The Daily Novel

Up early to drive my wife to Axminster to catch the London train. Blinding September sunshine as hot as Provence and it is only 9 AM in the morning. Did my first shop at the Tesco store there. Snatched a special offer - a computer keyboard knocked down to two pounds. Be perfect for using with my laptop in London on the spare mahogany computer table. Should help me to stave off repititive strain injury for a few years, however much I blog.

It is only ten minutes drive so I am drinking my coffee on the terrace at Charmouth before 10 AM. Feeling the heat of the sun seeping through my flesh and bones. Decide I am not going to waste the day on the telephone to BT, who have still failed to connect my London number. It gives the message, ‘You have dialled an incorrect number”. In other words it is my fault not BT’s! Perhaps I should just leave them to it. And post up the figures on my blog. And change the title to How many days does it take to connect a telephone. Now 48. Maybe when the total gets to 100 days I can persuade some MP to ask a question in Parliament.

So today I shall enjoy myself. But the morning newspapers are full of the panic arising from the Bank of England’s bale out of the Northern Rock Building Society. Apparently depositors have withdrawn three billion pounds in three days, which is more than the total assets of many building societies. The shares of another aggressive mortgage lender, Alliance and Leicester, fell by one third last night, though the management insists that it in my trouble at all and has not sought the help of the Bank of England.

The government insists that there is no need to panic but has taken the quite unprecedented step of guaranteeing the deposits of Northern Rock and any other bank which falls into trouble. Clearly Alastair Darling knows the history the Great Crash on Wall Street in 1929 and how it started a worldwide slump which was still causing unemployment and poverty for millions throughout the 1930s. The Republican administration of President Hoover had made the mistake of increasing the panic by tightening the money supply. The reversal did not begin until the Democratic regime of Franklin Roosevelt, whose New Deal pumped in Government money to rescue world capitalism, and provided work and earnings for the unemployed.

But the experts are polarised as to the severity of the present crisis. The optimists note that the world economy of the 1930s was dominated by western capitalism, which caught a severe cold when Wall Street sneezed. Today’s economy is much more diverse. The vast and rapidly growing Chinese economy, whose ideology is an inscrutable mixture of the thoughts and Chairman Mao and Karl Marx and aggressive modern high tech capitalism.

Gordon Brown is somewhat similar. His roots are deep in the British Labour Party, with its blend of socialism with Christianity. But he is eager to work together with big business and finds much more in common with the convictions of Margaret Thatcher, than does David Cameron, the current leader of the Conservative Party.

The pessimistic experts are not at all sure he has got it right. What if the Government action does not stem the panic the Government is compelled to deliver on its promise, and pump several billions into the economy? The figures are big enough to cause an even greater panic and start people remembering the run on the pound which has plagued so many Labour administrations in recent history, including those of Clement Attlee and Harold Wilson.

The problem is that history never repeats itself exactly. I think that the pessimists are right to be worried about mortgage lending. Mortgages as high as five times earnings have become common. And some people have been encouraged to borrow more than the current value of their houses, based on the expectation that British house prices will go on rising, as they have done so spectacularly for most of the last fifty years.

I am impressed by the arguments of the pessimists. House prices had already started to fall before the Northern Rock hiatus. A mild recession for a year or two is highly probable. And it is not going to be easy for the government to stop it developing into something far worse.

Thinking about the economy led me into thinking of the big companies who have just as much influence upon our lives as do governments.

(Pause to walk out on to terrace and have another injection from the sun. There is just enough wind to stir the leaves of the palm tree but the sea is placid, the waves gently lapping the beach. Two walkers are strolling up Strongborough Hill and beyond it the sands of Chesil Beach are clearly visible, though it is too far away for me to see the people on it.)

I feel so good that I am minded to put in a few good words for some of the fattest cats of capitalism. Currys have just telephoned to say they are delivering the new cooker tomorrow between eight and twelve and that their delivery man will telephone me half an hour before arrival. I think they will be as good as their word, because that is what they did when they delivered the new dishwasher a fortnight ago. I am also welling up with gratitude to Tesco, for the bargains I picked up this morning, including four bottles of Rioja.

Dixons, which also own Currys and PCWorld, and Tesco, are two of the great success stories of post-war British capitalism. Both Stanley Kalms (Dixons) and Jack Cohen (Tesco) were full-blooded exponents of capitalism and evangelical about its virtues. Both companies provide excellent value for money and mostly very good quality. Both companies can be faulted. The low prices of Dixons’ products are partly due to the fact that their salesmen persist in encouraging customers to take out expensive five year guarantees, which, in my experience, are mostly un-necessary. Tesco, like most big supermarkets, squeeze the prices charged by their suppliers, so much that they have difficulty in making any profit.

But they clearly pay more than lip service to the notion that customer is always right and and know the value of talking to the customer, and above all listening to them.

Unlike the two companies who have caused me most trouble in my house move, BT and npower. In writing this blog, it occurs to me that this might be something to do with the fact both are the products of the privitisation of public utilities ushered in with such conviction by Margaret Thatcher.

On one of the rare occasions when I acutally got through to a human being in BT, he told me that the problems I was experiencing were maybe to do with the restrictions put upon  BT by the regulator, Ofcom, and the role played by the split off company, Open Reach. I think this might be worth looking into when I have time.

Meanwhile I hope that the Brownites would do well to ponder just how their version of New Labour needs to be amended. Questions for their next away day.

1. How do you regulate big companies to limit their use of their power?

2. Is the capitalistic model the right one for public utlities? Perhaps the best way of running public utilities is not nationalisation nor capitalism, but a third way.