Planet Jonny

Given that the world is currently trembling on the edge of financial armageddon, there has, not unreasonably, been a lot of talk going on about just who's to blame for the current predicament. Is the short-sellers, who tried to break the banks? Is it the whizz-kids who worked out new and exotic ways to lend money? Or perhaps the bankers who then loaned the money out? Perhaps the salesmen, who loaned money to people who clearly couldn't repay it? Or perhaps the regulators who failed to stop it happening?

But one suspect, and the decisions they took, never seems to get mentioned. How about Joe Public, the man in the street?

One of the things that has become apparent through all of this is that, with a few exceptions, it's been banks getting into trouble, and not mutually-owned building societies. Now I'm not a huge fan of capitalism, nor of socialism. Instead, I've always had a hankering for a third-way of mutually owned societies, independent of the state and in competition with each other.

It was for this reason that when I bought my first flat, I did it with a mortgage from the Woolwich (I think it was) Building Society. And when I got my first car, I became a member of the Automobile Association. However, it appeared that my beliefs in the benefits of mutual ownership were very much in a minority, because my fellow members of the Woolwich Building Society voted to turn it into a bank, and my fellow members of the Automobile Association felt that they were rather be customers of the AA division of Centrica PLC.

I was pretty pissed off.

Time after time, in vote after vote, the British people rejected the Victorian concept of mutually owned societies in favour of PLCs. They no longer wanted to own and control the services they relied on. They would rather be customers of a PLC who served not them, but its shareholders, and whose ultimate aim was not the betterment of society, but the accumulation of wealth for its owners.

I was outvoted on both occasions involving me, but I'd like to think that I've been broadly proved right. I think the world would be a better place if we had more mutually owned societies and less PLCs. Certainly, I think our financial sector would be more stable with more building societies and less banks. Northern Rock lasted 147 years as a building society; it imploded after less than 11 years as a bank.

Now I know what people will say when they read this post, because it's what they always say to me when I advance this argument verbally. They will argue that the repeated votes by British people to convert their building societies to banks did not represent their rejection of the concept of mutually owned societies in favour of capitalist PLCs; instead, they were simply voting for what they saw as free money.

I accept that is the case. They weren't voting for the choice they felt was best. They were voting for the choice they were being bribed into voting for; they neither knew nor cared what it was they were voting for. (It seems like people talk a good talk against capitalism until the capitalists offer them a few hundred quid).

But my question would be: does that make it any better?

Personally, when it comes to the Northern Rock and the Halifax and all the other building society turned banks currently running themselves into the ground, I at least can make what I think is a pretty good point.

Don't blame me. I didn't vote for this.

Tags: credit crunch