No escape from boom and bust

The National Theatre has revived its production of The Lehman Trilogy for a limited run. This award-winning play illustrates what Marx and Lenin taught us – that the accumulation of capital and its expansion into an imperialist financial system leads to crisis upon crisis, boom and bust, until even capitalists like the Lehman Brothers can’t survive.

This whole sorry saga – a tour de force in three acts – is played out by only three extraordinarily versatile actors, against a skyline, first of Montgomery, Alabama, then of Manhattan. Their stage is a box-like structure and the colour scheme black and white, as in old photographs and cinematography. Cardboard boxes remain piled up on stage throughout, a poignant symbol of the boxes used by Lehman office workers as they were forced to clear their desks.

Dominoes

Banks collapse like dominoes. Failure is built into the system, which encourages risk taking and exploitation of the poor. Lending for investment purposes based on useful production is replaced by the selling of toxic bundles of debt, of no value to people or nations.

Lehmans forgot its origins in enabling investment and simply followed the money. The timing of this revival seems right, with politicians of all hues still blaming the banking disaster of 2008 for their own inability to manage the economy.

With war in the Middle East, there is also urgent need to combat a particular kind of antisemitism, which conflates capitalism and banking with Jewishness, and Jewishness with the Israeli state. The play indirectly invites questions about these matters, as it charts the development of the USA and the fluctuations of capitalism from the 19th century to the present day.

Early parts of the dialogue are interspersed with exclamations in Yiddish, to remind us of the humble origins of a typical exiled family, seeking to prosper in new lands and to retain their traditional values in the face of the mounting temptation of the money markets.

The Lehmans were German-Jewish immigrants from rural Bavaria in 1844. They start out in a small way as general store owners and itinerant salesmen in Alabama, where cotton is king, becoming “Lehman Brothers” in 1850. They start to trade in raw cotton and soon experience the first of many widespread panics caused by a collapse of the financial system.

After the bloody Civil War (1861-1865) and Emancipation they emerge stronger and become a bank, aiding Reconstruction in Alabama. In 1869, by now in New York, convenient for the sea routes to the cotton mills of Lancashire, they diversify from agricultural into industrial interests.

Panic takes hold again in 1873 as the stock markets collapse. The Lehmans diversify to survive and by 1880 are found dealing in coffee and oil. In 1884 they start investing in steel and railways. As World War One looms, the US establishes the Federal Reserve, its central bank.

Postwar

Postwar, a new generation becomes interested in financing emerging industries geared towards mass consumption, such as airlines, automobiles, motion pictures and cigarettes. Undeterred by Protestant east coast prejudice and rejection, they diversify into launching retail companies too.

In 1929 the Lehman Corporation, an investment company, is created. It is the year of the Wall Street crash, followed by the Great Depression, with millions unemployed. By an incredible stroke of luck, the millions of dollars received from the trust’s shareholders had not yet been invested back into the stock market.

‘The whole edifice of loans came to a head in 2008, precipitating a financial crash…’

Added to that, someone from outside the family was brought in – John D Hertz of car rental fame. His capital from selling his Yellow Cab Company to General Motors was the boost Lehmans needed to help weather the crash. Herbert Lehman diversifies into politics, supporting Roosevelt’s New Deal and controls on bank speculation. He says: “Grabbing and greed can go on for just so long, but the breaking point is bound to come sometime.”

The family ride out World War Two, but in 1965 a reckless younger generation turns to the latest grand commodity – money – divorced entirely from the production of goods. The 1980s, the Reagan years, are driven by market deregulation. Investment banks become primarily concerned with financial services.

Still named Lehman Brothers, the bank is acquired by American Express, which discards it in 1994. Meanwhile the oil crisis due to the Gulf Wars has sent the markets into a tailspin. The stock exchange is now digitised and incomprehensible to older members of the firm.

Lehman’s offices are destroyed in the 2001 attack on the World Trade Center, but in 2002 the company acquires ambitious new global headquarters in Manhattan. Lehman Brothers entered the subprime lending market early – a hugely profitable business creating mortgages bundled into “junk” bonds. But many borrowers were unable to pay. The whole edifice came to a head in 2008, precipitating a financial crash.

The rest is history – Lehmans quickly bankrupt, billions of dollars wiped out, stock markets around the world collapsed, and the worst financial slump since the Depression, threatening entire nations. Capitalism was put on life support – bailouts, “quantitative easing” (printing money) – for which workers are paying to this day.

This production of The Lehman Trilogy by Stefano Massini, adapted by Ben Power, is playing for a limited season until 5 January 2025) at the Gillian Lynne Theatre in London.

• Further reading: Peter Chapman, The Last of the Imperious Rich: Lehman Brothers 1844-2008, published by Portfolio in 2010 and still available.