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FINANCE

Book World: Review of I.O.U. by John Lanchester

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Sunday, January 17, 2010

I.O.U.

Why Everyone Owes Everyone and No One Can Pay

This Story

By John Lanchester

Simon & Schuster. 260 pp. $25

British journalist and novelist John Lanchester's gift is to see the big picture in new ways. Much of our current plight, he argues, comes from lack of competition in the broadest possible sense. The end of the Cold War left the United States, in his view, with no countervailing ideological force to worry about. "One of the most vivid consequences was the abolition of the ban on torture, which had previously been a defining characteristic of the democratic world's self-definition." But with no conflicting world view to which the United States needed to feel superior, a big reason not to torture was swept off the board. "The same goes for the way in which the financial sector was allowed to run out of control," Lanchester adds. With capitalism "unchallenged as the world's dominant political-economic system . . . it could have been predicted that the financial sector . . . was in a position to reward itself with a disproportionate piece of the economic pie. There was no global antagonist to point at and jeer at the rise in the number and size of the fat cats; there was no embarrassment about allowing the rich to get so much richer so very quickly."

As for the bust-cum-bailout syndrome that has afflicted the U.S. and other economies, Lanchester sums it up in a phrase that could almost be a poetic couplet: "a huge, unregulated boom in which almost all the upside went directly into private hands, followed by a gigantic bust in which the losses were socialized."

-- Dennis Drabelle drabelled@washpost.com



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