The Guardian has reported that the vice-chairman of Goldman Sachs, Lord Griffiths, has given a speech at St Paul’s cathedral in London about morality in the marketplace in which he argued that society (the British public) should “tolerate the inequality as a way to achieve greater prosperity for all” . Not only do I disagree with the premise that giving lots of money to a few people will make everyone else more prosperous, it also seems as though his primary argument is that if we don’t accept this, banks will relocate overseas.
I didn’t see the speech and haven’t read a transcript so don’t know if there was more to it than that suggested above, but it doesn’t seem like a particularly moral argument to me. Give us what we want or else. Personally I think we should stand up to these kind of threats. I don’t believe that there are any strong arguments in favour of the trickle-down effect. There must be some kind of conservation in the system: the more the bankers keep the less there is for the rest of us. What is more, since banks don’t really build anything or invent any new technologies, the more money they keep the less there is for industry to work with.
There’s no question that banks do provide a valuable service, but is it quite as valuable as they seem to think. I agree that at the moment individual banks may be forced to pay ridiculous salaries in order to retain good staff, but there is no real reason why we as a society cannot push for a global change such that this is no longer the norm. It seems as though banks pay much higher salaries to a much larger percentage of their staff than other comparably sized business. Although banks may well have a larger percentage of highly-trained staff than many other industries, this still doesn’t seem to justify such huge salaries. If anything, if more of these bright people were encouraged to go into other industries that may develop technologies that can change the way we live – rather than being seduced by huge salaries in the banking sector – we may all benefit.
Although I am pleased that Alistair Darling, the Chancellor, has criticised the banks for paying huge bonuses so soon after being bailed out by the government, I have to admit that I suspect that this is more for political effect than because he truly believes it is wrong.