Is banker-bashing PC?

Wednesday December 7, 2011

Tom Miers looks at hostility to bankers through the ages and wonders if there is a trick to be played on the critics of capitalism

Banking has always been regarded with suspicion.

Those who provide money to oil the wheels of commerce usually court unpopularity. Nobody likes to pay their bills, but interest on a loan is particularly resented. This is partly because its utility is misunderstood, as Simon Hills pointed out in his article on this site (Money, Snobs and politicians, 24th November).

The image of the corrupt and usurious money-lender is a constant throughout history. Crassus the money-man was the ugly one in the Roman triumvirate next to the heroic Caesar and Pompey (whose careers he financed with colossal loans). He had his comeuppance in fitting style. When they captured him, the Parthians poured molten gold into his eyes and mouth to symbolise the evils of his pursuit of wealth.

Christ threw the money lenders out of the Temple, and the character of Shylock in Shakespeare’s Merchant of Venice tells us all we need to know about how Jewish bankers were viewed in late Medieval Europe. Both Christianity and Islam placed severe restrictions on usury, which meant that money-lending became a speciality among enterprising minorities, fuelling their diasporas – Jews, Armenians, and later Huguenots and Scottish protestants. Of course this made it all the easier to demonise bankers, because they were seen as culturally alien.

Today bankers faced the renewed hostility of society. They are blamed for instigating the credit crunch and subsequent depression. Of course as usual they were simply reacting to the incentives held out to them. Interest rates were artificially low, so they lent more than was wise. That is what market agents do in any sector – money flows to where there is demand.

So the real culprits in the crisis are governments. It was they who artificially inflated the housing market to win votes. It was the politicians who underwrote and encouraged low rates and high debt levels. The bankers simply reacted accordingly.

What we see now is politicians attempting to distract public ire away from themselves and onto financiers. But you reap what you sow. The climate is now so hostile to those who deal in capital that capitalism is itself under threat.

The old traditional names in the City of London are redolent of its minority roots – Rothschild, Fleming, Warburg. Nowadays the City is a Babylon of global talent, blind to ethnic, religious or national prejudices. But imagine if financiers were still largely drawn from identifiable minorities. The re-emergence of Shakespearean prejudice against the money men would collide with modern politically correct sensibilities. Bash a banker, and you bash a Jew / Scot / German.

Come to think of it, perhaps the finance lobby is missing a trick here. They could use the weapons of their enemies against them. Picture the expression on the face of the hippy demonstrator / trade unionist / archbishop / politician if next time he calls for a Tobin tax he is accused of being anti-semitic!

Tom Miers is Editor of the Free Society