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David Marquand: Mammon's Kingdom (Allen Lane)

David Marquand's tale ought to be old by now.

Anyone who lived through 2007-2008 with even a flickering awareness of what had become of the world should grasp, as though by conditioned reflex, what the Great Crash signified. This time, things really did fall apart.

You don't need to know what Fred Goodwin got up to at RBS in his hubristic fantasies to get the point. It isn't necessary, though it is useful, to understand how debt and money parted company with reality, or why this was first celebrated, then encouraged.

All you need to know is that a global financial system turned out to be rotten, intellectually and morally; that democracies were taken hostage, one by one; and that when the moment of truth arrived, ordinary people were robbed - as they are still being robbed - to pay off the blackmailers and hold society together. All of us were taken very close to perdition. There is surely no adult who knows less, or needs to know more.

But look around you now. Bankers have yet to flood the prisons. On Wall Street and in the City, smart boys and girls have returned to packaging up bundles of "obligations" to be traded on their private black markets. Politicians, especially in the UK and the US, cajole their populations into believing that spending on the sick and the poor was the sole cause of the trouble. The game has begun again, as though - each word deserves its weight - nothing at all happened.

In the early months of the aftermath, as people began to ask a few pointed questions of the science (alleged) of economics, and wonder why so many of its practitioners failed to detect the coming earthquake, Karl Marx enjoyed a brief revival. The New Yorker, daring indeed by American standards, asked if he might not have been essentially right after all. The economists who had provided Wall Street and the City with advice and justifications didn't want to hear it, but Marxism was, in one sense, the least of it.

Finance had captured the world, robbed people blind, and managed to bring economies to their knees in the pursuit of ever-more profit. The problem was not one of "regulation" - though a tiny amount wouldn't have hurt - but of democracy. The old, mocking honorific, "masters of the universe", had ceased to be a joke. Governments bowed to farceurs and thieves; economists served as their footmen. Public anger in the face of this truth was vast. Still the perpetrators survived; still they thrive.

David Marquand's essay is timely, then, to say the least of it. If no lessons are learned from a man-made disaster, what prevents a repetition? If the world does not amend its assumptions, alter its political ecology, or throw restraints over those who move fictive money around, where are our protections? Britain's desperately fragile recovery - for those who can detect such a thing - would be lucky to survive even a mild shock. So Marquand shows us for what we are: still myopic, still exposed, still in thrall to the new Mammon.

Much of the essay is taken up with describing the transformation of the political elites of Britain, of all parties, into "a mighty congregation" whose "tenderness to the rich and obsequiousness to the City spawned a ballooning and rootless financial sector, detached from nation and place". This was less corporate capture, as the jargon goes, than a process of willing surrender, from Thatcher's Big Bang to "the Blair-Brown regime's fierce solicitude" for any whim expressed by the money people. In short, this was corruption.

It was not achieved simply because the commonality (as we should still call ourselves) were more stupid than usual. In a brilliant chapter, Amnesia Conquers History, Marquand argues that the "British no longer know where they come from or who they are. The very word British has become problematic." He might say that again. But this loss of a fragile identity suited perfectly the ends of those market "individualists" who repudiated history and made an "anti-history" of their own. They got rid of a nuisance called the past.

Dutifully, economists followed suit. Great crashes are hardly a novelty in the annals of their calling, but with some software and some self-justifying maths, a new breed with no interest in dull dead men "persuaded themselves that the booms and busts that had been capitalism's most obvious hallmarks for centuries were no more". They appeared - that word on which worlds turn - "to have banished risk for ever". They were believed and they were trusted.

Marquand has spent a long lifetime trying to describe the world in which we live and, for the obligation never fades, to change it. His historical memory has not fallen into abeyance. His range of cultural reference, like his writing style, is full of resonances. Though his book is dedicated to Britain as he understands the word, his larger purpose is as old as political philosophy, as ancient as ethics. The essential question: how should we live? Or as Marquand has it, "Who Do We Think We Are?"

He proposes some ideas "Towards a new public philosophy". He argues, unlike most see-no-evil politicians, that mastering capitalism remains an imperative. He espouses those values crudely described as "green". He asks, as most of us should ask, why economic "growth" remains a shibboleth on a wrecked planet whose orthodoxies have failed. "The greatest obstacles to a decent capitalism," he writes, "are in our minds."

You might question if decency and capitalism deserve space in the same sentence. At a time when $152 trillion of the world's wealth ("luxury goods" excluded) is reckoned by the Boston Consulting Group to be in private hands, you might wonder why eating the rich has not become an option. But Marquand is not, by any stretch, that kind of left-of-centre writer. He prefers a "national conversation". So who speaks, and who listens?

The idea of amelioration in the face of rapacious capitalism is as old as the Labour Party. Indeed, Marquand's essay could have been written - and who knows? - as bedtime reading for Ed Miliband. The author's final sentence - "We can't go on as we are" - counts as the philosophy of venerable common sense. But one thought is omitted. What if, this time, decency fails to assert itself?

After 2007-2008, there was a notion, for a while, that this time "they" wouldn't get away with it. They did, though, richer and more brazen than before. Marquand adheres to the faith that if people of goodwill apply themselves, common decency will prevail, social justice will be restored and the madness will cease. The fact is there is no sign of that. "We can begin to master markets instead of allowing them to master us," says the author. Those markets respond, with absolutist confidence: "No, you can't".

And then what? Across the planet, from Occupy Wall Street to the small towns of China, revolution flickers and burns. If the followers of Mammon disdain Marquand, only resistance remains for common people.

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