If I had written the final season of Downton Abbey

Montclere Castle: location of the fictional Downton Abbey

More than 200 mansions of the type featured in Downton Abbey were destroyed between the two World Wars.  Wouldn’t you have loved to know how Downton might have survived it?

Our household never missed a minute of the recently concluded BBC drama; and, like many, we were disappointed in the final episode, indeed in the entire final season.

Why?

The appeal of this soap opera springs from its adherence to the mores of the day and the history of the British estates, a history that goes back to the Tudors. By the time of Downton Abbey, a saga that straddled World War I, the British aristocracy had survived economic decline, onerous taxes and war.  At the outset of the first season, Downton’s survival had depended upon a strategic marriage by the Earl to a Jewish American heiress.  That was the reality of the time. 

That theme -- preserving a way of life and the duty felt by the Earl to do so -- was lost in the final season.  Julian Fellowes is a great writer.  However, if he had bothered to ask me (not that I thought he might), I would have advised him to keep that ball in play. 

In a wonderful recounting of the history of the British estates in Vanity Fair, Charles Spencer (the younger brother of Diana, Princess of Wales) captures the culture of the British aristocracy which, for centuries, lived according to a certain tradition centered on the idea that it was their solemn duty to preserve their estate along with its property, its decor and art collections.

The early seasons portrayed the Crawley family against a backdrop of modernizing the farming operations, selling parcels of land to real estate developers and (as I wrote about in “How DowntonAbbey destroyed England”) the loss of significant capital in a stock swindle. 

 

Michelle Dockery as Lady Mary

In Spencer’s Vanity Fair piece, he summarizes the context thusly:  

“… [T]he British aristocracy [was] forced to morph and contract from its final peak, in the late 1870s. Then 80 percent of the country’s acreage was owned by 7,000 families, principally those of the 431 hereditary members of the House of Lords—the dukes, marquesses, earls, viscounts, and barons of the United Kingdom. Beginning in the 1880s, the export of grain from the Americas, followed by the arrival in Europe of refrigerated meat, halved agricultural income in Britain. What had been the lifeblood of the great estates for hundreds of years was cut off suddenly, and unexpectedly, with devastating effect, in both the short and the long term: agricultural rents were the same in 1936 as they had been in 1800.

“In a grim pincer movement, taxation increased at the same time. Death duties were introduced in 1894 at 8 percent. By 1939 these had reached 60 percent. In 1948 they were levied at 75 percent on estates worth more than £1 million (an equivalent, at the time, of $4 million). The British aristocracy drew in its horns. The most prominent families sold around seven million acres, or a quarter of England itself, in the years on either side of the war’s conclusion...” 

How would Lady Mary have dealt with these macroeconomic conditions?  I would have loved to know. 

Laura Carmichael as Lady Edith

I’m all for happy endings.  After all, I grew up in a time when full length Disney animations of Snow White and Cinderella were Sunday evening prime-time entertainment.

However, were I writing it, the Earl, deep into his 70’s by the mid-1920’s, would have met his demise in the final season, shortly after his bleeding ulcer burst so unceremoniously during one of Downton’s famous formal dinners.  And, so long as I am fiddling with the fortunes of the Crawley’s, I would have left Lady Mary refusing to marry beneath her station and the sister she despised, Lady Edith, as a fellow spinster and estate-mate, having ruined her prospects of marriage by having a child out of wedlock.

Bette Davis and Joan Crawford in Whatever Happened to Baby Jane

Imagine, if you will, a final scene with Mary standing astride this fading empire, her sourpuss sister skulking in the background.  That would have begged for a sequel, wouldn’t it? 

Would the Crawley sisters survive the socioeconomic ordeal?

Or…

Would the sequel be kind of like “WhateverHappened to Baby Jane?”

A Bottomless Pit of Money

I should have known what would happen.  Three cities in three days, each with a pre-dawn start to my schedule, culminating with my arrival on Saturday in Rochester, NY where the temperature was 6°F.  So, I caught a head cold.

Well, at least I know it was a cold now.  But, at the time, I thought it could be anything. “It’s either the flu or pneumonia,” said the doc.  Even in my Robitussin induced stupor, the idea that I might have pneumonia scared me a bit.  People my age die of pneumonia all the time. 

“Your lungs sound clear but I could take an X-ray to be sure it’s not pneumonia.  Do you want to do that?” she asked.  Now, I suppose if my head were clearer I might have asked, “If my lungs are clear, why do you think I have pneumonia?”  But, I didn’t. But, because I was asked and said yes, I’ll get a whopping big bill from the radiology department.  So, why am I telling you all this?  Because it’s a microcosm of the challenge we have reforming healthcare. (No, Obamacare didn’t reform healthcare.) 

In the not too distant future, I will be eligible for Medicare.  Then I won’t sweat this stuff at all.  After all, the government is a bottomless pit of money, right?  Of course, being a fiscal conservative, I wonder what might happen when the Medicare fund runs out of money, which should happen in 2024 according its Trustees. 

But then, why worry about that?  The country shows no sign of slowing its production of new money to fund government deficits.  And, no one in Washington (or anywhere else) seems to care.

So, how do we wrestle this beast to the ground?  And, why bother?

I think economist John Mauldin phrases the problem statement best:  “In the US, the real question we must ask ourselves as a nation is, ‘How much health care do we want and how do we want to pay for it?’ Everything else can be dealt with if we get that basic question answered. We can substantially change health care, along with other discretionary budget items, or we can raise taxes, or some combination. Each path has consequences.”

The cover story in this Week’s edition of Time magazine, “Bitter Pill, Why Medical Bills Are Killing Us”, digs deep into the challenges we face.  Before reading the article, I thought of the medical insurance companies as the Evil Empire in this quagmire.  But, the economic power is shifting to hospitals, particularly non-profit hospitals, according to the article’s author, Steven Brill.

Hospitals are buying up physicians’ practices and aggregating services to control the entire medical supply chain.  In some rural areas, they are the only game in town serving the community much like a utility company – except there is no public service commission to control prices.  Brill goes into great detail examining why the so-called non-profits have higher net margins than their for-profit brethren, on which they pay no taxes of course.   The nation’s second largest non-profit hospital, The Cleveland Clinic, nets over $570M and pays its CEO more the $2.5M per year.  Does that sound like a non-profit to you?

To make matters worse, the hospitals grossly overcharge for everything.  How do we know?  Well, hospitals are required by law to submit their actual costs to Medicare, which pays cost plus a standard profit margin. The net of it:  Medicare pays only about an eighth of the average hospital’s full charge.  So, the huge “profits” of the non-profits are the result of them grossly overcharging their non-Medicare patients.

A few weeks ago (in a fit of whimsy) I used the popular TV show Downton Abbey as an example of how entrenched interests -- the lords and ladies of the British aristocracy -- hampered the economic progress of Great Britain, the pre-eminent economic and military power of the 19^th Century. 

Now, the US has its royals – the lords and ladies of the healthcare system --absorbing 20% of GDP, spending it inefficiently and undermining the financial security of the middle class.  The entrenched power of these institutions – represented by lobbyists that outnumber members of Congress 7 to 1 – are hampering the economic progress of the US, the pre-eminent economic and military power of the 20^th Century.

It makes me wonder…  WHO WILL LEAD?

How Downton Abbey Destroyed England

Downton Abbey

I admit it.  We’re hooked.  We never miss an episode of Downton Abbey, a sweeping soap opera filled with complex characters that takes place in early 20^th Century England.  It’s the latest offering from Masterpiece Theatre who gave us Upstairs, Downstairs a generation ago. 

When we aren’t wondering what will happen next…

Will eldest daughter, Mary, marry the heir to the estate? (She did)  Will youngest daughter, Sybil, run away with the chauffer? (She did too)  Will Lord Grantham’s valet go to jail for murdering his wife? (No surprise, he did!)

….. we are marveling at the presentation of  British manners and the class system. 

Now in its third season, we find ourselves in the 1920’s.  It was a time of social change and lots of dialog is devoted to the pending breakdown of the British class system.  Maggie Smith, playing the grand dame of the family, offers comic relief as well as context.  When she first hears the word “weekend” she asks, “What is a week-end?”.   Presumably, all days are the same if you have never done a day of honest work in your life.

But, all this clinging to tradition strikes me as more than a bit odd given the decade in which this melodrama takes place.  This was the Roaring 20's  in the U.S.  And, these blokes are going on and on about how they have an obligation to “provide jobs” for the lower class workers who live in their house and reside on their estate.  This, apparently, is part of the rationale for hanging on to the estate no matter what the obstacles may be.

During the 20’s, the implementation of mass production techniques drove down wholesale prices and increased industrial production in the US.  Meanwhile, the British economy stagnated.  While the dukes and duchesses were providing jobs to valets and ladies’ maids whose profession was to help their masters get dressed a couple of times a day, their counterparts in the US were putting people to work in factories, producing washing machines, radios and cars. 

Actor Hugh Bonneville as Lord Grantham

An analog often used in teaching economics is that of the “last buggy whip manufacturer”.  He tends to his trade and makes good money even while people are buying cars en masse. When there is no longer a demand for his product, he goes broke.  It’s a simple way to explain the effect of innovation.  Austrian economist Joseph Schumpeter called it the Law of Creative Destruction. 

Think of what email and FedEx have done to the Post Office and you’ll understand it easily.  Or, trace the evolution in the music industry from vinyl records to cassette tapes to compact discs to MP3 players.  Embrace innovation or go out of business.

In an early episode of Downton this season, the Earl loses most of his fortune in a bad investment.  His new son-in-law, the heir to the estate, invests a large inherited sum not in an industrial enterprise or even in bonds but rather in the estate, Downton Abbey.  All are relieved that the grand tradition of the British upper class may  be preserved.

And it will be.  Until they make the last buggy whip, that is.