From the TUC

Bankers: is envy excellent?

14 Feb 2009, by in Economics, Society & Welfare

In the 1980s, when working in the finance sector was considered next to godliness, Oliver Stone made a film called Wall Street in which the anti-hero, Gordon Gekko made “greed is good” a catchphrase for the era of masters of the universe. It was meant ironically of course, but many people in the finance sector seem to have had an irony bypass, as well as a moral-compass bypass and, as we have found out in the last year, a being-any-good-at-your-job bypass. The rest of us, of course, know that greed is a sin. And we also know that envy of those bonus-boosted bankers is also a sin (Former Cionservative MP Angela Knight wins today’s “They just don’t get it” award for arguing that).

But I’ve decided it isn’t. I’ve read some of what big bank bosses said to the House of Commons Select Committee and like most people I know I was appalled at their lack of contrition. We’ve all been pussy-footing around about this and we ought to stop.

We should indeed be very, very envious, and very, very angry – not so much about the bonuses as about the impunity with which top bankers have survived the crash they caused. It is quite different to the punishment that is being meted out to ordinary people in the US, the UK, and especially in the developing countries. March with us on 28 March if you agree.

The Weekly Standard’s editor Christopher Caldwell, writing in the Financial Times, is predictably kinder to the banker bosses. He says that what they demonstrated was that they were not personally guilty (yes, like in Agatha Christie’s Murder on the Orient Express, we’re all guilty of stabbing the global boom in the back). But he accepts that part of the problem with this analysis is that the banker bosses were paid bonuses that suggested they should have been able to foresee the crisis and take steps to avoid it happening. He concludes:

“If one thing emerges from the chequered history of American financial populism, it is that most financial collapses have had populist causes, not just populist reactions. The people now tormenting the bankers are as capable of ordinary stupidity as the bankers proved to be. As long as that is kept in mind, show trials like the ones last week can do some good. The public does not need reassurance that the bankers are worse than the rest of the populace. It does need to establish that they are no better.”

I think it is probably right that we should not be envious of the banker’s huge bonuses. I don’t want to live a life consumed with envy about people being richer than me. But on the other hand, I don’t think there’s anything wrong with arguing that such bonuses can damage the economy (especially if they reward short-term foolishness over long-term rationality), or arguing that such bonuses should be heavily taxed (it’s often forgotten that Lord Mandelson’s 1997 General Election statement that he was “supremely relaxed about people getting filty rich” was qualified by the phrase “as long as they pay their taxes”). Martin Wolf explains why big bonuses are bad news with characteristic wit, and Emma Jacobs has explored their malign gender dimension.

And I’m certainly not envious of some bankers – like the union members who are losing their jobs as the banks that employ them crunch, crash and collapse.

But I do think we should envy something that is not completely unrelated to the bankers’ big bonus culture – the impunity with which they have survived the crash they caused (the connection is that they decide how much of our money they get paid, and they decide whether they get sacked or not). It is quite different to the punishment that is being meted out to ordinary people in the US, the UK, and especially in the developing countries.

How many of the top bankers who did things that contributed materially to the global recession we now face are losing their jobs, their homes, their social standing and their livelihoods. Some have lost jobs although they seem curiously capable of picking up new ones (often, it seems, regulating the system they crashed!) Some have lost stock options, although many more are still gathering in bonuses for lamentable failures (sorry, for losing not quite as much money as the market average!) Their gongs aren’t being taken away, or their second and third homes (let alone the first ones). They aren’t being expelled from their swanky provate clubs, and their metaphorical epaullettes aren’t being torn from their designer suits. Their spouses aren’t ditching them for younger, smarter and now richer insolvency experts. They really aren’t feeling the pain, and they just don’t get it!

I want people to envy the big bankers’ impunity, I want them to be righteously angry about it, because I want to see the impunity that comes with wealth and power to be taken away. Because that impunity is far more damaging to society than big bonuses are to the economy.

Greed ain’t good. But envy, channelled for the right purpose, can be excellent.

One good way to channel that envy is to join the the Put People First March for Jobs, Justice, Climate on Saturday 28 March ahead of the G20 summit of world leaders.