Tamara Ecclestone Reforms Capitalism
In the 1980s, Bernie Ecclestone invented Formula One and made a few billions pounds. He’s now in the process of giving huge chunks of his wealth to his daughter Tamara.
In a very important sense, Tamara is putting the world’s dominant economic ideas to the test. She’s a kind of one-woman experiment in the virtues and vices of Capitalism.
We’re so focused on what Capitalism does to the poor, we tend to forget to study with sufficient rigour what it does to those it makes rich.
The entire point of Capitalism is to free people to make money. But it says very little about how they might spend what they end of up making. This vital question is generally left off the agenda, lest it interfere with that prized political virtue: ‘freedom’.
But a lot is resting on Bernie’s freedom and ultimately Tamara’s choices. There’s a huge history of intellectual effort leading up to this father-daughter duo. Big 20th century economists like Friedrich Hayek and Milton Friedman battled to show the benefits of markets to societies. Tamara is the fruit of these sophisticated moves. She is what success looks like for Capitalism. So how has she responded to her blessed situation?
Tamara’s personalised Range Rover
Tamara bought a Ferrari, a Bentley and, recently, a Range Rover. She bought a spa for her dogs, a one million pound bathtub; a few drinks for her friends (they were reported to have cost 30,000 pounds) and a large house in Kensington Palace Gardens, which needed a total refit – and now includes a conveyor belt to bring her handbags within easy reach. She’s also been interested in showing her life to the world, with a documentary reality series and some topless shots for Playboy.
Tamara doesn’t go around hurting people and she’s been pretty active in charity (though for her to give 1,000 GBP is like someone on an average income giving away 10p).
If you were to ask Bernie what he made his money for, a big part of the answer would be that he wanted Tamara to be happy. He’s probably done that; all her material needs are catered for, and she certainly seems to have a lot of fun. But what about the rest of the money? What is its purpose? What should it be doing for the world?
Tamara got married.
We’re so focused on shortages of money, we don’t often consider how its occasional enormous surpluses should be handled. The deep problem of Capitalism is not so much that it leads to private wealth, but that it leaves it entirely to chance whether people do wonderful things with their advantages – or concentrate on motorised racks for their shoes.
In the 15th century, Lorenzo di Medici funded the Renaissance. In the 1920′s, Catherine Drexel founded Xavier University in New Orleans, which played a major role in developing a black professional middle-class, with incalculable benefits to the US. In the 1940′s, William Volker, who made a fortune selling household furnishings, funded a number of US think-tanks that eventually made a great contribution to the peaceful and successful ending of the cold-war. These were grand ambitions commensurate to extraordinary means. They also remain the sharp exceptions.
Perhaps a lot of the resentment against the rich is really a way of being justifiably angry, not at their money, but at their lack of purpose and imagination. Could a society evolve so that it paid attention not only to the opportunities for making money but also to the expectation that it be spent with equal intelligence and rigour? Arguments in favour of redistribution and against inequality are at least in part complaints about wasted opportunities.
It’s the peculiar fate of Tamara Ecclestone that the meaning of Capitalism should be played out in the details of her luxurious and very public life. It’s easy to snigger at what she has spent money on to date: seeing her waste her fortune reassures us that it was never worth accumulating in the first place. But, if we accept the basic premises of capitalism (and we do), then the real challenge is to work out what she should ideally go shopping for in the future.
Thirty thousand pounds on champagne with a couple of friends is not the end of the world. But it does suggest a certain lack of purpose. Maybe Tamara doesn’t really know what to do with most of her cash.
The usual answer is to suggest that, in the interest of the public good, she should be relieved of her advantages. The government should step in with a more ambitious tax regime and put the money to proper work.
The problem is that Tamara is quite poor as far as governments are concerned. We don’t know the exact state of her bank account, but suppose she has something like 600 million pounds at her disposal. This is huge for an individual. But sadly it is a very small sum in the realm of government. Westminster could use it to give everyone in the UK a one-off bonus of 10 pounds. It would make a ripple in the news for one day, but a sandwich, one cup of coffee and a bus ride later and it would all be gone. It could be used to pay down the national debt – by 0.05%. It could all be spent widening a few miles of the M6. Not nothing, but hardly the stuff of dreams. Westminster is already spending something like a trillion pounds a year and things are at best just ticking over. There’s no compelling reason to use a private fortune – even of this magnitude – to mimic, on a toy scale, the things the government is doing already. The opportunities should lie in areas where the central government can’t or won’t take action.
There are many of these and they matter a lot. Democratic governments are surprisingly constrained in what they can legitimately spend taxpayers’ money on. The focus tends to be on satisfying material needs that can’t be disputed: the need for hospitals, schools, roads and prisons. These things are so clearly necessary, no one can be accused of being wasteful or crazy (and therefore lose office) if they divert resources towards them.
But this doesn’t mark the limit to what a good society needs. Our needs aren’t only material. There’s a huge area of psychological and aesthetic requirements that governments can’t or won’t touch and that are a natural area for private fortunes to focus on.
It’s not just government that is weak in these areas. Pure commerce tends to shy away from them too. That’s because the return on investment is insecure. Businesses worry about how the balance sheet will look in six month’s time – which is too quick for many worthwhile projects. Deep pockets mean you can absorb the risk.
The Philosopher’s Mail has drawn up a list of four things Tamara could do to improve Britain:
One: Prevent rows
Rows are a scourge of domestic life, causing untold misery and despair. You’ve seen a fair bit of this yourself.
You might think it’s just a matter of luck: some people end up having lots of blazing, lacerating shouting matches, a few seem to avoid them altogether. But that’s not quite right. Dealing effectively with a disagreement or relationship difficulty (and without screaming abuse) is a matter of skill not chance. It’s just that we have not collectively paid much attention to teaching and learning the relevant moves.
So here’s the idea. There’s plenty of knowledge already out there somewhere – we’re not suggesting you should fund a research project. Instead – go in for consciousness raising: make people feel that rows are a problem that can be addressed. It’s not hopeless.
Then we need to publicise the good moves and that costs money: we need a big advertising campaign on how to back down (even when you’re in the right); how to say sorry and mean it (even if you only mean it a bit); how to lessen the panic – plenty of good people end up here. You’re not a unique monster just because you’ve lost it for a bit, but you do have to try to patch things up.
You’re not going to stop all rows, obviously. But if everyone had half the shouting matches they do, Britain would be a very much happier and more productive place. That should be the first goal.
Two: Set up the ideal celebrity magazine
You like reading Hello – and so do millions of other people around the planet. Celebrity is one of the most powerful forces in the world. But you know that celebrity gossip does not often pick up on what’s actually good and impressive about people. We only get to see the bling, not the sources of the motivation or the origins of creativity. We’re asked to get excited about a film or skin-care product promotion. We’re excited: that’s what makes someone famous. But you could help us get better at discerning the true merits of the people whose lives we are so fascinated by.
Your magazine wouldn’t just focus on the ways in which celebrities do things the rest of us never will – like have a fabulous wedding on a beach, with Elton John supplying the music. Instead it would look at how someone can do things we all do slightly better, can be patient or good at compromise or gets on well with their children or is a loyal friend. These are genuine virtues and they are transferable. The rest of us can’t book out the grand hotel. But we can be encouraged to forgive or be stoic.
Three: Get us to spend more time on the couch
At present going into psychotherapy is unusual and embarrassing. It shouldn’t be. Addressing our intimate troubles should be one of the basic things we all do.
Celebrities make things fashionable. A lot of people want to do a little of what you do. A while back, there were no almost nail bars in the UK. Now there are thousands. They are on every high street. This is a long-term business opportunity. It would take investment. It would take time. It would make a huge difference. You have the two key assets: you have the celebrity status that can help shift public perception and you have the money that can see this through its tricky fledgling days. It’s not in the end about pure charity.
Four: Make other people’s houses like yours
You love your houses in Kensington and Los Angeles. You are a home girl – you want to get the get the furniture just right; you like big windows, high ceilings. You like designing bath rooms. But at the moment, these skills are focused pretty much all in one place – your own. You could spread your ambition and your taste. IKEA made the move, a while back, of bringing a modest modern simplicity to the mainstream. In the past that style was very expensive and only had a few supporters. The genius of IKEA was to make it normal and inexpensive. And it improved a lot of people’s lives.
You have a different style – more elegant and sensuous. But you should be thinking in the same big terms. The government won’t appoint a minister of elegant rooms. But you could take on that role without formal appointment.
You are facing a problem that’s new. Modern societies allow private fortunes to be made, far in excess of what one person, or family, can spend on themselves. This didn’t happen so much in the past, so we haven’t built up a clear sense of how private wealth can be most usefully and interestingly used. You’re a pioneer.