Marc Rich, the godfather of global commodity trading who died last week, ‘deserves credit as one of the greatest creators and sharers of wealth in business history’, wrote James Breiding in the Financial Times in a counterblast to obituarists who had painted the secretive Swiss-based billionaire and former fugitive from US justice as ‘a flamboyant, tax-evading crook’. Bill Clinton certainly saw the better angel in Rich’s nature, granting a presidential pardon for his embargo-busting dealings with Iran against all precedent and advice. But leaving aside the unpatriotic oil trades and the unpaid taxes (not to mention the former Mrs Rich’s timely donation to the Clinton Library), is Breiding right to argue that the Rich legacy — the explosive growth of commodity markets and consequent prosperity of resource-rich nations — was for the good of the world, and we should thank him for it?
Well no, not really. Long-term supply and demand of carbon fuels and industrial metals would have found other ways to meet without Rich’s intermediation. The big oil companies that ran their own global market before he muscled in on it in the mid-1970s may not always have been paragons of corporate virtue, but they were never as chillingly amoral as he was.
‘You can’t run a business on sympathies otherwise you’d be hampered,’ was one of his sayings. ‘They wanted money and I wanted their commodities,’ he observed of the vicious regimes with which he conducted what Breiding (in his book Swiss Made) tellingly called ‘intimate relationships’. When someone asked Rich what gave him a buzz, the answer was not his daughters or his Picassos or his lovely view of Lake Lucerne, but ‘I like making money.’
The truth about Rich is that he was an archetype of ‘silo mentality’ financial capitalism, to borrow a phrase from Gillian Tett’s Fool’s Gold. That’s the kind of capitalism which makes ‘nothing but money’ — to borrow a phrase from the trading floor of Bear Stearns, the bankrupt Wall Street investment house — while caring not a jot for the social consequences. And what’s frightening is that Rich’s real legacy is as a role model: his former protégés and apprentices now control, through his empire’s successor companies Glencore Xstrata and Trafigura, the price of just about everything.
It is a constant theme of this column that capitalism is essentially good and that self-made billionaires are generally to be admired; but business without ‘sympathies’ is banal, vulgar and corrosive. And that’s how Mr Rich should be remembered.
Early to work
The new Governor is here at last, and he took an early Tube to work on his first day to show he’s a streetwise kind of guy who cares about his carbon footprint even if he costs three times as much as his predecessor. Or perhaps (as my predecessor Christopher Fildes reminds me) he was consciously imitating the great Montagu Norman, Governor 1920–1944, who commuted on the Central Line with his ticket tucked into his hatband. Either way, I can only wish Mark Carney luck as the media waits for him to trip up and disappoint even as the latest economic indicators, particularly from the manufacturing and export sectors, seem to be offering him a free ride on a recovery that has already begun.
He must be secretly glad that his wife Diana — who I’ve already tipped as ‘the new Sally Bercow’ — is so willing to distract attention with her blogs and tweets, the latest being a rant about the environmental horror of teabags. Before the couple start overturning Threadneedle Street traditions, as they surely will, I hope Diana realises the eco-value of one of them, which is the presentation to new members of the Bank’s Court of their own numbered silver napkin ring. This is a reminder that the English gentleman doesn’t expect a cleanly laundered linen napkin every day so long as he recognises the used one as his own — and he wouldn’t know what to do with a paper one.
Down the mine
The controversial commodity in my part of the world is not ayatollahs’ oil or even shale gas, but polyhalite fertiliser or potash, of which there’s said to be 2.6 billion tonnes lurking under an area of land and sea around Whitby in the North York Moors National Park. The project is the subject of a planning battle that comes to a head at a special meeting later this month. A ‘socio-economic impact report’ commissioned by the promoters, Sirius Minerals (whose shares have more than doubled in the past year), claims that the proposed mine will create more than 6,000 jobs in an area of high unemployment where what’s otherwise available is low-paid work in the tourism sector, and will bring annual ‘gross value added’ to the local economy of £943 million. Nationally, say the consultants ERS, the mine will contribute £300 million a year in taxes and add 0.1 per cent to GDP growth. But objectors ranging from Natural England to the Caravan Club retort that it will deter tourist spending and threaten the moorland landscape — though no one claims that the well-shielded mine site at Sneaton, six miles south of Whitby, is itself a beauty spot.
Watching this argument from 30 miles away with no axe to grind, I can only conclude that the planning authorities would be barking mad to turn the project down — but as with so many other transformative developments, there’s no accounting for local folk. I refer protestors to a letter in last week’s Whitby Gazette from a café owner in Staithes pointing out that, within a mile of his lovely little fishing port, the Boulby potash mine has operated since 1969 without doing any apparent harm to visitor numbers, house prices or quality of life. Boulby is indeed far more sinister than the proposed Sneaton mine, since it houses, 1,100 metres down, detectors placed by government scientists in search of ‘dark matter’, the missing element of the universe. And even deeper than that, I gather, Marc Rich has been spotted selling sulphur to Satan.