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THE BITCH, THE STUD AND THE PRAWN

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Adam Curtis | 14:16 UK time, Thursday, 8 December 2011

THE RISE OF GEEZER CAPITALISM IN MODERN BRITAIN

It is very difficult to properly see the times you are living through, but it is made more difficult today by the insistence of politicians and commentators that there is no alternative to the present economic system. This almost hysterical mantra closes down other, different perspectives and makes it impossible to draw back and see what the present world is really like.

I've stumbled on a wonderful documentary film made in the 1960s that in an odd way does help give some kind of perspective on today. It's about two brothers called Billy and George Walker. Billy was a boxer and George was a gangster who became Billy's manager. The film is a beautiful record of the way two brilliant chancers were manipulating British society and the media at a moment in 1964.

Out of that moment would come a vast business empire - of property, leisure and films all run by George Walker, that rose up in the 1980s and then crashed spectacularly in 1991. If you follow the story of that empire it takes you on a behind-the-scenes journey that shows the truth behind many modern businesses in Britain - showy facades built on a mountain of debt.

But the story doesn't just stop there - because the ghost of George Walker, his family, and his business practices have continued to haunt  Britain in all sorts of odd ways. And the story suddenly brings into focus some of the attitudes underlying modern society. A world where many people  have become chancers like Billy and George Walker, out to get something for nothing.

 

George Walker was the elder of the two brothers. He began as a boxer himself, but in the mid 1950s he became a right-hand man to the most notorious of London gangsters - Billy Hill.

Billy Hill spent his time doing what he describes as "little tickles" - stealing from warehouses, holding up mail vans and even ram-raiding jewellery stores. Then in 1954 a group of Moroccan "businessmen" asked Billy to restore the Sultan of Morocco to his throne. The French had forced the Sultan out - and exiled him in Madagascar.  Billy and George went to Tangier, set up a fake insurance company called The American Fidelity Corporation to cover their activities, and bought a boat to go and get the Sultan.

But it all went terribly wrong. Interpol told the Moroccan police that they were "Britain's biggest bandits", and then someone torched the boat and Billy Hill and George Walker ended up fleeing to Cannes.

Later in his life Billy Hill published a wonderful autobiography called Boss of Britain's Underworld - and in the book he outed the by now famous tycoon, George Walker, as his sidekick. He confirmed it by publishing this photo of him and a young George Walker on the run sunbathing in the beach at Cannes.

 

George Walker then got caught trying to steal a consignment of nylons from the London docks and was sent to jail.

When he came out he gave up the gangster life and turned instead to managing his younger brother Billy who had become a boxer. Guided by his brother, Billy Walker soon became a star in Britain - famous far beyond the world of boxing.

In 1964 the BBC made a fly on the wall film called The World of Billy Walker. It is beautifully shot in a 60s cine verite style - and has some fantastic footage when Billy Walker goes to America that was shot for the BBC by the legendary documentary maker Albert Maysles.

The film captures the beginning of the rise of the two brothers - and the lost world of the 1950s east end where they come from. Here are some sections.

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But not everything was quite what it seemed in the world of the Walkers. Although Billy Walker was a good fighter - he never actually won a professional title. In reality he was an early modern celebrity - famous as much for who he was as for what he achieved.

And George Walker took that celebrity and used it to start building businesses - first garages, then their own brand of petrol called Punch Petrol, then a chain of fast food restaurants, followed by a nightclub in Piccadilly called Billy's Dilly.

In 1968 the BBC made a film analysing how George Walker was still able to use his brother's relative failure in the professional boxing world to create the businesses. The programme shows how, although Billy Walker loses the fights, he still gets a big cut of the purse. As George Walker bluntly says in the film. "We only box so we can invest".

But then the brothers split. George Walker wanted to borrow a vast amount of money - and Billy was too frightened. I have added a touching interview from the 1980s where the two brothers explain the split. It is a great moment - when Billy Walker says about his brother: "He can handle, what's the word for it? - oh yes, debt"

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At which point British cinema enters the story. First with Billy Walker.

In 1968 Billy Walker was badly defeated by Henry Cooper in another championship fight  - and he finally gave up boxing. He decided that he was going to become an actor instead. In 1970 he got a part in the film version of Up Pompeii playing a character called Prodigious.

 

Unfortunately the role was not a speaking one - but Billy decided that he could develop his range and he started to take acting lessons. In 1971 the Nationwide programme made a short film about Billy Walker learning to act. Here it is - and I have added on a clip from his next acting role. It is in Up The Chastity Belt - the sequel to Up Pompeii. This time the part is a speaking one. The character is called Chopper (you can see how Billy was getting typecast) - and you can observe the effect of the lessons.

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Meanwhile George Walker was turning himself into a "leisure tycoon". In 1974 he formed a company called Brent Walker - and built the Brent Cross Shopping centre on the old Hendon Greyhound track in North London.

And then he too turned to cinema. In 1977 he went to the Cannes Film festival - 23 years after he had first been there on the run from Tangier - and found himself sitting next to Joan Collins at lunch. He offered to finance a film based on the novel written by her sister Jackie, called The Bitch.

It was a great success and Brent Walker went on to fund the equally successful sequel, The Stud. It was the start of the rise of  George Walker as the saviour of the British Cinema industry.  This would culminate in the 1980s with him buying Goldcrest Films who were famous for making Chariots of Fire.

But like so much of what George Walker did, this wasn't quite what it seemed. It would later be revealed at a trial in the 1990s that Brent Walker had ruthlessly used the cinema part of the empire, and the films they made, in a scheme to fake profits for their whole business. Those fake profits were then used to persuade the banks to lend Brent Walker more money - so they could do more takeover deals.

Here is George Walker the film tycoon filmed as part of a documentary in 1982 about the new face of the British film industry - along with another outsider who has come into finance the movie renaissance "he's an Arab" says the shocked commentary - "he's called Dodi Fayed"

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In the late 80s Walker's film empire continued to grow. In 1987 he bought Elstree studios. The studios were sold to him by two great characters - the brothers Menahem Golan and Yoram Globus who ran Cannon Films.

In many ways they were the American model for what Walker was trying to become in Britain, an independent force that could challenge the big studios by making popular movies. And in the 1980s Golan and Globus pretty much invented the modern Action Movie - like the immortal Death Wish IV: The Crackdown along with comedies like Dumb Dicks - but most notorious was Delta Force starring Chuck Norris, made in the wake of the hijacking of a TWA plane in Beirut in 1986.

In 1987 the BBC made a wonderful fly on the wall documentary about Golan and Globus. It's called The Last Moguls and it is a brilliant peek into the world of movie deals and trash remakes of the 80s, and this is a good excuse to show some extracts.

I love the section about the making of Delta Force where Chuck Norris in an interview explains how the film tries to show what America's response to Arab terrorism should be in the future:

"I think terrorism is going to get greater all over the world, and I think it's time we started doing something about it right now rather than waiting till it gets a lot worse."

The aim of the film, Norris says, is to show America how to do this retaliation - through what he calls "positive violence". As opposed to "negative violence" - which is what the terrorists do.

Along with George Walker's use of film and celebrity to fake profits in order to do takeover deals, you begin to wonder whether the whole of the subsequent economic and foreign policy of Britain and the United States wasn't created by the rubbish movies of the 1980s.

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By the late 1980s George Walker was at the zenith of his fortunes. Both press and TV portrayed him as one of a group of new tycoons who were re-generating Britain. Well-connected bankers elbowed each other aside up to offer him money to use to make more deals. The bankers then told the financial commentators that Walker was "a visionary" - and it all became a self-fulfilling legend of success.

Walker bought the Trocadero in Piccadilly, the Brighton Marina, then he branched out into chains of pubs - then he went to Europe and bought casinos, marinas, hotels and holiday villages across the continent.

Walker was brilliant at publicity - and the archives are full of him in helicopters showing reporters his latest deal. Only one programme pierced briefly through the hype. It was a film made by BBC South in 1988 that began with the normal helicopter sequence - but then captured an odd moment where George Walker goes to meet the Mayor of Le Touquet.

Walker was proposing to develop a holiday village and golf-leisure complex on the sand dunes next to the town. At the meeting Walker wants the mayor to give him a document agreeing to the development, but the mayor wants Walker to show him the details. Walker doesn't seem to have any details - and insists all he needs is for the mayor to say yes.

Here he is - first charming a whole load of bankers, then in the helicopter - and then with the mayor.

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In 1989 George Walker did the biggest deal yet. He bought the William Hill chain of betting shops. But then he found that he himself had been conned because William Hill's previous owners had massively exaggerated the company's profits. As a result Brent Walker came crashing down. The banks who previously had queued up to give him money now viciously turned on George Walker and destroyed him.

In June 1991 the banks forced Walker out in a dramatic late-night board meeting. But it was only the start of his downfall. Within months the banks called in the Serious Fraud Office. They told the investigators that they had discovered evidence that the company had faked profits on an enormous scale during the 1980s. The SFO then charged George Walker with theft and false accounting.

The SFO were convinced that Walker would be convicted - but in October 1994 he was cleared of all charges. But then it got very odd. A year later the former Finance Director of Goldcrest Films, Donald Anderson, was convicted of covering up the faking of profits on a massive scale at Brent Walker in the 1980s - and was jailed for two years.

The key witness was another Goldcrest employee called Frederick Fisher III who told the court that Mr Anderson had told him that millions of pounds of false profits were being concealed. Anderson also told him, Fisher said that "it was being done at the behest of Mr Walker".

In the face of this George Walker fought back in a dramatic way. He and his family told their version of his downfall in a BBC documentary in 1996. At the heart of it is a wonderful three-way set up in a pub with Walker, his wife Jean and one of his daughters called Romla as they sort of emotionally act out the story.

The Walkers use the film to tell how, when the crisis began, they had put the family's personal fortunes into the company in a last desperate attempt to keep it afloat. The real villains, they say, are the banks who effectively mugged the family and forced George Walker out.

And it was true that, privately, there was a lot of sympathy among city commentators for George Walker. They thought that what the crisis really showed was the horrible ruthlessness of the major banks. In reality they had used George Walker - and now were letting him swing alone in the wind.

I have put these bits from the programme together. Yet again Walker was ahead of his time. He and his family were creating something very akin to today's reality soaps.

Three years later Romla Walker would star in Eastenders.

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George Walker wasn't finished though. In 1997 he went off to Moscow - to sell cigarettes to the Russians. And he also set up a company that transmitted greyhound racing live from Britain to Russian and Serbian betting shops.

And the practice of creating business empires based on vast amounts of debt went from strength to strength in Britain. It was no longer the province of geezers and spivs like George Walker. Instead posh people now did it and accordingly it adopted a shiny new name. It was called Private Equity.

The inventor of Private Equity takeovers in Britain was called Guy Hands and one of his first purchases was the very thing that destroyed George Walker - the William Hill chain of betting shops.

 

Guy Hands began as a banker working for Nomura, but in 2002 he set up a Private Equity company called Terra Firma. He quickly became a heroic figure - called a financial genius and a visionary because he had invented what was described as a new system of financial engineering that was described as "like crack cocaine for financiers".

But this was mostly PR rubbish. Essentially what Hands did was simply borrow vast amounts of money from the banks, tinker with the companies he bought (or brilliantly streamline them and introduce efficiencies - as his supporters claimed) and sell them on for an enormous profit.

And lots of people copied him. They also ruthlessly exploited the tax loopholes that had originally been created to encourage genuine entrepreneurs who sold businesses they had built up over the years. This was hijacked by the private equity players - and it allowed them to pay tax at just 10% on the gains they made.

At the height of the boom one of the leading Private Equity financiers pointed out that he paid less tax than his cleaners. Many people questioned whether people like him could truthfully be described as entrepreneurs.

The takeover boom flourished until the financial crash of 2008 when the banks stopped lending money, and it has left many large British companies with their solid foundations removed - and replaced with the shifting sands of debt. Many of those debts will soon come up for renewal, starting next year - and there are are growing fears that this may lead to a massive national crisis - the collapse of a number of key British enterprises.

But unlike the geezers of the past, the heads of today's Private Equity hide away and avoid the limelight. There is very little footage of them in the archives. But Guy Hands does share George Walker's fascination with showbusiness. In 2008 he borrowed £2.6bn to buy EMI - and here's a rare bit of footage of him - going to an Odeon cinema to tell the assembled EMI employees that thousands of them are going to be sacked to service the debt.

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And like George Walker, Guy Hands also got involved with making movies. In 2001 he backed what seemed to be an unlikely script.

It was a film called Crust. It told the story of a pub landlord who finds a giant seven foot mutant shrimp on a beach. The landlord then decides to teach the shrimp to box - and believes this will make his fortune.

The film was made but unfortunately it was never shown - and even more strangely never even made it to video.

Here are some pictures of the 7 foot mutant boxing shrimp.

 

And luckily the director of the film has put an extract from it on his website - and you can watch it here. Personally I think it looks great.

But then the truth came out - thanks to Gordon Brown.

Officials in the Inland Revenue had begun to notice more and more British films had actually amassed takings of less than £100. The tax men began to suspect something was up.

One possibility was that all the films were so bad that no one would release them.

In fact the reality was that for all these films it didn't matter whether they were seen in a cinema or not. Their real function was as a tax dodge for rich people. It was known as double dipping - and it allowed the investors to claim tax relief twice on their investments. And this is what Mr Hands had been doing when he put his money into the mutant shrimp film.

In 2005 Gordon Brown put a stop to it - and Guy Hands was furious. Together with 74 other investors he sued the tax advisors who had recommended he invest £11 million in a whole range of such films - another one was a comedy called Nine Dead Gay Guys (which did make it to DVD).

I'd love to know the full list of these tax-dodge British films. One estimate is that between 2003 to 2005 the tax breaks were worth £5bn in cash terms. As the journalist Nick Cohen has pointed out:

"This was money that came from working and middle-class taxpayers who didn't hire accountants but paid as they earned. It was money which might have been spent on schools, hospitals, the army or other fripperies"

 

In March 2011 George Walker died. At the same time his other daughter Sarah finally found love.

Back in 1989 Sarah had married into the aristocracy. She became the Marchioness of Milford Haven. But the marriage went wrong, she got divorced, dated James Hewitt, and did good work for charity.

Here is some footage of Sarah Walker back in 1988 talking about what it was like to work for her father, and then awarding a polo trophy to the Marquess of Milford Haven's team. The team was sponsored by Brent Walker. (George Walker also did the other posh thing all businessmen are supposed to do - it sponsored a Wagner festival).

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Then, in 2010, Sarah met a city entrepreneur called Michael Spencer. Like her father, Spencer was a self-made man who had risen to become fabulously wealthy. He was a friend of David Cameron's and had become the Treasurer to the Conservative Party.

Like Guy Hands, Michael Spencer too has found an innovative way of making money out of the best intentions of the government. He is one of a select group of City brokers who make Quantitative Easing work.

Their job is to buy up bonds using government cash - taking a tidy cut for themselves for every bond purchased. At the last count the government had pumped in £275bn. Spencer has been quoted as saying "the crisis is good for business."

Meanwhile the last remains of George Walker's empire are quietly crumbling into decay. Brighton Marina hasn't quite lived up to Walker's claim that it would be "the Venice of England". And here is the Trocadero today:

 

It is all rather shabby. Segaworld is long gone and Funland is all boarded up.

 

But fragments and memories of that empire still surface in the oddest places. One of the famous contestants in Big Brother 2009 was a character called Freddie Fisher who changed his name to Halfwit - along with Sophie who changed her name to Dogface. In real life he was Frederick Fisher IV, son of Frederick Fisher III who was the star prosecution witness who revealed how Brent Walker had faked profits throughout the 1980s - and finally destroyed George Walker's empire.

Freddie the IV survived for 72 days in Big Brother and fell in love with another housemate Bea who then rejected him. And all this happened in a fake house built inside the old water tank at Elstree studios - the studios that were once owned by George Walker.

 

And the mutant prawn boxing movie, Crust, was finally shown - in Japan. It was a cult success and has subsequently spawned a whole new genre of films in Japan called "sea-life sport movies". The two most famous are "Calamari Wrestler" and "Crab Goal Keeper".

 

And here is a link to the moment the Calamari makes his dramatic entrance.

 

If only Guy Hands had not just invested in Crust as a tax dodge - but made sure it got released. Then he might really have given something back to society, albeit a boxing prawn.

 

Comments

  • Comment number 1.

    As I was reading this and got to the bit where you say the film 'Crust' was never released I was shocked as I remember watching it in Tokyo, as you later state it was released in Japan (under the name 'Ebi Boxer' if I remember rightly) and is pretty awful.

    Shamefully i've also seen 'Nine Dead Gay Guys'... I need to get out more.

  • Comment number 2.

    Hi Adam. I love your stuff. It always puts an interesting skew on things and pulls together so many different strands.

    Two points:

    (i) "At the height of the boom one of the leading Private Equity financiers proudly announced that he paid less tax than his cleaners."

    I don't think this is fair reporting. The comment you refer to sounds like ones variously attributed to either Warren Buffett of Berkshire or Nicholas Ferguson of SVG at the peak of the boom. In either case, the two were not "proudly" making the statement. Indeed they were raising it as a point of concern to be considered by policymakers.

    (ii)

    "Like Guy Hands, Michael Spencer too has found an innovative way of making money out of the best intentions of the government. He is one of a select group of City brokers who make Quantitative Easing work. Their job is to buy up bonds using government cash - taking a tidy cut for themselves for every bond purchased. At the last count the government had pumped in £275bn. Spencer has been quoted as saying "the crisis is good for business." "

    This is a disingenuous description of Michael Spencer's business model. ICAP is an inter-dealer broker. One of their business lines is to trade government bonds on behalf of major counterparties and dealers. Yes, they take a spread on every trade and so if QE raises the level of bonds transactions, their profits will increase. But can you describe another intelligent way for the capital market to operate? Without large liquidity brokers like ICAP, the sovereign bond markets would become more expensive to operate in and thus, on the margins, increase the cost of government debt. This would ultimately cost the taxpayer more. ICAP, if anything, is one of the true "nuts and bolts" businesses of the city.

    The sophistication of financial and capital markets are highly positively correlated to the productive output and welfare of a society. Capital formation is an essential societal function. Yes the current model has many flaws, but to resort to a knee-jerk presentation of any financial activity as somehow suspect and usurious doesn't, I think, help form a debate about how to improve things.

    Keep up the great work! Loved the piece on Greece.

  • Comment number 3.

    Dear ilikethebbc – you are quite right about the cleaners point. He was being critical – apologies, that was wrong and I have corrected it.

    On your other point. I don't think I'm being unfair on Mr Spencer. Everything you say about what he does is right, and I'm not saying that it's the wrong way to do quantitative easing. But what I was trying to gently point out is that, while Mr Spencer is a vocal advocate of the free market and a fierce critic of attempts by government to tax the city a bit more – he is in effect acting as an agent of the state when he buys the bonds with all the money being pumped out by the Bank of England and is thus really playing the role of a state bureaucrat - using state power to rescue the financial and free-market system that he believes so much in. It's a slightly ambiguous position born out of the present crisis – which, as Spencer himself admits, he is doing very nicely out of.

    Adam

  • Comment number 4.

    "The sophistication of financial and capital markets are highly positively correlated to the productive output and welfare of a society."

    Is this serious?

  • Comment number 5.

    For those who are interested, the films AC mentions above, "Crust", "Calamari Wrestler" and "Crab Goalkeeper" aka "Kani Goalkeeper", have reviews on IMDb.com and they rate 6.2, 6.2 and 6.0 respectively. Both the Japanese films were directed by Minoru Kawasaki who also directed "Executive Koala" which rates 6.5 on the same website. As an Australian, I'm particularly interested in "Executive Koala" as it is at once a prison drama, a slasher flick, a musical and a kung-fu flick with a murder mystery / psychological thriller theme!

    I was all fired up to watch worthy films like the 2010 documentary "Human Resources" and the 2005 Italian TV doco "Fallujah, the Hidden Massacre" this December but on seeing AC's recent post and discovering these gems along with "The Tony Blair Witch Project" that I also accidentally found, I'll have to shelve the documentaries for the time being.

    Oh, "The Tony Blair Witch Project" ... no, not made by Kawasaki and it's actually a North American movie (but it probably made just as little money as those British films that Gordon Brown nixed) about a group of people who break windows in a ghost town, thus arousing the ire of the ectoplasmic inhabitiant, while apparently discussing Francois Truffaut films and searching for Tony Blair. No, I haven't seen the film, I'm just looking at the reviews on IMDb.com.

    All these Blair Witch Project parodies and the original film are based on Ruggero Deodato's "Cannibal Holocaust" which beyond the outrages that include a coconut, a turtle, some raw liver and various torture scenes is quite a clever satire on media sensationalism. I have seen most of this film but the ending was cut off (it was taped for me by a friend who also did "Man Bites Dog" the French-language student Belgian film on the same videocassette) so I never found out how the main characters were dealt with by the Amazonian natives.

    And funny thing I was reading about the London Trocadero restaurant just some time ago and found a French / Belgian link which I found so hilarious I fell off my seat laughing and must have hit my head really hard because I don't remember all the details.

    As for "The sophistication of financial and capital markets are highly positively correlated to the productive output and welfare of a society ... " - well I guess that depends on which direction the correlation goes in: we could call it the trickle-up inverse effect in which a positive becomes negative and a negative becomes positive. Now that's what I call a very sophisticated arg

  • Comment number 6.

    The sentence should have read:" ... Now that's what I call a very sophsticated argument!"

    By the way there is a trailer of "The Tony Blair Witch Project" and there are spoofs of that film on Youtube. Is there no end to all the pixillated pullulation going on around me?

  • Comment number 7.

    Thanks for the blog. I have seen Crust and can highly recommend it, if you can track down a copy that is. It's strangely moving.

  • Comment number 8.

    Did try looking for "Crust" on Amazon.com but couldn't find it. I was hoping there might be trailers on Youtube as well but I had no success. When doing a search, punters need to add the director's name Mark Locke to narrow it down.

    There is a sweet tender moment on "Calamari Wrestler" here at http://www.youtube.com/watch?v=BFWb9lNSZ5k but the mind boggles at how the, erm, little one was conceived. I did look up Wikipedia for some information about how it might be done but - gulp! - that attachment in the Wikipedia entry looks very ropey!

    And here's the trailer for "Crab Goalkeeper": http://video.google.com/videoplay?docid=-2945967268571048006

  • Comment number 9.

    I actually saw Crust when it screened in the market in Cannes, and it was well received by the audience.

    The budget was creaking slightly and the effects could have been better, but it was an unusual (and brave!) mix of creature film and heartfelt character-led comedy. Nothing at all like the B-Movie idea it seems to be at first glance.

    The press agreed, including The Evening Standard and The Times - who dubbed it 'the toast of the boats' when they saw it out there, James Christopher admitting he 'cried real tears'.

    Indeed it's a mystery that Crust didn't find UK distribution. Did something fishy go on there? Or were UK distributors simply not sure how to market it? A film about a seven foot boxing shrimp is possibly a hard sell (even though boxing shrimp do exist - mantis shrimps - at a smaller size), especially as it doesn't do much boxing and spends a lot of its time sitting on a Travelodge bed watching This Morning.

    Distributors were braver in Japan, where Crust was released theatrically and did well enough, bizarrely, to inspire other sea-life sports movies, including Calamari Wrestler and Squid Goalkeeper. These films good fun but clearly much more in the B-Movie tradition than the more unique and much less trashy film that inspired them.

    For now Crust remains a film that simply didn't get a chance to find its audience, but time will tell. Check the web (and the illegal torrent sites!) and there's a quite a bit of love for it out there.

    And it's also available from Amazon Japan here, an English version with Japanese subtitles:

    http://www.amazon.co.jp/%E3%81%88%E3%81%B3%E3%83%9C%E3%82%AF%E3%82%B5%E3%83%BC-DVD-%E3%83%9E%E3%83%BC%E3%82%AF%E3%83%BB%E3%83%AD%E3%83%83%E3%82%AF/dp/B0000V4LZ4/ref=pd_cp_d_2

  • Comment number 10.

    Thanks for posting this Adam. Another very interesting piece. I worked on the crew of a film that was a 'tax dodge' in 2001. It was called 'Requiem' - http://www.imdb.com/title/tt0391422/. I have never seen it but there is a review of it here: http://www.zone-sf.com/requiem.html - where is gets a hammering.
    I'm not sure if it ever got released.
    Andy

  • Comment number 11.

    Interesting to find out that Spencer worked for Drexel Burnham, relating back to part 3 of The Mayfair Set.

  • Comment number 12.

    With respect to the notion that "you begin to wonder whether the whole of the subsequent economic and foreign policy of Britain and the United States wasn't created by the rubbish movies of the 1980s" the reality is closer than is palatable.

    Violence in films paints a reality that is most effective by programming populations to be prejudiced against the artificial enemy of the day and most damaging is the mind control it exerts on young uneducated males and their propensity to join the military and kill foreigners obediently. The CIA and Pentagon among others permit Hollywood to use their war hardware in return for script editorial veto and inclusion. If a war movie isn't appropriate, the alphabet soup agencies and war psychos have the money and influence to make movies that frame issues to their liking.

    A lovely example from the 90's found that security males fond of dark glasses, coiled wire to an ear, and complete obedience to their pensions over and above their personal relationships and any morality were beginning to be seen as a sinister accessories tainted by black budget projects being openly discussed on the internet.

    The solution was for a cool movie portraying the males in dark civilian attire and glasses as behind-the-scenes dudes with sexy kit, and off planet responsibilities. It was so successful the lay person now thinks "Men In Black" references special security guys even though the original Men In Black phenomena is super-high weirdness that troubles the Feds as much as it does the witnesses who receive a visit.

    The geniuses in disinformation fixed it as neat as one could wish. They steered a movie that positioned their Feds as the 'Official' Men In Black though civilians came up with the term.

    Hollywood made the MIB's cool and real life supernatural cache made them bad ass cool. A complete win for synthetic reality.

  • Comment number 13.

    Adam,

    The Bitch was actually the sequel to The Stud not the other way round as you stated. The original meeting with Joan Collins may well have centred around The Bitch, but that was not the order they were written or released in.

    Regarding the putting together of a list of tax-dodge British films....If you were not already aware..

    The British Council have an online directory of all British made films released and unreleased - ( as far as I know - I could be wrong..) - year by year since 1997.

    Both Crust and Nine Dead Gay Guys are listed with production and sales agent details although Requiem is not. I'm sure that a researcher with some time spent cross referencing the directory will be able to put an initial list together for you. Or perhaps someone in the British Council Films Department could oblige on your behalf ??

    I think it is somewhat disingenuous to lump in Brighton Marina with the 'crumbling decay' of George Walker's empire. It may have its faults but that has more to do with capitalist expedience and pragmatism I conjecture.

    Brighton Marina is a thriving 'city by the sea' within a city by the sea, a highly popular destination and residentially desirable, far in excess of anything George Walker could have imagined. I remember the Marina at the beginning of the eighties as a sad, cold, concrete, desolate wasteland.

    The project itself is still not finished - four decades later - and is certainly not in keeping with your depiction of the Trocadero.

    The cost of continuing to build the Marina would have been unimaginable in 1985 when Brent Walker took it on for £13 million. The development programme at the time was £120 million.

    For anyone who hasn't been to the Marina do not be put off by Adam's mischevous remark...

  • Comment number 14.

    theartteacher2 - " "The sophistication of financial and capital markets are highly positively correlated to the productive output and welfare of a society." Is this serious?"

    Yes, it is a serious statement, borne out by the facts. Can you name a sophisticated, developed society that managed to achieve its status without having deep, liquid, and sophisticated capital markets to intermediate savings between individuals, corporations, and government? They are conspicuous by their absence. Indeed, societies like Russia and Cuba, that have tried to do without, had to reinvent them in some limited form just to keep their head above water (Lenin's NEP, etc.).

    Do any of my statements equate to saying the current system is perfect or that the professionals representing the capital markets behaved perfectly through the boom? No. But I can't think of any section of society that behaved perfectly through the boom.

    The current 99% vs. 1% debate is problematic because it is characterising an us vs. them "greed" situation. The real issue is that future societal development now requires the application of very high levels of intangible or intellectual capital in order to improve on what we already have (given we have come so far). That is why returns to the 1% have increased so much - the marginal "great idea" is highly rewarded (Google, Apple, etc.). The productive and process efficiencies squeezed out of businesses by private equiteers is but one example of this trend.

    The focus on the real wage stagnation of labour, a key point of the 99'ers, is not quite right - is doesn't allow for the "hedonic" improvements in what their static real wages can buy. There is no doubt that average household contents and activities have vastly improved since the 1980s.

    With the advent of the maker movement, 3d printing, self-driving cars, acceleration in robotics, etc., this is a trend that is set to continue.

    Given that most of these improvements will come from heavy reliance on intangible and financial capital rather than labour, the question is how to incentivise such improvements (the benefits of which flow to the whole of society) without proportionately increasing the rewards to these components. I'm not sure such a solution is so easy.

    The value of "middlemen" professions is hard to understand. Economics is hard to understand; it is a highly circular discipline in which everything affects everything else in unexpected ways. To quote Robert Merton "there isn't a person in the country who is thinking hard about problems that doesn't have a folder somewhere marked something like 'circular systems'"

    Stephen Pinker makes some interesting comments here, in relation to the value of "middlemen":

    http://video.google.com/videoplay?docid=6037708729636407580 (46:20 onwards)

    He is discussing it in the context of a presentation on high Jewish achievement. The Jewish community, being over-represented in professional communities such as entrepreneurs, businessmen and finance, have long had to address many of the criticisms currently being thrown at capital markets, bankers, financiers, and "the 1%" in general.

    How to communicate what is at issue, such that the broad populous can intelligently engage in the debate, is a thorny issue. David Miliband's attempt to differentiate between "good" and "bad" capitalism seems farcical. But that is nothing new in political or economic life!

  • Comment number 15.

    "The sophistication of financial and capital markets are highly positively correlated to the productive output and welfare of a society."

    Correlation ain't causation... in this case, not by a long shot!

  • Comment number 16.

    I think there is some confusion on this forum with the activities of the global financial industry with those of what some of us would call the "real" economy, that is, the economy that produces goods and the services, including financial services, related to the production of goods for consumption. These financial services include insurance, marine insurance, appropriate capital investment in projects aimed at producing goods (such as building new factories or investing in new manufacturing processes) and ensuring that buyers of products are able to pay on terms acceptable to both sellers and buyers. They might also include services that benefit the employees of firms so they feel secure and happy about working for these firms and these might be appropriate rewards for going beyond what's in one's job description on a temporary ad hoc basis, and appropriate superannuation and medical insurance benefits.

    Such services do not include financial services aimed at divesting funds away from manufacturing and related activities for personal benefit so one can deposit funds in secret bank accounts in other countries to avoid paying tax or other legal and financial restrictions. In addition, financial services should never be used in such a way that taxpayers are effectively subsidisng activites that are potentially illegal. An example might be where employers raid employees' super funds to obtain money for use in insider trading on stock markets.

    Government regulation does help but the problem with it is it can always be repealed. A classic example is the 1933 Glass-Steagall Act which was enacted by the Roosevelt government in the US to reform the banking industry and cut down on the kind of stockmarket speculation that led to the Great Depression. This Act seems to have done more or less sterling duty for the US economy at least until the Clinton government's 1999 repeal of certain of its provisions which had forced the separation of investment banking and commercial bank lending. The repeal meant that conflict of interest prohibitions on individual bankers were swept and it's very likely that the Gramm-Leach-Bliley Act that repealed Glass-Steagall was in large part responsible for the 2008 global financial crash because investment banks were able to effectively "steal" deposits made in commercial banks which had been taken over by investment banks.

    I'm sure there are equivalents in British and Australian societies of the Glass-Steagall Act but I use this even though I'm not American because it illustrates very starkly at a level most people on this forum can understand how a certain industry may not be trusted to regulate its activities and how individuals in that industry can put their self-interest above the industry's long-term interests, let alone the other banking industry they treat as a goldmine.

    So yes the sophistication of financial and capital is correlated to some extent positively with the level of productive output of society but mainly because the real economy has been hijacked by the abstract financial economy. As P Pilkington says, correlation ain't causation!

    We need to have an economy that can produce goods and appropriate services for people in a way that reduces and minimises waste, that does not exploit or degrade them and their families, that does not pit one sector of society against another in endless and meaningless competition for its own sake and which must not be milked by parasitic parallel economies operating outside the jurisdiction of the law.

    And I agree with an earlier comment that movies and even videogaming can shape violence in real life. The internet is full of websites that tell you the way people handle guns in Hollywood flicks isn't correct yet individuals make the same mistakes again and again in handling small automatic weapons. At another level, we have drone aircraft killing civilians in Pakistan, Yemen and other parts of the Middle East which are operated by people sitting at videogame-like consoles in places around the US (Nevada state always seems to come to mind). There's some statistic doing the rounds that says that for every two terrorists or similar people targetted and killed by a drone aircraft, 98 innocent people are hit as well so the technology is certainly not accurate. The implications of the use of drone aircraft technology and its effects on populations affected by it are sure to be immense.

  • Comment number 17.

    The poster who said that it was unfair to say that his cleaner paid less tax than he did is probably wrong. I worked for the rich in the early 90's in Canada. They would often joke with me that they paid less tax than I did. One client was a lawyer who had a bit of a crush on me. They explained how it works.

    For approximately 70k this lawyer would transfer ALL of your assets into a numbered corporation headquartered in the Caymans. With nondisclosure on paper you were penniless. Then your lawyer would form a second local numbered corporation. The first corporation would contract the second corporation to hire you as their local agent with full signing privileges. Your salary would be approx 30k per year. Just enough not to arouse the tax man's suspicion. You would be the “caretaker” of you two million dollar condo and 280,000$ Mercedes while paying less tax than I made as your personal security. Upkeep and bookkeeping was 5 to 7k per year.

    So Adam you need apologize for nothing.

    P.S. Using rehypothecated pretend money to buy government bonds burns me up. Why can’t I pretend to buy a few million in bonds and live off the interest? Rich douche bags. I hope Greece defaults. You Armani welfare bums.

  • Comment number 18.

    ilikethebbc says: Do any of my statements equate to saying the current system is perfect or that the professionals representing the capital markets behaved perfectly through the boom? No. But I can't think of any section of society that behaved perfectly through the boom.

    But I can think of only one section of society that aggressively pushed for a criminogenic regulation-free business environment; used the freedom-to-fraud that arose in this environment to create a massive and massively profitable housing bubble that inevitably destroyed the economy; received a massive transfer of wealth and power from the state in the form of bank bailouts; and successfully used a lobbying and influence peddling blitz to indemnify itself, while propagandizing for and enforcing austerity on the working class. Maybe you missed it, but we have witnessed the greatest criminal transfer of wealth in human history, and your vaunted 'middlemen' both caused it and benefited from it.

    The value of "middlemen" professions is hard to understand. Economics is hard to understand; it is a highly circular discipline in which everything affects everything else in unexpected ways.

    Economics is not hard to understand. Economics is easy to understand: an ideological pseudo-science designed to justify the transition from democracy to oligarchy. The 'hard to understand' tag is part of the mystique of the priesthood: "Sure, it may seem to you, poor peasant, that you have been screwed, but in fact things are as they should be, and your failure to see that just comes from your own lack of understand. See, economics is difficult to understand - leave it to the priesthood, and don't fret."

    The Jewish community, being over-represented in professional communities such as entrepreneurs, businessmen and finance, have long had to address many of the criticisms currently being thrown at capital markets, bankers, financiers, and "the 1%" in general.

    This seems to be a side-ways way of brown-baiting the OWS movement. That's a shameless smear, worthy of Glenn Beck.

    But I'm all for middle men. The banking sector does indeed serve a useful social function - like public utilities. So, structure and regulate banks like public utilities. Your middle men can do their thing, and earn a comfortable living while doing it. And, as an added bonus, we can euthanize the oligarchy, and have a reasonable prospect of a sane and just future.

  • Comment number 19.

    " ...Can you name a sophisticated, developed society that managed to achieve its status without having deep, liquid, and sophisticated capital markets to intermediate savings between individuals, corporations, and government? ..."

    We can: the UK was a highly sophisticated, developed society in the 19th century without the kind of sophisticated capital markets that supposedly intermediate savings among individuals, corporations and governments. Add also Germany during the same period and especially after unification in 1870 and Japan after the Meiji restoration in 1868. By 1905 Japan was sufficiently technologically advanced to defeat the Russians in naval battle.

    I could refer also to South Korea under Park Chunghee (1969 - 1979) and succeeding military governments up to the early 1990s who oversaw that country's industrial development from war-torn basket case to the world's most efficient steel manufacturer. And how about Taiwan from the 1960s on under the Guomindang and their successors, to become the leading manufacturer of semiconductors and other major computer components?

    In all of these countries, governments more or less took the leading role of investing in basic infrastructure, especially railways (a major driver of industrial development and trade which helped to unite Germany), and in key industries such as shipbuilding. Look at India also: government investment since the 1960s in the space exploration program laid the groundwork for the computer software industry that now drives Indian excellence in science and technology.

    In Japan and South Korea, government subsidies and grants encouraged the development of large companies such as Mitsubishi, Sumitomo and Mitsui which later acquired or grew their own banking and finance companies to fund their further growth into areas directly or indirectly related to the primary activity of shipbuilding. Shipbuilding needs raw materials of iron and steel (hence, the need to control supplies of those, leading to the takeover of iron and steel companies); you can do a lot with those materials apart from making ships - you can make cars and whitegoods like refrigerators and washing machines too - why not take over the manufacturing of those?

    And just what do we mean by "sophisticated" financial instruments? All too often, such instruments are not meant to encourage the funding of manufacturing activity which really needs loans and adequate credit facilities on terms that both lender and borrower can agree on. Such instruments are often more about avoiding or evading tax so as to invest money in places or activities beyond the jurisdiction of the government you owe tax to. Schemes such as transfer pricing in which a company can set up numerous subsidiaries in high-tax and low-tax countries so subsidiary A in a low-tax place lends money to subsidiary B in a high-tax place (so sub B claims the costs of borrowing and gets tax rebates in its domicile and sub A claims profits in its domicile and pays little tax) are classic examples as are also certain types of trusts where the ownership and management can be spread over numerous "owners" and "managers" in different countries and secrecy arrangements are built in so that any one manager of the trust has no way of knowing who's responsible for managing the entire trust and who the ultimate beneficiary is.

    And if we're talking about 3D printing, creating meat from stem cells and other futuristic technologies, these in the main will be driven by entrepreneur-led firms of small to medium-small size who usually rely on loans and credit to fund the research and the processes involved. An aspect of 3D printing that many of its supporters emphasise is its adaptability to customising products for a small client base: to finance a small and particular manufacturing run, you don't need complicated structures of funding to do that!

    And let's look at sharia banking in some Islamic countries too: sharia banking prohibits the charging of high interest rates on borrowers by lenders. In such financial environments, banks and borrowers act as partners in joint ventures to fund major projects and the bank has an interest in seeing the project succeed rather than treat it as a permanent money tap.

  • Comment number 20.

    Much as I hate to detour a sophisticated thread on economic disputes that I am finding to be fascinating, and enlightening, reading, I didn't think I could leave this comment unchallenged (it has nothing to do with economics, and precious little to do with the point of Adam's blog, BTW):

    'The original Men In Black phenomena is super-high weirdness that troubles the Feds as much as it does the witnesses who receive a visit.'

    I consider myself to be considerably more interested in what may be defined as Fortean phenomena than probably the majority of readers of this blog, but applying Charles Fort's values to phenomena means being inquiring and sceptical as well as credulous (if you don't believe me, read what he himself writes in 'Lo!', 'The Book of the Damned' etc.).

    The general consensus these days about 'Men in Black' is that the identification of them was almost entirely down to the work of Gray Barker, beginning in his 'They Knew Too Much About Flying Saucers' in 1956, and that Barker was an inveterate prankster and hoaxter who liked to make money out of the UFO market, and, indeed, con believers. He was responsible for continuing to popularise the idea of the 'MIB' throughout his life, and other notable proponents of it, such as John Keel, used Barker as a substantial source and informant. We also know that Barker developed his theories on the 'MIB' through successive works - it wasn't until his second publication that he linked them with the idea of being extraterrestrials.

    The main reason that this mythos may 'trouble' any US government agency is that there is a possibility that the original germ of the idea did, indeed, derive from actual reports of USAF plainclothesmen who attempted to pressurise individuals not to take overt interests in spreading UFO rumours in the '50's (which, rationally, would have been of concern during such a period of Cold War paranoia - unsurprisingly also, they may well have dressed in conservative black suits and fedoras as would have the vast majority of the US adult male population of the time). Virtually everything else concerning the theory of 'MIB' is likely to be supposition at best, and pure bunk at worst.

    I actually felt that the overall point being made in the post that referenced 'MIB's - about Hollywood being co-opted to an extent by the military at times - was making an interesting observation that deserves more study. But I think there's a need to question certain generalising assumptions, too.

    Of course, there is always the recourse that the confessions attributed

  • Comment number 21.

    This site's comment app stinks. I had a running comment on a previous comment (... no, thank you ...), and set the cited materials in italics markup. Then I hit 'preview' and, lo and behold, the italicized stuff shows up, well, italicized. Then I hit 'post', and the italicization disappears. Now my comment makes no sense. Seriously, generic online blog applications get this right.

  • Comment number 22.

    Well, quite...the end of *my* comment was

    ...attributed to Gray Barker are disinformation planted later to throw investigators off the true scent...

    Because they would say that, wouldn't they?

  • Comment number 23.

    [I have split this post up as the BBC blog software seems to have problems.]

    Lots of spirited comments - very interesting. I shall throw a few thoughts out there; I hope they are of value.

    --- Correlation ain't causation

    Agreed, I would say capital market development is a "necessary but not sufficient" condition for advanced societies to exist. So it may not be the "cause" of advanced societies, but they are likely impossible to implement without.

    --- "Such services do not include financial services aimed at divesting funds away from manufacturing and related activities for personal benefit so one can deposit funds in secret bank accounts in other countries to avoid paying tax or other legal and financial restrictions."

    It's worth noting that there is no such thing as "divesting funds away". Banks are essentially pass-through vehicles - their deposits are backed by real assets, otherwise there is nothing of value to back the deposit.

    One problem of the bubble was that certain assets were mispriced, creating subsequent holes in banks balance sheets. And capital was over-allocated to certain sectors of the economy, such as real estate, personal unsecured debt, etc. But that was a function of what was happening in society at the time.

    Or in other words, the "onshoreness or offshoreness" of deposits should, all else equal, not affect the availability of real capital to industry, government and individuals, because those are the only places in which one can find assets of real value to back deposits.

    It's also worth noting that offshore assets have taken on a similar status to pork barrel spending in the US. Congressmen frequently strike out at their political opponents’ excessive pork spending and charge that is it bankrupting the nation when, in fact, it only accounts for ~0.75% of total spending, and they would be much better off discussing core issues like the offset between defence and welfare budgets.

  • Comment number 24.

    [I have split this post up as the BBC blog software seems to have problems.]

    Similarly, offshore tax structures probably cost global governments around ~$250bn/yr (Tax Justice estimate) - a huge sounding sum. But that is relative to a global annual tax take of perhaps more than $15tr, so avoidance is costing less than 1.5% of the potential take. Definitely something to fix, but it is a tiny fraction of total activity and certainly not something that should be a headline issue when discussing the iniquities of the financial system.

    --- "In addition, financial services should never be used in such a way that taxpayers are effectively subsidisng activites that are potentially illegal. An example might be where employers raid employees' super funds to obtain money for use in insider trading on stock markets."

    Yes, I agree that people should not do things that are illegal. I believe if you quantified examples of the activity you describe, it would prove very negligible relative to total financial market activity.

    --- "But I can think of only one section of society that aggressively pushed for a criminogenic regulation-free business environment..."

    There is a lot to digest in your statement, and it is a very stylish piece of writing. But I think a balanced analysis is that there was little criminal activity by bankers as a proportion of the total. They were just responding to the prevailing political and regulatory cycle in a rational way. Yes some wealth has been unjustly transferred. I agree that is a great shame.

    Probably the most egregious transfer of wealth has (stating it simply for efficiency and thus in truth incorrectly) been toward the boomer generation and away from younger generations. The artificial stability of pension and employment promises handed to boomers has left younger generations with a large debt to pay.

    --- "Economics is not hard to understand. Economics is easy to understand"

    It is great you find it a straightforward discipline to follow. Others, myself included, are perhaps not so fortunate. I agree with the instinct that one should be cautious of patrician elites. I agree with the instinct that Economics is not a science and has many failings. But it still seems an essential discipline that has to be improved, not discarded. And one must ultimately defer to specialists on complex matters, just as one would not self-medicate and do without doctors.

    A great case study in what happens when you try and popularise the political and economic process is California. Due to their direct democracy system, they have political gridlock and suffer from schizophrenic and self-contradictory budget legislation because the left hand doesn't know what the right hand has promised. Consequently California is bankrupt. Here is an amusing article on the topic - http://www.economist.com/node/18563612 - part of a broader special report on the topic by the Economist which is very good reading.

  • Comment number 25.

    [I have split this post up as the BBC blog software seems to have problems.]

    --- "This seems to be a side-ways way of brown-baiting the OWS movement. That's a shameless smear, worthy of Glenn Beck."

    I did not intend that at all. I will not pursue the line of argument any further as it is clearly at risk of being misperceived in ugly ways.

    --- "But I'm all for middle men. The banking sector does indeed serve a useful social function - like public utilities. So, structure and regulate banks like public utilities."

    It looks like we differ on the rhetoric, but agree on the conclusion. Great. But I would add one does need individuals enfranchised to rapidly take large risks with capital. Prop desks, money managers, hedge funds, etc. provide an essential function in capital markets of being the marginal liquidity provider. But such activities should take place on a balance sheet that can withstand the commensurate drawdowns (ie., the Volker Rule or similar seems a valid concept). I would further add that the crisis had an awful lot to do with mass delusion about what constitutes "low risk" rather than banks consciously choosing to take excessive risks with high risk “gambling”. That is something that is extraordinarily hard to regulate away as you cannot design regulation that prevents mass societal delusion. There will be more banking crises.

    --- "We can: the UK was a highly sophisticated, developed society in the 19th century... Add also Germany during the same period and especially after unification in 1870 and Japan after the Meiji restoration in 1868... I could refer also to South Korea under Park Chunghee (1969 - 1979)"

    Unfortunately the internet is a poor place to conduct an interactive discussion, so I suspect that we have crossed wires. I would include all of the above as examples of societies that got ahead due to their increasingly deep capital markets.

    Indeed, 19th century Britain is probably one of the quintessential examples of getting ahead due to better access to capital - Walter Bagehot was motivated to write Lombard Street celebrating just this fact. Similarly for post '70 Germany (Blood & Iron is a fantastic book that lays out this topic in some detail) and post Maji Japan was a favourite of Milton Friedman.

    But to intuit your core line of reasoning: you are suggesting state directed finance & development can be a good thing. I agree. But often there are huge downsides - state or consensus directed banking can be even more precipitative of banking crises than regular banking, as Japan and South Korea found to their costs, and as China will likely find in the coming decade. So banking crises are here to stay.

    --- "All too often, such instruments are not meant to encourage the funding of manufacturing activity which really needs loans and adequate credit facilities on terms that both lender and borrower can agree on."

    I would reiterate that you need to be careful when thinking about the banking system.

    Many of the products created in the boom were priced based on false assumptions. But almost always, their underlying purpose was capital intermediation to supply funding for real assets.

    --- "And if we're talking about 3D printing... you don't need complicated structures of funding to do that!"

    Yes, I hope that some of the mentioned technologies can put more power back into the hands of Ben Franklin type innovators. But to effectively ration capital appropriately in the venture sector, you do need smart private equity investors that have a deep and enduring fascination with their chosen investment field.

    As for complexity of funding structures - sure I do not think venture capital investment instruments need be excessively complex. But nor were the majority of problematic assets in the banking crisis all that complex. It was the underlying misperception in society about the value of such basic things as land and housing, who is an appropriate borrower, and the appropriate supply of such goods, that was the crux of the crisis. But yes, obfuscated financial products did not help matters.

  • Comment number 26.

    @ ilikethebbc:

    I agree the forums here don't favour very long posts and each comment doesn't have the facility to generate its own independent thread of comments. In addition to "complain about this comment" we need "reply to this comment" for each comment generated!

    I agree state-directed financing operates well up to a point: how well it does depends on how it's structured. Simply applying blunt instruments like tariffs or grants can encourage complacency and a culture of dependency in which grants and subsidies keep on growing and growing without review at taxpayers' expense. Such grants often hide salary padding and bonuses. That's why joint ventures and other financial packages that neither lenders nor borrowers can treat as money spigots might be ideal. Similarly ventures where lenders have a direct stake in the project and seeing it completed and earning income and profit could be favoured.

    Consensus-directed banking would be a problem in both public and private institutions: the issue is groupthink and people shielding bad news from their bosses or clients.

    You are probably thinking of the property boom in China where people often buy a second home as an investment because they don't trust the sharemarket? Then leave that home idle rather than rent it out? Hence the phenomenon where ghost cities can exist while there is still an undersupply of housing. The problem there might be lack of confidence in sharemarkets due to uncertainty about how well they're regulated and whether the legal system in China discriminates against small investors. There have been a couple cases where Chinese-Australian businesspeople have been sentenced and jailed on very flimsy pretexts and I suspect these individuals got into trouble because they refused to take bribes or to pay officials under the table. The Chinese government has also invested a great deal in the country's infrastructure but many projects seem to have been rushed. Japan has had bullet trains for 50 years with close to zero casualties; China has had bullet trains for about 5 years and already over 40 or 50 people have died in bullet train accidents.

    True, you need good private equity investors who understand and are enthusiastic about their particular investment fields but they also need the appropriate legal and accounting regulatory environment and support. The government must be prepared to support them and any whistle-blowers. There are many good and ethical people but often it takes one or two unscrupulous individuals to wreck the industry's reputation.

    As for the subprime loans situation, the repeal of ce

  • Comment number 27.

    ... As for the subprime loans situation, the repeal of certain parts of the Glass-Steagall Act in 1999 encouraged banks and other lenders in the US to adopt a reckless attitude in lending to borrowers of dubious credit worth and the attitude spread outside the country.

    Yes it's usually not the actual financial products or packages themselves that are the problem but it's how they're managed, whether managers care about their management and what supports whistle-blowers have when they discover wrong-doing in their organisation and want to take action. If governments, regulatory groups and professional associations don't care, all the legislation on the books may as well not exist. We can talk about "deep" capital markets all we like but their complexity or not means squat if no-one's got an eye on the overall direction where they're headed.

    I've seen an article on the Internet that suggests that capitalism in itself isn't the problem, it's how it has been managed over the past 100 years or so that's the problem. I did a print-out and took it away; just gotta find it now to get the references!

  • Comment number 28.

    Got the article now. It is Alan Hart's "An idiot's overview of why Western Capitalism is crashing" and can be found at www.alanhart.net. Hart's contention is that capitalism and its structures are fine: the problem is that the economic elites of Western nations in the 1970s - 1990s failed or refused to invest in developing poor countries so that their populations could be brought into the marketplace so that they could share in the bounty of Western goods and services.

    The comments that follow Alan Hart's article themselves are interesting. One comment contends that large monolithic corporations like News Limited don't represent capitalism at all and true capitalism is represented by small companies that are owner-managed which all compete for consumers. In such an environment, government and other regulation is easy to enforce and transparency is at its maximum so that consumers have full knowledge about product and its suppliers in order to make economically rational choices.

    The comments do not say how financial markets would operate in such an environment but I presume the emphasis is mainly on commercial banks and similar lenders providing loan and credit facilities to borrowers, and investment banks taking deposits in a variety of forms with the two types of banks staying separate and negotiating loan packages on behalf of commercial borrowers to link investment funds and loans. The financial markets act to support commercial activity and to obtain and provide information about money flows and transactions so that sound assumptions about future financial market stability can be made and loan products structured accordingly. Transparent operations within financial markets are made compulsory so as to avoid insider trading and illegal money flows.

    This of course implies that governments are vigilant in regulating financial markets and ensuring that violations of law or regulations are dealt with promptly and the penalties applied appropriately in ways fitting the crimes.

  • Comment number 29.

  • Comment number 30.

    ilikethebbc’s is an apologist. I do not trust him.
    Many safe Canadian Banks love trading in England. My bank, CIBC, has 72 billion hypothecated to the maximum. All off balance sheet of course. Here is how you can make huge sums with small assets by defrauding taxpayers. CIBC buys 500$ worth of a stock or security in London from Broker A. 250$ cash and 250$ on margin for which they have “collateral” which may in itself be of dubious value. CIBC then has 500$ worth of assets on paper. But the 250$ they borrowed is ALSO considered an asset by Broker A and they can use that as collateral to buy securities on margin from Broker B. Who can then buy on margin from Broker C, etc. So 250$ of notional assets which may have little real world value to begin with turns into many thousands of dollars on the stock market. After going through many brokers’ hands this "money" is used to buy sovereign AA bonds. Bond yields may look like crap at 2%, but if you rehypothcate you can buy 4 of them. 2% bonds times four give an 8% return on a rock solid investment. If you want to take some risk why not Greek or even Venezuelan bonds at 15%. That is a 160% ROI, all paid for by taxes on little people like you and me. Some economists estimate that 75% of Europe's money supply could disappear if one sovereign nation defaults. Not unlike the 17 trillion that disappeared last time we didn’t regulate the banks. This is the contagion whose name they dare not speak. Back from the dead, Fractional Reserve Banking.
    The solution is easy.
    Step one. Retail banks are not allowed to speculate, use fractional reserve banking practices or rehypothecate funds. Only investment banks.
    Step two would be regulating these welfare mums in yachts so they stop stealing taxpayer money and take actual risks on new businesses.
    Sorry for not being well spoken. I’m a working class vet from some far flung colony. Even the BBC fears telling the truth to power it seems.

  • Comment number 31.

    @ nemo888: Comment 30 looks OK to me. I'd actually have to see the stock in action to get a better understanding of what it is. I suspect most people who handle it never see it in its entirety. But that's the whole point of the thing: the stock is fragmented so that no-one can see the whole and be able to predict the damage it could do.

    If the rest of you want something similar you can read at length, the holy bible is Nicholas Shaxson's "Treasure Islands: Tax Havens and the Men who stole the World". See here http://treasureislands.org/

  • Comment number 32.

    I think people get blinded by complexity - how can acquiring wealth through financial manipulation and market gambling be anything other than parasitic?

    You can say it structures the economy, brings credit to where startups need it and all that, but to me it's like saying a slave society can't function without its enforcers and masters - it's a tautology; the objection is to the overall shape of the society that can't do without parasites; a society shaped (to some degree) by and for the parasites. If you suddenly remove Saddam you get chaos ad insurgency - this is not a good argument for Saddam.

  • Comment number 33.

    What is our political alternative? What does it include? In the context of global equalities and contemporary colonialism does it include transfer of wealth? Where does white privilege fits in in your economic systems? How does Enlightenment anthropocentric thought reconcile with Indigenous systems of knowledge? How do Western economies compensate for the atrocities? to Indigenous Nations and non-Indigenous nations. Economics is actually very simple, in its premise economic theories divide the world into people and resources. Everything is else is history, everything becomes exploitable. We can talk all we want about 'sophisticated economic systems' that are inherently based on the exploitation of third and fourth world. Until this fact is addressed in your 'theorizing' you continue to perpetuate systems of thought that created this mess.

    Capitalists are so comfortable with their oppression, today they don't even think twice about it, it seems natural. What drives me crazy is that they are not honest about it. Class system are just natural to them, well of course because they created them. Alternative politics you ask? First, the most important thing is to examine our western epistemology - where did came from how did it came to be, where does economic theory originates from? Than you have to ask yourself: is a political non-oppressive system possible? What does contemporary racism, sexism and white patriarchal structure has to do with oppression.
    It is "funny" how enlightenment made us think as everything being separated from each other including economics from everything else. As in when we talk about economic theory we don't relate it to a larger oppressive structure that perpetuates contemporary ideology of 'death'. I mean it in the context of dominant epistemology that brings life on this planet closer and closer to become extinct.

    So lets really try to imagine an alternative political system? What would it include?

  • Comment number 34.

    Just revisiting Comment 25 by ilikethebbc where it says "...I would reiterate you would need to be careful when thinking about the banking system". I am thinking that like nemo888 and like some of my earlier comments, that the banking system should be separated into consumer banking, commercial banking and investment banking. Consumer banking (personal credit, personal and housing loans, personal savings) would be the province of credit unions, S&Ls and community banks. In some places, post offices would take care of this role. Personal savings and superannuation plans would fund personal and housing loans.

    Commercial banks would lend to businesses and be funded by joint ventures that might or might not involve government agencies. Funds could also be raised through bond or equity issues, or even by lottery.

    Investment banks would lend for very large projects that might involve building or repairing necessary infrastructure.

    All these branches of banking might involve fairly sophisticated financing packages and structures but the people selling them should be trained to explain how they work to their customers in language that is easily understood and doesn't use unnecessary jargon. There should also be a clear career path for people in the banking industry where they can learn all aspects of banking and acquire an ethic of dealing fairly and justly. In the current system we have, too many people come straight out of university and go straight into a rarefied area of banking where they do number-crunching with specialised accounting and financial mathematics software packages and never get to see the consequences of their work.

    But as Alexandre Homonyuk suggests, even my thoughts and nemo888's suggestion are playing along with the current political system of control. I've just seen Scott Noble's "Human Resources" documentary which fairly smacked me for six: the statement that economist Adam Smith decried the fragmentation of work into a series of repetitive and meaningless tasks plus the news that Charles Darwin never actually referred to "survival of the fittest" in his theory of evolution hit hard. Competition turns out to be an unnatural state in human society. And our current economic system is based very much on the assumption that competition is natural and there will always be winners and losers.

    One alternative to our economic system might be the use of social credit instead of debt as the driver of economic production. If debt is needed to create money and direct its flow, then this creates a relationship of inequality between lender and borrower with the lender having power over the borrower. Under a social credit system, a credit office calculates the amount of credit that should be circulating in an economy with a price adjustment mechanism reflecting the real costs (not money costs) of production. (Real costs refer to opportunity costs of producing one thing and not another or what you could buy with the money instead of investing it in production.) Every person has a basic guaranteed income whether they work or not.

    There are different versions of social credit and they're not without problems: the mechanisms used to calculate how much credit should be circulating in an economy might be very arbitrary and smack of the ways in which the USSR used to determine what should be made and what shouldn't. Although they sound socialistic, historically social credit systems have been associated with right-wing and extreme right-wing groups, many of which had an anti-Semitic bias. The idea is still popular in many parts of the English-speaking world, mainly Australia, Canada and New Zealand. I think Global Research website may have several articles on social credit. Anyone interested in finding out more should visit www.douglassocialcredit.com.

  • Comment number 35.

    " Digital coins" combined with modern encryption technology could remove a lot of these banking problems. It could store its own transaction history and eliminate the practice where a single piece of currency is misused as collateral in several different places at the same time. The major mechanism in the casino economy which in turn creates more bogus new money from financial double handling. This encrypted digital currency would have to be backed by personnel responsibility and real goods and services. A system of Self credit

    Self credit is where the creation of new money is linked to its creator/borrower/producer and would mean no one could escape the legacy of new money creation as it would ultimately be tied back to them as each unit of currency is branded with a creator ID. IE if you borrowed credit you invent the money yourself backed by a promise to produce economic value equal to that credit. If a unit of credit expired due to being written off as bad debt it could disappear from the system the moment it went toxic... and the risk of it disappearing would also be built into its code. You could see money that was likely to go toxic upfront AUTOMATICALLY. credit responsibility would be non transferable. You created it its down to you to repay it or it losses value and in turn your perceived credit rating.

    This would entail a simplification of the financial sector rather than a expansion of it as a lot of practices become redundant.

    http://digitalcoin.info/Digital_Coin_Introduction.html

    an idea worth perusing

  • Comment number 36.

    I'm just here to thank you for "The Power of Nightmares". It has to be the greatest documentary i have ever seen. I am sure others have commented on it far more eloquently than i ever could.


    I am really pleased the BBC had the.... "minerals" to air the series.


    I am looking forward to watching "Century of the Self" and "All Watched Over by Machines of Loving Grace".

    Regards

  • Comment number 37.

    I enjoyed this post. So I hope it won't appear too churlish to say that everything you say about "tax dodging" in connection with British film production is completely wrong, both in detail and in spirit. You say:

    "But then the truth came out - thanks to Gordon Brown. (NO IT DIDN'T. THE RELEVANT TAX LEGISLATION EXPIRED IN 2005. THERE WAS NO "TRUTH TO COME OUT", AND THE EXPIRY HAD NOTHING TO DO WITH GORDON BROWN.) Officials in the Inland Revenue had begun to notice more and more British films had actually amassed takings of less than £100. The tax men began to suspect something was up. (NO. FILM REVENUES HAD NOTHING TO DO WITH IT - AND LET'S NOT FORGET THAT THE ORIGINAL LEGISLATION ALSO INCLUDED TV PRODUCTION.) One possibility was that all the films were so bad that no one would release them. (YES, IT'S LIKELY THAT BRITISH FILM AND TV PRODUCERS WERE RESPONSIBLE FOR SOME TRULY UNINTERESTING AND UNAPPEALING PRODUCTIONS. BUT YOU CAN'T BLAME THE FINANCIERS FOR THAT.) In fact the reality was that for all these films it didn't matter whether they were seen in a cinema or not. (NO. IT DEPENDED ON THE MECHANISM THE PRODUCER USED TO OBTAIN FUNDING.) Their real function was as a tax dodge for rich people. (NO. GIVEN THAT THE BBC, FOR EXAMPLE, ALSO ACCESSED THIS TAX RELIEF, ARE YOU SAYING THAT THE "REAL FUNCTION" OF THE BBC'S PRODUCTION DEPARTMENTS AT THIS TIME WAS TO PROVIDE A TAX DODGE FOR RICH PEOPLE? THIS IS NONSENSE.) It was known as double dipping (NO IT WASN'T) - and it allowed the investors to claim tax relief twice on their investments (NO IT DIDN'T. "DOUBLE DIPPING" WAS THE TERM USED WHEN TV AND FILM PRODUCERS, NOT FINANCIERS, CLAIMED TWO SETS OF TAX RELIEF ON THEIR PRODUCTIONS.) And this is what Mr Hands had been doing when he put his money into the mutant shrimp film. (DO YOU HAVE ANY EVIDENCE WHATSOEVER FOR THIS CLAIM?) In 2005 Gordon Brown put a stop to it (NO HE DIDN'T - SEE ABOVE) and Guy Hands was furious. (NO, THIS WASN'T THE REASON HE TOOK ACTION.) Together with 74 other investors he sued the tax advisers who had recommended he invest £11 million in a whole range of such films - another one was a comedy called Nine Dead Gay Guys (which did make it to DVD). (NO. YOU MISREPRESENT A HIGHLY TECHNICAL LEGAL ACTION.) I'd love to know the full list of these tax-dodge British films. (THERE'S NO SECRET - A FULL LIST OF BRITISH TV AND FILM PRODUCTIONS WHICH QUALIFIED FOR THE APPROPRIATE TAX RELIEFS IS OBTAINABLE FROM THE DCMS. BUT I WOULD ADVISE CAUTION - GIVE

  • Comment number 38.

    I got cut off. But my main point is that principal beneficiaries of these tax arrangements were not the financiers (though of course they took their cut) but British television and film productions. So, yes, Nick Cohen is right that the money might have spent on schools and hospitals. Instead it was appropriated by TV and film producers. They need not have done so - it was their decision to take the money. All the financiers did was to create the mechanisms to make the system work.

  • Comment number 39.

    @ mididoctors: I can see where digitalised self-credit dovetails with social credit. The mechanism that might be used to determin how much credit should be circulating in an economy could be based on reported historical self-credit data obtained from their owners.

    Some issues about self-credit identities I'd like to raise. At a very basic level self-credit is like having a line of credit without the card. It's possible for one person to have several credit cards; might the same apply to lines of self-credit? What's to stop someone from having several lines of self-credit under different names? Perhaps one way to stop such abuse would be for applicants to surrender biometric data through iris scans or the scanning of vascular networks in both your hands as forms of ID when applying for a self-credit line.

    Children would need these self-credit lines even if just to buy lollies. How would these lines be safeguarded against predatory individuals or companies wanting their custom for profit? And how could you stop parents from taking advantage of their children's lines and wrecking their offspring's future credit reputation?

    Would corporations also be eligible for self-credit? What problems could arise if several people in a corporation are responsible for generating funds or credit through self-credit?

    And what is to stop government, private corporations or any of their agencies from manipulating a database of self-credit accounts to add extra taxes or charges onto the accounts without the owners being aware?

    These are rhetorical questions which I don't expect you or anyone else to be able to answer right away, they are just topics to consider if we're to move away from a debt-based economy.

    BTW I've seen news that says 47% of US Congress members are millionaires and many of these people represent districts that are poor. No doubt the "capitalism" that we practise isn't capitalism as Alan Hart and his commenters at my previous Comment (No 28) and it's really corporate fascism and plutocracy in disguise. It'd be interesting to see what percentage of politicians in other countries are also millionaires and where their money comes from.

    Please don't insult pigs and troughs any more.

  • Comment number 40.

    @NausikaDalazBlindaz

    RE self credit . self credit for most people would be invisible. if you worked for someone you would just get paid in digital credit/perpetual coin and you would spend it as money so children who were dependent on adults for money would not be in some vulnerable position to create there own self credit.

    whether corporations would be eligible for self credit? yes if such entities remain lawful... choose your bias. The money system itself does not preclude reform of business structures in this regard. it is agnostic.

    remember [read the pdfs at the website] if there are internal problems at a corporation/company/trading entity of juristrisction of credit coin creation this will manifest itself automatically at every transaction that credit is involved in if it fails to redeem itself to the originator within a set time[not detailed on how that is worked out and is potentially a bigger area of possible misuse]. Effectively the productive value of the creator decays .... ie a real indicator of stock value [if such things are allowed to exist] would be self tracking and transparent in real time. pseudo-market value of the credit would not be determined by irrational sentiment but whether anyone actually bought the creator’s services as there is a dividend on redeeming your own currency.... the other thing is that increases in the money supply are backed by real services so to maintain value of new money the best thing you can do to preserve its value is invest it in real goods and services.

    As for cheating. every coin is digital tagged and anybody behaving underhand is trackable to source so things would be difficult to game in that regard. trying to manipulate the database if possible would screw up the entire system but the point is encryption technology is assumed to prevent this. OTOH if you did fiddle the system it would be apparent fairly quickly.

    the system is really about maintaing your inflow to match your outflow....if you get out of kilter your self credit line devalues because your economic activity is insufficient but your debt does not expand via compound interest! in fact you may never go bust and any payments you receive or make in perpetual coin are at full value.

    if you lost your job your issued self credit would decay in value compared to redeeming coin within the time allowed.. if you returned to work you could redeem debt as you inflow/outflow ratio would start gaining in value and in the meantime you total debt would not have grown exponentially! this is very different to the present were the poor are hit with massive interest payments and even if their circumstances change for the better they can not fight the power of the exponential function.


    house buying would become a very different proposition with digital coin. house prices would remain far more static and no one need default or be made homeless.

    There is some areas of this I don’t quite get so I am not 100% on it myself as I need to think more on it. The hoarding and control of perpetual coin would need some thinking[in theory there could be no holding of perpetual coin at all IIUIC]

    The idea is not overtly connected directly with any particular political system... in a way the workers control the credit for creating the means of production ;-) so it that regard it could even be communistic in nature despite having a heavy dose of libertarianism embedded in it.

  • Comment number 41.

    Mr. Curtis,

    I continue to be impressed with the consistency of your 'voice' in this blog. Having watched, enjoyed and felt challenged to reassess preconceptions by many of your documentaries, I find I hear that 'voice' when reading this blog.

    Again, a very well written piece.

  • Comment number 42.

    @ mididoctors: If the system works, I'm not worried about whether it's "libertarian" or "socialist"! Funny how people think certain ideas or ways of seeing things have to be "left-wing". No-one these days would ever associate Adolf Hitler and the Nazis as being "green" but Germany under the Third Reich did have a definite pro-environment outlook which among other things connects with the "blood and soil" doctrine in which Germans have a natural bond with the soil and Nature and people who don't have this connection should be eliminated.

    I got the PDFs and the idea of digital coin looks good to me. Hoarding and control of digital coin should be impossible: there would be no central bank, indeed no banks at all theoretically because credit coin could exist universally and locally at the same time. The system would permit the use of vouchers that circulate in local communities only but also allow for exchange within networks of communities and between one network and another, and so it goes. Hoarding should be impossible because credit coin will not attract interest and only has value when you spend it.

    The main problem I can see is in the issuing of mortgages for residential properties. In many societies, buying houses is an indicator of wealth and social status and self-credit in itself will not change psychology or cultural values. We would need a system in which the cultural value attached to accumulating houses is diverted into investing in industry or community activities. An appropriate tax regime might push people away from acquiring more residential properties than they actually need.

    There might also be a problem in that the need to spend self-credit (because it devalues if you don't use it) might encourage built-in obsolescence and mediocre quality in products. We might get the same problems of resource wastage, misallocation of resources, pollution and environmental destruction that debt-based / growth-oriented economies encourage.

    As for whether companies are eligible for self-credit in their own right, that would depend very much on whether they should be treated as legal "entities" in their own right in a particular jurisdiction. There are arguments for treating corporations as single "persons" - it's much easier to tax a corporation and to sue it than to tax or sue all its constituent human associates.

    At least we have an idea of a system combining self-credit and social credit that avoids the excesses of debt-based financial systems. The system could also take a leaf out of sharia banking and include some basic principles of%2

  • Comment number 43.

    Let's finish: " ... At least we have an idea of a system combining self-credit and social credit that avoids the excesses of debt-based financial systems. The system could also take a leaf out of sharia banking and include some basic principles of economic justice to mitigate some of its more extreme aspects.

    Mididoctors, why aren't we running the world? I'll be the Bitch, you can be the Stud ... who wants to be the Prawn???

  • Comment number 44.

    Interesting piece. I cut one of Guy Hands' tax loophole films in 2003 called 'Tabloid.' This was one of a raft of well-made films which barely saw the light of day, including 'Rocket Post' and 'Global Heresy'. Tabloid had a cast including Mary Elizabeth Mastrantonio, Matthew Rhys and John Hurt. Heck, even David Soul was in it. It had a rather neat neon colour palette and a few rather gruesome murders. There was only one public screening, though, a ridiculously short time after filming wrapped, meaning it had temp music, titles saying "CGI shot here" and it ran at a pace normally colonised by Bela Tarr. It didn't matter much, because the Line Producer and his friend were the only people in the audience, and it had met the deadline for the tax loophole to become available. It was never shown again. The director rang me six months later in a despondent mood to say that Rosemary West had a better chance of release than our film.

  • Comment number 45.

    Whats wrong with the video player Adam...? I can't watch the films of late. The last three dispatches ( the videos that is ) have not been playing and this is most annoying...I have Adobe Reader Adam so there should be no problems. This is most irritating as the films are as good as the written post and compliment each other perfectly...Please sort this Alan...G...

  • Comment number 46.

    Oh dear...Please excuse me there Mr Curtis, I do apologise calling you Alan instead of Adam...Sorry about that...G...

  • Comment number 47.

    I started off fascinated by the promise of learning about George Walker, who was a well-known gangster, and hoping this article would enlighten me as to the truth of how Walker actually built his empire using earnings from the proceeds of his massive criminal empire. Instead, this article preposterously seeks to blame the banks for bringing down a so-called hard-working cockney lad made good.

    Curtis writes well but his understanding of finance is very poor, and he makes a lot of ridiculous, poorly-researched, and completely unsubstantiated claims about what are actually rather complicated structures, due to what is clearly some kind of prejudiced political agenda.

    1) Private Equity does not rely solely on leverage (particularly nowm, when it's very hard to borrow) - most of its capital comes from investors
    2) while it's true that some bad films were made during the film tax deal era, many good (and some great) films were also made. Essentially, these deals simply allowed production expenditure to be written off as a capital cost, which was an enormous help to the UK film industry, created many thousands of jobs, and promoted British culture around the world. Now that these tax breaks are gone, the UK film industry is dying and most of these jobs have been lost.
    3) Double-Dipping actually refers to a method that was developed by accountants for getting 2 tax write-offs on a single film. Sure, this was a sharp practice, but if the UK government body in charge of auditing these deals (the DCMS) had actually done their job properly, they would simply have disallowed one of the write-offs, and it could never have been possible. In any case, this practice only lasted for last 18 months of the 11 years of film tax deals, and probably accounted for some £300M of production.

    Based on this article, I now have little respect for Adam Curtis, and will certainly be recommending to my friends not to read anything he ever writes again.

  • Comment number 48.

    stratfranks:

    Your 3 bullet points hardly differ from the points that Adam was raising in this blog post, it's just that you seem to be of the opinion that because the government / regulators hadn't made a practice illegal then it's fair game to take advantage of a loophole regardless of the morals involved. This is one practice of many that the wealthy are (or were) able to take advantage of in order to avoid paying the taxes their earnings mean they should pay.

    I do think you make a fair point about the benefits to the UK film industry by providing jobs but it does also seem a unfortunate that so many of these films were never released or weren't given the publicity that perhaps they deserved. It's also a shame for me however, that the only way the UK film industry can seemingly be boosted is via a by-product of a tax avoiding scheme for the rich.

    So many of Adam's other blog posts snake through different stories and links in order to reach and highlight the overall argument he is making in each post, if you disagree with this view that's of course fine but you have to accept it's his opinion. If you would like to find out solely about George Walker the internet is a wonderful tool to do so.

    Finally:

    "Based on this article, I now have little respect for Adam Curtis, and will certainly be recommending to my friends not to read anything he ever writes again."

    It's a shame that you feel your friends can't make their own judgements on whether to read anything from Adam for themselves!

  • Comment number 49.

    The two immediate comments by stratfranks and onwhosplanet are interesting and relevant to an Australian context: in the 1980's the Australian government introduced the 10BA tax incentive to encourage more film-making and set up the Film Finance Corporation in 1988 to bring investment-bank finance management packages to local film makers here. State governments also tried to chase down Hollywood-style movie productions with tax incentives. Results apparently were pretty dubious with many films here being made as tax shelters to park excess monies and maybe only a few films like the "Mad Max" series of films starring Mel Gibson and Paul Hogan's "Crocodile Dundee" movies enjoying success.

    Paul Hogan has been under investigation by the Australian Taxation Office for tax evasion for many, many years and was even prevented from travelling back to the United States last year.

    Interested people may like to Google-search an article by Alex Burns and Ben Eltham, "Boom and Bust in Australian Screen Policy: 10BA, the Film Finance Corporation and Hollywood's 'Race to the Bottom' " or go to http://vuir.vu.edu.au/15804/ and click on the PDF icon. Among other things the paper argues that the 10BA subsidies encouraged a boom-and-bust cycle in film-making which, combined with low marketing and production budgets (that may mean poor advertising, cheap sets and equally cheap acting), bad distribution and poor financing decisions, hurt local film-making and gave Australian films a bad name among the film-going public here.

    We now have a situation where Australian actors have to compete with American, British, Canadian and other Anglophone actors for work in Hollywood if they are to have viable film-acting careers. Our film industry cannot hope to compete with the creativity and vitality of film industries in Hong Kong and South Korea; the latter country arguably produces the best art-house films of any country at present. We do not currently have a film director who can match Chanwook Park, Lars von Trier or Todd Solondz for consistent if wacky and controversial work over a period of years.

    @ gerry: Of all the people you had to accidentally offend, you had to pick G! Usually affects Zeus-like detachment around here but needle him enough and he starts sharpening the lightning bolts ... I speak as one recently bloodied by a sudden attack. Sacrifice an Iphigenia among your female relatives and all should be well.

  • Comment number 50.

    Why is it that all the self important, self serving financial geniuses think that society should all bow down and worship their magnificent financial brains.

  • Comment number 51.

    I think you might be being a bit mean about Walker and the marina at Brighton. It wasn't his project originally, but he certainly made it into some kind of success. I guess he may have just borrowed somebody elses money to do it, but then what is money good for, if it doesn't move around a bit?

    "Construction costs far exceeded the original budget. Backers were reluctant to give further funding so the development stopped. In 1985 the Marina taken over by Brent Walker and led by flamboyant boxer turned businessman George Walker. He immediately brought in a superstore operator and developed a village square with shops and restaurants, followed by flats and houses built on promonitories overlooking the inner harbour. A 1600 space multistory car park and cinema complex was completed in 1988."
    http://www.brightonmarina.co.uk/about/history.aspx

 

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