Читать книгу Alpha City - Rowland Atkinson - Страница 8
ОглавлениеLondon is a world city, one of a select few that command and control the world economy. In fact, it is not simply one of the world cities, but the world city, the paramount member of a group producing and receiving vast fortunes within a global economy run increasingly for finance. Simply put, London is the alpha city.
The alpha city presents itself as the domineering, swaggering and altogether ruder sibling of those cities lower down the global hierarchy. Like a posturing man in a meeting, it jostles to maintain its pre-eminent place, as the one to whom all others should offer respect. A language of entitlement flows from this status. It is found in the effusive adjectives of the brochures describing the city’s most select trophy homes and luxury high-rise apartment blocks. There can only be one One Hyde Park, 1 Kensington Road, 77 Mayfair, Clarges Mayfair or Embassy Gardens among the myriad unique residences and palatial homes dotted around the city’s West End and beyond. As in the market for rare art or wine, appeals to the unique, to luxury and to marks of good taste are found here in abundance.
This is a city increasingly for money, not for people. It is here that capital, capitalism and the capitalist elite come together. In doing so, these combined forces have torn up the mission statement of the city as a place for all. Now, perhaps more than ever before, it is a playground for the wealthy and a hothouse in which to grow capital under hydroponic conditions, carefully tended by the city’s politicians and financial institutions.
One Hyde Park
The argument of this book is that for all the spectacle and beauty of a city created by expanding personal fortunes, such decorations are distractions from the more vicious and discriminating impacts of wealth on the life of the metropolis. Beyond the facades of the luxury homes, the smoked-glass nightclub entrances and the comfortable private clubs, lies a city in the process of being hollowed out.
This city above all others appears to the wealthy like a beacon in a storm, a luxurious harbour in which to weigh anchor in a restless and troublesome world. London sits at the top of those rankings showing where the world’s wealthy, political and social elites reside. These groups of the super-rich are distributed across a constellation of fine residences in select quarters of the city and beyond, in comfortable suburbs and small satellite towns – untroubled by the split fortunes of a city in which vast wealth co-exists with significant hardship and social stress. It is to London that so many of the world’s ultra-wealthy come to live, invest or indeed hide. The city’s abundant luxury homes and quiet districts offer them safe spaces insulated from the intrusions of unsightly poverty or anything else one might find disagreeable about city living.
Whether measured in terms of its wealth, GDP, cultural offering or liveability, London can confidently lay claim to being the alpha city. Its bright lights only cast other cities into the shadows. The dusty cloth of the establishment, old boy’s networks and gentlemen’s clubs has been re-cut and tailored to suit a new power elite formed out of a mash-up of old and new money, political and corporate power, and personal or dynastic wealth. The international rich come to the city in search of prime assets to buy and sell, to take advantage of house prices cheapened by strong foreign currencies, to escape the insecurities or dangers presented by their own governments, or to offload bundles of criminally sourced cash, laundered through London’s real estate. Some even come to the city to live.
Compared even to New York or Tokyo, the two other truly ‘world’ cities, London has the largest number of wealthy people per head of population. It is the epicentre of the world’s finance markets. It is also an elite cultural hub, offering enviable open streetscapes, swathes of green space, a reputation for safety and low levels of state intrusion. Within what is referred to as the world urban system, London is the most brilliant celestial body. But, we should remember, even stars die.
‘Alpha’ denotes both the beginning and the most powerful member of a group. London as an alpha territory is sufficiently large to generate its own gravitational field, a force that pulls in much of the world’s wealth and many of its most wealthy individuals. But it is also a kind of social centrifuge that increasingly, to paraphrase Shelley, spits out those damaged or unhoused by its workings – the poor and the unwanted. All of this goes on under a regime of interests operated effectively by the city’s elite of politicians, governors and financial institutions. This group defends markets and rising inequality while courting the wealthy at a time of enormous hardship for many.
All of this raises the question of how we might begin to understand the city and what it stands for when the rich sip £8,000 gold-infused cocktails while swathes of public housing are demolished and those on low incomes are evicted from tenancies to the city’s hinterlands. Such uneasy comparisons might be defended as simply representing instances of diversity in a city that has always offered massive contrasts. In reality, these and many other examples of exclusion and poverty are connected to the fortunes and positions of the wealthy by deep, subterranean flows of capital, political ideology and social networks. Despite being invisible to the naked eye, these underlying forces drive the stellar gains of the wealthy, seduce and enroll those who come to rely on their spending, and assist the development of programmes that further exclude those on low incomes. In one sense London is shared, but its various prizes and dividends are most definitely not.
London’s position as the heartland of capital is revealed in the newspapers every day, whether the reports are about traffic jams of supercars on Regent Street, the hundreds of high-rise riverside apartments reserved for the wealthy, or the exchange of football teams between one oligarch and another or the parties at which politicians, media moguls and artists mix. The stories are familiar, but how should we understand what is going on, who benefits, and the broader impacts of alpha city status?
In this book I want to show that there are significant and damaging consequences that come from the city’s increasing devotion to capital. It is critical that we grasp the extent to which massive wealth, produced in a global economy that seems to generate new fortunes each day, has real and grounded impacts on the everyday life of the city. Capitalism delivers incentives for a relatively small group to rework the operations of the city. These tweaks bring further benefits to the wealthy and their adjuncts while casting adrift those in the wider community. Whether the result is a new crisis or a resurgent boom, the wealthiest continue to reap massive rewards while defending the workings of the city as the best there is to offer.
Back street boy racers
It is difficult to understate the ability of the wealthy to influence and reshape the world around them, given the power of money. Yet, in both more subtle and forceful ways, money also has the capacity to ensnare and colonise the minds and values of all those who benefit from it – politicians, developers, planners, corporate lawyers and financiers, but also interior decorators, club and restaurant owners, real estate agents, hotel owners, personal service providers and so on. This is what some describe as the ideological function of money: it gives one the power to buy stuff, but its deeper influence lies in its power to conscript the hearts and minds of many to the domination of markets and the demands of capital.
Money is a force that shapes our mentalities and the models we use to understand how the world around us works. When today’s global wealth surveys display images of green shoots and graphs with sharply rising lines, it is easy to forget that the financial crisis of 2008 was considered to present a near existential threat to the capitalist system. Instead, that threat was diverted, towards the vulnerable through public cuts and austerity programmes. The arrogance that so often goes with wealth and power appears as a particular insult to those forced to endure the government-sponsored collapse of public services and spaces.
Many of these issues are delicately interwoven, but a lot of the changes brought to the city by the rich and powerful are quite blatant. As we will see in this book, much of the form and function of London has been modified by large houses, skyscrapers and megaprojects, while the needs of the rich for luxury and personal security have transformed the look and feel of the city as their homes become fortified and their streets secede from the city’s public realm. This gathering point of super-affluence, a great wen of wealth, grants visibility and superficial legitimacy to the insanely unjust reward system that the global economy has generated and to the kind of city for the few that this brings with it. As will already be clear, the mark of the alpha city should be considered less a badge of honour and more a source of concern. But let us start to dig a little deeper.
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The world’s ‘top’ cities have got where they are less as a result of hard work and more because of the accidents of history and locational advantage. Despite the myths pinned to effort, entrepreneurial brilliance, strategic know-how and various other unrivalled qualities, the reality is that many of the features supposedly unique to the world cities are of course also offered by others. Nevertheless, a confluence of historical, cultural and colonial factors have undoubtedly contributed to London’s near-alchemical success. These factors include its fortunate position at the midpoint of global longitudinal time zones (Greenwich Mean Time), and a national history of imperial expansion that generated enormous wealth, bolstered more recently by its dominance of the global finance economy for at least three decades, alongside Tokyo and New York.
London is an enormous honeypot of personal wealth: in 2017 it was estimated that its residents held around $2.7trn.1 This figure does not include the city’s richer hinterlands that have long accommodated wealthy county and ‘City’ types who wish to live within reach of the fumes of finance in the capital. Today, many of these commuter locations also attract the interest of extremely wealthy international buyers. Small towns like Windsor, Ascot, Virginia Water, Leatherhead, Weybridge, Henley, Marlow and Bray form part of a long-standing island formation, environs whose established wealthy are joined, as in many parts of London, by the newly minted global rich.
There has long been the sense that London and the South East are effectively another country, but recent estimates show them breaking off from the rest of the UK even more emphatically.2 One mark of this transition is the seemingly improbable fact that the total value of homes in Elmbridge – a small, very affluent town to the west of London with a population of 130,000 – is now greater than that of the city of Glasgow. Likewise it is hard to comprehend that the top ten London boroughs by property wealth are now worth more than North Wales, Northern Ireland and the whole of Scotland put together.3 This regional rump of wealth, a ‘fat ass’ of property riches and the presence of the rich themselves,4 is an attractive prospect for the world’s wealthy who have increasingly wanted a piece of it.
London is a rich city however you measure it, and long has it been so. But one of the thornier debates regarding its advantages rests on the degree to which its wealth really contributes to the fortunes of the nation more generally.5 Much of this wealth comes through the ownership of property, as well as investment portfolios from which incomes can be extracted and wealth further supplemented – the very definition of what might be considered a truly capitalist class. Part of this story of split fortunes – between those who live from the proceeds of their capital and the rest – was revealed in the 2015 World Wealth Report which showed that around one in twenty of London’s population was a ‘high net worth individual’ (a dollar millionaire or with around £660,000 in non-property wealth), representing nearly half (44 per cent) of this group nationally (840,000).
Many of London’s rich don’t consider themselves to be particularly well-off in a city in which the average cost of a terraced home is now just shy of half a million pounds.6 Yet the city also boasts 431,000 property millionaires, that is, households living in homes worth a million pounds or more (roughly one in twenty people). Some will remember the comment from the model Myleene Klass that two million pounds wouldn’t buy a garage (a figure mooted at the time as the basis of an annual property tax), but many might suggest that she either had particularly high standards for car storage, or else was among the many now somewhat detached from the housing needs of the average Londoner.
By 2018 the amassed fortunes of the roughly 18.1 million global super-wealthy topped $70 trillion dollars – a lot of wealth for a tiny fraction of the world’s roughly 7 billion population.7 In 2008, at the outset of the austerity decade, there were only 11 million in this group, highlighting the fact that the public cuts that have hit so many so hard are part of a system that has continued to enrich the wealthy.8 Indeed, as many now argue, the austerity project can be linked to a political and economic machine devoted to protecting and expanding that wealth. The fortunes of the world’s rich are large enough to wipe out the third world debt of $2.4trn twenty-five times,9 clear the US and UK budget deficits,10 and perhaps still have enough left over to bid on a few cases of nineteenth-century Bordeaux at Sotheby’s.
If there are nearly half a million millionaires in London, then who are the city’s real wealth elite? They constitute roughly the top 1 per cent of wealth (rather than income) holders in the city, around 88,000 in a population of 8.8 million. But this measure belies the vast variations of wealth even within this group – the tiniest cluster of the top 0.001 per cent are considerably wealthier than the remainder. Many in London possess wealth that has been generated within the UK, and which may have been transferred across generations. But many of its most monied are what used to be called the nouveau riche; they possess wealth that was not inherited and that, in the case of many of the richest, has been generated as a result of regional and global economic and social instability. This instability has seen changes in national leadership, corporate ownership and the extraction of value through mechanisms that have created new and dramatic clusters of wealth, particularly among those benefiting from the shift to capitalism in the former Soviet Union and from financial and economic liberalisation in Latin America. Alongside these are the resource-based wealthy of the Gulf states as well as the new rich of East Asia and, to a lesser extent, Africa.
The billionaires, despite the inevitable attention they receive, are really only the tip of the iceberg. If we want to understand the wealthy and their impact on the city we need to go much further. To get the full picture of how London works for the rich and for capital we must include not only the other tiers and categories of the super-rich but also, critically, those who court, support, laud and defend them. Real wealth is often defined in the various rich lists in relation to three bands: first, the High Net Worth Individuals (HNWIs) who hold between $1m and $5m in investable wealth, described somewhat cutely by Capgemini as the ‘millionaires next door’; then there are those worth between $5m and $30m (known as the mid-tier millionaires); finally there is the rather wide band of those who have $30m or more, known as Ultra High Net Worth Individuals (UHNWIs). There are around 353,000 HNWIs and 4,944 UHNWIs, the latter forms only 0.05 per cent of London’s population (or just 1 in 1,785 people in the city).11 Of those classified as multi-millionaires, that is those with £6.6m ($10m) or more, there are 12,000 in London.12 Many of the best-rewarded company directors (median income £3.9m13), as well as the wealthiest of politicians (such as Jeremy Hunt, who sold his company Hotcourses for £30m), pale in comparison with these upper echelons of the city’s rich.
Roughly 22 per cent of the global super-rich (UHNWIs measured here as those with $50m+) live in Europe. The majority reside in the US (51 per cent) and Asia-Pacific regions.14 In the UK we can find roughly a hundred billionaires, with their combined wealth of $253bn, of whom around 95 live in London itself according to the Sunday Times rich list, more than in any other city in the world. The city’s rich are located mostly in the central districts of Mayfair, Belgravia and Knightsbridge (the core of the super-prime property market), the city’s northern suburbs and outside it to the west.15 London has also become increasingly popular over the past decade as a destination for the world’s rich: 2018 saw the largest single-year influx of HNWI ‘golden passport’ seekers (over 114,000) in the past ten years looking to use investment in the UK as a means of accessing citizenship.
The rich are not islands, even when they live on them – wealth is never simply self-made, nor does it make one self-sufficient. They are dependent on a range of bespoke private services, advisers and institutions as well as the publicly planned, designed and managed city around them. They are supported by the property buyers and agents required to source the right home, family offices to manage accounts and personal affairs, the lifestyle managers needed to locate tickets, contacts or access to key events, and numerous financial service providers who offer advice and products. All this can be conceived of as nothing less than a life-support system firmly located in the alpha city and without which the wealthy would soon struggle, like a luxury yacht in the doldrums.
The lifestyle and service needs of the rich create a distinctive geography driven in large part by their seeking maximally advantageous locations for their homes (whether first, second, third or fifth). Choice of location is determined by the proximity of workplaces (if they are so burdened), financial service providers, private schools (such as the French school in Kensington or the American schools to the west of the city) and leisure and cultural infrastructure. Neighbourhood and home life is set alongside the need for additional rooms for visitors, and the use of one or more of the seventy-five 5-star hotels (the most in any single city – New York has fifty-nine, Dubai sixty-one) and the seventy Michelin-starred restaurants in the city. For transport, the twenty-five luxury marque car dealerships are essential; for leisure, the opera houses, theatres and public art galleries (of which two, the Saatchi and Newport Street, have recently been built with private money, while a further four have seen extensions or wings added thanks to the largesse of the rich). There are more than 250 banks in London representing 26 countries, many offer bespoke services for the wealthy, even among many of the larger banks as well as by so-called family offices that run the financial and practical affairs of the richest. London also has four universities ranked in the world’s top forty (New York has three) for educating offspring.16
Some of the most spectacular changes generated by the rich and their investments can be seen in the city’s many new buildings, the product of perhaps the most dramatic construction programme undertaken in the city in the post-war period.
The built environment, in the shape of new housing developments and a transformed skyline, expresses in solid forms of steel and glass the flows of capital beneath them, indexing the rising fortunes of the wealthy themselves. The many and massive high-rise constructions in particular reshape the city’s ambience, infusing it with the aura of money and signifying the acquisition of the city by capital. This shining new built environment offers a glimpse of the deeper economic and political forces reshaping the city, creating new ranks of beneficiaries and changing the look, feel and function of London for everyone who lives in, works in or visits it.
One way to appreciate the scale of the changes is to focus on the city’s new high-rise skyline, a massive alteration to the built fabric of a city that, like its European counterparts, had always been characteristically low-rise. This is still an unfamiliar landscape to many – the average age of London’s skyscrapers (buildings taller than 100m) is only fourteen years.17 Even by 1950 New York could lay claim to 140 such buildings, and Chicago twenty-nine: high-rise buildings signified the technological and economic advances of the US, which itself epitomised the meaning of urban life in the twentieth century. London had to wait another decade before it saw a building that exceeded the height of St Paul’s Cathedral (111m) – Pimlico’s Millbank Tower, built in 1963 and soon to be converted into a 5-star hotel and luxury apartments by one of the city’s billionaires, who was given planning permission, with no requirement for affordable housing, by the then mayor, Boris Johnson. The first London skyscraper to exceed 150 metres was the NatWest Tower, built in 1980 in the City of London, just prior to its ‘big bang’ deregulation and expansion in 1986. In fact, only thirty-three buildings higher than 100 metres were built in London as a whole between 1960 and 2008, or roughly a skyscraper a year.
It gives some idea of the step change in the city’s economy, and its links to real estate, to know that in only the past decade (the alpha years of 2008–18) a further forty-four towers have been completed. The city has arguably been a late developer, but much more is to come, as we will soon see. London’s dramatic new skyline divides opinion between those who feel it speaks of a new confidence and see it as a mark of global success, and the many others who argue that the rampant reach skyward has destroyed the character of a once distinctive and beloved city.
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London’s geographical centre does not lie at Buckingham Palace or the Houses of Parliament – symbols of the city’s regal and democratic power respectively. Any milestone or sign showing the distance to London terminates at the equestrian statue of the last absolute royal, Charles I, in Trafalgar Square. If we were to seek the city’s political heart we might look to Westminster, the traditional home of Parliament and the various ministries clustered along Whitehall, and to 10 Downing Street. We might also want to bring in the city’s thirty-two local governments and their role in planning and administering the capital, as well as the relatively new role of the mollusc-like City Hall, designed by a super-wealthy architect, and home of the city’s mayors since 2000. These places symbolise the democratic sources of regulation and management of the city, but are they the locus of its power today, or should we look elsewhere to understand what makes the modern capital tick?
In order to understand the ways in which political and democratic institutions are connected to the interests of capital, we might begin our search in the discreet offices of the hedge funds located in former merchant’s homes in Mayfair, in the City of London certainly, and perhaps in the Bank of England. Yet, in many ways, a search for the city’s economic, social or political power base is doomed to yield empty chairs in spacious rooms – power is a more elusive and deeper capacity than any particular building or institution might suggest. As the city changes and new institutions, wealthy individuals and those binding these sites and key players together emerge, a contemporary search for the centre of the city must recognise the power that emerges from the laws, movements and interests of capital and the few winners it has produced. Here we may be reminded of the claim to the heart of the city made by the Center Point tower, built in 1966, longstanding emblem of a previous housing crisis and now of the alpha city’s resurgence as it is converted into super-luxury flats.
Seeking the heart of a city that runs in ever greater alignment with the interests of wealth and the wealthy, we might look to key buildings such as the Shard, within spitting distance of City Hall and emblematic of the key forces shaping the city. The ninety-five-storey, roughly 1,000-feet high building, a mix of offices, hotels and residences (most of them still empty years after completion), was bankrolled by Qatari sovereign wealth fund monies. Like many others in central London, this was a building constructed by new international wealth searching for a place to grow.
Similar funding bankrolled the Candy Brothers’ One Hyde Park development (designed by Richard Rogers) overlooking the Harvey Nichols department store in Knightsbridge. Such buildings exemplify the sway of capital and its imprint on the city today. Very little of this architecture offers a sense of public contribution or new spaces for circulation and social life, unless one counts the sky garden of the Walkie Talkie building, 20 Fenchurch St, where this concession to provide a public space had to be wrested from the developer. The 11th commandment underwriting this cityscape is that if you have, you shall receive much more.
A contender to replace the Charles I statue as the central point of the city today might be the sculpture that stands beside the ultra-prime residences at One Hyde Park. Walking the canopied length of the road to the side of this building one will find the five curious figures of Jacob Epstein’s work The Rush of Green. Completed in 1959, it seems unlikely that its title was intended to refer to the future sea of cash that would come sloshing into what was then a city arguably in economic and demographic decline. There they stand, a mother, father, child and dog, figures seemingly distended in their attempt to evade the god Pan who chases them. With a little poetic licence we might suggest that they are running away from the antiseptic emptiness of the new apartments at One Hyde Park. Yet the rush of cash and rivers of gold have since flowed like a biblical deluge, making any such escape impossible.
If we continue to walk along nearby Park Lane, we might spot a low-loader truck delivering Porsches to one of the handful of luxury nearby dealerships, their young male staff shuttling them to waiting clients. Sit in nearby Mayfair itself for a while and you will likely see well-groomed women exiting from beauticians in perfect synchrony with the arrival of a powerful chauffeur-driven car. With even fairly modest resources one can access a small part of this world by buying a coffee in some of the most famous hotels in the world: the Dorchester, Claridge’s (for the old school), Jumeirah Carlton (for the Arabs) or Bulgari (for the quite simply loaded). Old photographs in the lobby of the Bulgari portray a charming and grounded class of artisan leather-workers and fashionable strollers in charmingly decaying Italian urban centres. Such images appear as the fantasised retreats nostalgically hankered for by the wealthy – quaint, peasant-filled settings that money power has often since destroyed. The reality here, as in the city more widely, is that such luxury is often built upon the destruction of the authentic places and ways of life around it.
Knightsbridge forms the focal point of the global investor’s imagination. The overall effect at street level, belying the luxury and calm within, is the sense that the intersection outside Harrods is perhaps less the heart of a former empire than the central conduit along which capital flows into the city – a place with no allegiance to anything but money, untethered from social obligation or affiliation to place. If you come from China, the Middle East or Russia, and lack direct knowledge about where best to live in London, you can come to rest in these environs, safe in the knowledge that the extended larder and dressing rooms of Harrods and Harvey Nichols are but a step away among a vast array of personal service providers, restaurants, clubs and comfortable neighbourhoods.
For sale (Harrods)
Walk through some of the back streets of Kensington to Chelsea and the growing honeycomb of below-street excavations is indicated by elaborate apparatuses of skips, conveyer belts and impossibly noisy jackhammering, a source of enormous resentment on the part of those who see themselves as London’s true residents and guardians, its long-term wealthy. If this area is the heart of the city, it feels more like a device to enable wealthy bodies and their cash to rest, rather than a living, breathing social space.
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Cities are key components of the global market economy and of the capitalist world system of accumulation. They are centres for the creation, processing and storage of wealth, but they are also places in which value that has been extracted elsewhere is then invested and circulated. This is why the City, as the financial heart of London, has become so important to its apparent success. Cities with significant financial sectors are the key nodes in a world economy that is itself increasingly financialised as more and more aspects of social, economic and political life are dictated to by the finance economy with its proliferation of financial instruments and investments.
The intensity of the flow of capital, both to the City and into London real estate, tells us much about the operation of this system and the state of the world around us. It also says something about the ability of particular urban centres to become major condensers of wealth and points of confluence for the wealthy themselves and their investments. Such cities are sticky places that hold onto these flows through cultural, architectural, historical and social qualities that help them attract business and maintain their economic dominance. Economic theory might suggest that the functions of the City could be fulfilled equally well in a field in Northumberland or on a large rig built in the middle of the Atlantic. In reality, the reason the rich themselves choose to live and invest in particular places like London, New York or Tokyo lies in their need for economic networks as well as the satisfactions to be derived from social connections, the cultural patina of tradition, and the ambience generated by fine streets and residences.
The economy and the city are not run according to some master plan. The city is formed of a highly complex set of interactions within and between politics and commerce and their various captains. The perceived magic of the markets lies in the idea that even without some central system of allocation, the city as a whole works to bring goods and services to companies and consumers with little or no fuss. In reality, such a system is also deeply implicated in political processes that cast these alchemical operations as disembedded from social and civic life, even when it is clear that the markets are closely monitored and managed by governments working in concert with leading economic actors and institutions. The power of markets is ideological as well as economic – their portrayal as open, unfettered and efficient methods of resource allocation remains a deeply held principle among many in the political and commercial worlds. Nevertheless, apparently beneficial market systems have been strongly associated with deepening inequality and the massive enrichment of particular individuals even as they are lauded for creating wealth.
For several decades the allure of the market has inveigled its way into forms of political thinking that have become aligned with the needs of business and finance. This becomes problematic when the background assumptions of pro-market systems become deeply embedded in political and economic life to the detriment of social needs and functions. In short, markets come first and social essentials, like housing, education and health, become secondary issues, instead of being understood as part of a system in which the needs of citizens are paramount. Market principles have become so deeply entrenched that the functionaries of the operating systems underpinning capitalism – government ministers, local authorities, planning departments, chambers of commerce, business leaders and financiers – all begin to sing from the same hymn sheet.
Even after the financial crisis, market-based economic models and ideas continued to dominate discussions, frequently without reference to the ultimate rationale for economic life itself – to address human need. Much of this lopsided thinking can be linked to the way such ideas were connected to the ability of markets to generate enormous windfalls for political honchos, captains of the financial system and dealers in real estate. The danger of these beliefs is that they enabled a massive expansion of wealth among a few while doing little to benefit the city’s residents as a whole.
Conspiracies are not required to bring to life a working model of these interests, systems, ideas and networks. We can call the effect of these processes ‘city capture’. This notion may help us think through what is happening to many cities globally, where the demands of capital are being met with open arms and minds by local elites keen to attract and benefit from the money of the wealthy. The term plutocracy literally means ‘money power’, often conceived in terms of government by the wealthy or the sense that government itself is run at the whims and instruction of the rich. In a plutocratic city like London, this makes local politicians, builders, decorators, butlers and estate agents, among many others, the mediators and facilitators of a process in which the rich themselves appear to have significant power.
That power does not reside solely in the overt actions of plutocrats lobbying government and politicians directly; there is an interleaving of interests and assumptions about what is best for the city that runs much deeper. This makes power, as the capacity to exert some kind of force, something more diffuse and complex than the traditional idea of a power elite or establishment tends to convey. The availability of many tens of thousands of the global rich presents itself as a significant business opportunity. Politics becomes the very stuff of this business. Similarly, the social mission statement of the city becomes subtly realigned with, for example, the idea of realising the value of any and all ‘underused’ assets as the city intensifies its investments (housing associations selling homes, local authorities selling playing fields, care homes, housing estates and so on).
London’s contemporary power bloc consists of many key individuals, but these people are almost incidental to the exercise of power. It is the roles they perform and the resources they hold that bring power to life. There is, however, a sense that the traditional establishment has undergone a change, not so much in terms of its personnel, but in the reconfiguration of its underlying operating system. The old political and economic order is not dead, but its fabric has been rewoven to include the very rich and their agents acting, lobbying and building on their behalf.
The city’s power bloc is thus a complex amalgam of forces, money flows and wealth. This is not to suggest some kind of fully integrated, coherent network of individuals and institutions. Wealth is not just about a coterie or an elite, it is also about an idea or a set of values to which many in the city and beyond now subscribe. These values are transmitted through training in neoclassical economics and underwritten by the tenets of financial journalism and the discourse of politicians who are themselves often the beneficiaries of dynastic or new wealth to say nothing of those who aspire to be wealthy themselves. The result is the capture of the city by money and those whose interests are served by it.
City capture is a process that involves not so much conflict and strategic gain as an apparently voluntary acceptance and submission to the ruling logics of capital and its expansion.18 Making lots of money is understood as a positive sign, and good things come to those who can attract more money and inward investment. This means that those with money can colonise, profit from and subsequently dictate how the city and its various resources are to be used. This can be seen in the way planning authorities in the city have come to identify private developers as critical to the remaking of many districts, while presiding over the demolition and loss of desperately needed public housing. This capture of place has been achieved without battle or bloodshed, if not without some degree of localised protest and significant social pain.
The capacity of market logic to colonise the minds of those occupying positions of power is an important aspect of what has been termed cognitive capture – the influence over government of key economic ideas and principles of the importance of markets and the high value to be placed on financial institutions.19 In the present context this means that political institutions become preoccupied with the idea that finance capital is central to economic vitality and are thus supportive of whatever finance needs in order to flourish. These assumptions run so deeply that they often remain unquestioned. The power of Wall Street and the City of London arguably resides not just in their daily business activity but also in their ability to perpetuate deep assumptions about what is good for all.
These influences and processes are periodically exemplified by the comments of key politicians, keen to show they are not antagonistic to the interests of capital and its primary beneficiaries, the rich. Whether it be the ‘intensely relaxed’ attitude towards the wealthy famously expressed by Peter Mandelson, or the lauding of the rich as ‘tax heroes’ by the former London mayor, and now prime minister, Boris Johnson, this open and welcoming environment gives those holding fortunes significant power. Yet their influence in reality works its magic in indistinct ways. Billionaires and UHNWIs do not generally make direct demands on political parties, though of course we are increasingly learning more about the role of the rich and international wealthy in political funding and lobbying. More often politicians, seeking investment in their town or city, simply act in tandem with the needs of capital by second-guessing the agendas of the super-rich, because, in essence, they identify these with their own needs.
Of course, plutocracies do sometimes operate by way of large bribes or expensive and laborious lobbying (the influence on electoral politics of hedge fund managers and rich individuals being but one example), but at the city level these processes become more opaque and complex, even though the results are everywhere in evidence around us. These include proposals for costly projects like the unbuilt Garden Bridge, the undermining of public planning rules by developers seeking to avoid having to build affordable housing, the incorporation of city councillors into the property machine via hospitality and gifts, the drive by developers to build almost exclusively for the world’s wealthy and for investors, the evident lack of capacity to police the vast flows of laundered money in the built environment, the demolition of viable and essential public housing and the banishment of tenants beyond the city.
None of these things happened because some billionaire picked up the phone and called the mayor. They happened because it became acceptable and was deemed necessary to think that these processes represented the most efficient and best use of the city in order to ensure its maximal profitability. This is why the story presented here cannot be fully understood simply through the traditional tropes of old boy’s networks, private clubs or meetings over liquid lunches in the City.
A number of key changes can be identified that undergird these shifts in the operation of the city. Certainly the city’s elite and its networks have, over time, become increasingly efficient at recruiting those whose primary allegiance is to making money, rather than to notions of class or indeed nation. These changes have altered the formation of existing elites while building new and more complex ones. Constellations of interests, including the City and its various institutions, the government and cabinet, underwrite systems of regulation and rules of trade that facilitate rounds of accumulation by the affluent. The game of politics and corporate life has changed significantly during the neoliberal era, with self-serving, short-termist and reckless behaviour increasingly evident.20 Politicians have arguably changed in their role and position in relation to the (newly) wealthy. They have become what some now describe as a kind of butler class – functionaries who see their role as one of subordination to the wealthy, supporting, guiding and pampering them.
This is the way of urban life in a plutocratic city in which money power is courted and channelled wherever possible by central and local government officials, who are either themselves signatories to the mantra of footloose capital and trickle-down economics or who believe that they have little agency over such forces. Critically, the results impact not only on the lives of the elites; they also have the effect of underwriting arguments made for dislodging the poor or for ignoring middle-income groups who are seen as less valuable to the urban economy. There is a real savagery to these processes, even if it is frequently cloaked in a language of opportunity or described in terms of new horizons of international investment. Meanwhile the policy-making elite are able to live sheltered from the consequences of their own decisions, in leafy districts, comfortable clubs and on exciting leisure circuits, uninterrupted by envious workers or lazy benefit recipients.
Money has real power – it can generate a new skyline, subvert planning principles and rules, purchase apparently unpurchaseable club memberships and secure privileged access to policy-makers and governments or to important power networks that are less visible. Money doesn’t force its way in; it slides into the scene and is usually welcomed. Money power is the binding and guiding logic of the city, dictating, influencing and shaping the parameters of what is possible. The overall effect has been that London, a city that has long worked for capital through its financial services sector, increasingly also works for the rich.
