Shaw: Capital Crimes

Capital Crimes

Katy Shaw, Leeds Beckett University

Spring 2015

MeltdownAs a site for making visible the social order and defending that order, the contemporary city offers specific conditions and contexts that make it an appealing setting for contemporary crime fiction. A space in which tensions relating to national identity, state authority, law and culture can be played out, the city offers a representational stage on which broader tensions between the economy and society can be enacted. The genre of the thriller offers an equally appropriate home to literary representations of the world of contemporary finance and financial speculation. Both are concerned with quests for knowledge, the solving of mysteries and thrive upon tension, action and high-speed developments. Charting changes in the financial sector and the impact of these developments on contemporary cityscapes, the ‘Crunch Thriller’ critically examines the influence of financialisation on Western capital cities in the years preceding the 2007-8 credit crunch.

Concerned with money, crime, technology, power and personal ambition, Crunch Thrillers constitute a timely evolution of the financial thrillers published during the 1990s in response to contextual economic and political developments including deregulation and the threat of the ‘rogue trader’. The 1990s witnessed a renaissance of financial thrillers seeking to represent contextual developments on Wall Street and the newly deregulated City of London. In these texts, financial crimes ‘replaced either Cold War fears of nuclear war or more contemporary fears of environmental disaster as the apocalyptic threat to the planet which the thriller was able to pose and defuse’. Nicky Marsh charts the rise of the ‘rogue trader’ during this period as both an extension of the individualisation of Thatcher period and a target upon which the faults and fears of the economy could be effectively projected. For Marsh ‘financial thrillers from the Nineties onwards are so interesting […] because they actively confirm and contribute to the trader’s reflective relationship with the market, even as it defies the assumptions of classical economics regarding the market’s benign “invisible hand”’ (Marsh 2007: 100). Pitting an individual against a social, political and economic global system, financial thrillers of the 1990s established many of the motifs and tropes that post-millennial ‘crunch thrillers’ later developed in response to the changed financial contexts of the new millennium.

However, in the Crunch Thrillers of the new millennium, the threat no longer lies in an individual, but in the financial system itself. The protagonists of Crunch Thrillers are professionals who are implicated in controlling these financial systems and become propelled into extraordinary circumstances and problems they must solve or attempt to understand. The motives behind the crimes they face centre on the pursuit of money, knowledge and control. Interrogating a pre-crunch obsession with money making, these texts lift the lid on the processes and systems that informed the 2007-8 financial crisis.

The first in a trilogy of novels set against the backdrop of an unfolding crisis in global capitalism, Martin Baker’s 2008 novel Meltdown presents a fictional financial crisis that is never the less deeply informed by the economic, politics and social contexts of global markets in the lead up to the 2007-8 credit crunch. Prophetic of events to come in its examination of issues including press oligopolies and high risk trading, it emphasises the interconnectedness of global cities before and after the credit crunch. The action of Meltdown moves across the world, but its narrative events are primarily located in Paris During the nineteenth century, London and Paris were the leading financial centres of the world. Despite being taken over by New York from 1945 onwards, Paris continues to play a supporting, parallel role to London as a financial centre. While the city does not enjoy the advantages of a shared English language, it is nevertheless home to the French Ministry of Finance and the Bank of France, as well as Europe’s leading corporate bonds market. With an active stock market not far behind that of London in terms of transaction volume, and supported by a wide network of finance and investment banks, including a significant cluster of investment funds, Paris holds a leading role in the Euro zone in the twenty-first century and offers a timely location for a crunch thriller.

In Meltdown (2008), the press and the financial worlds are closely aligned. Protagonist Samuel is brought from the academic world into the financial world of oligarch Khan, a man attracted not by the accumulation of money for its own sake, but for its associated power. As Khan openly states at the beginning of the novel, ‘it’s the material world, the outside world, for want of a better phrase, that attracts me’ (29). Samuel is moved from Oxford and ‘employed as a trainee on the proprietary trading desk of Ropner Bank in Paris […] reporting to Khan’ (32). A world away from the libraries and colleges with which he is accustomed, Samuel notes that the ‘trading floor was no bigger than the St Cross law library at Oxford but […] Instead of creaking trolleys loaded with leather-bound law reports, billions of dollars were hurtling around him now, invisibly flowing from Tokyo to Frankfurt to New York, alighting briefly in his rue Auber dealing room in Paris and moving restlessly on again. Billions and billions and billions of dollars.’ (35).

Khan operates in a similarly virtual manner, ‘monitoring the markets from whatever tea shop or art gallery he was in’ (180) as an omnipresent ‘rock-star boss’ (182). ). Characterised as a ‘King Kong’ of the financial world, ‘popular journalism made out that he toyed with currencies and share markets like a wilful child tossing toys against the wall of a playpen’ (22). As the thriller develops, Khan is variously characterised as ‘a jackal of capitalism’ (245) and one of the ‘demi-gods of the financial world’ (364), a man renowned for ‘his manipulation of the markets’ (383) who runs ‘the capitalist system for your own benefit’ (364). For Khan, ‘speculation is just an amusing game – even if it can bring a whole country to the edge of the precipice’ (305). As he and Samuel ‘embark on a speculative adventure’ (68) that generates ‘undiluted market panic’ (36) as the key cause of the crimes committed – ‘power without responsibility’ (304) – becomes clear.

An outsider in this financial world, academic Samuel notes that the financial workers of Paris worked ‘ridiculous, inhuman hours […] driven by a desire to make more and more money’ (71). Significantly, he notes the residing issue of the ‘many traders who imbibe and snort and roll dice that the occasional extinction of a bad debtor is written off as an operating cost. It must concentrate the minds of those in areas quite wonderfully’ (384). In what now seems like an early warning signal, Samuel argues that any examination of the average trader suggests that ‘they live on the edge, with caffeine, alcohol, sex and drugs to help them along’ (383), creating inflated confidence and stamina which arguably contributed to the crunch. He observes that each hedge funds operates like ‘a ball of unfocussed energy. They can be stretched out like safety nets, or turned into diamond tipped torpedoes. With all these short-term market coups, it’s the torpedo function. What matters then is secrecy – placing your bets in the marketplace through lots of sources so you get maximum surprise and the best price and all that’ (304).

The surprise that awaits society in this crunch thriller is a total ‘meltdown’ of economic systems and faith in the financial world. Reporting ‘mounting panic across the world markets’ (194), the newspaper-style columns that conclude the novel suggests that there was

[…] was a collage of discontent, fear and anger across the wide spectrum of those directly affected by the crisis. There were interviews with pensioners, who nest eggs had suddenly dropped 20 percent in value, with car dealers who said that Jaguars and Porches would lost most value as investors wealth was eroded. Financial dealers predicted a massive recession and thousands of job losses. Some estate agents claimed that there would be a flurry of interest in property as money fled from shares into “something solid” (195).

Accompanying reports detail attacks across the world – on Wall Street bars, civilian protests in Hong Kong and ‘Market Rage’, as enraged investors shooting staff at financial offices (313-4), seeking ‘vengeance on the money types who they felt had stolen their savings’ (195). Highlighting profound flaws in global economic systems in the years leading up to the credit crunch, Meltdown models a fictional scenario that became a contemporary reality weeks after the novel was published. Sketching fictional discontent that predicted the real-life riots, protests and long-term loss of faith in the financial sector that would follow, Baker’s text tackles deregulation, a lack of accountability and detached business ethics to propose the financial world as a contemporary crime scene in the making.

Concerned with the ever-increasing power of technology in financial trading, Crunch Thrillers critically represent technological advances and new financial practices and their role in the development of crime and deviance in the markets of the post-millennial period. Representing cybercrimes as a major threat to new millennial finance, the Crunch Thriller examines how and why technology can be harnessed as a tool against the markets to damage integral processes, subverting computer processes and controls and damaging financial reputations.

11429709Robert Harris represents concerns regarding the vulnerability of global financial systems to cybercrimes in his 2011 Crunch Thriller, The Fear Index (2011). Set over twenty four hours from 6 May 2010—the date of the British general election and also of the Flash Crash – the novel follows a group of employees at Hoffmann Investment Technologies, a fictional hedge fund operating in tax-haven Geneva. As diplomatic home to the headquarters of many United Nations organisations, Geneva offers a significant setting, combining an old financial sector centred on private banking and a new financial cluster of commodities training in oil, sugar and cereals. The city is also a network for law consultancy and IT, the home of international asset management and many private banks which have an established reputation for reliability and confidence. Famed for its political and legal stability and high quality of life (Geneva has persistently been in the top 15 GFCI since 2007) its financial industries generate 19% of national GDP and employ over 200,000 people (Michael Mainelli and Chiara von Gunten, 2014). As a location for Harris’ crunch thriller ‘the hedge fund capital of the world’ (244) is significant not only for its tax laws and scientific community, but also for its historic connections to Mary Shelly and her 1818 novel Frankenstein. Harris’ Gothic financial thriller is obsessed with what it means to be human in the contemporary world. Quotes by Charles Darwin open chapters and a first edition of The Origin Of Species quickly becomes an object of intrigue as the novel develops, raising questions about the role of the human against the rise of artificial intelligence and technology.

The titular ‘Fear Index ‘or ‘VIX’ refers to the scale by which financial traders measure volatility in the markets. In this novel, the Index becomes the focus of an evolution in the use of mathematical and scientific research to understand the operation of global financial systems. The mothballed American Super Collider project, rejected by the US government in 1993 due to financial worries, created a generation of physicists and mathematicians who ‘had to go off and become quants on Wall Street, where they helped build derivatives rather than particle accelerators. And when that went wrong […] the banking system imploded’ (282). At CERN X, these displaced researchers create an algorithm that produces a set of predictions on the fear index based on an amalgamation of data on the internet about the emotions and feelings of the world as represented online. The accurate and successful programme they create – VIXAL – is:

a kind of glowing celestial digital cloud, occasionally swarming to earth. It might be anywhere – in some sweltering, potholed industrial zone stinking of aviation fuel and resounding to the throb of cicadas before an international airport in South-East Asia or Latin America; or in a cool and leafy business park in the soft, clear rain of New England or the Rhineland; or occupying a rarely visited and darkened floor of a brand-new office in the City of London or Mumbai or Sao Paulo; or event roosting undetected on a hundred thousand home computers. It was all around us, he thought, in the very air we breathed (384).

While algorithmic and mathematic attempts to explain risk and behaviour are nothing new, the concept of a computer using a wealth of online data to bet on movements in behaviour and how these will affect the market offers Harris a starting point from which to offer a wider critique of global political and economic systems and virtual representation in the twenty-first century.

Through VIXAL, Harris critiques not only pre-crunch financial regulations, but also questions the long-term transplanting of scientific knowledge and staff into the financial markets. As maths and physics graduates head into hedge funds, Harris shows how a quest to understand profit can lead to a threat to society and the stability of modern financial world. Ultimately, their algorithms do not generate real wealth or create real communities, but instead foster a fatal disconnect in contemporary society. It is perhaps fitting that this thriller about the secret world of twenty-first century finance ends with reference to the Greek legend of Icarus. Offering its narrative as a modern dystopian fable about an obsession with money making and a quest to control risk and knowledge, the novel suggests that flying too close and reaching too far was not an endemic part of financial culture by 2007, but also an intrinsic product of the contemporary capitalist system.

Reviews of The Fear Index overwhelmingly focussed on its contemporaneity, praising the novel as ‘utterly of our time’ (Snow 2011) and ‘as up to the minute as a news flash’ (Kemp 2011) in its ‘diligent research into a hither-to closed world’ (Nicholas Roe 2011) that offers ‘an uncomfortable core of reality’ (Gapper 2011) that ‘feels like a wake-up call’ (Evans 2011). While the suspense of the thriller genre lends itself well to the conditions of the credit crunch, as James Patterson argues, ‘what gives the variety of thrillers a common ground is the intensity of emotions they create, particularly those of apprehension and exhilaration, of excitement and breathlessness, all designed to generate that all-important thrill. By definition, if a thriller doesn’t thrill, it’s not doing its job’ (Patterson 2006: 6). Focussing on the uncertainty of the crunch period, Crunch Thrillers offer a timely fusion of the financial crime and thriller genres, presenting readers with a pleasurable duality of anticipation and anxiety, since the conflict, deceit and obstacles facing the protagonist are also those facing the wider world of contemporary readers.

Drawing attention to a wider lack of scrutiny and governance in the global financial sector at the height of its power, Crunch Thrillers present capital cities as apposite sites for the centralisation of financial services, and therefore a nucleus for financial crimes. Across these texts, crime is offered as an expression of the industry that it targets. Using the city to foreground the criminality inherent in contemporary banking, Crunch Thrillers make visible the inside world of finance and connect it to the outside world of the city through acts of crime and deviance. Examining how finance can transform the city into a scene of crime and deviance, Crunch Thrillers profile the obviously advantages to financial industries offered by capital cities, but also explore the negative impact of financial industries on the cities that host them. Symptomatic of a wider lack of scrutiny and regulation in the financial industries, the crimes of crunch thrillers are offered as a literalisation of the many unseen financial practices and market manipulations that flouted regulatory laws and contributed to the 2007-8 credit crunch. Rampant financial crimes in these novels are offered symbolic of the real-life banking practices that eroded public confidence in the financial industries and illuminate a wider lack of public understanding about how finance works in the post-crunch period. Focusing on dishonesty, collusion and the unseen victims of financial crimes, Crunch Thrillers illuminate a widespread culture of transgressions against the markets, financial institutions and the public that would go on to inform the era-defining events of 2007-8.

 

Works Cited

Martin Baker, Meltdown (London: Pan, 2008)

Benjamin Evans, ‘The Fear Index: Review’, The Telegraph, 29 September 2011 <http://www.telegraph.co.uk/culture/8781960/The-Fear-Index-by-Robert-Harris-review.html

John Gapper, ‘The Fear Index’, Financial Times, 23 September 2011 < http://www.ft.com/cms/s/2/dc1eaf2a-e04a-11e0-ba12-00144feabdc0.html>

Robert Harris, The Fear Index (London: Hutchinson, 2011)

Peter Kemp, ‘The Fear Index’, Sunday Times, 18 September 2011< http://www.thesundaytimes.co.uk/sto/culture/books/fiction/article776270.ece>

Michael Mainelli and Chiara von Gunten, ‘How do Swiss Financial Centres Compare to the Rest of the World’, Zyen.com <http://www.zyen.com/component/content/article.html?id=994>

Nicky Marsh, Money, Finance, and Speculation in Recent British Fiction (London: Continuum, 2007)

James Patterson, (ed.) Thriller. (Ontario, Canada: MIRA Books, 2006)

Nicholas Roe, ‘A Life in Writing: Robert Harris’, The Guardian, 23 September 2011 < http://www.theguardian.com/culture/2011/sep/23/life-writing-robert-harris>

Jon Snow, ‘Books of the Year 2011: Jon Snow’, New Statesman, 17 November 2011, < http://www.newstatesman.com/2011/11/sleep-watson-ben-books-jon>