STUCK in a Far North hotel room in midweek with a few hours to spare, I looked for something to read and came across Anthony Trollope’s 1875 satirical masterpiece The Way We Live Now.
If you’ve never read it, all you need to know is that it’s a brilliantly cutting expose, inspired by the financial crisis of the 1870s, which examines the way in which the appearance of flash, easy money stops fundamentally decent people asking even the most simple moral and economic questions, inevitably leading to disaster.
As I re-read it, it was impossible not to place the proceedings in the context of the current banker-inspired downturn and to divine in the central villain of Augustus Melmotte – a shadowy, egotistical swindler who gives the illusion that he can simply conjure money out of nowhere – the figure of Vladimir Romanov.
It was all there – the short man of mystery from foreign climes who tells the locals that of course he can turn the established order on its head, giving the impression that the norms of economic activity do not apply to him.
Where Melmotte threw lavish parties and promised everybody that they could get rich by investing in American railway shares that could not possibly have provided the return on investment he was suggesting, so Romanov peddled the fool’s gold that was also at the heart of Rangers’ downfall: that a club can pay its players far more than its turnover can justify, without any obvious means of squaring the financial circle, and that all will be well.
Who, asked Trollope, is to blame when we should know that we’re on a road to oblivion but continue regardless because we’re too greedy to do otherwise? Was Melmotte to blame for the ruin of investors who must have known his Ponzi scheme was too good to be true? And is Vladmir Romanov really to blame for the ruin of Hearts when we have all known, as my colleague Andrew Smith details on page 10, that the wage bill at Tynecastle has been anywhere from 102 to 126 per cent of turnover for the past seven years when every objective observer puts the maximum sustainable outlay at nearer 60 per cent of turnover?
Trollope’s point is that, if we ignore the machinations of financial charlatans then we will all eventually pay a heavy price, even if he also conceded that people always indulge in willing suspension of disbelief when it suits them and that they must consequently be protected. So Rangers fans ignored unsustainable levels of spending as long as they were winning titles, while Hearts fans did the same despite the obvious signs of approaching and utterly unavoidable financial armageddon.
The answer to the very real financial crisis of the 1870s, which inspired Trollope’s rant of a novel was heavy regulation. For decades afterwards, the Bank of England stepped ruthlessly on any investment professional who didn’t have the financial reserves or foundations to back up their business practices. Such was the dread of a summons from the Old Lady of Threadneedle Street that it was a system of regulation which worked until the Big Bang in the 1980s, when raw greed gained the upper hand once again and disaster ensued.
There will always be peddlers of economic fantasy like Augustus Melmotte, Vladimir Romanov and Craig Whyte, who take advantage of human greed and fans’ loyalty but, unless there’s a system of proper regulation, with the SPL prepared to fine and ban clubs for unsustainable financial practices, it’s only a matter of time before we’ll be back here once again.
Either way, the one thing that we can say for sure is that if Trollope were a Scot he wouldn’t have been a season ticket holder at Tynecastle or Ibrox. . .