History Lesson(s) #2

On April 20th [2008], he walked to Launton, near Bicester, in search of the site where a meteorite fell on February 15th, 1830. 1830 was a year of revolutions, in France and Belgium, and in England, where the Captain Swing riots began at the end of August and continued through the Autumn. On September 15th, the Liverpool to Manchester railway was inaugurated. The monument was halfway up Poundon Hill, on the site of a former diplomatic service wireless transmitter used by the Special Operations Executive during World War II. But it was not meant to commemorate the meteorite. It was a millennium milepost on a cycle route to Cambridge, one of the thousand funded by the Royal Bank of Scotland. RBS was the world’s largest bank. In the previous day’s paper he had read about its weak capital position. It was then the most vulnerable major bank in Europe.

--Robinson in Ruins, 2010, narration by Patrick Keiller.

An odd thing occurred this week. Britain’s national debt jumped by £1.3 trillion, virtually 100% of GDP, and hardly anyone paid attention. The bad news was crowded out by the surprise 0.5% drop in national output in the last quarter of 2010.

There was reason to this apparent insouciance. What happened was that the figures published by the Office for National Statistics (ONS) finally caught up with the huge banking bail-outs of late 2008, when the government took effective control of Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG) by injecting big slugs of capital into them.

Yet even if this was a chronicle of a debt foretold, it is worthy of note. Even in these troubled times it is not every day that the national statisticians of any country reveal a near trebling in debt. Before the banking rescues in October 2008 net public debt stood at £742 billion, equivalent to 52% of GDP. By the end of the year it had soared to £2,070 billion, worth 147% of GDP, according to the report published on January 25th.

The ONS had already included in its previous public-debt figures Northern Rock, a mortgage lender that was eventually nationalised after suffering Britain’s first bank run for over a century. Together with Bradford & Bingley, another former building society that was rescued, that had added around £130 billion to the nation’s liabilities. But these mortgage banks were minnows compared with RBS and LBG, which put a further £1.3 trillion on to the public balance-sheet. Following its ill-fated takeover of the Dutch bank ABN AMRO, RBS had become the world’s biggest bank by size of balance-sheet while the shotgun wedding between relatively healthy Lloyds TSB and ailing HBOS during the banking crisis had created in LBG a domestic behemoth controlling around 30% of mortgage lending and current accounts.

--The Economist, 28/01/2011.

In New York, at least three major banks were known to be at risk of failure. A few days earlier, the two largest US mortgage finance corporations, with $5 trillion worth of loans, had been taken into public ownership to save them from collapse. In the early hours of Monday, September 15th, after a weekend of frantic negotiations between US and UK bankers and the federal reserve, Lehman Brothers announced that it would file for bankruptcy. A few hours earlier, Merrill Lynch had agreed to be taken over by Bank of America for only $50 billion.

On Monday morning, stock markets began falling. By 9 a.m. in London, the share price of HBOS, the UK’s biggest mortgage lender, had fallen by 34%. The spokesman for the company stressed that “HBOS is a strong financial institution.” During the afternoon at a White House press briefing, the US Treasury secretary Henry Paulson assured the public they could remain confident in the “soundness and resilience” of the financial system. By the end of Monday’s trading, oil prices had dropped by more than $5 a barrel, wheat futures were up 3.2%, and gold had risen by more than $28 an ounce. On Monday evening, the US authorities agreed a $20 billion emergency loan to the insurer AIG, after its share price had fallen by 63% during the day.

On Tuesday, markets in Asia that had been closed on Monday fell rapidly in early trading. In London, HBOS’s share price continued falling – a spokesman claimed the bank was strong and “well-capitalised”, and there were calls for government intervention to stop hedge funds from short-selling the bank’s shares. In New York, when the markets opened, AIG’s share price fell again, by 30%. Late that night, the US government agreed to give AIG $85 billion in return for a 79.9% stake in the company.

On Wednesday morning in London, HBOS began merger talks with Lloyds TSB. In Moscow, the government regulators suspended trading on the two main stock exchanges. The Bank of England announced it would extend its emergency lending scheme for UK banks. In New York, gold closed up $70, one of the largest one-day increases on record. At seven o’clock on Thursday morning, Lloyds’s takeover of HBOS was announced to the City; shares continued to fall, and gold rose another $30. Six of the world’s largest central banks together offered $180 billion to overcome the scarcity of funds in short-term dollar markets.

On Friday, the world’s stock markets stopped falling. Government intervention had averted the financial system’s immediate collapse. But the US and UK’s deteriorating performance was reported daily. While the turbulence had subsided, it seemed likely there would soon be more. With the state having intervened on such an unprecedented scale, it seemed possible to imagine for a moment that this was no ordinary crisis, and that some larger historic shift might be occurring.

--Robinson in Ruins, 2010, narration by Patrick Keiller.

Underneath all reason lies delirium, drift. Everything is rational in capitalism, except capital or capitalism itself. The stock market is certainly rational; one can understand it, study it, the capitalists know how to use it, and yet it is completely delirious, it's mad. It is in this sense that we say: the rational is always the rationality of an irrational.

--Gilles Deleuze, from "Capitalism: A Very Special Delirium", Chaosophy (Semiotext(e), 1995).

In particular there is this idea that there is something natural about markets. As [Edmund] Burke said, there are the laws of commerce which are the laws of nature which are the laws of God. And still, every morning on the Today programme we are confronted with the same assumption, that the market is natural and that anything else is intervention and is artificial, which is clearly nonsense, it's just absurd. I mean, you don't have to think about it from the point of view of a foxglove to think of it as being absurd, but maybe that helps a bit.

--Patrick Keiller, interviewed by Daniel Trilling, Politics and the English Countryside, 24/11/2010.

When we hear early on in the film that Robinson has made contact with a series of “non-human intelligences”, we initially suspect that he has finally succumbed to madness. Yet the “non-human intelligences” turn out to be not the extra-terrestrials of a florid pulp-science-fiction-inspired psychosis, but the intra-terrestrial life forms that an ecological awareness reveals growing with a silent stubbornness that matches the brute tenacity of capitalism.

--Mark Fisher, English Pastoral, November 2010.

We have indeed secreted a human age out of ourselves as spiders secrete their webs: an immense, all-encompassing ceiling of secularity which shuts down visibility on all sides even as it absorbs all the formerly natural elements in its habitat, transmuting them into its own man-made substance. Yet within this horizon of immanence we wander as alien as tribal people, or as visitors from outer space, admiring its unimaginably complex and fragile filigree and recoiling from its bottomless potholes, lounging against a rainwall of exotic and artificial plants or else agonising among poisonous colours and lethal stems we were not taught to avoid. The world of the human age is an aesthetic pretext for grinding terror or pathological ecstasy, and in its cosmos, all of it drawn from the very fibres of our own being and at one with every post-natural cell more alien to us than nature itself, we continue murmuring Kant’s old questions – What can I know? What should I do? What may I hope? – under a starry heaven no more responsive than a mirror or a spaceship, not understanding that they require the adjunct of an ugly and bureaucratic representational qualification: what can I know in this system? What should I do in this world completely invented by me? What can I hope for alone in an altogether human age?

--Fredric Jameson, Valences of the Dialectic (Verso, 2009), p. 608.

Robinson in Ruins - Patrick Keiller, 2010, 35mm