Books: Capitalism Gone Wild

Robert Harris. Michael Birt for Newsweek

For a man whose well-turned thrillers encompass the venal workings of power in both the modern and ancient world, Robert Harris leads a very quiet life. He lives in the Berkshire village of Kintbury, 60 miles west of London, and on the day that I went to meet him for lunch in the local pub, the main topic of conversation was the unusual-looking duck that had appeared on the towpath.

Such are the thrills of the countryside, said his wife, the journalist Gill Hornby (sister of novelist Nick Hornby), when we walked back to the Victorian vicarage where she and Harris live with their four children. Harris has referred to it as “the house that Hitler bought,” because he paid for it with the proceeds of his first novel, Fatherland, which imagined how the world might have looked had Germany won the Second World War. In the early 19th century, it was owned by a man called Fulwar Craven Fowle, whose son was engaged to Cassandra Austen, sister of Jane. The beech tree in the middle of the lawn that runs down to the canal is old enough to have witnessed Jane Austen’s visits to the house, though Harris’s new novel, The Fear Index, was inspired by a different kind of 19th-century writer.

It is set in the world of high finance, but Harris conceived of it as a ghost story or Gothic fable in the mode of Mary Shelley’s Frankenstein or Robert Louis Stevenson’s Dr. Jekyll and Mr. Hyde. Its protagonist is a brilliant but eccentric scientist and hedge-fund manager called Alex Hoffmann, who has devised software that can track human emotions, particularly fear, and hence predict the movement of markets. The program generates vast profits for its creator, but in the best traditions of the genre, it proves less than stable. The action of the book takes place over 24 hours as the program spins out of control.

The novel has been a long time in the making. Harris had been thinking about it for 12 or 13 years, since he read Bill Gates’s book Business at the Speed of Thought, which talks about companies having a digital nervous system. He had always wanted to create an Orwellian dystopia, and he was fascinated by the idea of people going to work at a company that was more intelligent than they were. “What would you do if the machine on your desk was taking all the decisions, and you were simply window dressing?” he said over lunch.

After the collapse of Lehman Brothers, he realized that reality had come true in the financial markets. When he started researching the book in early 2010, a friend took him to see a hedge fund in London that was relocating to Geneva, partly because it could recruit people from the Large Hadron Collider. “Financial novels have become rather clichéd. I didn’t want to write about Wall Street or the City of London, but to write about a hedge fund in Geneva, with all the Gothic overtones of Mary Shelley and so on—that did intrigue me.”

Yet despite what Harris calls the book’s “Gothic flights of fancy,” it is rooted in his observations of the world. “I have two motives when I write a book. I have always thought of myself as a political writer…but then allied with that, there is the sheer pleasure of telling a story.”

Harris, who was born in 1957, divides his adult life into two halves. Before he moved to the country and concentrated on writing novels, he was political editor of The Observer, Britain’s only left-leaning Sunday newspaper, and a columnist for the Murdoch-owned Sunday Times. In 1992, the Labour Party was defeated in a general election for the fourth time, and as it began a period of reappraisal, its spokesman on home affairs asked Harris to lunch. The relatively unknown politician was Tony Blair, who two years later became Labour leader and set about making the party electable by rebranding it “New Labour” and launching the Clintonesque “third way.” Harris was included in the leader’s entourage for the last two weeks of New Labour’s triumphant 1997 campaign, and he still feels lucky to have been granted that privileged position: “Very few journalists, and no novelists that I can think of, have been fortunate enough to have that kind of access to power, and if you make power your subject, then to travel around with a guy who’s about to become prime minister is very instructive.”

He modestly maintains he became a novelist by accident. He had written several nonfiction books during the 1980s, including Selling Hitler, about the sale of fake diaries that purported to be Hitler’s, and he had an idea for “a kind of travel guide” about how Europe might have looked had Hitler not been defeated. Yet when he tried to write it, he found he could say what he wanted only by inventing characters and stories. Writing the first sentence of the book that became Fatherland was life-changing. “It was terrifically exciting. A whole scene began to develop in front of me—a wet riverbank, a floating body. It was like switching on a machine.”

Fatherland’s success confirmed his sense of vocation. He followed it with Enigma, another World War II novel, and Archangel, about Stalinist Russia, before turning to ancient Rome in Pompeii. He wrote two volumes of a planned trilogy about philosopher and orator Marcus Cicero before being drawn back to contemporary politics.

It was his anger over the Iraq War that turned him sharply against Blair, and led him to The Ghost, a thriller about a former prime minister called Adam Lang who is hiding from a war-crimes prosecution on Martha’s Vineyard and attempting to write his memoirs. Lang’s first ghostwriter has died mysteriously, and his replacement also finds his life in jeopardy when he discovers the real reason for Lang’s devotion to American policy. Harris sums up his attitude toward Blair by quoting Harold Pinter: “We all believed in New Labour, and what a fucking shithouse that turned out to be.”

robert-harris-book-cover-om03 'The Fear Index' by Robert Harris | 307 pages. Knopf (January 31, 2012)

If there’s one thing Harris does not blame Blair for, it’s the destructive effects of the financial markets, which he explores in The Fear Index. The New Labour government, he says, was no worse than any other in supervising the markets: “As the years go by, we begin to see the shape of the last 30 years or so. The fall of the Berlin Wall was a terrific boost to belief in the free market—a lot of regulations were lifted, and there was a kind of hubris about what the markets could do…This era collided with the digitalization revolution, and it does seem to me that the financial markets slipped out of control—of government control and, to some degree, almost of human control.” He believes an “enormous act of larceny has taken place” as vast wealth has been transferred to “greedy people who just happen to shift electronic money around,” but he also believes we were all guilty of colluding in the madness: “We all got caught up in it. We have securitized our future, and then if you don’t get growth, and it doesn’t all go perfectly, the mechanism stalls, and everyone’s in big trouble.”

He has a “lot of sympathy” for the Occupy movement. “It’s far easier to identify the problem than it is to identify any solution. So they reflect the muddle…I think these movements are likely to grow in force and will put democratic governments in a very tricky position.” Yet his ringside seat at Blair’s ascent formed his view that politics is played the same way in every country and every era. He is currently writing a film script of The Fear Index and then intends to return to the trilogy about Cicero. The shift in setting will not require a radically different approach: “I don’t think that humanity changes an awful lot. The whole pleasure of writing a novel set in the past is the realization that things have been like this before.”

Robert Harris on the1 percent world:
The Power of Fear: Humanity should be proceeding toward great prosperity; instead there's a will toward collapse, ruin, destruction.

Hedge-Fund Honchos: A man in Geneva said he had made $700 million on Thursday. And of course I was still paying for dinner!

The Personalities: The traders are in it for the money. The quant half really aren't. It's the opportunity to test their theories, and the markets become a great laboratory. Both are dangerous, extremes of human nature.

Edward Platt writes for the New Statesman. His new book, on Hebron, is out next year.