Dear departed Oscar Wilde has one of his characters say that
A cynic is one who knows the cost of everything
and the value of nothing. I do believe the world has become by that
definition a very cynical place and, with vast sums of money washing about
globally, our moral compasses have been lost. Misuse of the power of money and
the widening gap between the very rich and the rest of us sharpens the pain and
the dangers of this development.
Money makes the world
go around, as the song goes, and this rather threadbare creed has been
adopted as the religion of the City of London, of Wall Street, of commercial
Paris and of the staid counting houses of Frankfurt. In as far as the accepted
business of these places is the management of money, well and good. The
mischief comes when these centres of power aspire to control and direct people
and entities outside their proper ambit. Thus, should we easily accept that
Wall Street deserves a firm grip on the throat of the government of the United
States, that the British government should bend its knee to the undemocratic
will of the City, or that Europe owes obeisance to the bulging money-bags of
dubious origin of France and Germany? I suggest the answer is a firm negative.
I do not approve of the demonization of banks and big
business. Sensibly run they are essential elements in our national prosperity
and most employees are of estimable quality. Yet we can neither forgive nor
forget the economic crisis of 2007-8 when the West was almost laid low by the
folly of irresponsible banking practices, leading to huge taxpayer-funded
bail-outs. In Britain the failures of Northern Rock, Royal Bank of Scotland and
Halifax Bank of Scotland have been devastatingly chronicled; in America the
Byzantine world of Bear Stearns and Lehman Brothers, among others, have also
found their scribes. But the useless Boards of Directors of these and similar
institutions and the highly rewarded leaders, have not faced serious charges –
untouched in public, they have become the notorious modern “Untouchables”. To
add insult to injury, the banks persist in their wrong-doing and regularly we
read of mis-selling of all manner of products to their luckless customers and
rate-rigging misconduct, attracting large fines but basically demonstrating
total contempt for their fellow-citizens. The taxpayer, and perhaps especially
those dependent on benefits, deserve much better; judicial inaction is a
scandal.
 |
| Fred Goodwin of RBS - still smiling |
The absence of ethical standards at the banks filters down
to other businesses. Although he is the founder, controller and inspiration of
WPP, the eye-watering £43m 2014 pay package of Martin Sorrell is unsurprisingly
causing a storm, even among the usually catatonic institutional shareholders.
The great historian Lord Acton hit the nail on the head; All power tends to corrupt and absolute power corrupts absolutely.
Parliaments, even as venerable as that at Westminster, have
not been immune from the lure of gold. The parliamentary expenses scandal of
2009-10 saw many dozens of MPs implicated and forced to make repayments; many
offenders were quietly advised not to seek re-election and 6 MPs and 2
peers were imprisoned for their deceptions. The amounts cheated from the system
were relatively small (a US congressman or a Greek politician would laugh at
such paltry sums) but the damage done to the reputation of parliament is
incalculable. Sadly even respected Malcolm Rifkind has sullied his public
esteem by apparent involvement in a cash-for-influence imbroglio.
In the US, political corruption, in the form of private
interests overruling public ones, has long been a live issue. Huge sums are
spend on lobbying and on the financing of campaigns for mainly conservative
politicians. The Koch brothers spent $122m in the 2012 election and Sheldon
Adelson contributed $150m in support of his pet right-wing causes. The line
between legitimate lobbying and corruption is a narrow one and the Supreme
Court takes an (over?)-generous view. Scandal surrounds some of the staff of
Governor Cuomo of New York. Big Oil, big Pharma and Armament contractors are
the usual suspects but firm legal decisions are elusive. The voters are greatly
upset by these shenanigans and all governments in the West need to tackle
corruption vigorously, as David Cameron recently declared.
For the consequences of failing to tackle corruption are
clear to see elsewhere. Oligarchs undermined Yeltsin in Russia and have waged
an often lethal war with Putin. Money speaks insistently in India and China; murderous
drug cartels are close to the powerful in Latin America. In Greece, 40 years of
blatant corruption have brought ruin. To its shame, Germany allowed Ferrostaal
to pay huge bribes to the then Greek defence minister, Akis Tsochadzopoulos,
for the supply of 4 submarines costing €3billion. The submarines never worked
properly and Akis got a 20 year jail sentence. The Germans also stood by whilst
Siemens bribed its way into lucrative Olympics contracts and the supply of
electrical equipment. Siemens readily stumped up €330m in an out of court
settlement. Finger-wagging from self-righteous Germany naturally does not play
well in Greece.
Much worse, Germany was the leading light in pressurising
Greece to accept the heavy terms of the first €130bn bailout in 2010; it has
emerged that this bail-out was entirely designed to enable French and German
banks to exit Greece by substituting sovereign bond purchases for commercial
debt: the Greeks received hardly anything. The IMF was horrified, but silent.
The unfortunate Greek taxpayer was caught in a classic “bankers’ ramp”
defending an unsustainable Euro, just as Britain in 1931 defended the equally
obsolescent Gold Standard. This episode fuels the calls for Grexit and, later,
Brexit.
So cash sloshes around the world, seldom to the benefit of
the deserving poor. FIFA, and the antics of Sepp Blatter and Jack Warner, are
merely symptoms of the prevailing malaise.
I do not advocate the rapid conversion of our all-too-human leaders into
“sea-green incorruptibles” on the lines of homicidal French revolutionary
Robespierre but an ethical revival is long overdue. Savonarola, all is
forgiven!
SMD
8.06.15
Text Copyright © Sidney Donald 2015
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