I’m fairly certain that we can all agree on the basic premise that, by and large, money is good: it clothes, feeds and houses us and it allows us to engage culturally and socially with our fellow human beings. However, the fetishisation of money under the neoliberal hegemony of the last thirty years or so has led us into worrying new territory in which money equals capital-G Good: we now live in a culture in which the highest moral virtue is the ability to turn a profit.
The rise of this phenomenon stems, I would argue, from the increasing importance of Finance in our economy, which in turn has led to the increased prominence of the Financial and Business worlds in our public sphere. Not only have more than a quarter of Conservative Members of Parliament and Peers held jobs in the financial sector, but successful businesspeople are cropping up on our televisions more and more on programmes such as the Apprentice and Dragon’s Den. What is worrying is that this increase in exposure is concurrent with an upsurge in the respectability of their opinions as the health of the economy seems increasingly dependent upon the decisions of this small club, whose opinions are therefore of importance to us all. Indeed, the popular moniker of the investor Warren Buffet, who is himself unusually modest for someone in his position, ‘The Sage of Omaha’, speaks volumes of the respect that we endow the opinions of this group of people with.
What is wrong with this, I hear the members of Durham University Investment Finance Group cry? The problem with the invasion of the public sphere by the financially- and business-minded is the unworldly level of moral absolutism that this world inculcates in those working in it. Working as a trader in an investment bank you have the ability to be categorically proven right or wrong, which does not occur anywhere else in human experience. If you made money from a deal, you were right. No doubts; no half-measures, just absolute rectitude. Equally people can be proven doubtlessly wrong in this alternate reality by losing money; thus those who are profitable are also absolutely not-wrong.
This profit-morality is, to embark on a huge over-simplification of the sub-prime mortgage crisis, what wrought such havoc among the global financial system in 2008. Banks came up with the genuinely clever idea of insuring the risk of people defaulting on their mortgages out of house, which, in theory, meant that, for a small fee, the banks had removed all risk of losing their investment in people’s mortgages. Huzzah! Guaranteed profits for all! (No more boom and bust?) Except that the logic of the rectitude of profitability led bankers to reinvest this same money again and again, because according to their books, they were 100% going to get it back. Thus what was intended as an innovative safety feature for mortgages was instead used to massively leverage banks positions with regards to housing market so that when large numbers of people defaulted on their repayments the insurance companies did not have the funds to provide the banks with the money that was 100% absolutely on their books.
What was clearly wrong was so obviously right to those putting these deals together, because they made more money. For a further example of this thinking in action (if another was needed) see the comments of Raj Rajaratnam, former manager of the Galleon Group hedge-fund, on hearing of his conviction for insider trading, who is apparently still not “clear” as to what he has supposedly done wrong: he broke the law to get an unfair advantage over his competitors, but to him the action was not wrong because it guaranteed profits.
Whatever the dangers of this thinking in the financial world, they are nothing compared to the danger when it smashes through the dimensional plane into the real world that people live in. The most obviously misguided confluence of the two, and a very common one if we return to the increase in control over the public sphere of business- and financial-types, is the discussion of a State, in terms applicable to a business by people evangelically certain of their own rectitude. Indeed, the orthodoxy applied to struggling companies in recent years, that to protect ‘The Balance Sheet’ (the arbiter of neoliberal morality, and a prime contender for God’s old spot in the modern secular society) fat must be trimmed and the business downsized, is being applied to the State.
We see this nicely demonstrated by George Osborne’s approach to the public finances: downsizing UK Inc., as it were, coupled by his insistence that his plan is the right one, and that it is working in spite of apparently mounting evidence that his policies are returning the UK to recession.
This is, however, fundamentally incompatible with the notion of a welfare state: the ‘workforce’ of the state, i.e. its citizens, cannot be cut: the state has a duty to provide a level of social security to those most in need. Cue a debate on the preferred size of the state, and whether or not the taxes of hard-working citizens should be spent on people who can’t or won’t find work, and whether we really need a welfare state at all because it costs rather a lot of money doesn’t it. But the fact this debate is even taking place at all, let alone that billions are being cut from the welfare budget, is a sign of a society that has become too caught up in this profit-morality and has forgotten the basis for morality in a healthy society: human beings.
The debate around the welfare system has been conducted in the abstract territory of money lost to fraud, the need to reduce government spending and the putative ‘scrounger’ found in the pages of certain newspapers. But little has been made of the human reality of the changes. One disabled charity was roundly shouted down for being overly emotive when it made the point that around 10% of people receiving Disability Living Allowance responded in a survey that they would not find life worth living if they lost their welfare payments (which is precisely what has happened to scores of people who have been medically unable to work for years, only to be reclassified as fit to work and sent on their merry way). But this is the crux of the whole point of a welfare state: a society which makes the lives of its most vulnerable citizens literally unbearable in the name of efficiency savings does not deserve to call itself civilised.
Business and Finance are important, and, by and large, forces for good, creating jobs and prosperity; but the thinking that underpins them is inappropriate for the government of any state. Unfortunately with no end in sight to this neoliberal paradigm we can only hope that those at the helm of UK Inc. decide that it is profitable to invest in the welfare of its citizens.