Saturday, September 05, 2009

A Law Unto Themselves

The British government's ongoing refusal to address the question of grotesque bonuses that bankers pay themselves, awarded for doing what seems to be little more than looting the economy, makes one wonder just how deep the financial sector's capture of our government has been.
That this practice continues despite the banks having had to be bailed out quite clearly indicates that bankers feel themselves entitled to such payouts; there seems to be no question of them having to be earned. In such circumstances, the bonus is to the banker what the tithe was to the medieval prelate; a tribute payable by the serfs to an arrogant and remote overlord.
There is no question that this is the fault of both the study and practice of economics, and the violent application of economic theory to democracy. The more madcap economic purists will say that this is not the case, that if the theory had been followed we'd all be fine. However, such arguments border on jesuiticalism; if you start off by telling people that it's OK for them to always act rationally in their own self-interest, then they'll always act in their own self-interest; and as we have seen since the start of the credit crunch, the rest of us will be too busy worrying about how to pony up the tab to be able to debate whether or not their actions were rational in the first place.
The idea of debating whether our bankers acted rationally, or were instead so irrational they they merited being restrained in mental institutions under compulsory measures of care, is not one which has caught hold quite yet. Its day might yet come.
For nearly three decades, perhaps much longer, the banks have had too much power, to the extent that we now must question whether the country is being run for our benefit or theirs. They are just one sector of the economy. There is absolutely nothing special or unique about them as businesses. Indeed, the vast majority seem to be anti-businesses, making nothing and producing nothing. Perhaps from the start, there would have been merit in considering a banker to be nothing more than a slightly better class of bargee - someone whom you know is necessary in order to keep things running smoothly, but who are by their nature disreputable, the sort of person you wouldn't want your daughter to marry and who should be shunned and mocked in the street.
But no, the solar gravitational pull felt by power towards money meant that the bankers ended up becoming knights and lords; in the case of Frederick Goodwin, for seeming to do little more than casting thousands of people out of work. For a title to be awarded to such a man was a disgrace; that he has kept it is an aggravation of the offence. If, as Chesterton said, tradition is nothing but democracy extended over time, then it can also be fairly said that aristocracy is nothing but plutocracy extended over an equivalent period.
The existence of protected classes of persons is an affront to the very concept of democracy. Yet that's what the bankers now are. Going about business as usual with the authority of the state when your actions have led to the ruination of the false economy you were instrumental in creating is perverse; yet the sense of entitlement bred by being able to run roughshod over every democratic norm knows no shame. In their worldview, it's necessary for them to be paid so much, otherwise they'll go elsewhere. In one of Parliament's more purple moments, Cromwell shouted, 'In the name of God, go!'; a sentiment one can sometimes detect echoing faintly down the arches of the years, when some drone or other is heard bleating, braying or lowing about how much we owe bankers for helping keep us clothed, fed and sheltered. Go, please, just go. The model is broken, and no amount of glue and blutack can fix it.
As Eric Hobsbawm quite rightly remarked, class war is almost always waged with very much more venom from above than from below. Two decades of violent and unremitting class war perpetrated by the world's rich upon its poor have brought us to the brink of disaster. It is hard to see how the fourfold expansion of the world's labour market has benefitted anyone, not when the price of goods has been artificially deflated by cheap Chinese and Indian labour on a dollar a day. The argument that this expansion has helped lift millions out of poverty is morally nullified by the workers of the Third World being forced to work in dangerous conditions more appropriate to the savage capitalism of the early 19th Century; and those who claim that their poverty is their 'comparative advantage' might care to reflect not only upon the disgusting idea that being poor anywhere can be an advantage, but also upon the damage to international relations that a generation of mutilated Chinese bodies and broken Indian minds will eventually cause. At some point, the classic liberalism might just have to be dumped in favour of bigger weapons; and the whole tedious cycle of history will start all over again.
It doesn't have to be like this, of course. There is a better way, which would be for government to begin exercising control over business in a very much more direct and interventionist manner than it has done in recent years, starting with the directors of failed businesses, no matter how large the business or well-connected the director, being publicly harangued by the relevant minister. This is something Vladimir Putin does with great style (demanding that Oleg Deripaska hand back the ballpoint pen with which he'd signed an undertaking was one of the best pieces of polical theatre I can ever recall seeing), and is one of the most admirable aspects of modern Russian political culture. Governments should be neither friendly nor unfriendly towards business; they should instead be strictly business-neutral. Businesses have no votes. This natural inability to participate in civic life should automatically muffle its voice, instead of its voice being the only one that's heard.
There are those who will say this is unfair, and would amount to victimisation. To this, only can only reply is that it should be considered one of the risks of doing business. That is, if your business model still factors risk into it - the risk seems to have gone out of banking sometime ago, at taxpayer's expense.
We are now living with the consequences of having had a series of governments so business-friendly that they have brought us to the point of ruin, the nadir of managerialism. Instead of businesses being consulted about everything, let the people, you know, us, be consulted instead.
Before it's too late. For what, I do not know; and do not really want to find out.

2 Comments:

Blogger James Higham said...

makes one wonder just how deep the financial sector's capture of our government has been

In your opening lines is the answer to your wondermnet, Martin.

05 September, 2009 11:14  
Blogger Martin said...

You're probably right, James.

05 September, 2009 15:34  

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