Saturday, 1 of November of 2014

Mark Twain’s century old story still has something to tell us about wealth and financial crises

This week’s column from The National

In 1893, Mark Twain wrote a short story called The Million Pound Bank Note. Two wealthy British brothers give said note to an American pauper who arrives in London. They have secretly made a wager on whether he can survive for a month without ever cashing the note.

By presenting the note, the American eats in restaurants, buys clothes and acquires lodgings. Since no ordinary shop can change it, he is extended credit, and becomes the object of sycophancy. Realising that he never need actually spend money to gain goods, he offers his name to back a mining project being floated by a friend on the stock exchange, and walks away with £200,000.

Light-hearted the story may be but it offers insightful social commentary. The richer you appear to be, the more money you can make, the more people fawn over you and the less you actually need to contribute to the economy and society. The mere illusion of wealth is sufficient.

In 1953, the tale was adapted into a film starring Gregory Peck. The updated plot reflected the slow death of the British Empire, with Peck representing America’s rising sun. This time, the American loses the note, which prompts a loss of confidence at the stock market in his mining venture. With the illusion of his wealth exposed, he tries to explain to the stock exchange that the mine is a solid investment, and that the loss of a piece of paper shouldn’t change that. But he is thrown out of the old boys’ club, whose members only listen to those from within their own elite.

Although the film was made 60 years ago and Twain’s story is more than a century old, both could easily have been produced as a parable on today’s financial crisis. Growth was pegged to confidence, big names and crowd mentality, and when confidence flagged, prices crashed and the market collapsed.

Does this mean we should accept that when it comes to wealth twas ever thus, and shall forever be so? I don’t think so. There has been a public mood shift. Social networking tools, the unparalleled enormity of the financial crisis, the rising concern over environmental sustainability, the growing disparity between rich and poor, but mostly people’s awareness of all of this, are the ingredients of rising discontent. Banks are bailed out, bankers are paid bonuses, MPs in Britain justify extortionate expenses, European MEPs refuse to reduce their pay. The head of the Indian Grand Prix says stop talking about India’s poor and concentrate on the country’s affluence.

One manifestation of the mood change is the Occupy movements around the world, most notably in New York and London. A few thousands of protesters they have rattled the closed club.

Occupy’s critics say they offer no constructive alternative. In response, Occupy points to the fact that their presence is symbolic, representing deep global discontent with those who uphold a system that protects only its own interests. Their protest is clearly aggravating, despite being peaceful. Importantly, Occupy offers a space to discuss new options and learn from the perils of our attitudes to illusory wealth.

Even though wealth continues to be distributed unequally, knowledge and awareness since Twain’s time is more accessible. Perhaps this is the trigger we needed.

And if you were wondering what happened in the film, it all worked out. The American found his note and confidence was restored in the market. If only our current crisis were so easy to solve.


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