Making the financial crisis live
Paul Feldman reviews The Power of Yes, dramatist David Hare’s attempt to understand the financial crisis on stage at the National Theatre.
In the opening lines of his new play, The Power of Yes, about the financial crisis, David Hare tells the audience that for four days in 2008, “capitalism ceased to function”. He was referring to the period around mid-September when Lehman Brothers went to the wall and the markets melted down.
The Power of Yes, commissioned by the National Theatre, spends the best part of two hours (without a break) trying to explain, actually to understand, the financial crisis that broke with such a vengeance and precipitated the current economic recession. Hare (Anthony Calf) speaks to a variety of financiers, bankers, industrialists, academics, regulators and journalists in a bid to grasp what took place.
George Soros (Bruce Myers), the billionaire hedge fund manager and philanthropist, for example, tells Hare that he always had his doubts while Howard Davies (Jonathan Coy), first chair of the Financial Services Authority (FSA), denies all responsibility for the failure to keep the lenders in check.
Through his “witnesses”, Hare points the finger sharply at New Labour. Giving the Bank of England “independence” was the first thing that Gordon Brown did in 1997 while at the same time stripping it of any oversight of the banking sector. This was given to the FSA – which had neither the competence nor the mandate to intervene.
Brown encouraged the lending boom that eventually turned into a credit crunch that froze the financial system and jeopardised the livelihoods of millions of ordinary people. By that time, the financial services sector of the economy was producing over 25% of all tax revenues, The Power of Yes points out. It was truly New Labour’s holy milch cow (only now the taxpayers are having to feed the same animal instead of milking it).
The device Hare uses to bring out the elements of the crisis just about works, although the absence of drama is felt by anyone who, for example, saw the TV dramatisation of the collapse of Lehman Brothers or read recently that the British government was within hours of shutting ATM cash machines.
But ultimately the cause of the crisis remains something of a mystery. Hare does well to steer away from the “greedy bankers” explanation in search of something deeper. What drove the bankers on? What led to the massive build-up of credit and its balance sheet opposite, debt? Was it, as Hare is told, “the thing itself”?
We get a glimpse of what it was about in references to low-priced goods from China and the fact that consumers had to spend beyond their means to buy the flat screen TVs and laptops. Hare could have done with a few witnesses to explain globalisation of production and finance following the breakdown of the post-war boom in the early 1970s.
Ultimately, the actual cause of the financial crisis – capitalism itself – is relegated to a back seat after being given such prominence at the start. In its place, we get a sense of a system mistakenly based on what were considered to be mathematically infallible ways of measuring risk and the erroneous view that free markets are the solution to everything. This is helpful, of course, because these outlooks contributed to the crisis.
The logic of the opening statement about capitalism, however, is that if it ceased to work, then there has to be something fundamentally unstable about the system of production for profit. Next time, Hare could call witnesses from the past as well as the present. The German exile who wrote Das Kapital would prove illuminating, for example.
Nevertheless, The Power of Yes makes some powerful points in a compelling way, with images about “socialism for the rich” (the bail-outs) and ships being driven at full speed towards an iceberg left firmly imprinted on the consciousness. Hare’s attempt to get to grips with the financial crisis is entirely worthy and watchable.
19 October 2009