Thursday, 9 June 2016

Why bankers will bring down the neoliberal delusion

The moral collapse of politics is one of the great continuing sagas - and not confined to one particular set of chancers and loud-mouthed fools.  The greatest irony is that the principal agent of decline has been the supposedly-liberating computer and the ability of the slaves of technocracy and their fellow-travellers in the selfish, amoral and grasping carriage of the global train to oblivion to render their potential meaningless and their control all-encompassing.

Continuing the unedifying illumination on the darkest corners of the capitalist psyche that has been cranked up by the destruction of BHS and the theft of pensioners' assets, the revelations earlier this week about the behaviour of the self-styled venture capitalists, whose ability to shift the blame is their only skill, should cause right-thinking altruists to raise their game from party politics and consider exactly what kind of society and economy we are creating.

I have recently finished John Kay's excellent combination of forensic examination and polemic Other People's Money, which combines great writing and accessibility with a damning indictment of both the failure of the financial sector and its rapacity in extracting value from the real economy.  The high priests of the banking community have condemned an analysis which should underpin a political programme that seeks out and destroys parasites whose contribution to the well-being of the world is to try to avoid tax and to pauperise all those who stand in their way.

When I commenced the study of economics over three decades ago, banking and financial services were seen as necessary, morally-driven intermediaries that raised capital, protected assets and had at least some vestige of social responsibility and accountability.  This remains the hope and expectations of sections of society that should know better.

Removing legal and moral obligations in the name of the market has created a sub-set of the financial industry that bases its behaviour on the assumption of taking advantage whenever possible.  They have no morality in the sense that they engorge themselves on the wealth of others, without taking any real risk themselves.  Bankers, and the flummery of self-styled analysts and risk experts around them, are worse than the compulsive gamblers who they would try to avoid in the street, in that they are never venturing their own cash or well-being, while at the same time making moral and political judgements well beyond their own competence or capability.

Short-termism is the modus operandi of the current self-styled wealth generators.  Yet they are supposed to be replacing the capability of the state to invest in infrastructure, and to look after the long-term interests of individuals whose pension and social security provision has been undermined in the name of markets and efficiency.  This is akin to putting Herod in charge of social services, or Donald Trump atop a major nuclear power.

Yet the wealth they generate is illusory and non-existent, without the actions of an economy beyond the financial services "industry".  The way they get rich is not by generating real prosperity but by sucking out others' contribution.  This is parasitism, whatever your political creed.  Some of it is inevitable, but it does not make it desirable.

Nearly a decade on from the financial crash and subsequent depression, the banking sector has lived a charmed life.  The challenge for politicians is to make the issues credible and straightforward to enable an articulation to be put forward in the future.  The same applied to the complexities of outsourcing and the destruction of the public realm.  Whatever happens with respect to the UK's EU membership, the post-capitalist world has reached a point where the self-styled emperors' nudity will become embarrassingly obvious.

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