Monday, November 10, 2014

Bankers and Poets

I have always disliked being boxed or categorised. Perhaps it is why I have an aversion to star signs - 'ah, you are a Capricorn. Now it all makes sense.' More seriously than that though, I think a big part of what causes us to be happy or unhappy is our continual search for an identity. What we do or don't like defines us. What we do or don't agree with defines us. We then end up looking for the feathers to flock together.

Once in a flock, we get cut off from those who disagree. It feels good to be part of a group. The self-less focus on problems of the group rather than your own really does make you feel good. I am becoming more and more suspicious of being part of any group though where the opposition is classed as evil. I still allow myself some leeway when it comes to sport. The animal instincts which are present need to be channeled somewhere, and as long as you can shake hands afterwards a little banter is good fun. Off the playing field it gets more dangerous. I wrote about a problem we have with the current form of capitalism being that because of real world friction, sometimes we end up doing work for the sake of work rather than because it adds value. The same can be said of groups that have an interest in being seen as different. Take political parties for example. In a country with two parties, each needs to define themselves around opposing sides of a few issues. They can't by definition agree on everything or they wouldn't be able to campaign to be voted in. Like the work for works sake problem, professional politicians have a vested interest in sticking to their same group and finding things to disagree with the enemy. Ideally they keep the same support base. This appears to be the case in the US and the UK. Both are liberal democracies that are slowly chipping away at remaining barriers to liberty and equality. Both are wealthy countries. Many big ticket items took massive battles to win but we are largely cleaning up the 'last mile' towards true freedom. Where is the incentive to start breaking down barriers between Republicans and Democrats, or Labour and Torries? It is not difficult to shift your gaze to other countries around the world with significant poverty issues and legalised discrimination against minorities. We are, or should all be, on the same side eventually.

This doesn't mean we have to agree on everything, but some attempt to understand the opposing views seems to be very hard to find sometimes. An example is when people self-define as being extreme capitalists or anti-capitalist. The recent Global Financial Crisis gave plenty of fodder to people who wanted to create groups around the issue. Robert Shiller recognising this danger made an attempt to write a book explaining the various roles in the finance world to avoid people thinking that because there were some bad apples or some problems in the system, all of Finance was evil. It is far too easy shorthand to say something like 'Bankers are evil'. I have even seen supposedly mainstream tweeters who would not self-define as trolls  making comments like 'Putting a "banker" in charge of an economy is like putting a pedophile in charge of schools'. I know rule number one of participating in social media is not to feed the trolls, but the problem is there are too many people who don't consider themselves trolls who make comments like this.

In the simplest definition, a banker is simply someone who is licensed to receive deposits. They hold peoples cash. Instead of letting it be inactive they lend it out to other businesses or people to keep the economy going. I am busy reading Stephen Fry's very funny 'More Fool Me' autobiography. In it he speaks of friends trying to get him to invest his money in something other than cash. He says that he didn't understand why after making money, he had to try make money on that money. Were it not for banks, Mr Fry's pile of cash would sit under his bed. He would literally be a Scrooge McDuck. Instead of wealthy people being hoarders, bankers help keep 'money working'. Gates and Buffett don't have pools of money. Instead the money is invested in real businesses making or doing real things for real people. That is a good thing. A good banker gets to know and understand her clients. She understands the risks of businesses and can be a good sounding board. Various advances in legal approaches etc. and bigger banks have allowed more standardised contracts and greater risk control which make it easier for new businesses who aren't well known to get access to capital. I am not excusing the examples that can be made of poor risk control and of clearly dodgy incentivisation. I agree that a bonus culture focussed on short term results is problematic and some of the compensation ends up being incredibly excessive. What I don't think is helpful is not realising the benefit we get from certain professions and labelling them aggressively without a full understanding.

While well intentioned, I am not sure Shiller's book will be well read by those who troll in this way. The problem is that this vitriol becomes part of someones definition. If you want to be categorised as someone who isn't driven by making money but has a nobler cause you are going to want to use certain words to advertise this. Capitalism allows some people to contribute to society 'by making money'. This doesn't make them evil. I wonder if a group of artists put on an exhibition where they took Shiller's book and tried to illustrate each of the roles he mentions in a creative way if there would be more reach?

It swings both ways obviously. There are those who go to the extreme of saying that anything that doesn't make money is a waste of time and are derisive of people who pursue lives of meditation, poetry or anything that doesn't have a tangible product. 

My point is simply that while I accept that in any big enough category there are likely to be a small group of genuinely nasty characters, and while we can always improve given good-willed criticism, I am not convinced that we should too easily label groups as evil. It is my view that expanding your group as wide as possible is a key to happiness. Expanding your definition of yourself to include others... and that includes Bankers and Poets.
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