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Introduction

During the refurbishment of a London home a sink was thrown out. An unremarkable event were it not for the fact that the house, in the plushest of districts, had been installed with a feature that offended the sensibilities of the new owner: a floor-to-ceiling solid Italian granite unit costing around £30,000. The size of the unit meant that it could only be smashed out, yet out it had to go. Lots of money, too much money, enormous waste – even the new and perfectly functional destroyed in the name of some subtle change in the markers of good taste. Such stories abound in a city in which growing numbers of the world’s super-rich seek a home, whether they intend to live in it or not.

As money circulates through the city both the old and the new are destroyed through the making and remaking of places and, of course, the making of even more money. This spin cycle of capital operates under hyper-active economic conditions in which massive gains are mainlined to a select few. The result is a wealthy elite who have come to achieve staggering purchasing power, with the acquisition of multiple homes, sports teams, newspapers, media companies, industries and votes. But to really understand such power we need to be able to place it: London, the alpha city, is in many ways the pre-eminent site of the rich.

London competes on the world circuit to be the natural habitat of the rich thanks to its good homes, culture, history, society, financial heart, and cluster of corporate command centres. The city’s more or less unrivalled position has come about through its single-minded pursuit of the rich, creating seamless, open borders for capital while ignoring its working population and its poor. In adopting this strategy, the colours of those in power are pinned firmly to the mast of a ship propelled by the variable winds of global capital. The city is like a vessel buoyed by cheap and flexible labour, all the while throwing its provisions for those in need overboard. Participation in the alpha city’s undoubtedly vibrant social life is increasingly predicated on the ability to pay. The psychology, economy, politics and deeper operating system of the city are run more and more for money, its reason for being in many ways forgotten and its vision of the future indifferent to the plight of many of its residents.

Change in cities is rarely as dramatic as it has been in London over the past twenty years. A veritable crescendo of activity, reaching a climax of capital investment: a move from cool, to Cool Britannia, to an Olympic peak achievement, to the hip, and then to a city associated more than anything else with the rich – each shift echoing and integrating the dividends of the global economy. The London of the 1990s still resounded to slam-door trains, noxious diesel buses and a sustained economic reverse. The East of the city remained an index of enduring poverty while the West accommodated long-standing wealth and a series of comfortable suburbs beyond it. Today the East has been claimed by a creative class as gentrification has transformed many of its neighbourhoods. From a low-rise city with a comfortable skyline, hundreds of new towers have emerged, including the largest in Europe, with many more still to come. A city economy that was once the site of a gentlemanly capitalism now embraces the mantra of cash at all costs, without heed to the social consequences. Perhaps most visibly, the presence of an internationally sourced super-rich cadre is now evident to everyone.

The pursuit of money, and of those with lots of it, infiltrates and reshapes the spaces and culture of the city, physically changing old streets and creating entire new districts, lifting house prices, attracting waves of international capital and the temporary gains generated by asset sales. It seems that if a pound sign can be placed on anything, it can be put up for sale. One of the key challenges of governing a city economy running hot on international capital and an influx of the world’s super-rich is how to ride and tame this flailing force. But as capital flowed into London at every new opportunity, the only question asked was how to create the right conditions to let the city’s economy accelerate still further.

These massive changes and apparent improvements helped to mask their flipside – disinvestment in local neighbourhoods, demolished estates, evictions, rising homelessness and, alongside these changes, the apparent loss of an ethos of care as support for those in need was systematically withdrawn. As the money flows of finance and property seeped into numerous districts, providing many with windfalls, city governors were reassured that all of this stuff was a simple and self-evident good. Yet viewed today, the rise of an alpha city seems to have been based on a Faustian pact, a contract taken out on the zero-contracted, with the price for success being the exclusion of the poor souls of the city while capital and the rich ride on.

London is a vast, almost unknowable automaton, a complex city machine incorporating new and old elites, modern-day merchants, immense homes and corporate megastructures. Taken as a whole, this city, alongside a handful of others globally, is a key node in a global economy founded upon endless cycles of extraction and growth. The beneficiaries are small in number and rewarded in an abundance beyond everyday comprehension. What this also means is that those doing well out of the system are less concerned about its more pernicious outcomes. Today we know that the system’s economic priorities yield winners and losers in a rigged game designed to channel ever larger dividends to those already winning.

To understand the condition the city finds itself in, we must understand the traditional alliances of state, capital and City. To be sure, the positions, networks and interests of each overlap in complex ways. Yet the power of money also lies in its subtle ability to co-opt and align those whose work is in some way connected to servicing capital or the rich themselves. This of course includes the bankers and other servants of wealth, but it also includes politicians, local councillors, planners, developers, builders, real estate agents, luxury fashion retailers, department store workers, chauffeurs, restaurateurs, art, wine and antique dealers, auctioneers, bank clerks, servants, car dealers, tailors, delivery folk and indeed anyone whose livelihood is connected to the wealthy. Wealth becomes a city industry in its own right.

To understand this confluence of interests we must look beyond what is happening to house prices one month, or observations about where the city is going another. To get at the substance beneath the froth of such commentary we need to examine the deeper structures of the economy, the nature of the political system with its conflicting interests, alliances and divisions, the standing stock of housing, and the influence of money and the moneyed on the city. It doesn’t matter too much whether prices for mansions are tumbling or rising because the rich have already occupied them (unless you happen to be an estate agent or a government relying on tax revenues from such sales), nor does it matter when falls simply generate new opportunities for cash-rich international buyers to snap up assets at bargain prices – the same people are in power, and the same logic of capital is in operation. We need a longer-term and macroscopic view of such matters, one capable of tracking the processes, institutional life and socio-economic forces that are making and remaking the city in the interests of the wealthy.

The members of the city’s power bloc – a complex amalgam of networks, institutions and elites whose perspectives are shaped by a common interest – now seek to move away from a sense of patrician obligation and stewardship. Whether this be through residences behind gates and high walls, holidays on yachts or inaccessible beaches, investments in schemes to avoid or evade tax, or in exclusive hotels – the general sense is of a grand escape, the ever further secession of the successful and of the cash they command. Understanding what has happened to the city as money has reshaped it requires work, but the dividend is an insight into how to devise and plan for a city better based on principles of fairness, inclusion and social justice.

To understand London is also to comprehend the workings of our society, economy and polity, of which it is both product and creator. But to really know the city we must become analysts skilled in divining the complex social and economic forces that ultimately shape its material fabric. A city is not a natural occurrence. To be sure it evolves, but it does so according to the designs of its politicians, builders and planners, the competing interests of the powerful, the existing laws and regulations, and the accommodation of the regressive results of these forces by the powerless. In the past, the state and ruling class came to have an interest in maintaining, preserving and securing the amenity of the city. Projects were undertaken in the form of recreational parks, hygiene works, new infrastructure, public housing and transport networks, as a means of preventing dissent, disease and disharmony among the working classes, but also for the middle and upper classes who collectively benefited. Today’s elite appear to show little interest in such social contracts or obligations. London is a city apparently the poorer for the wealth condensing there.

This book offers an impression of London at this moment, as a city facing the paradoxes of a post-crash decade, defined by an increasing meanness in terms of social support, alongside the simultaneous rise of the super-rich and their capture of the city. This disconnection of fates has been arbitrated by its less wealthy elites, through their efforts in the political and corporate domains. We must remember how the commitment to public cuts was forged in a class politics born of a machine hardwired to protect the position of the corporate, political and capitalist elites. But perhaps what is new today is that even those managing this system sense that its limits may have been reached, that its injustices and excesses have become too much, or perhaps too obvious. The decision in July 2019 to deny planning permission for the proposed ‘Tulip’ viewing platform in the City – funded by a Brazilian billionaire and designed by a super-rich architect with an ‘educational’ agenda – was a sign perhaps that such white elephant projects will at least be challenged when they lack any genuine social benefit.

Social need has been put into the shade by the easy wins of free-floating global capital and the billions of laundered cash flowing through real estate and finance. That shade has been amply provided by the many tower blocks built for wealthy investors. The needs of the city’s poor, most of them in working households, appear to be further eclipsed and side-lined by the statistics highlighting service sector growth, the contribution of finance to the economy, and the rocketing redevelopment of the city – the stuff that has to be kept going because it is good for us all! This impression of good health is a story enthusiastically narrated by those among the political class favoured by capital and the wealthy.

Many may feel that this book’s central argument is overplayed and unjustified. In what possible sense could this cascade of wealth into the city have a contaminating effect on its life? What kind of naïve, envious position is being privileged in an account that questions the contribution of the rich? What would we do without these great wealth creators if they all upped and went somewhere else? The time-honoured claim made for established wealth and corporate life in general is that their activities and investments have the effect of ‘lifting all boats’. But this core proposition, indeed this ruling set of ideas, today appears increasingly unsustainable and is everywhere being eroded.

According to Oxfam’s annual survey, in 2018 the number of billionaires who owned as much as the poorest half of humanity stood at twenty-six – enough to fill little more than a third of the seats on a new London Routemaster bus. Yet the system that produces such evident excesses has its massed ranks of defenders. While the world rushes headlong towards numerous precipices, whether they be political, ecological, economic or social, its fundamental structures continue to create subsidiary winners who become the cheerleaders of capital and capitalism. Today the hollowness of this vision is everywhere being pointed out and denounced. Increasingly, the exclusive and excluding landscape of new and unaffordable homes is generating a simmering rage, a substrate of feeling throughout the city whose consequences we do not yet know.

What does a city run for the rich mean for everyone else? Certainly its effects and costs can be calibrated in social terms: in the shifting, unrecognisable and often alienating urban landscape; in the creeping privatisation of public space; in the subtle messaging and forms of control relayed through the city’s media and politics. But what does it say about the influence and power of money, and about capitalism itself, that it can create a city that appears to be both flourishing and floundering at the same time? The heart of this system appears to beat ever faster, running the risk of overload or systemic breakdown. Yet if another crash is around the corner, we know that it will not be footloose capital or the wealthy who will suffer.

The global financial crisis of 2007–8 marked the beginning of a new level of indulgence towards the wealthy, with tax cuts, quantitative easing, asset price inflation and a reduction of interest rates among the measures taken. Since that moment there has been a long boom in property generated by the effects of the crisis, motivating the wealthy to pour money into those cities that appeared safe bets in an unstable world. The alpha city is today more a place for money and the moneyed than it is for living in, and this has had significant consequences. The most important result perhaps lies in our losing sight of what cities are for – as places where people live and thrive, where the city’s economy is set up to serve its residents’ needs, rather than being a magical playground for the super-rich in the hope that a few others may be enriched as a result.