In his scathing assessment, Jones says this cronyism between politicians and big business deflected attention from the true causes of the crisis.
Highlighting further the close links between the two worlds, Jones references a 2012 study that showed 46 per cent of the UK’s top 50 publicly traded firms had a British politician as a director or major shareholder. This was the highest proportion among the nearly 50 countries involved in the study.
The author is particularly critical of Dave Hartnett, the former head of HMRC. During his tenure as the UK’s chief taxman, Hartnett struck several controversial deals that effectively enabled large corporations to get away with paying the bare minimum in tax. He then left to work for Deloitte – one of the Big Four accounting firms that make the lion’s share of their income by doing just that: helping companies and wealthy individuals pay as little tax as possible.
Jones asks readers why comedian Jimmy Carr and singer Gary Barlow were hauled over the coals for engaging in so-called tax minimisation plans while the City’s bigwigs went largely unchallenged. The answer, he says, is the high-level connections and protection afforded to the most influential among us.
Jones includes ‘big media’ in this group of self-preservationists, claiming the recent Leveson inquiry into the phone-hacking scandal chose – wrongly – to focus on the editors and reporters involved rather than taking a deeper look at the ownership of big media firms and the control they exert over publicly distributed information.
In truth, The Establishment is a book that states very loudly what many in society think on a daily basis. Just last week came the announcement that former editor of The Sun and Rupert Murdoch favourite Rebekah Brooks would return as chief executive to News UK – the company she was forced to leave four years ago in the wake of the phone-hacking scandal. Even then, she departed with a £16m payout. It is little wonder that so many citizens hold ‘The Establishment’ in contempt.
Owen Jones’ effort to quantify and qualify that contempt is certainly worth a read.