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Swellboy on… financiers who fall

What Charles Dickens teaches us about the world of high finance

Swellboy on… financiers who fall

Image: Brijesh Patel

December 14 2010
Nick Foulkes

I recently learned that an Oxford contemporary had published a book about hedge funds. I asked how long it was and was told over 300 pages – about 299 pages too long for me, then. Anything other than a primary school-style introduction to the subject would only complicate what is already a fairly opaque financial vehicle. In fact I am not sure if a hedge fund is a vehicle; maybe it is a financial instrument, or a financial genre or Mammon only knows what else. Hedge funds were once explained to me by Nat Rothschild and the concept made sense for a full 15 minutes. After that the mist descended again.

I am not really that sharp when it comes to money and when I pointed out that everything one needed to know about high finance could be found in the novels of Charles Dickens, my financially literate friend scoffed. But I persisted. Take Ponzi schemes such as that recently practised by the enterprising Mr Bernard Madoff. Had the recently impoverished gentry of Palm Beach, Geneva and the Upper East Side only read their Martin Chuzzlewit closely instead of the Banker’s Bulletin or Moneymaker Monthly, they would have come across Montague Tigg, an operator who makes Madoff look like the colonial upstart that he was.

Nor did any of us have any excuse at all for believing that certain financiers were gifted with an almost godly omniscience and were simply too big to fail. Step forward Mr Merdle, the financial panjandrum of Little Dorrit, a financier so highly regarded by the great, the good, and indeed everyone else that any action, however banal, was freighted with an almost superhuman significance and moment. And yet the unthinkable happened and Merdle went bust.

The only difference between then and now is that in Dickens, both financiers met a sticky end – Tigg was murdered and Merdle topped himself. Today they are more likely to award themselves a richly deserved gold-plated copper-bottomed and otherwise metallurgically-enhanced pension pot.