Probably More Succinctly Describes The Ethos of the Just-Passed Era Better Than Anything Else

This bit, from a Michael Lewis story about the collapse of the Icelandic economy in this month’s Vanity Fair:

The rocks beneath Reykjavík may be igneous, but the city feels sedimentary: on top of several thick strata of architecture that should be called Nordic Pragmatic lies a thin layer that will almost certainly one day be known as Asshole Capitalist. The hobbit-size buildings that house the Icelandic government are charming and scaled to the city. The half-built oceanfront glass towers meant to house newly rich financiers and, in the bargain, block everyone else’s view of the white bluffs across the harbor are not.

It’s not just Reykjavík  adorned with unfinished Asshole Capitalist style; what is Dubai except Asshole Capitalist? We’ll be able to enjoy those unfinished glories for a while, I suspect.

70 thoughts on “Probably More Succinctly Describes The Ethos of the Just-Passed Era Better Than Anything Else

  1. The unfortunate fact is that building codes only apply until you have enough money to pay off the people who write and/or and enforce the codes.
    Up in Seattle this was/is a very hot topic, due to the explosion of super-priced condo towers across the city. The sadly funny part was seeing a super-priced condo go up, proclaiming it’s marvelous views of Lake Union or Elliot Bay, and then the next year someone would put up another super-priced condo right next to the other one, such that the original’s excellent views of the water were now excellent views of… Front rooms and bed rooms and balconies just half a city block away.

  2. Even more succinct: TANSTAAFL! (Or rather, TANSTAFM – There ain’t no such thing as free money!)

  3. Sub-O: “The unfortunate fact is that building codes only apply until you have enough money to pay off the people who write and/or and enforce the codes.”

    I suspect what happened in Iceland is that the codes didn’t address it because it had never occurred to anyone to build such a thing.

  4. One suspects the half-built Reykjavik office blocks will be de-asshole-capitalized in the near future via explosive-fueled implosion-demolition. That structural steel is worth a lot of cash.

    Dubai will take quite a bit longer to fall apart, because there’s too much money there to disappear right away. We’ll have to see how much oil and gas they’re producing say, 5 years from now as compared to now.

  5. Blocking the waterfront’s not cool.

    So who’s most likely to occupy the towers when/if they’re completed and not demo’d?

  6. Only 4 of the 7 Emirates has petroleum resources, but all 7 have a revenue sharing agreement from the oil revenues.
    Considering they’ve only been an independant nation since about 1972, they’ve done a pretty good job of diversifying and planning for the future, the Jebel Ali Free Port being one example. They’ve always known of, and planned for, the likelihood that their oil would run out first, and are pretty shrewd businessmen, I’ll be interested to see how this weather this economic storm.

    Undoubtedly, the Emiratis overspent and overdeveloped, I was there in 1995 , and now I barely recognize it from pictures I’ve seen over the past 5 years..

  7. That’s a very interesting (though long) article on the meltdown of the Icelandic economy. It does explain a lot about the meltdown of other economies as well.

  8. I also used to go to Dubai in the 80s and 90s when it was low-rise (Abu Dhabi had the skyscrapers) and quite personal-scale and yes, the pics from today look like another planet. In fact, it all looks like a lot of JG Ballard titles – Vermilion Sands, Super-Cannes, Concrete Island, High Rise, The Crystal World and The Unlimited Dream Company – just before the current Wind From Nowhere sandstorms fill the drained swimming pools (Terminal Beach and Crash).

    My father, an airline pilot with Kuwait Airways in the 50s and 60s, used to go to Dubai when the airport runway was still compacted sand; the Gulf generally was undeveloped enough then that the foreign aircrews all lived on the Med in Beirut and commuted 1000 miles to Kuwait to go to work.

  9. I visited Bangkok in 2005, which was still (is still?) dotted with giant unfinished shells of skyscrapers from when the Asian financial bubble burst in the mid-nineties. Apparently homeless people sleep in them now.

    But then this *is* Thailand, where they’ve been trying to build a new airport since the 1970s and have been continually stymied by government corruption. I think the airport corporation belonged to the Prime Minister’s wife when I was there.

  10. Also: http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom is a very good article on the Economic Death Spiral from the inside, and http://www.mint.com/blog/finance-core/a-visual-guide-to-the-financial-crisis/ is the first time I’ve seen the housing bubble explained in a way I can understand (i.e. with pretty pictures, I am a doofus).

    I’m not sure if those work as clickable links, I’m not a WordPress genius.

  11. Never been anywhere more Ballardian than Clark AFB in the Philippines: an enormous US air base, complete with suburban/colonial housing, schools, swimming pools, bowling alley and hotels; buried under ash by Mt Pinatubo, handed back by the USAF, stripped bare by desperate homeless Filipino volcano refugees, and now returning to jungle. It still has the enormous runway, and off one end of it retired USAF pilots with Ray Bans fly their light aircraft, like Roman settlers in Britain after the fall of the Saxon Shore.

  12. Dubai was always destined to fail, as success was defined as becoming permanent competition to NYC, London, Tokyo, one or two Chinese cities (hard to tell which ones for certain), and whichever city in India finally decides to be their representative on the world stage. If you notice all of these cities have something backing them. NYC is backed by the largest and most dynamic economy in the world. London is backed by largest economic union in the world. Tokyo is backed by the 2nd largest economy. The Chinese city is backed by the largest population in the world and 3rd largest economy, etc. What was Dubai backed by? Old money from oil/gas reserves that are running out. They don’t have a great economy by themselves. Nor do they have great geography for tourism, as the Med is just around the corner and it is 120 degrees in the summer in a pure desert environment. It might end up being an important city in the Middle East, but it won’t be a global player.

  13. Decry ludicrously expensive and useless architecture all you like, but remember that people go to Egypt to see the pyramids, not the mud worker huts.

  14. I doubt it’s folly as much as it’s psychology and neurobiology- self-aggrandizement simply feels much, much better than meek attention to the needs of the many. Serotonin, mainly.

  15. It’s increasingly a pain in the ass. Moreso because as someone who thinks of themselves as a capitalist – I own a successful small business, therefore I do believe in owning the means of production (quite literally). If my business succeeds or fails, it’s down to my own hard work, sensible decision and continued creative success – until it reaches the stage of the bank with whom I have my money going tits-up. At that point, it’s out of my control, and in the hands of people who’ve proven themselves unworthy of my hard-earned.

    Thus the system fails, despite my careful husbandry of Making New Stuff and creating lucre and jobs out of whole cloth.

    To cull a parallel from one of John’s earlier essays, it’s as though the woman I’d married did have her own income, but then blew both hers and mine on crack and losing lottery tickets.

    Goodness knows, I don’t want Gubment frakking with how I run my company (any more than it already does). They know zip about special effects, 3D animation such. But what good does being left alone by the government do when the money I make becomes worthless? I don’t have the answers – if I did, I’d be practising my Public Face and using my inside voice to try to run for public office. But I shall miss being able to cheerfully assert that I’m a Capitalist, for that term has been horribly, horribly debased.

  16. That has got to be the first business story I have ever read that mentioned elves and “Orc shrieks.” What a great read. Thanks for sharing.

  17. Excuse the back-to-back posts, but I was so impressed by the Iceland article, I forgot to comment on Dubai. I think smashing telly! described the Dubai situation perfectly:

    Short of opening a Radio Shack in an Amish town, Dubai is the world’s worst business idea, and there isn’t even any oil. Imagine proposing to build Vegas in a place where sex and drugs and rock and roll are an anathema. This is effectively the proposition that created Dubai – it was a stupid idea before the crash, and now it is dangerous.

  18. I predict a series of new SF stories about squatting in ruined and half built skyscrapers. I further predict that in the three to nine months between acceptance and publication, many of those stories will be overtaken by real events.

    Sub-prediction: with all those empty houses in so many mid-western US cities, some of them will develop staggeringly awesome local music scenes, because broke musicians will be able to rent cheap or squat for nothing.

  19. What I like about the article on the fallout from idiot finance in Iceland is that it’s apparently one of the last bastions of classic Western machismo; can-do taken to an insane degree. Like the guy who literally went from being the captain of a fishing boat to being an investment banker. It’s like Heinlein on crack.

  20. Imagine proposing to build Vegas in a place where sex and drugs and rock and roll are an anathema.

    That’s probably why Vegas has restaurants with world-name chefs, five-star shows and celebrity appearances; it realized you can’t run just on booze and poker forever. I don’t pretend to know the eventual fate of Dubai, but an ultra-luxury theme park pitched to the bored superwealthy can get by without openly having liquor and prostitution.

    As for ‘asshole capitalism’, isn’t that redundant? Capitalism is about being a selfish asshole; otherwise it’d be socialism.

  21. Cicada@23 – looking at the Pyramids releases Serotonin? And here I’ve been spending money on prescription drugs.

    Article on Iceland was interesting, indeed, both as a blueprint of the whole financial mess and a peek inside an insular culture.

  22. Not just western– remember that the guy who founded Lenovo started out carrying baskets of crap in China. Make fun of a can-do attitude when it fails if you like, but bear in mind that sometimes it works, too, and when it works it can work stunningly.

  23. @31- If you’re the guy the pyramids are being built for, yes. The primate brain responds to being at the top of the pecking order by releasing serotonin.
    So weirdly, if you try competing with and beating your neighbors you might could skip the prescription drugs. Picking something harmless to compete at might be best. Cake baking? Karaoke? Jogging? International finance?

  24. “As for ‘asshole capitalism’, isn’t that redundant? Capitalism is about being a selfish asshole; otherwise it’d be socialism.”

    *Migraine Salute*

    No. No, it’s fecking not. Capitalism is about private ownership of the means of production. That means I own my business, which produces stuff, for which I get to keep the proceeds of my production. Is that selfish? Well, I’m not doing it for anyone else’s immediate benefit but my own, but I’m not an asshole about it. My rates are fare, I treat my clients well, and I deliver high-quality work with a maximum of value and a minium of drama.

    Capitalism works *best* when nobody’s being an asshole – it breaks down when the risk/reward feedback loop goes out the window as it did with the banking sector.

    If I was told to run my business under socialist means (where I work my arse off in order for other people to get rich off my work, and take home just what I need to eat beans) then I’d quit and go into something easier. In fact, it’s that pile of crap which is impelling me to leave the UK in the first place.

  25. Cicada @ 33

    The primate responds to a lot of stimuli by releasing serotonin. Sorry, your argument isn’t convincing.

  26. MarkHB – Goodness knows, I don’t want Gubment frakking with how I run my company (any more than it already does).

    A bunch of rich bakers said exactly that, and then made the government stop. And now look where we are.

    Capitalism works *best* when nobody’s being an asshole – it breaks down when the risk/reward feedback loop goes out the window as it did with the banking sector.

    This will always happen unless someone with the power to say “stop” makes it stop. People with no creative impulse for things like engineering or entertainment or medicine can make more money finding a bigger sucker than they can at honest work.

    I’m not saying abandon capitalism. I’d rather have some balance where there’s social services funded by taxes, but it pays as well as can be managed to work hard and create things, and at the same time, people who want to run con games like the world bankers did are prohibited from doing so.

  27. I have to agree with #34 MarkHB to a certain extent. Capitalism is getting an underserved bad name right now. The bankers/business leaders failed us morally, but we also failed ourselves. We allowed the government to de-regulate and not enforce regulations, which allowed everyone to take short cuts. Some of us also failed to understand a $500k mortgage, when it was going to be 8 times our yearly salary.

    #39 Josh – concerning pay in government services…it’s pretty freaking good, at least at the Federal level. I’m a contractor and I see what everyone gets paid.

  28. Todd @36 – Are you suggesting that being at the top of the heap _doesn’t_ cause the top ape to have a serotonin release (and subsequent happy)?

    Scalzi @38- Hey, whatever field works for you. After all, you surely enjoy being a very good author…now imagine what’d happen if your reward structure was based solely on word count… which is something of the situation of the financier, whose rewards are based solely on the number of dollar signs…

  29. They obviously did not raise taxes on the producers enough, or throw enough money at non-existent problems.

    Oh, and they avoided letting the free market work, because, you know, they were much smarter than that.

    LOL.

  30. I don’t remember the last time I heard anyone say, apropos conventional crime, “You know, I want the government to get out of the law enforcement business.” I mean, someone somewhere must have said it, because even the absolute dumbest ideas have articulate (or at least loud) supporters, but I don’t recall hearing such a thing. Most folks seem to recognize the need to pool together resources for police departments, courts, etc., to prevent crime or punish those who commit it.

    But the moment we start to talk about crimes that involve a balance sheet instead of a gun or a mask, we get a lecture about the wonders of capitalism and the free market system, and how the market self-corrects, making government intervention unnecessary. And a significant number of people fall for this pile of crap, despite having been treated badly by an employer, or cheated by a retailer, or deprived of a retirement by someone who accepted their money and passed it along to the next Ponzi victim, and so on. It’s as if personal experience means nothing against the sacred invisible hand that rights all wrongs.

    I’m strongly in favor of capitalism, but I don’t much like fairy tales as anything other than pure entertainment. The invisible hand is about as real as the tooth fairy or Jack and the Beanstalk. Capitalism is a human endeavor, and like all human endeavors, the people involved fall into three general categories: a few saints, a lot of people who are largely decent (or at least not too larcenous), and a small number of complete dicks. We need regulation and enforcement to keep the dicks from bringing the whole thing tumbling down, just as we need law enforcement to keep other, less-ambitious dicks from stealing our stereo or shooting us.

    For almost thirty years we’ve bought into the notion that government was the problem and not the solution. And, sure, government often is a problem, most notably when we elect people who tell us that it’s useless, then proceed to prove the point. But we have to grow up, and fast, and recognize that the notion that government can do nothing is every bit as corrosive as the notion that government can do everything. Absolutely, let’s debate what government should do in this crisis, but let’s drop the I-don’t-want-government to-do-anything-but-cut-my-taxes talk for the nonsense that it is.

  31. Ouranosaurus @27 – there was a story some years ago that I was never able to confirm, about thousands of abandoned houses and farmsteads up in the northern plains, maybe North Dakota, that were supposedly there for the claiming. Show up, move in, in theory it was then yours. I always thought it would be a good idea for artists or craftspeople to band together and take over a handful as an artist’s colony.

    But then you’d have to deal with the winters up there.

    And the living in abandoned skyscrapers comment made me think of the Mad Max movies, I think it was “Thunderdome” that ended with a scene of people telling the legend of Mad Max around a campfire halfway up a highrise.

  32. Bob @ 43 – You put that really well wth the law enforcement metaphor. I think it goes a bit beyond that – it’s like we’re allowing people who’d benefit most from crimes to change the laws to make things not-crimes.

  33. Hey Cicada, you missed the qualifier. While you certainly don’t accomplish anything with a “can’t do” attitude, arrogance will always bite you on the ass in the end. These guys made the previous administration look measured and cautious.

  34. Capitalism works *best* when nobody’s being an asshole – it breaks down when the risk/reward feedback loop goes out the window as it did with the banking sector.

    Capitalism works with or without assholes. Assholes aren’t the concern.

    Capitalism works best when there is complete transparency. Regulations shouldn’t impede people from doing business, but they do need to require that the whole playing field can bee seen by everyone playing.

  35. @ 43 Bob– I think you’re talking about two separate issues here– 1) These damned cowboys managed to screw things up beyond all mortal recognition and 2) These criminals did something illegal.
    You can, and I imagine people overall basically did, send the financial system into a crash without needing to break a single law. That laws were broken here and there is just a case of a few sprinkles on top of an otherwise legal bowl of ice cream, but isn’t the root cause.
    Imagine if, say, Warren Buffet and Ben Bernanke walked out arm in arm one day and said “We have no trust whatsoever in any bank or other financial institution public or private”. Legal? Sure. Kiss civilization goodbye? Possibly.

  36. Cicada

    I’m saying that gross generalizations, like those in your arguments, are easy to dismiss because of a lack of specificity. Do all primates react by releasing serotonin when “dominant”? Do some actually release less? Is correlation the same as causation? How can you tease apart such a relationship when serotonin is such a basic neurotransmitter mediating so much? Does serotonin translate into “happy” for the ape? How does one measure this in a species that can’t tell us?

  37. #46, Josh Jasper – I think it goes a bit beyond that – it’s like we’re allowing people who’d benefit most from crimes to change the laws to make things not-crimes.

    Good point. It’s as if my neighborhood cat burglar had successfully lobbied Congress to pass the Sure, Break Open the Window and Help Yourself Act.

    #49, cicada: I think you’re talking about two separate issues here– 1) These damned cowboys managed to screw things up beyond all mortal recognition and 2) These criminals did something illegal.

    I’m saying that some of the things the damned cowboys did should have been illegal, and would have been, had we not bought into the collective delusion that the market has built-in correctives which preclude the need for sensible regulation and enforcement.

  38. @52- I have to disagree with you on the built-in correctives. It has ‘em. They just don’t preclude crashes. Sort of like how the very best way to teach a kid not to play with a stove is to let him play with the stove. Nothing works better; there’s just some scarring as a side effect.

    The other thing to think about is whether the government would have actually predicted this mess and taken proper steps to head it off. Even if the government has the stick, and is willing to use the stick, they still may not hit the right thing with the stick.

  39. @53 – I have to disagree with you on the built-in correctives. It has ‘em.

    Well, OK then.

    They just don’t preclude crashes. Sort of like how the very best way to teach a kid not to play with a stove is to let him play with the stove. Nothing works better; there’s just some scarring as a side effect.

    A lot people are going to be devasted by this crash, and not just the profligate and foolish. “Just some scarring” doesn’t even begin to describe what’s going to happen to them.

    The other thing to think about is whether the government would have actually predicted this mess and taken proper steps to head it off. Even if the government has the stick, and is willing to use the stick, they still may not hit the right thing with the stick.

    Wouldn’t it be sensible to at least try?

    You’ve inadvertently summed up what disgusted me about the Bush Administration. I don’t blame Bush for not heading off 9/11. I don’t blame him for not heading off the financial crisis. I do blame him for not even trying, until the horse had already escaped from the barn and hopped a freight to Cincinnati.

  40. I’ve got it.

    If all of Scalzi’s fans can tell him what to write, then we have socialism.

    Hey John! Get off your pallid white geek ass and write us some Kirk Vs. Spock slasher-fic you slacker!

    Otherwise, you’re an weevil capifailist asshole! Yeah! And we’ll mock you!

    On the internet!

    I need a drink. Oh, look, a drink – not posting on the Internet anymore tonight, then.

  41. @54 Bob- You’re assuming that trying has no associated costs of its own. It might be impossible to prove that a piece of regulation stopped a financial trend which would have turned out to be fantastically profitable and beneficial, but surely you can imagine how that could happen.

    As for devastation due to economic contraction, your best solution is probably to call for enhanced social safety nets. Enough of those and it doesn’t so much matter what the cowboys are doing– you tax ‘em in the fat times and use that to ensure adequate food and shelter and such during the crashes.

  42. @55 That’s not socialism, that’s the market at work.

    “My epic Kirk/Spock homage sold fifty copies. Oops, better come up with a good OMW universe idea…”

  43. @56, cicada – You’re assuming that trying has no associated costs of its own. It might be impossible to prove that a piece of regulation stopped a financial trend which would have turned out to be fantastically profitable and beneficial, but surely you can imagine how that could happen.

    Yes, responsible regulation might cost money, and we might make a mistake. Better to do nothing until the urge to act passes.

    As for devastation due to economic contraction, your best solution is probably to call for enhanced social safety nets. Enough of those and it doesn’t so much matter what the cowboys are doing…

    It’s sort of like my idea for reforming criminal law: let the criminals shoot whom they want, but let the victims cut to the head of the line in the ER.

    Look, you and I are so very far apart that I can’t believe we’ll ever come to agreement, or even close. And I can’t believe that anyone else finds this exchange entertaining. So vote for whom and what you want, and I’ll most likely vote against you. That’s democracy in action.

  44. @Bob @56,

    What we had was broken, so I voted for the other guy.

    Capitalism in-and-does the Ownership of the Means – that’s not broken. It isn’t. I try harder than most, and I produce prettier than most, because I’m in competition and that’s how you stimulate folk.

    The banks, yes, are broken. That’s sad. I hope Obama fixes them. This would, basically, be forgiving them their fuckups under deregulation. The money that is our blood should not be run by the pleasure centres of the brain.

    *sighs*

    It’s pretty obvious to me, but I’m a crayon-chewer. And I’m *tired* after half my life being lived under a frakking moron.

  45. @60- You’ll note that government regulators also failed to catch the problems at the plant. So sure, if you’re going to have something ineffective, might as well be cheap and ineffective.

  46. There’s missing problems, and then there’s not being aware of the basics of your job, like the fact that salmonella can, in fact, live in peanut butter.

  47. Is that selfish? Well, I’m not doing it for anyone else’s immediate benefit but my own, but I’m not an asshole about it.

    Which is to say, it’s selfish. You’re not helping your customers in order to make them happy and the world a nicer place; you’re doing it because it benefits your business. I’m not saying that capitalism is a bad thing, mind you; just calling it what it is.

    And if you move to the US, you may be awfully surprised at how much socialism there is in the ‘free market’. Listening to large business owners gripe about the gub’mint is like listening to a teenager whine that his parents make all this money yet they give him a tiny allowance.

  48. Difference being, mythago, that the business owner’s parents didn’t make the money. Nor did the Government. The business owner made the money. Being “permitted” to keep a slice of one’s profits is pretty irritating, when you’ve made ‘em out of nothing.

    Selfish? Okay. Well, if that’s your word for it. Strangely, though I don’t actually feel an urge to defend myself from it. After all, the byproducts of what I do *are* happy clients and an increase in the net beauty of the planet, so what difference do my motivations make? If I didn’t love making beautiful things, I’d’ve gone into something different as a career.

    In any scarcity-driven system (that is to say, an economy), then the persuit of profit is a necessary thing. Otherwise the facilities to do things won’t exist. I will say, though, that the term “selfish” has a bunch of negative connotations (as I’m sure you well know!) which I think are churlish to apply to all people who work for themselves with a broad brush.

  49. #64, MarkHB – Difference being, mythago, that the business owner’s parents didn’t make the money. Nor did the Government. The business owner made the money. Being “permitted” to keep a slice of one’s profits is pretty irritating, when you’ve made ‘em out of nothing.

    Ah, the Horatio Alger myth.

    It’s a popular pastime for successful people to assume that they are the sole reason for their good fortune. They conveniently overlook the fact that government–particularly good government–is also essential to their success. Try to start up your business in, say, the western Sahara, and you’ll certainly save a lot on taxes. Of course I don’t know what you’ll do about electricity, or roads, or running water, or postal service, or those pesky armed marauders.

    I’m a small businessman, but I don’t deny the fact that decent government makes my business possible in the first place. So I have to pay my cut to the federal and state governments because, maddening as they may be, they do provide a genuine service.

    Sure, I applaud you for working hard and running a good business. But never for a moment forget that a big factor in anyone’s success comes from winning what Warren Buffet calls the Ovarian Lottery. I was lucky enough to be born in this country to two loving parents, and it would seem churlish to grouse about paying taxes to a country and government who helped me be all I could be.

  50. Really, Bob – don’t go there. My folks divorced when I was 11, I left home at 18 to make my own way, and being a Yank living in the UK I’m not eligable nor have ever claimed any kind of benefit. Apart from three fillings, and a couple of courses of antibiotics. I admit I’ve had that out of the system, but UK dental’s mainly private-pay anyway, good luck finding an NHS dentist.

    I’m gonna rein myself in right there and just say please – don’t go there.

  51. Wreeeenching my brain back out of ruffled-feathers space, I couldn’t agree more about fair taxes for *good* Government. I’d be delighted to pay even LA taxes – lots cheaper than here – and even try to hope my tax money’s going to competent folk.

    In principle, no argument. At one level, yes, tax money is excised at the barrel of a gun. Another angle, though, for another time.

  52. In a democracy, people get the government they create. If taxes are going to bad government, it’s the fault of the people who keep electing that government and letting it do what it does.

    But really, unrestrained idiocy in the banking world is doing us far more damage than taxes are, and we just can’t tax-cut our way out of this either. In the US, the middle class is still getting a tax cut though. Only people who earn more than $250k a year are going to get taxed more on the amount over $250k a year they make. By a few percentage points. Oh noes!

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