I’d hoped to avoid writing about banksters for a while, but how can you? Prime Minister’s Question Time was once again dominated by bankers behaving badly following, the news that Eric Daniels of Lloyds group, is getting his snout in the trough to the tune of £2m. Playing catch up with that other state-owned banker boss, Stephen Hester of RBS, who has awarding himself £2.3 million in bonuses. Really, how can you ignore this kind of thing? These people are engaged in legal theft – their banks only exist because of public subsidy. If anyone should be getting bonuses, it’s the tax-payers.
I keep reading headlines about how it’s time to stop “banker bashing”. That it might damage the City of London’s reputation if we keep harping on about their bonuses. But I hardly think reputation comes into it: bankers clearly have no reputations left to defend. I can’t think of any group in society which as so unconcerned about their public image, so unwilling to mend their ways. Even paedophiles feel remorse.
We shouldn’t let the bankers off the hook just because they are impervious to criticism, beyond shame. When governments fail to act, it is left only to parliament and the media to focus public opinion and try to bring bankers to account. It’s a tough job. At the select committee hearing this week, the Labour MP John Mann, asked Bob Diamond, the new boss of Barclays (£11 million last year) if he knew “why it was easier for a camel to get through the eye of a needle than for a rich man to get into the kingdom of heaven”. He pretended he didn’t know what Mr Mann was talking about. Surely you just pay people to do the needle thing? It was time, said Mr Diamond, for bankers to “stop apologising” for themselves. Really? I must have missed it.
The ruthless capitalists of the last century, like Andrew Carnegie the steel magnate, or John Paul Getty, the oil billionaire, cared a great deal about what people thought of them. They did remorse, too. And they spent huge sums trying to get posterity to hold them in high esteem – hence the Carnegie Trust, the Carnegie Halls. Getty endowed countless museums and galleries hoping that history would link his name to great art rather than hard cash. This lot don’t care a toss. The plutocrats of today seem happy to be regarded as graceless philistines who care only for personal self-enrichment. Yes, some hedge fund managers give to charity – it’s tax efficient after all – and some bankers even claim to be Christians. Lloyd Blankfein of Goldman Sach famously said he was doing “God’s work”. Goldmans has just awarded £13bn to its staff in bonuses and remuneration – well it beats loaves and fishes.
But listen to what bankers say about themselves. “We eat what we kill” is one of Wall Street’s favourite sayings. Any profession that abides by such a morally reprehensible mission statement is clearly beyond hope. But it also means that they are on the wrong side of history. People who are incapable of moral vision are generally brought down by their own myopia. Like sharks, bankers are as stupid as they are vicious. They don’t realise that they need the sea to swim in, and that sea is civil society.
The financiers have achieved a remarkable feat: they have united Left and Right in common cause against financial kleptocracy. Keynsians like Joseph Stiglitz and Thatcherites like Niall Ferguson, disagree about just about everything, but at the Edinburgh Festival this summer they laid aside their differences and spend their time tying to out bash the bankers. The Right realise that the banks represent the biggest threat to capitalism since the collapse of the Berlin Wall. The fact that this is a moral challenge doesn’t make it any less potent. Economic systems, like constitutions, only exist through consent, and the behaviour of bankers is undermining trust in the market itself. Who needs the Communist Manifesto, when you have people like Bob Diamond?
Moreover, the market simply cannot function properly when it is dominated by concentrations of oligopolistic financial power, supported by state subsidy, which are free plunder the wealth of society and are beyond restraint. This diminishes the productive power of the economy by diverting wealth into unproductive activities like speculation. Bankers are essentially parasites: they make nothing but debt. And this, in the end, is what I believe will bring them down.
No section of society can retain its privileges without supporters. Not even the Tories try to defend bankers any more. Prime Minister’s Question Time has become a bidding war between Labour and the Chilton on how to curb bonuses. So far, neither Labour nor the Tories have found the will or the means to do so, but they will get there in the end. Thirty years ago, the trades unions were eventually curbed when they lost public support, and the unions, even during the Winter of Discontent, retained vastly more public goodwill than the bankers do today. Shop stewards were, after all, fighting for their fellow workers, not for themselves.
Call me naive, but I believe the clock is already ticking for the financial elite. When the banking commission reports in November, there will be action to tax bank bonuses, and to break up the behemoth banks that dominate the high street and use granny’s savings to speculate on credit default swaps. Banks will be given a choice: if they want the security of public subsidy, they must behave as a public service. If they don’t, they must accept that, when the next crash comes, they go bust. That will concentrate minds.
The international character of the financial crisis will ensure that regulation of the banks also crosses borders. The European Union is being destroyed by a sovereign debt crisis which is the result of irresponsible bank lending. The EU has no choice now but to act to control banking behaviour. In ten years, we will be looking back in amazement at the behaviour of the Hesters and Diamonds They are the great villains of the age – hate figures, who have run out of moral credit, and will shortly be foreclosed.