Still getting off on banker bashing

It has neither enlightened anyone as to the structural causes of the current economic crisis nor has it shed light on what ought to be done to engender a bit of much-needed economic growth. Yet, at every stage, politicians, backed by the commentariat, have never ceased to indulge in it. I’m talking of course about bashing bankers, or, when politicians fancy a change of moral scenery, lambasting super-salaried corporate executives.

The latest opportunity to project the putative sins of society on to a single figure came in the form of Stephen Hester. In many ways, he is the perfect candidate for banker bashing. Not only is he a banker, he’s also the current chief executive of the Royal Bank of Scotland, the recipient of a £45 billion state-bailout package in 2008. So, the news that he – the bloke in charge of a still struggling, 82 per cent public-owned financial institution – was in line for a £1million bonus on top of his £1.2million a year salary for, as far as anyone can tell, simply doing his job, was always going to have the potential to cause outrage. And outrage, it did. In fact, such was the opprobrium coming Hester’s way that there was an air of inevitability about Sunday evening’s announcement, made from his weekend getaway in Switzerland, that he was to forgo this particular bonus (he’s keeping the others, mind you).

There is, of course, little reason to feel sorry for Hester, or indeed for the man he replaced both as RBS chief and Poet Laureate of Banker Greed, Sir Fred Goodwin. They will neither starve nor have to lay off the domestic staff. Likewise, it is difficult to muster much in the way of tears for those highly remunerated chief executives or company directors who, thanks to the broader political obsession with high pay, are now acceptable targets for political sermonising and media heckling – indeed, as Lib-Con business secretary Vince Cable reminded us once again last week, executive pay is ‘out of control’ and shareholders need to start reining it in.

But whatever your feelings towards individuals such as Hester or Fred ‘the Shred’ Goodwin, there is a massive problem with this lash-the-rich sentiment. For it both absolves politicians of long-term responsibility for the deep-seated problems now besetting the economy and, worse still, it suggests that the solution to our current woes is not economic at all, but psycho-cultural. That is, we need to change our mindsets, we need to stop being so grasping and so grubbing. We need, in short, to create a culture that recognises, as prime minister David Cameron said with such mock profundity a couple of years ago, that ‘there is more to life than money’. And, lo, the scales will fall from our eyes.

One can understand why scapegoating the bankers or blaming the chief execs has proven so consistently appealing to politicians: it has provided a simplistic, readymade excuse-cum-explanation for the desperate economic straits in which we now find ourselves. Hester, Goodwin and the rest, greedily speculating on investments on which they could never hope to recoup, led us into the economic abyss out of sheer avarice. ‘And look’, shout (and point) the UK’s political class, ‘there they are, still trying to rake it in while the rest of us try to muddle through’. So, bankers or – weirder still – highly remunerated corporate types, cop the flak for the recession. Meanwhile, the politicians that oversaw the massive expansion of a credit-fuelled economy at the expense of one that actually produces wealth have got off relatively lightly. In fact, about the only criticism made of politicians in relation to the economy is that they didn’t regulate greedy bankers soon enough.

And it is in this willingness to present the economic crisis in terms of greed, albeit mainly that of bankers, that one can glimpse the cultural and moralistic rather than economic project nestling behind the blather about bankers’ bonuses or executive pay. Because for all the talk of reducing ‘inequality’ between the 90 per cent, or indeed the 99 per cent, and the tiny percentile range of top earners, the attack on the highly remunerated has got absolutely nothing to do with raising the living standards of the lowly paid. It has nothing to do with a popular struggle for material betterment, or a political fight for a better life. Rather, it is best grasped as an elite-stoked quest for something akin to a spiritual readjustment; a way, if you like, of encouraging us to care less about stuff and more about non-material things or, to use Cameron’s happiness lingo, ‘our general wellbeing’.

Hence the focus is on limiting the high earnings of bankers or other well-paid corporate types, rather than working out how to raise the living standards of everyone. The idea is that it is this relative gap between those who remain incredibly rich and the rest of us paupers that is the problem. This gap encourages envy. It encourages us both to desire to be wealthy, to want the lifestyles of the rich and sometimes not very famous, and to feel either depressed about not being to obtain that status or anxious about having to keep up the appearance of status. In the words of journalist Will Hutton, who worked with business secretary Vince Cable on the self-styled High Pay Commission, ‘the knowledge that such ostentatious consumption is possible has a shadow effect on every British citizen. Individual human beings instinctively compare themselves and are sensitive to what the whole of society values’.

The point, then, of stigmatising conspicuous wealth through banker bashing, of surreptitiously encouraging shareholders to limit execs’ incomes, is to make the rest of us feel less inferior, less consumed by dreams of consumption. Because if our problem is material greed, itself fuelled by a desperation to keep up with the super-rich Joneses, then what our political class is trying to do is forcibly to bring the Joneses closer together. They are doing this not by aspiring to raise the living standards of those at the bottom, but by trying to lower the living standards of those at the top. In Unjust Rewards, her 2009 book on people who get paid too much, influential British commentator Polly Toynbee argued that something must be done to stop British society from becoming like an extended camel train, with the very wealthy at the front, miles ahead of those impoverished sorts at the back: ‘That way the stretched-out camel train can be drawn back together: bunched closer it will travel further and faster and in better spirits, safer and happier.’

This is the dispiriting intent underlying the current assault on the high paid, be they bankers or company directors. We may be living in dire economic circumstances, but we would be happy if we were all in it together. While social solidarity is desirable, it would be better if we were striving for more together, rather than reconciling ourselves to being happy with less.

Tim Black is senior writer at spiked.