John Lanchester on the City

John Lanchester has a terrific article on the workings of the City in the current issue of the London Review of Books.

He also touches upon its social effects:

In London, as a rule, non-City people don’t love City people, and there isn’t much non-economic interaction between them. The bonuses are a big part of that. The City is, collectively, astonishingly wealthy. It earns 19 per cent of Britain’s GDP. People don’t mind that in itself but they do mind City bonuses. Last year, these amounted to a truly boggling £19 billion, all of it paid at the end of the year.

In London, the effect of that money has become almost entirely toxic. I’m not talking here about middle-class envy – the resentment increasingly expressed among the ‘middle-class poor’ about how unfair it is that these bankers get paid so much for contributing so little. That resentment seems to me to be largely hypocritical, a middle-class resentment of one of the few forms of inequality that doesn’t benefit them.

But City money is strangling London life. The presence of so many people who don’t have to care what things cost raises the price of everything, and in the area of housing, in particular, is causing London’s demographics to look like the radiation map of a thermonuclear blast. In this analogy only the City types can survive close to the heart of the explosion.