I have always been fascinated by markets, when I first discovered them I was amazed that they could be chastised by some, worshipped by others and seemed to have a strange mythical power to affect ‘real life’ things.
To hear someone on the news say ‘it will be interesting to see how the markets react…’ or ‘the markets reacted badly to this event……’ was incredibly bizarre and made me question how this abstract concept could wield so much influence over people.
It was only after living, experiencing and a fair bit of reading that it clicked for me that markets actually are people. They are an embodiment of what we do because they are just a huge reflection of what we are buying, thinking, fearful and confident about and contain all the irrational, aspirational, impulsive and emotional behaviour that people do.
Getting back to the blog and away from context – markets surround us and have played a part in pretty much everything we do. However, not all markets are visible and many live well away from regulation, government knowledge and safety nets. The idea of this study was to look at the shadow economy that exists in Greater Manchester not so much at a macro level but to see what type of transactions are carried out, by who and how.
The study is an ethnographic piece of work and has meant spending long periods of time within the key communities studied – the study is 10 months old and will likely go on for at least another three years.
As this is a piece of work that has been company funded we are able to go where we find interesting things and really push them. We are not attempting to quantify the shadow economy in terms of pounds and pence or chastise it. The purpose of the work is to look at the human elements, what is being traded, why and what markets are developing where mainstream markets either exclude or are excluded.
We are also hugely interested in not only the ‘really’ illegal such as drugs and prostitution but also those markets and transactions that are illicit because of their existence outside the mainstream (taxed) economy and how people flit between the economies.
We will write this blog as we go along – this is not a report or a full study – just some snippets along the journey.
A big credit must be paid to Sudhir Venkatesh and his work ‘Off the books’ (which you can buy here) as it fascinated me to go out and try to emulate his work but in a Manchester style!
Money Lending (1) – The nice(r) side
It’s fair to say I have a very strong personal opinion on unregulated money lending, I have a strong opinion on regulated money lending, which I’m confident in saying I am not in a minority.
So attempting to maintain an objective viewpoint was going to be incredibly difficult.
First things first – nothing in this blog is promoting illegal money lending, the extreme ends of the spectrum are a horrendous vicious cycle which I wouldn’t wish on anybody. However, what I am going to briefly talk about is what I will call (for terminologies sake) the ‘middle ground’ i.e. not a high street (or back street) legal lender but also not a baseball bat wielding ‘Mr Big’ of the underworld.
This is not an overall view of the market, rather it is an individual story.
The plan wasn’t to start with this particular field it rather found me, after spending some time in a pub and café in a ‘well-known’ area of Manchester I got chatting to a fella (let’s call him Dave) who used to come into the cafe for a coffee on a morning.
I’ve always been very honest with people about who I am and what I am doing and usually (sometimes) people have reacted well (mainly indifferent) to it.
Dave was working and sending money to his ex-partner for their two children, this left him with very little money for himself and he survived on a paltry amount each week.
After a few discussions he was fairly confident I was who I said I was and we discussed the loans he had – the main and ongoing one being with ‘Ted’ (clearly these are made up names). My own personal biases were very much coming to the fore here, however what was really clear was that Ted was viewed as a key local and accessible service not only to Dave but also many others like him.
Dave did not use Ted’s services every month and sometimes not for a few months, but he did need that extra cash at certain points of the year. Being excluded from the mainstream credit market due to his past and also due to his lack of income, credit history and situation it left him with very few options.
I asked what type of amounts he borrowed and they rarely strayed over £150 which he had the option of paying off quickly or slowly and he showed me his book. The interest rate was large but not at the level of some ‘legitimate’ and regulated lenders. I asked about any times he had been unable to pay and the response was largely positive – he regarded Ted as (almost) a friend and in the few instances where he had not been able to pay an arrangement had been quickly sorted out.
The impression I got was Dave and Ted were always likely to do business together in the future so a squabble that turned into anything bigger was good for neither party and every single disagreement had been settled between themselves.
In terms of the view I had of this business was that a baseball bat or at least a physical threat was never far away (after all these lenders do not have access to courts to settle disagreements or defaults). The reality in this one relationship was one of a market that has developed where there was a need for one, Dave needed credit and Ted provided it with an interest for himself within it. Of course Ted wants his customers to keep coming back but he also wants them to pay and have the ability to pay.
This as described in the context piece is just one relationship in a huge market that exists on a spectrum probably from this one at the nice(r) end to the grubbiest one you could imagine at the other. It was though without incident and had evolved through some basic supply and demand economics with price acting as the arbiter (It was also the first one I discovered so it marked me being out there too!)
There are obviously some huge societal issues here around Dave’s situation and how he should be in a position not to need this service and how he should be rewarded for doing the right things – that is not the point of this study and actually society is a long way from eliminating poverty and all the industries that spring up to supply it and in many cases maintain it.
The Gladwellian in me would be trying to utilise the networks of reasonably civilised lenders like Ted to impact some social change but I can’t see that idea catching on with politicans.
Next time on this subject we will look at a very different money lending business model which is further down the desperation scale and with that comes some pretty horrible situations.
EDIT – After reading this back it feels a bit fluffy saying all money lenders aren’t baseball bat wielding thugs – I stand by this. Would I want to be in this situation, no and I hope nobody has to use these sources of credit. However I would rather deal with Ted then a character I will introduce you to the next time we talk money lending (even though I have never met him)
I disliked intensely the fact I had braces as a 14 year old, particularly as they were applied on the week before I was going on a holiday with a friend of mine to Butlins at Skegness where I was
planning to use my 'tallness' to get served alcohol.
The braces were removed just before my 17th birthday and between that day and me turning 32 I never went near a dentist's chair.
Coffee, coca cola, sugar and a slightly more mature outlook on life eventually got me back in the chair. Dentistry had clearly changed, my dentist Tony 'call me Tony' wore high tops and generally had a mellow outlook on life, I was delighted when he said my teeth were fine but this immediately made me think - either this 6 month thing is just a swindle or Tony is not quite as thorough as I had hoped. Either way I was happy as Tony 'call me tony' said I only needed to come in once a year, all good.
Unfortunately the good times cannot last forever and Tony 'call me Tony' left for pastures new. My new dentist saw me and immediately put me back on every six month visits and took a slightly more traditional and patronising 'floss mafia' stance.
You're wondering what this back story has to do with anything - well you'll likely be disappointed to know it doesn't bear any significance whatsoever, however I do have an experience to share.
My most recent visit to the chair has left me with a key question 'During a scale and polish when the hygienist has the suction thing in my mouth what exactly is the correct tongue etiquette?' As there is no sign on the door saying what to do and I don't remember any school visits or stickers explaining this I was left a little perplexed.
This seemingly random question first popped into my head when the hygienist wasn't performing at her optimum level removing the excess liquid from my mouth and a question of whether to swallow or not swallow emerged.
The case against was compelling, firstly and practically If I swallowed I imagine it would not be in the top 5 products I have tasted.
The liquid would also be a difficult one to get back as it was lodged between my bottom teeth and bottom lip so it would take a swallow combined with either a head tip or a mouth close to get it back.
Finally it would also be really clear to both the dentist and hygienist that I had swallowed, whilst this was not a major factor in my thought process the prospect of being locally known as the scale and polish swallower seemed like a big burden to bear.
Whilst weighing up these arguments rationally the amount of liquid in my mouth was continuing to grow to the point where I thought 'this is going to spill out very soon'
So immediately I had a comparison to make - did I want to be the swallower or the dribbler in the eyes of these health professionals.
Thankfully my hygienist clicked into gear, the amount of liquid had clearly become visible and thankfully the adrenalin kicked in and the backlog was cleared. Phew.
However with this new found devotion to duty came a new tactic with the suction machine where it was being moved around my mouth. This presented a very real question and one I had previously not considered (maybe due to my sparse appearance at the dentists in the recent past) what do I do with my tongue in this situation, before now and even through the uncomfortable swallow incident I hadn't given my tongue a second thought, now, however it was all I could think about and with this came conscious control of it.
The two tactics I thought of were as follows;
1. Keep it still - obvious, keep it in the middle and very still. This sounds really easy but try it (I bet you're trying it!). However try it lying back in a chair with two ladies with implements in your mouth whilst trying to maintaining a nonchalant look of cool.
2. Play a zonal roaming role - second guess the movement of the suction, find a way of working with the hygienist at a telepathic level so my tongue could vacate the area the suction device was moving to and vice versa. Whilst this sounded like hard work it felt more comfortable and involved me 'doing' something.
Clearly I went for tactic number two, which I will strongly advise never to do. I must have appeared that I was either very fond of suction machines,or just plain odd. However, after thirty or so seconds (involving one incident where the tip of my tongue was grabbed by the device) which seemed like around ten minutes I decided to change tactics and just try to forget about my tongue.
The forgetting tactic worked a charm and led me to believe there are some things that just don't need me to be involved with mentally and this was clearly one. Conscious control is not all it is cracked up to be and mindless intervention becuase it feels better to do something is not always a good tactic - whilst this story was not meant to work on two levels it appears I have weaved some kind of lesson in life into it. This was not the intention, the key lesson I am taking away is not to tongue a suction machine.
The above happened in the course of about three or four minutes but as you can see the scars are much deeper!
NEXT WEEK (and slightly more seriosuly) the Undergorund Loan Business in Manchester