It’s an abiding mystery that the very rich don’t feel the pinches that the ordinary rich do. Sunseeker, the yachtmaker, said the other day that their multi-million speedboats were keeping the business afloat even as the bottom end of their market was feeling the pinch. There will always be plenty of multi-millionaires to buy Hirst, even in the depth of a recession.

In Hirts’s case, we have all the conundrums that art always presents. After all, we have no idea whether his pieces will grow more valuable as works of art, or be stripped down for whatever their raw materials are worth. In short, his works may be thought risible quite soon. Or not.

Then there’s the intriguing business of what Hirst will do with his loot. He might just become an ordinarily rich person. But it is just as likely that his wealth will be folded back to us all as his audience. Perhaps he’ll start a gallery or a foundation. Whatever.

Roughly speaking, the problem is this. Capitalism is prone to bubbles, but they really do differ in degree and kind.

Here’s a morphology.

(1) Stock Bubbles
At their most pure (The South Sea Bubble, the 1717 Mississippi Company), these are stock schemes in which there is no actual economic activity. But these readily get confused with, say, the 1990s Internet Bubble – in which there probably was a real business. Greed and irrationality underlies bubbles, but at least in the Internet case, people were aware that something big and real was happening. Tulipmania sits somewhere between the two, as does the art market. Will Damien Hirst’s productions get melted down for their gold?

(2) New instruments
John Law, who was behind the Mississippi Company, also came a cropper when he tried to engineer a new currency for France. But he wasn’t operating as a crook when he did the latter: he was inventing new approaches to currency and was – hardly surprisingly – out of his depth. 

This is a little like the muddle modern banking has got into as it recently sliced and diced sub-prime debt.

Indeed, many of these dramas turn out to be schemes which are crucial to capitalism’s future – it’s just that the pioneers don’t post large enough warnings as to the riskiness of innovation.

(3) Straight frauds
Some bubbles and some new instruments are introduced as straight frauds, or as screens behind which straight frauds can be perpetrated. Thus, Enron’s crime was very like the fraud perpetrated by Jabez Balfour in the late 19th Century. Enron was playing with energy futures and other devices which few people understood, just as Jabez was playing with new schemes for insurance and housing.

Enron and Jabez were developing schemes which in non-criminal hands would turn out to be valuable.

In conclusion…..
Many capitalist pioneers turn out to be crooks. Or, many crooks turn out to be pioneers. It’s spotting the difference which makes for entertainment.

Anyway, there are no signs of crookedness in the present crisis. Regulators encouraged bankers to get careless as they invented new wheezes. The bankers overdid it. The bubble burst.

The books excerpted in the R4 series
The Science of Getting Rich by Wallace D Wattles
The Moneymaker by Janet Gleeson
Little Dorritt by Charles Dickens
Liar’s Poker by Michael Lewis
When Genius Failed by Roger Lowenstein
Metamorphoses XI by Ovid 
Tulipmania by Anne Goldgar
The Bonfire of the Vanities by Tom Wolfe
The Reformation of Manners by Daniel Defoe
The Great Crash 1929 by John Kenneth Galbraith
The South Sea Bubble by John Carswell
Tulipmania by Anne Goldgar
The South Sea Bubble by John Carswell
Extraordinary Popular Delusions by Charles Mackay
The Age of Turbulence by Alan Greenspan
A Short History of Financial Euphoria by John Kenneth Galbraith

I would add:

Millionaire: The philandere, gambler and duelist who invented modern finance, by janet Gleeson
Jabez by David McKie

For some years I made repeated if half-hearted attempts to become an advisor to Tony Blair. I dared to imagine that I could help him wrestle with the problem of reconciling his urges to be a warrior and a Christian. Anyway, he – or his people – didn’t bite. When I read The Ghost, I found myself missing the essential dilemma in describing (or satirising) Blair. Harris does describe how one never knows whether Blair actually had any conviction or was merely an actor. But Harris avoids altogether the greater piquancy, which is whether Blair had a rather barmy religious conviction about his higher purposes. What’s interesting about Blair is not only whether he had convictions but on what he based whatever convictions he had. Anyway Blair is much more interesting than Lang is.  

The lastest examples I have of the great and the good succumbing to the ridiculous affectation of enjoying this barbaric festival of testosterone come from last Saturday’s Financial Times. In it we learn that is the game of choice of (Jacques) Herzog and (Pierre) de Meuron, the designers of the Bejing Bird’s Nest. They designed the ground used by FC Basel, their home team. Now they are designing a ground for Portsmouth FC (a club which has the merit at least of being proud of its family following).

Lest I be taken to mean that there is no merit in football, I supposes I ought to concede its usefulness to the international investigators trying to understand the wrong-doings in Darfur, as retailed in the FT (26/27 July 2008). They resorted to talking football because they found it difficult to discuss the matter in hand. Who can blame them?

Let’s leave aside for a moment whether these men are on to anything that will work. Everything about their coming together is a great American story. We meet an immigrant theoretical physicist (Klaus Lackner) who believes carbon can be scrubbed from air. He meets a climatologist (Wallace Broecker) who is inclined to agree. Lackner (as Columbia academic) worked on a late incarnation of the Biosphere project, the failed dream child of a Texan billionaire (Ed Bass). It was an attempt to replicate the earth’s atmosphere in a manmade bubble. There’s a practical mechanic (Allen Wright) who is fired when the Biosphere finally fails. His brother (Burt Wright ) is a Tucson fireman who works with ventilation systems. Broecker hooks all these men up with a further billionaire (Gary Comer), who agrees to fund an attempt to build and (patent) carbon scrubbers.

The team have made some kit which works. To cut to the chase, the US would need tens of millions of units about the size of lorry containers. (Quite how many depends on how many big power stations mop up their carbon emissions at source.) Luckily, these container-sized units could be anywhere, and they could be near disposal sites for the carbon-dioxide waste they’re designed to produce. But disposal seems to be a whole other dimension of problem.

I imagine that whether we “solve” climate change, or merely survive it, the story of the solutions we find will often look like this. Academics, mechanics and entrepreneurs will be crucial, and chance, inspiration and adventure will be at the core of it all. Quixotic people will turn out to have been invaluable. 

A lot of people who have come to me for spiritual counselling have wanted to talk about their sex lives. So you may gather I am a bit of an expert in the field. The first thing I’d say is that you can never predict from appearances who likes to use prostitutes. The second thing is that it’s impossible to predict what fantasy will turn on whom. So when we come to the Max Mosley case against The News of the World, I have views:

It wouldn’t be his fault if Nazism looms large in his life
Everyone knows the Nazis were sexy – all that leather and doing the dark thing
One can do Nazi sex fantasy without being a Nazi
Anyone can do Nazi sex fantasy without having a fascist father
Doing a Nazi fantasy is nobody’s business but one’s own
Newspapers shouldn’t be allowed to prey on Nazi fantasists
He wasn’t doing anything even like full-on Nazi fantasy

On the other hand, it may not matter if Max loses because:

He could go on leading Formula One without difficulty
It’ll give us all a chance to show we don’t give a damn
It’ll remind us that all our games may become public and none of it matters