CENTRE POINT
The essence of capitalism is not to promote free markets, but to rig them
SIMON JENKINS
Who do you want to rule over you, lawyers or apparatchiks? Choose lawyers and you will soon be spending half your money and all your waking hours on the brutes, like they do in America. Choose apparatchiks and you may have Beria and his KGB cronies banging on your door at midnight. Scylla or Charybdis, there is no third option.
In Britain I have always gone with the Berias. I like to think that at least I went to the same school. If push came to shove, they would see me to a decent gulag with my Shakespeare and my Wisden. Lawyers on the other hand are Promethean eagles. They would gnaw at my vitals, leaving me awake at night with paranoia and ruining me with writs, affidavits, injunctions and mandamuses. I don't trust them.
I imagine Lord Archer would disagree. The last time he had a spot of bother, the legal fraternity came spectacularly to his rescue. Learned friends, judges, jurymen, paraded down the Strand, halberds glisten- ing, pennants fluttering, with Lord Alexan- der on a white steed at their head. In wigs and gowns they declared him pure as driv- en snow, and his wife even purer. Trumpets sounded all the way to the bank.
Last week he awoke to a different sound. The apparatchiks were out for revenge. In Stalin's day such sadists would warn their victims via their children at school. The teacher would murmur about a forthcom- ing 'visit'. Today's frightener is a reporter calling on the car phone, 'just following up a DTI rumour that's going round the City'. The victim is expected to give an involun- tary flick of the steering wheel and hurtle his Mercedes into the stanchion of an M4 flyover.
The recent treatment of Lord Archer is not unprecedented. I recall the name of John Ritblatt being plastered over the Financial Times when he was being 'investi- gated' by the DTI for mysterious transac- tions. Robert Maxwell was likewise vilified in this way. No costly charges are brought and no apologies or exonerations required. Kafka himself could not have written a bet- ter script. The DTI's inspectors appear to use this technique to warn those it feels are too close to the wind or against whom it has a grudge. The justice is crude, rough and ready, a kangaroo court.
Insider trading rules are beautifully designed for this purpose. They are meant to protect small investors from being shut out of information by those in the know. All must have equal access to intelligence about companies and their prospects. This is, of course, pie in the sky. In ten years just 26 prosecutions have been brought and ten convictions secured. As Marx rightly point- ed out, the essence of capitalism is not to promote free markets, but to rig them. All the insider trading laws do, with their penalty of seven years in prison, is give a wondrous power to DTI inspectors.
The extraordinary mishandling of the ITV franchises by the Home Office in the 1980s culminated in the relaxation of takeover rules for television companies last winter. This put television shares into the same category as Trollope's American rail- way stock. Policing their movement was like policing the liquor business in Prohibi- tion Chicago. Lady Thatcher's so-called free market in independent television fran- chises meant that a few people could become very rich and others ,lose all. I doubt if a single share was bought or sold in that market except on the basis of some- body somewhere telling somebody else something with a wink and nod. Buying and selling shares is a boring hobby at the best of times. The only fun is gleaning some inside knowledge and acting on it.
In Britain insider trading is like adultery, fine provided you are not caught. It is an activity that public figures seem to find irre- sistible emblems of their potency. In Amer- ica such dealing is a serious offence and defences are cracked by complex plea-bar- gaining by witnesses. In Britain, City friends do not rat on each other. Since being caught and prosecuted is so unlikely, the only sanction for the authorities when they catch somebody is publicity and shame. Yet the fact that nobody is found guilty — when so many are assumed to be guilty — tars everybody with the same brush. An acquittal is no help to the repu- tation of the innocent.
Lord Archer had to endure a week of newspaper stories stating, on the basis of ' It is not fragrant.' nothing more than one confirmed visit to himself and his wife by a DTI official, that his entire career was in ruins. Nor is there any recourse to his learned friends. De Tocqueville is off duty, Uncle Joe is cur- rently in charge.
I believe the bulk of the British public is with Uncle Joe. They say they dislike arbi- trary government but they do not mind when the rich suffer. Lawyers are for the rich. If John Major's Government is for the apparatchiks, so be it. His Child Support Agency is a classic of apparatchik rule: offi- cials empowered to take arbitrary decisions over the lives of citizens without recourse to law and even overriding court orders. Likewise his health inspectors can close restaurants, agriculture officials can ruin farms, planners can make millionaires or bankrupts overnight. Lawyers are nowhere in sight. Quasi-judges are like quangos. They have private powers that seem free of real-time accountability.
I once visited a housing advice centre in Manchester in which hundreds of people were being lined up to be told when their homes were to be forcibly demolished. They would be assigned a flat in Skelmers- dale. They were frightened and tear- stained. I met a Polish lady in the queue who said it was just like being a refugee back in the war. The housing official enjoyed untrammelled power over her life, absolutely without redress or appeal.
In Lord Archer's case nobody alleged that he himself benefited from any insider trading and he vigorously denied it. Surely no prosecution could ever stick. The motive of the official concerned was 'neither finan- cial nor personal' according to the reporter concerned, Martin Tomkinson. We must believe him. So what was it: a vague desire to see the balance of fairness and unfairness in British public life redressed a little? Odd chap, that Archer. Never know quite what to make of him. More of a card than a cad. But he thinks he ought to be Tory chairman — thinks he can play the old school tie game without the tie. Let's tip the wink to the press. That should take him down a notch or two. No fingerprints. No danger. That's the joy of it. That's the British system: justice mildly pink in tooth and claw, to keep uppity businessmen from getting ideas above their station in life.
Simon Jenkins writes for the Times.
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