Friday, 28 May 2010
The Demise of the Working Class Male
I've done a cover story for the Spectator this week about the demise of the working class male. It's not available online, but you can read Fraser Nelson's summary of it on the Spectator Coffee House blog.
Tuesday, 25 May 2010
The Return of the Wartime Thriller...
I've just returned from CrimeFest in Bristol. While I was there, I gave a talk on the return of the wartime thriller, which attracted a fair bit of discussion. Still, some of the six billion or so people who didn't make it to the talk might well be interested as well, so here are the notes I spoke from.
"When I staretd work on the Death Force series, it seemed to me that a military thriller was precisely the right kind of book to be writing at the moment.
After all, Britain has been involved in two long and fairly nasty military campaigns, one in Iraq, and one in Afghanistan.
The last decade has seen more sustained combat operation by the British army than any decade since the 1950s when the British Army was fighting in Korea.
But, so far there hasn’t been very much fiction about it.
There have been plenty of non-fiction books such as ‘Sniper One’ or ‘Eight Lives Down’ and some of them have been really good.
So far, however, thriller writers haven’t been tackling those wars directly.
They’ve been stuck in still writing the kind of spy and espionage thrillers that were popular in the Cold War.
Or else they’ve been writing crime thrillers, usually featuring ever more gruesome serial killers.
But they haven’t, on the whole, been writing about the wars we are fighting right now.
Which is pretty odd.
Because popular fiction is one of the ways we discuss and debate things that are happening in the world around us.
And thrillers have always been a genre that draws on and reflect the world around us.
The more I thought about it, the more it seemed to me that the world was ready for the return of the military thriller.
After all, if you go back to the origins of the genre, it was often bound up with military matters.
Think, for example, about a book such ‘The Thirty-Nine Steps’, which many people would quite rightly regard as one of the foundations of the whole thriller genre. Richard Hannay, its hero, isn’t a solider. But it’s a First World War novel, as indeed are the subsequent Hannay stories Buchan wrote. They are bound up with the wars that Britain was fighting at the time the stories were written.
If you fast forward, the work of a writer such as Eric Ambler, who many people quite rightly regard as one of the first literary thriller writers, is bound up with Word War Two. A book such as ‘Journey Into Fear’ is a wartime thriller that capture brilliantly the strange half-war, half-peace atmosphere of early 1940s, and probably tells you more about how people felt about the war at that stage than any history book.
In the wake of World War Two, the military thriller really came into its own. Look for example at the work of Alistair MacLean, one of my favourite thriller writers of all time. Books such The Guns of Navaronne and HMS Ulysses are classics of the genre.
Hammond Innnes started out as military thriller writer, based mainly on his experiences in the Royal Artillery.
And Dennis Wheatley, probably mostly remembered now for his occult novels, also wrote a series of World War Two thrillers.
In fact, when I started reading books, around the early 1970s, the World War Two thriller genre was one of the most popular. There was an endless series of them to choose from in the bookshops or in the libraries.
Then, I think, from the 1970s onwards it went into decline.
There were still military thrillers around. But it became an historical genre – think, for example, about the Flashman books, or Bernard Cornwall’s Sharpe series.
There was a reason for that, I think.
As I said earlier, the thriller genre reflects the world around it.
And for most of fifty years after World War Two, we didn’t fight any proper wars. We just had the Cold War. And, of course, in the Cold War all the actual fighting was done by the spies and secret agents. The actual soldiers – thankfully - stayed in their barracks.
Thriller writers latched onto that. From Ian Fleming to Len Deighton to John Le Carre there were countless spy thrillers. Indeed, there were so many of them, and that kind of warfare went on for so long, that we tended to think that the thriller genre and the spy story were virtually the same thing.
But, of course, that wasn’t true. It was just that thriller writers were reflecting the war we were fighting then.
Now, of course, that has changed.
One thing that’s happened to the world since the end of the Cold War is that we are fighting lots of small, hot wars, rather than one big cold one. Bosnia, Sierra Leone, Iraq and Afghanistan…and no doubt there will be more.
And in these wars, the fighting is done by soldiers, not spies.
So, in fact, this is precisely the right time to be writing a military thriller.
It’s already been happening to some degree.
Ask yourself this question. Who are the most successful British thriller writers of the last decade?
Well, Lee Child most obviously.
But also Andy McNab and Chris Ryan.
I may know a bit more about those books than I really should. But they are both writing great books which are firmly in the tradition of action, adventure thrillers.
I think Alistair MacLean could pick up any book by either writer, and feel instantly at home with them.
But, surprisingly, not many other British thriller writers have been tackling those wars directly.
How many thrillers have been set in Helmand, for example?
In fact, the thriller genre is too stuck in the spy story.
The real conflict in the world right now is military. That’s where the drama and the conflict and the stories are.
And that’s what thriller writers who are interested in the world around them should be writing about."
"When I staretd work on the Death Force series, it seemed to me that a military thriller was precisely the right kind of book to be writing at the moment.
After all, Britain has been involved in two long and fairly nasty military campaigns, one in Iraq, and one in Afghanistan.
The last decade has seen more sustained combat operation by the British army than any decade since the 1950s when the British Army was fighting in Korea.
But, so far there hasn’t been very much fiction about it.
There have been plenty of non-fiction books such as ‘Sniper One’ or ‘Eight Lives Down’ and some of them have been really good.
So far, however, thriller writers haven’t been tackling those wars directly.
They’ve been stuck in still writing the kind of spy and espionage thrillers that were popular in the Cold War.
Or else they’ve been writing crime thrillers, usually featuring ever more gruesome serial killers.
But they haven’t, on the whole, been writing about the wars we are fighting right now.
Which is pretty odd.
Because popular fiction is one of the ways we discuss and debate things that are happening in the world around us.
And thrillers have always been a genre that draws on and reflect the world around us.
The more I thought about it, the more it seemed to me that the world was ready for the return of the military thriller.
After all, if you go back to the origins of the genre, it was often bound up with military matters.
Think, for example, about a book such ‘The Thirty-Nine Steps’, which many people would quite rightly regard as one of the foundations of the whole thriller genre. Richard Hannay, its hero, isn’t a solider. But it’s a First World War novel, as indeed are the subsequent Hannay stories Buchan wrote. They are bound up with the wars that Britain was fighting at the time the stories were written.
If you fast forward, the work of a writer such as Eric Ambler, who many people quite rightly regard as one of the first literary thriller writers, is bound up with Word War Two. A book such as ‘Journey Into Fear’ is a wartime thriller that capture brilliantly the strange half-war, half-peace atmosphere of early 1940s, and probably tells you more about how people felt about the war at that stage than any history book.
In the wake of World War Two, the military thriller really came into its own. Look for example at the work of Alistair MacLean, one of my favourite thriller writers of all time. Books such The Guns of Navaronne and HMS Ulysses are classics of the genre.
Hammond Innnes started out as military thriller writer, based mainly on his experiences in the Royal Artillery.
And Dennis Wheatley, probably mostly remembered now for his occult novels, also wrote a series of World War Two thrillers.
In fact, when I started reading books, around the early 1970s, the World War Two thriller genre was one of the most popular. There was an endless series of them to choose from in the bookshops or in the libraries.
Then, I think, from the 1970s onwards it went into decline.
There were still military thrillers around. But it became an historical genre – think, for example, about the Flashman books, or Bernard Cornwall’s Sharpe series.
There was a reason for that, I think.
As I said earlier, the thriller genre reflects the world around it.
And for most of fifty years after World War Two, we didn’t fight any proper wars. We just had the Cold War. And, of course, in the Cold War all the actual fighting was done by the spies and secret agents. The actual soldiers – thankfully - stayed in their barracks.
Thriller writers latched onto that. From Ian Fleming to Len Deighton to John Le Carre there were countless spy thrillers. Indeed, there were so many of them, and that kind of warfare went on for so long, that we tended to think that the thriller genre and the spy story were virtually the same thing.
But, of course, that wasn’t true. It was just that thriller writers were reflecting the war we were fighting then.
Now, of course, that has changed.
One thing that’s happened to the world since the end of the Cold War is that we are fighting lots of small, hot wars, rather than one big cold one. Bosnia, Sierra Leone, Iraq and Afghanistan…and no doubt there will be more.
And in these wars, the fighting is done by soldiers, not spies.
So, in fact, this is precisely the right time to be writing a military thriller.
It’s already been happening to some degree.
Ask yourself this question. Who are the most successful British thriller writers of the last decade?
Well, Lee Child most obviously.
But also Andy McNab and Chris Ryan.
I may know a bit more about those books than I really should. But they are both writing great books which are firmly in the tradition of action, adventure thrillers.
I think Alistair MacLean could pick up any book by either writer, and feel instantly at home with them.
But, surprisingly, not many other British thriller writers have been tackling those wars directly.
How many thrillers have been set in Helmand, for example?
In fact, the thriller genre is too stuck in the spy story.
The real conflict in the world right now is military. That’s where the drama and the conflict and the stories are.
And that’s what thriller writers who are interested in the world around them should be writing about."
Monday, 24 May 2010
What Osborne's Emergency Budget Should Say....
In my Money Week column, I've been looking at what George Osborne's emergency budget on June 22nd. Here's a taster....
It’s not hard to sketch out the scene on June 22nd, when the new Chancellor George Osborne delivers his emergency budget on behalf of the coalition government. He clears his throat, looks around the house, and announces. “Cripes! What a mess. We resign – and one of those Milliband’s can clear up the mess if they are so smart.”
Amusing, but unlikely. In reality, Osborne will have to deliver a set of measures that will define the new government. There are four priorities he should focus on: restoring honesty to the public finances: simplifying the tax system: making deep structural reforms to the way the UK economy operates: and kick-starting growth, even if that means taking some risks in the short-term.
It is a long time since a Conservative Chancellor delivered the first budget of a new Tory administration. The last one was Geoffrey Howe’s, delivered in June 1979, just after Margaret Thatcher was elected Prime Minister. Looking back, it was genuinely radical stuff. VAT was raised from 12.5% on luxuries , and 8% on most items, to a standard rate of 15%. The basic rate of income tax was cut from 33% to 30%, with a target of cutting it to 25%. And the top rate came down from 83% to 60%. Exchange controls were relaxed, and big cuts to public spending were announced. Later budgets by both Howe and his successor Nigel Lawson were probably just as radical. But the main thrust of the Thatcherite reconstruction of the British economy was all laid out in the first speech. It was a clear and decisive break with what had gone before.
Osborne should be no less bold. The UK can still escape from the perilous, near-bankrupt state that thirteen years of Gordon Brown have left it in, but it will require swift and decisive action. Here’s what he needs to do.
First, there needs to be complete honesty about the dire state of the public finances. The UK doesn’t just have one of the highest budget deficits in the world. It has hidden much of the waste and debt of the Brown years. What turned the markets against Greece was not just the scale of borrowing. It was the fact it had fiddled its figures for so long. A 10%-plus deficit might just prove sustainable, given how bad the debt figures are everywhere else. But if the bond markets get the sense they are being lied to, they will move in for the kill. The first task of the new Office for Budget Responsibility will be to root through all the quangos, the private finance initiatives, and the pension obligations, and come up with some meaningful analysis of what bills British taxpayers will have to meet over the next decade. Nothing other than brutal honesty will do.
Next, the tax system needs to be clinically simplified. Over the past thirteen years it has turned into a vast, Byzantine mess that does more to destroy wealth than either collect or re-distribute it. A few basic principles should be established. All taxes should be low, fair, and simple to collect. All taxes should be standardised, whether it is on income, or capital gains, or inheritances, to reduce the incentive to shift assets around. People and companies should be exempted from taxes instead of given allowances or benefits. It will be virtually impossible to reform the current tax system along those lines. Instead, repeal the entire thing, and create a new, simpler tax system from scratch.
Third, make structural reforms right away. Changes to the tax system can have a big impact on the way the economy works. But it will take time. Five years is a minimum, and quite possibly longer. A falling pound by itself isn’t going to revive British manufacturing. But creating tax-free zones for factories would work, particularly if you placed them in the regions that are going to be hardest hit by the cut in public spending (Wales, Scotland, Northern Ireland and the North-East). Encourage saving, with tax breaks if necessary, and make sure debt isn’t subsidised through the tax system. The UK needs to re-balance its economy from financial engineering towards industry, science, technology, media and manufacturing. A start has to be made on that in the first budget if any of the results are to be seen before the next election.
Finally, make a wager on growth. Howe’s budgets were deliberately deflationary. He had to beat inflation out of the system, as well as re-structuring the UK economy. Osborne doesn’t have that unenviable task. Inflation, though creeping worryingly higher, isn’t yet a big problem. Instead, this Tory-led coalition can borrow a trick from Ronald Reagan in the early 1980s. He pushed for radical, pro-enterprise tax cuts, even when he didn’t have the money to pay for them. The gamble was that growth would come through swiftly enough to keep the deficit under control. And he was proved right.
Osborne should try something similar. The UK can’t just cut its way out of this deficit – not without imposing huge pain on public services, for which there will be little political support. It can’t tax its way out either. Taxes are already at the upper limit of what can be raised: push them any higher, and you’ll just collect less revenue. Instead, it has to grow its way out of trouble. Big cuts in corporation tax – say to the 12.5% levied in Ireland – would be the best way to do that. Global companies would flock back to the UK. Follow that up with cuts to the top-rate of tax, and entrepreneurs would be re-motivated as well.
It would be a big risk, of course. But as Howe showed in 1979, this is no moment for caution. Osborne is only going to get one shot at a radical change of direction. And the one thing that is certain is that on its current path the UK economy faces years of austerity and decline – so there is little to be lost, and much gained, from trying to turn that around.
It’s not hard to sketch out the scene on June 22nd, when the new Chancellor George Osborne delivers his emergency budget on behalf of the coalition government. He clears his throat, looks around the house, and announces. “Cripes! What a mess. We resign – and one of those Milliband’s can clear up the mess if they are so smart.”
Amusing, but unlikely. In reality, Osborne will have to deliver a set of measures that will define the new government. There are four priorities he should focus on: restoring honesty to the public finances: simplifying the tax system: making deep structural reforms to the way the UK economy operates: and kick-starting growth, even if that means taking some risks in the short-term.
It is a long time since a Conservative Chancellor delivered the first budget of a new Tory administration. The last one was Geoffrey Howe’s, delivered in June 1979, just after Margaret Thatcher was elected Prime Minister. Looking back, it was genuinely radical stuff. VAT was raised from 12.5% on luxuries , and 8% on most items, to a standard rate of 15%. The basic rate of income tax was cut from 33% to 30%, with a target of cutting it to 25%. And the top rate came down from 83% to 60%. Exchange controls were relaxed, and big cuts to public spending were announced. Later budgets by both Howe and his successor Nigel Lawson were probably just as radical. But the main thrust of the Thatcherite reconstruction of the British economy was all laid out in the first speech. It was a clear and decisive break with what had gone before.
Osborne should be no less bold. The UK can still escape from the perilous, near-bankrupt state that thirteen years of Gordon Brown have left it in, but it will require swift and decisive action. Here’s what he needs to do.
First, there needs to be complete honesty about the dire state of the public finances. The UK doesn’t just have one of the highest budget deficits in the world. It has hidden much of the waste and debt of the Brown years. What turned the markets against Greece was not just the scale of borrowing. It was the fact it had fiddled its figures for so long. A 10%-plus deficit might just prove sustainable, given how bad the debt figures are everywhere else. But if the bond markets get the sense they are being lied to, they will move in for the kill. The first task of the new Office for Budget Responsibility will be to root through all the quangos, the private finance initiatives, and the pension obligations, and come up with some meaningful analysis of what bills British taxpayers will have to meet over the next decade. Nothing other than brutal honesty will do.
Next, the tax system needs to be clinically simplified. Over the past thirteen years it has turned into a vast, Byzantine mess that does more to destroy wealth than either collect or re-distribute it. A few basic principles should be established. All taxes should be low, fair, and simple to collect. All taxes should be standardised, whether it is on income, or capital gains, or inheritances, to reduce the incentive to shift assets around. People and companies should be exempted from taxes instead of given allowances or benefits. It will be virtually impossible to reform the current tax system along those lines. Instead, repeal the entire thing, and create a new, simpler tax system from scratch.
Third, make structural reforms right away. Changes to the tax system can have a big impact on the way the economy works. But it will take time. Five years is a minimum, and quite possibly longer. A falling pound by itself isn’t going to revive British manufacturing. But creating tax-free zones for factories would work, particularly if you placed them in the regions that are going to be hardest hit by the cut in public spending (Wales, Scotland, Northern Ireland and the North-East). Encourage saving, with tax breaks if necessary, and make sure debt isn’t subsidised through the tax system. The UK needs to re-balance its economy from financial engineering towards industry, science, technology, media and manufacturing. A start has to be made on that in the first budget if any of the results are to be seen before the next election.
Finally, make a wager on growth. Howe’s budgets were deliberately deflationary. He had to beat inflation out of the system, as well as re-structuring the UK economy. Osborne doesn’t have that unenviable task. Inflation, though creeping worryingly higher, isn’t yet a big problem. Instead, this Tory-led coalition can borrow a trick from Ronald Reagan in the early 1980s. He pushed for radical, pro-enterprise tax cuts, even when he didn’t have the money to pay for them. The gamble was that growth would come through swiftly enough to keep the deficit under control. And he was proved right.
Osborne should try something similar. The UK can’t just cut its way out of this deficit – not without imposing huge pain on public services, for which there will be little political support. It can’t tax its way out either. Taxes are already at the upper limit of what can be raised: push them any higher, and you’ll just collect less revenue. Instead, it has to grow its way out of trouble. Big cuts in corporation tax – say to the 12.5% levied in Ireland – would be the best way to do that. Global companies would flock back to the UK. Follow that up with cuts to the top-rate of tax, and entrepreneurs would be re-motivated as well.
It would be a big risk, of course. But as Howe showed in 1979, this is no moment for caution. Osborne is only going to get one shot at a radical change of direction. And the one thing that is certain is that on its current path the UK economy faces years of austerity and decline – so there is little to be lost, and much gained, from trying to turn that around.
Tuesday, 18 May 2010
Bookseller Blog on the Supermarkets....
Are the sypermarkets bad for authors. In The Boookseller today, I'm explaining why not. You can read the piece here.
Monday, 17 May 2010
The Demise of London's Bling Economy....
In my Money Week column this week, I've been writing about how the sale of Harrods marks the deminse of London's bling economy. Here's a taster....
Money Week: Mohamed Al-Fayed Is Selling Out of Bling London. So Should You.
Mohamed Al-Fayed always said he’d never sell Harrods. It was the prize in his portfolio, the one asset he’d take to the grave with him. That, however, was before Qatar Holdings came along and offered him £1.5 billion for one of the world’s most famous shops. There aren’t many people who wouldn’t change their mind when that kind of money was on the table - and al-Fayed is not among them.
The Egyptian-born grocer has never been a popular figure in his adopted country. His brash, money-drenched lifestyle endeared him to no one. Turning a traditional British department store into something about as classy as a Dubai gift shop didn’t do his reputation any good. Nor did encouraging conspiracy theorists to focus on the Royal Family after his son Dodi died alongside Princess Diana.
But he has always been a brilliant street trader – and he has a street traders’ inner sense for when to buy and sell. From 1985 to 2010 he brilliantly rode the emergence of London as the headquarters of the ‘Bling Economy’. He knew how to mint a fortune from that more than almost any other entrepreneur. But now he almost certainly senses that era is coming to a close. There are plenty of bling assets on the London market. If al-Fayed is selling out, then so should you.
Fayed’s colourful career has always been rich fodder for conspiracy theorists. The acquisition of Harrods involved a long and bitter battle with another flamboyant tycoon, Tiny Rowland. He was immersed in controversy over his application for a British passport, as well as Princess Diana’s death. He made enemies everywhere.
None of that stopped him making money. He paid just over £600 million for Harrods back in 1985, and had taken out huge dividends in the years he has owned it. He owns the Ritz in Paris, as well as Fulham football club. Overall, his fortune is estimated at more than £600 million.
Plenty has been written about how he wants to spend less time on the business. And a lot has been said about how sovereign wealth funds such as Qatar Holdings are snapping up trophy assets at fancy prices. And while there is no doubt truth in both those points, the reality is that a man as smart as Al-Fayed, and with as keen an eye for what was cheap and what was expensive, wouldn’t be getting out now unless he felt it was the top of the market.
His talent was to see how London was changing. When he bought Harrods in 1985, the London economy was still emerging slowly from the gloom and depression of the 1970s. There hadn’t been any Big Bang in the City. Barrow boys still sold fruit and veg, not credit swaps and derivatives. The word non-dom didn’t mean anything. There weren’t any Russian billionaires – anyone in Russia interested in making money was more likely to end up in Siberia than the King’s Road. Getting credit still meant knowing your bank manager, and convincing him you wouldn’t fritter away any money he lent you.
Over the next quarter century, that changed dramatically. The ‘Bling Economy’ emerged, and London was its epicentre. The deregulated financial markets were minting millionaire by the minute. London became the tax-friendly home of half the Russian oligarchs and Middle Eastern oil sheiks. Everybody was piling up easy credit on their cards, with no meaningful checks on whether they were allowing their debts to spiral out of control.
Harrods was precisely the place to spend all that easy money. It was showy, snobby, expensive and tacky. In short, it was ‘Bling Central’ - a place to spend the money you hadn’t really earned, and didn’t mind wasting.
But in the next decade all those trends are likely to go into reverse.
First, there isn’t going to be nearly so much easy money around. The City may have returned to paying itself big bonuses. But, to use the markets own phase, it’s a dead-cat bounce. Over time, heavier regulation is gradually going to chip away at the fantastic way the financial markets pay themselves. On top of that, credit is going to be tighter across the whole of the developed world. People won’t be bashing the plastic the way they were. That is going to impact most heavily on companies selling luxuries and indulgences – such as Harrods.
Next, the non-doms are not going to be around in the same kind of numbers. As the UK goes though a massive fiscal crunch, a lot of extra tax revenue will have to be raised from somewhere. Rich foreigners are always going to be an easy target. Expect them to face higher and higher levies – which will prompt many of them to base themselves somewhere else.
Finally, the centre of economic gravity is moving east. Most of the Europe – and the UK is no exception – faces a decade of retrenchment as it tries to make its economy competitive once again. The money is moving to different centres – Mumbai, Shanghai, Hong Kong and Singapore. London isn’t going to be the centre of anything very much – and there won’t be a lot of money to be made from servicing its rich.
Harrods is just one example of the ‘Bling Economy’, although an emblematic one. The London market is full of companies that depend on wealthy foreigners. Think of upmarket department store chains such as Debenhams, Selfridges and Liberty. There are plenty of luxury goods companies such as Burberry. And there are dozens of retailers that depended on the easy availability of credit. They are all going to find business a lot tougher in the next decade.
There will still be money to made in the UK. But it will be done in a far more down-to-earth way. It will be engineers and exporters who make the fortunes – not retailers courting celebrities and the super-rich. Al-Fayed was smart enough to see that he’d had a good innings, but that the game had changed, and that now was the time to depart. Investors should follow that lead.
Money Week: Mohamed Al-Fayed Is Selling Out of Bling London. So Should You.
Mohamed Al-Fayed always said he’d never sell Harrods. It was the prize in his portfolio, the one asset he’d take to the grave with him. That, however, was before Qatar Holdings came along and offered him £1.5 billion for one of the world’s most famous shops. There aren’t many people who wouldn’t change their mind when that kind of money was on the table - and al-Fayed is not among them.
The Egyptian-born grocer has never been a popular figure in his adopted country. His brash, money-drenched lifestyle endeared him to no one. Turning a traditional British department store into something about as classy as a Dubai gift shop didn’t do his reputation any good. Nor did encouraging conspiracy theorists to focus on the Royal Family after his son Dodi died alongside Princess Diana.
But he has always been a brilliant street trader – and he has a street traders’ inner sense for when to buy and sell. From 1985 to 2010 he brilliantly rode the emergence of London as the headquarters of the ‘Bling Economy’. He knew how to mint a fortune from that more than almost any other entrepreneur. But now he almost certainly senses that era is coming to a close. There are plenty of bling assets on the London market. If al-Fayed is selling out, then so should you.
Fayed’s colourful career has always been rich fodder for conspiracy theorists. The acquisition of Harrods involved a long and bitter battle with another flamboyant tycoon, Tiny Rowland. He was immersed in controversy over his application for a British passport, as well as Princess Diana’s death. He made enemies everywhere.
None of that stopped him making money. He paid just over £600 million for Harrods back in 1985, and had taken out huge dividends in the years he has owned it. He owns the Ritz in Paris, as well as Fulham football club. Overall, his fortune is estimated at more than £600 million.
Plenty has been written about how he wants to spend less time on the business. And a lot has been said about how sovereign wealth funds such as Qatar Holdings are snapping up trophy assets at fancy prices. And while there is no doubt truth in both those points, the reality is that a man as smart as Al-Fayed, and with as keen an eye for what was cheap and what was expensive, wouldn’t be getting out now unless he felt it was the top of the market.
His talent was to see how London was changing. When he bought Harrods in 1985, the London economy was still emerging slowly from the gloom and depression of the 1970s. There hadn’t been any Big Bang in the City. Barrow boys still sold fruit and veg, not credit swaps and derivatives. The word non-dom didn’t mean anything. There weren’t any Russian billionaires – anyone in Russia interested in making money was more likely to end up in Siberia than the King’s Road. Getting credit still meant knowing your bank manager, and convincing him you wouldn’t fritter away any money he lent you.
Over the next quarter century, that changed dramatically. The ‘Bling Economy’ emerged, and London was its epicentre. The deregulated financial markets were minting millionaire by the minute. London became the tax-friendly home of half the Russian oligarchs and Middle Eastern oil sheiks. Everybody was piling up easy credit on their cards, with no meaningful checks on whether they were allowing their debts to spiral out of control.
Harrods was precisely the place to spend all that easy money. It was showy, snobby, expensive and tacky. In short, it was ‘Bling Central’ - a place to spend the money you hadn’t really earned, and didn’t mind wasting.
But in the next decade all those trends are likely to go into reverse.
First, there isn’t going to be nearly so much easy money around. The City may have returned to paying itself big bonuses. But, to use the markets own phase, it’s a dead-cat bounce. Over time, heavier regulation is gradually going to chip away at the fantastic way the financial markets pay themselves. On top of that, credit is going to be tighter across the whole of the developed world. People won’t be bashing the plastic the way they were. That is going to impact most heavily on companies selling luxuries and indulgences – such as Harrods.
Next, the non-doms are not going to be around in the same kind of numbers. As the UK goes though a massive fiscal crunch, a lot of extra tax revenue will have to be raised from somewhere. Rich foreigners are always going to be an easy target. Expect them to face higher and higher levies – which will prompt many of them to base themselves somewhere else.
Finally, the centre of economic gravity is moving east. Most of the Europe – and the UK is no exception – faces a decade of retrenchment as it tries to make its economy competitive once again. The money is moving to different centres – Mumbai, Shanghai, Hong Kong and Singapore. London isn’t going to be the centre of anything very much – and there won’t be a lot of money to be made from servicing its rich.
Harrods is just one example of the ‘Bling Economy’, although an emblematic one. The London market is full of companies that depend on wealthy foreigners. Think of upmarket department store chains such as Debenhams, Selfridges and Liberty. There are plenty of luxury goods companies such as Burberry. And there are dozens of retailers that depended on the easy availability of credit. They are all going to find business a lot tougher in the next decade.
There will still be money to made in the UK. But it will be done in a far more down-to-earth way. It will be engineers and exporters who make the fortunes – not retailers courting celebrities and the super-rich. Al-Fayed was smart enough to see that he’d had a good innings, but that the game had changed, and that now was the time to depart. Investors should follow that lead.
Thursday, 13 May 2010
How To Distinguish Characters....
I did an event up in Essex last night with two of my fellow Headline authors, Barbara Nadel and Michael Stanley. As is so often the case, I was really impressed by the quality of the questions people asked.
There was one that set me thinking a fair bit: How do you distinguish characters from one another.
I waffled away for a fair bit, but it was a good question, and one I probably haven’t thought about enough. I quite often read a book and find I get lost because the characters all blur into one. It’s particularly pressing in my case, because the ‘Death Force’ series features eight or nine main characters. And superficially at least they are quite similar: soldiers, blokes, etc.
It struck me later that in opera, each character has a theme, or maybe just a key, and that helps the listener tell them apart. And there is a clue in that for construction a novel. What I try and do is give each character a theme, or key: some fairly simple, but compelling, place they are trying to get to, or a demon they are trying to kill, or a journey they are trying to complete.
On top of that, you need to give them a voice. A way of speaking, and a way of fitting into the group. And you need to give them some really deep back story, so you know precisely where they are coming from.
But there is no doubt it is one of the hardest things a writer has to do.
There was one that set me thinking a fair bit: How do you distinguish characters from one another.
I waffled away for a fair bit, but it was a good question, and one I probably haven’t thought about enough. I quite often read a book and find I get lost because the characters all blur into one. It’s particularly pressing in my case, because the ‘Death Force’ series features eight or nine main characters. And superficially at least they are quite similar: soldiers, blokes, etc.
It struck me later that in opera, each character has a theme, or maybe just a key, and that helps the listener tell them apart. And there is a clue in that for construction a novel. What I try and do is give each character a theme, or key: some fairly simple, but compelling, place they are trying to get to, or a demon they are trying to kill, or a journey they are trying to complete.
On top of that, you need to give them a voice. A way of speaking, and a way of fitting into the group. And you need to give them some really deep back story, so you know precisely where they are coming from.
But there is no doubt it is one of the hardest things a writer has to do.
Monday, 10 May 2010
The German Economy Is Back....
In my Money Week column this week, I've been explaining why the German economy is back in Europe'd driving seat. Here's a taster....
In a few weeks time, with the World Cup underway, we’ll no doubt get used to Gary Lineker and Alan Hansen reminding us to ‘never underestimate the Germans’. It’s their stock phrase, as a relatively talentless team uses reserves of power, discipline and organisation to secure itself at least a place in the semi-finals.
Just as ‘Never underestimate the Germans’ is a good rule in football, so it’s not a bad one in economics either. After two decades of under-performance, as it absorbed the horrendous problems of the old eastern Germany, the country seemed to have lost its way. Unemployment soared, growth nosedived, and its confidence evaporated.
Now there are signs that it’s re-claiming its traditional role as Europe’s dominant economy. It is the most creditworthy country in the world. It is one of the few that isn’t burdened with massive consumer or corporate debts. During the Greek crisis, it has taken an assertive role, the one nation that got to call the shots. Over the next few years, Europe will have to get used to the Germans being the dominant force again. That may be no bad thing. The German model of capitalism – engineering-based, export-led, debt-averse – is one that the rest of the world might start to find appealing again in the coming decade.
After the Wirtschaftswunder – or economic miracle – of the 1950s and 1960s, we’d got used to Germany being the economic powerhouse of Europe. The deutschemark was the continent’s strongest currency – so much so that in the 1980s, the British and the French both took to shadowing it, as the only way of bringing inflation under control.
The last two decades, however, saw a steady, relentless decline. The integration of Eastern Germany after the fall of the Berlin Wall in 1989 proved far tougher than anyone expected. The euro disguised the strength of its currency. Frankfurt lost out to London as Europe’s main financial centre. Indeed, the Germans were never really cut out for the financially-driven, debt-fuelled, casino capitalism of the last ten years. They don’t like to borrow money, aren’t interested in owning their own homes, and don’t even think much of stock markets.
Indeed, so far had Germany fallen that only a few years ago, even the British could imagine themselves outstripping the Germans. In 2004 for example, the chief economic adviser to Barclays published a report predicting that the British economy would be larger than the German by 2025 despite their larger population. There was nothing fanciful about it. If you projected the growth numbers forwards, that was how it worked out.
Except that lines on a graph are a poor way of predicting anything. This decade, the Germans will be back, and in a big way. True, the economy was hard hit by the credit crunch (the economy shrunk by 5% in 2009). The sudden dip in world trade hit its export economy as suddenly as any, and some of its regional banks lost a bundle during the credit crunch.
But it has bounced back quickly. The economy is forecast to grow by a respectable 1.5% this year. Its corporate giants are powering ahead. Total net income at German companies that have reported earnings so far this quarter have almost tripled, compared with a 54 percent profit increase for Western Europe as a whole, according to Bloomberg figures. Industrial production is accelerating., and unemployment is falling fast.
The rapid emergence of the BRIC economies of Brazil, Russia, India and China has left most of the developed world scratching their heads and wondering how to earn a living. The Germans just get on with selling them more stuff. Exports to China are now rising by 13% annually, and to Brazil and India by more than 30% a year. Indeed, Germany is still tied with China as the world’s largest exporter. But while China mostly exports cheap stuff, churned out by worker on miniscule wages, the Germans export luxury cars, complex chemicals, and expensive machine tools, made by people on good salaries.
Indeed, looking forward, German seems far better placed than almost any other developed country. It has an export-based, manufacturing economy that sells the stuff the emerging economies need. It didn’t have a housing bubble, and its consumers, while never great spenders, aren’t burdened down by debts. McKinsey has measured the combined growth of corporate, consumer, and government debt from 2000 to 2008. In Germany, it only grew by 7% over the whole eight years, compared with 157% in the UK, 150% in Spain, and 70% in the US.
That’s nice for the German, obviously enough. They won’t be running out of beer and sausages any time soon. But it also matters for the rest of the world in two ways.
First, the Germans are likely to become much more dominant within the global economy. The more money you have, the more power. Germany can take the lead role in sorting out the mess in Greece because it will be paying for it. Expect the same to be true of every financial crisis that comes around in the next few years.
Next, successful countries set a template. In the last decade, everyone wanted to copy the Anglo-Saxon model. It’s debt-fuelled, de-regulated, financially driven model of economic growth appeared to be delivering results. In the next few years, the German model will become far more fashionable.
The reassertion of German values may be no bad thing. Rhineland capitalism is, in many ways, the most attractive way of doing business. It values thrift, hard work, saving, and making things. It believes in sound money, and is suspicious of inflation. It doesn’t have much time for deficit spending, and doesn’t believe you can cure a debt crisis with more debt.
The Germans – as they usually do – take it to extremes. But an injection of Teutonic economic sternness is probably precisely what the rest of the world could do with right now.
In a few weeks time, with the World Cup underway, we’ll no doubt get used to Gary Lineker and Alan Hansen reminding us to ‘never underestimate the Germans’. It’s their stock phrase, as a relatively talentless team uses reserves of power, discipline and organisation to secure itself at least a place in the semi-finals.
Just as ‘Never underestimate the Germans’ is a good rule in football, so it’s not a bad one in economics either. After two decades of under-performance, as it absorbed the horrendous problems of the old eastern Germany, the country seemed to have lost its way. Unemployment soared, growth nosedived, and its confidence evaporated.
Now there are signs that it’s re-claiming its traditional role as Europe’s dominant economy. It is the most creditworthy country in the world. It is one of the few that isn’t burdened with massive consumer or corporate debts. During the Greek crisis, it has taken an assertive role, the one nation that got to call the shots. Over the next few years, Europe will have to get used to the Germans being the dominant force again. That may be no bad thing. The German model of capitalism – engineering-based, export-led, debt-averse – is one that the rest of the world might start to find appealing again in the coming decade.
After the Wirtschaftswunder – or economic miracle – of the 1950s and 1960s, we’d got used to Germany being the economic powerhouse of Europe. The deutschemark was the continent’s strongest currency – so much so that in the 1980s, the British and the French both took to shadowing it, as the only way of bringing inflation under control.
The last two decades, however, saw a steady, relentless decline. The integration of Eastern Germany after the fall of the Berlin Wall in 1989 proved far tougher than anyone expected. The euro disguised the strength of its currency. Frankfurt lost out to London as Europe’s main financial centre. Indeed, the Germans were never really cut out for the financially-driven, debt-fuelled, casino capitalism of the last ten years. They don’t like to borrow money, aren’t interested in owning their own homes, and don’t even think much of stock markets.
Indeed, so far had Germany fallen that only a few years ago, even the British could imagine themselves outstripping the Germans. In 2004 for example, the chief economic adviser to Barclays published a report predicting that the British economy would be larger than the German by 2025 despite their larger population. There was nothing fanciful about it. If you projected the growth numbers forwards, that was how it worked out.
Except that lines on a graph are a poor way of predicting anything. This decade, the Germans will be back, and in a big way. True, the economy was hard hit by the credit crunch (the economy shrunk by 5% in 2009). The sudden dip in world trade hit its export economy as suddenly as any, and some of its regional banks lost a bundle during the credit crunch.
But it has bounced back quickly. The economy is forecast to grow by a respectable 1.5% this year. Its corporate giants are powering ahead. Total net income at German companies that have reported earnings so far this quarter have almost tripled, compared with a 54 percent profit increase for Western Europe as a whole, according to Bloomberg figures. Industrial production is accelerating., and unemployment is falling fast.
The rapid emergence of the BRIC economies of Brazil, Russia, India and China has left most of the developed world scratching their heads and wondering how to earn a living. The Germans just get on with selling them more stuff. Exports to China are now rising by 13% annually, and to Brazil and India by more than 30% a year. Indeed, Germany is still tied with China as the world’s largest exporter. But while China mostly exports cheap stuff, churned out by worker on miniscule wages, the Germans export luxury cars, complex chemicals, and expensive machine tools, made by people on good salaries.
Indeed, looking forward, German seems far better placed than almost any other developed country. It has an export-based, manufacturing economy that sells the stuff the emerging economies need. It didn’t have a housing bubble, and its consumers, while never great spenders, aren’t burdened down by debts. McKinsey has measured the combined growth of corporate, consumer, and government debt from 2000 to 2008. In Germany, it only grew by 7% over the whole eight years, compared with 157% in the UK, 150% in Spain, and 70% in the US.
That’s nice for the German, obviously enough. They won’t be running out of beer and sausages any time soon. But it also matters for the rest of the world in two ways.
First, the Germans are likely to become much more dominant within the global economy. The more money you have, the more power. Germany can take the lead role in sorting out the mess in Greece because it will be paying for it. Expect the same to be true of every financial crisis that comes around in the next few years.
Next, successful countries set a template. In the last decade, everyone wanted to copy the Anglo-Saxon model. It’s debt-fuelled, de-regulated, financially driven model of economic growth appeared to be delivering results. In the next few years, the German model will become far more fashionable.
The reassertion of German values may be no bad thing. Rhineland capitalism is, in many ways, the most attractive way of doing business. It values thrift, hard work, saving, and making things. It believes in sound money, and is suspicious of inflation. It doesn’t have much time for deficit spending, and doesn’t believe you can cure a debt crisis with more debt.
The Germans – as they usually do – take it to extremes. But an injection of Teutonic economic sternness is probably precisely what the rest of the world could do with right now.
Wednesday, 5 May 2010
Are The Supermarkets Bad For Authors?
I heard recently that Tesco will be stocking ‘Fire Force’ when it comes out in paperback late this month. For a popular thriller author, that’s probably up there with winning the Booker prize. The supermarkets have become crucial to promoting and selling books.
That was confirmed today, with a story in The Bookseller about where people are buying books. They now account for 20% of adult book sales, compared with 9% two decades ago. The internet accounts for 19% compared with – fairly obviously – nothing back in 1989.
I expect to read lots of wailing from authors and the publishing industry about that. But I’m not so sure it is really such a bad thing.
Of course, it puts a huge amount of power in the hands of a relatively small number of big supermarket chains, and Tesco most of all. Publishers and authors have to work very hard to get the approval of the BMFC (the Big Man from Cheshunt).
But there are a couple of interesting points to make.
First, I’m sure the supermarkets are expanding the market. On the whole the supermarkets present books in an attractive way. The prices are great – less than £4 for a paperback, and you don’t have to buy two or three to get the lower price. They present books to tons of people who probably wouldn’t go anywhere near a bookshop. Overall, that must mean more books get sold.
Second, it’s not really the bookshops that are suffering. Their share is doing fine. The losers have been the old mail order book clubs and the stationary stores. They probably catered for the fairly general, casual reader anyway – the people who now buy their books in supermarkets. And they didn’t do such a great job anyway.
The book market is evolving into two audiences. The supermarkets for the mass market. And the bookshops and the internet for more committed readers.
There needn’t be anything for authors to worry about in that. They just have to make sure they find their own place in the market.
That was confirmed today, with a story in The Bookseller about where people are buying books. They now account for 20% of adult book sales, compared with 9% two decades ago. The internet accounts for 19% compared with – fairly obviously – nothing back in 1989.
I expect to read lots of wailing from authors and the publishing industry about that. But I’m not so sure it is really such a bad thing.
Of course, it puts a huge amount of power in the hands of a relatively small number of big supermarket chains, and Tesco most of all. Publishers and authors have to work very hard to get the approval of the BMFC (the Big Man from Cheshunt).
But there are a couple of interesting points to make.
First, I’m sure the supermarkets are expanding the market. On the whole the supermarkets present books in an attractive way. The prices are great – less than £4 for a paperback, and you don’t have to buy two or three to get the lower price. They present books to tons of people who probably wouldn’t go anywhere near a bookshop. Overall, that must mean more books get sold.
Second, it’s not really the bookshops that are suffering. Their share is doing fine. The losers have been the old mail order book clubs and the stationary stores. They probably catered for the fairly general, casual reader anyway – the people who now buy their books in supermarkets. And they didn’t do such a great job anyway.
The book market is evolving into two audiences. The supermarkets for the mass market. And the bookshops and the internet for more committed readers.
There needn’t be anything for authors to worry about in that. They just have to make sure they find their own place in the market.
Saturday, 1 May 2010
The Big Thrill....
There's an interview with me about Fire Force on The Big Thrill website. You can read it here...
Subscribe to:
Posts (Atom)
Posts
