The Power of Yes
Lyttelton

My Real War 1914–?
Trafalgar Studios

Here comes Hare. And he’s got the answer to the credit crunch. His energetic, well-researched and richly informative new work opens with an actor playing the writer himself (curious frown, Hush Puppies) as he sets out to discover why the markets jumped off a ledge last autumn. The result is less a play and more a commission of inquiry. Over many a lingering lunch Hare has leaned his inquisitive ear towards senior bankers, top journalists and leading economists. He then distilled their testimony into this fact-crammed pageant. The City’s major players saunter across the Lyttelton stage, their silk-lined suits softly whistling, to deliver gobbets of wisdom and insight. Gradually, the picture takes shape. For 15 years the financial world had been suffering from an acute case of overconfidence. And it never knew it was sick.

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The trouble began when banks started selling debt to one another. That a debt could originate in one institution and be owned by another looked like a smart idea. It was extraordinarily hazardous. If you buy a debt you own a liability but it appears on your balance sheet as an asset. Its value depends on the debtor’s ability to make the repayments so the system relies on the accuracy of the debt gradings. These were wildly overoptimistic. But that optimism seemed like sanity. The fundamentals seemed to have changed in the 1990s. Economies had stablised. Markets were secure. Inflation, the great cancer of the 20th century, appeared to have been driven out for ever by those sturdy Chinese hordes toiling away for 46 cents an hour. Bankers were feeling chipper about risk and they assumed that the new credit swaps (‘pooling debt in opaque structures’, as one financier calls it) would make the market even safer. It did the opposite. Crash, bang, wallop.

These details are set out with bracing clarity and if you have the faintest interest in economics you’ll find this show fascinating. Occasionally, Hare lurches into propaganda. He tells us the crisis disposed of the cosy 1980s assumption that markets were wise and decent. Er, hang on. Markets, 1980s, wise, decent. Those four terms have never before appeared in the same sentence. Blinkered and rapacious are the words used for markets in the 1980s. The nicest name for them would be ‘disinterested’.

Hare keeps insisting that ‘capitalism failed’ last autumn. Not really. Capitalism stumbled, as it will occasionally, and then got back on its feet by doing the thing it does best, ferreting out new sources of leverage. The banks managed to strong-arm the governments into rescuing them by borrowing from the future. ‘Socialism for the rich’ Hare calls it. He’s clearly quite cross about the bail-out but he can’t put his indignation on stage because the losers — everyone who pays tax — are too general and impersonal a group to function as a theatrical entity. He’s also keen to throw a bunched fist at the wicked recipients of bonuses. ‘Just because you work in an ice-cream factory,’ scolds one journalist, ‘doesn’t mean you can have all the ice-cream you want.’ We’re supposed to nod approvingly. But the bonus system isn’t immoral, it’s an efficiency measure. It keeps banks honest. A trader who boosts your balance sheet by three million quid deserves a 10 per cent tip. If he’s denied that he’ll embezzle it (plus a lot more) or set up a rival bank.

One hopes the City’s workforce will attend this play en masse, take copious notes and learn never, ever to let it happen again. Right? Oh, sure. The curious thing about a bubble is that ‘bubble’ is the perfect word for it. A sweet, harmless, lovely-looking thing floating through the sky. Then it goes ‘Pop!’ and there’s a lot of noise but nothing has been destroyed. Skin and contents are scattered temporarily awaiting the formation of the next bubble.

The Trafalgar Studios has welcomed an epistolary drama with an extraordinary name. My Real War 1914–? is based on letters written by subaltern on the Western Front. We watch as the young man is transformed from trigger-happy jingo into disillusioned pacificist. The material is full of quaint antique language. Pretty girls are ‘fizzers’, loudmouths are ‘bad hats’. Though the show works well as an illustrated recital, it might have profited from more theatricality, more suspense. We know he’ll die. He doesn’t. That’s about it. And because he’s unwilling to spook his parents, he skims over the gory details of war. These letters are part of a project, ‘Forgotten Voices’, which rediscovers Great War literature. The following snippet comes from Red Night, a play by James Lansdale Hodson. ‘Took the wood,’ reports Private Hardcastle. ‘Six hundred men killed. Held it for 24 hours. Lost the wood again.’

This article first appeared in the print edition of The Spectator magazine, dated