The money world bows to American bullies

ANYONE living in Britain in the 1980s will recall the bizarre sight of hundreds of toffs from Oxford and Cambridge transforming themselves into American investment bankers.

The very same people who just a few years before had used the word "aggressive" only as an insult and pretended to disdain money-making came marching into Salomon Brothers and Goldman Sachs baring their ids to American interviewers. What they really wanted in life, they would say, was to sell the hell out of corporate bonds.

Many probably didn't even know what corporate bonds were, but that didn't matter. Somewhere deep in their English souls they knew that their culture was sinking and the lifeboats were filling up, and they were not going down with the ship.

The Oxbridge toffs were only the most striking - and hypocritical - example of cultural self-betrayal. By 1986 young Frenchmen working in finance had taken to calling themselves "Le Golden Boys", half of Scandinavia had turned up in the reception of Shearson Lehman, and even the Spanish and Portuguese had contributed their best and brightest to American finance. The tone and style of the American financier spread across Europe.

Now, more than a decade later, we can see that this was no mere passing phase. With the Asian financial system in ruins, the American financier has moved in and is being embraced as never before. When the South Korean government needs to sell bonds it turns to Goldman Sachs; when it needs to sell banks it calls in Morgan Stanley; when it needs to find jobs for its homegrown financial geniuses, it calls any American it can find.

The same is true for Thailand and almost as true for Japan. The Goldman Sachs partner is the late 20th-century equivalent of the colonial administrator. He is the man who moves into weaker countries and tells them how to behave.

Interestingly, young Koreans and Thais and Japanese are putting up with this. They are not rioting in the streets. They are not walking but running away from their rat-trap banks and finance companies and into American firms, or European firms modelled on American firms. American financiers in the late 1990s are seizing control of the money business across the Pacific, just as in the late 1980s they took control across the Atlantic. And young Asians everywhere want a piece of their action.

It's hard to measure the effect of this on American power, but it is great. All those charming Asian values - respect for the elderly, desire for permanence, loyalty to the company - are taking a blow from which they will never fully recover. (Ask the English.) The world of Asian money is being Americanised.

The funny thing about this phenomenon is that Americans do not formally acknowledge it. Informally, they can see that Treasury Secretary Robert Rubin is a far more important person, even outside the US, than Secretary of State Madeleine Albright. Yet the US still has in place an old-fashioned diplomatic structure, complete with its costly embassies and diplomats.

Does anyone really know what an ambassador does for a living? In times of war he or she is a source of confusion (remember April Glaspie telling Saddam we wouldn't mind terribly if he invaded Kuwait?). In times of peace an ambassador is irrelevant.

When real problems arise, as they have in Asia, the Powers That Be call on someone else to fix things. Often that person is not an American diplomat but an American financier. The world would be more true to itself if the American embassies were sold off to American investment banks as foreign branch offices.

For American financiers it is the best of all possible worlds. Their global prestige has never been higher. The Goldman Sachs partner is freed from whatever self-doubt he might have felt; the entire industrialised world now recognises his essential superiority.

But there is a rule in life, a corollary to the fool at the poker table rule. (If you don't know who the fool at the poker table is, you're the fool.) The rule is that if you don't know who the bully in the global economy is, you're the bully. As American financiers look down upon the world with malignant self-certainty, they ought to keep this in mind.

q Michael Lewis is the author of 'Liar's Poker', the best-selling account of Wall Street in the 1980s.