From Old Testament to Ancient Greeks and Romans, from Ebenezer Scrooge to Warren Buffet: why are practices of banking and investing often perceived as evil?
Distrust of banking and finance is, unfortunately, as ancient as civilisation. The Old and New Testaments of the Bible both contain clear injunctions against charging interest on borrowed money. The conflict between landowners and rent payers and merchants and labourers were discussed already by the Ancient Greeks and Romans.
Today, unquestionably, financial services organisations create value for the economy and working in finance can be a great career. Yet, some people have difficulties to see the secondary purpose associated with those jobs.
A doctor, for example, saves people’s lives. This creates a great opinion of this profession, in addition to providing economic value via any work that the saved person may do later in their lives. Someone working in a factory that makes products that most people appreciate is considered to be enriching people’s lives with that product that so many love. That very appreciated product is tangible, in addition to any economic value that it may provide in terms of increasing productivity.
This kind of people can’t see that the financial world underpins the creation of their appreciated products or activities, because tangibleness doesn’t exist with finance, in a series of transactions that make money. Finance can be even too easy to hate, when most people just see highly paid professionals, entering giant, multi-billion pound glass and steel boxes, to do things that aren’t easily explained, in firms that are completely opaque to outside scrutiny.
Many people also think that financial jobs disproportionately benefit the wealthy, since they know that the clients of financial firms are typically wealthy individuals or corporations owned by wealthy individuals, in terms of direct shareholder enrichment. Still, increasing the productivity of companies, financial jobs help drive the whole economy forward, making goods more affordable also for the middle class. In addition to this, there are all the venture capitalists that finance startups that create jobs, that private equity firms that assist management help turning companies around, and so on.
I
t is the same as if someone would insist that CEOs only make shareholders richer. It would be obviously not true because their decisions impact employees and consumers. And what about a hypothesis that the in-house financial staff at companies only would make shareholders richer? Again, their decisions also impact consumers of the company’s products and its employees. In the same way, those who work for financial services firms can be viewed as consultants or outsourced financial staff for companies that help company’s raise money or complete important financial transactions and by doing so, they benefit the company’s consumers and employees.
Then there is the way money is seen by this kind of individuals: to the average person, those working in finance have prioritised the desire to make money ahead of values that are “nobler”, valuing money even more than their own time, as financial careers often require longer working hours than other fields do. Actually, this is true, especially when they are getting started, but finance is not different from many top jobs in demanding long hours and people gladly accept this as a legitimate tradeoff because they know that financial jobs are among the most interesting jobs, and they actually appreciate spending their time on something interesting and well compensated.
The Great American Recession has not helped the sector getting a better reputation, since it turned the attention to the one field that was directly involved but nobody understood: investment banks. Media began to write stories about the trickery involved in subprime mortgages and the conflicts of interest inherent in the credit rating system. Bailouts of the large banks caused cries of outrage as taxpayer money got poured into saving what most saw as a corrupt, broken, and morally bankrupt system that worked against the “normal person”. Yet the American dream was wanted by every one of them, together with the home they could never afford, and the 2007 boom gave them all an opportunity to realise that vision because credit was so easy to come by, that that practice became embedded in American culture. After the 2008 meltdown, anyway, the perception spread out that no major person in finance got punished anywhere near the extent that they may have “deserved.” The trust that was required for and placed in finance has been severely damaged.
In conclusion, practices of banking and investing are not always perceived as evil: it is the perception of the character and motives behind them. Think of the Christmas Carol, Charles Dickens takes the banker Ebenezer Scrooge on a journey from heartless stinginess to charitability but makes no indication that he gave up his wealth or business. Nebraska-headquartered Warren Buffet, also noted for his philanthropic work with Bill Gates is hailed as “The Sage of Omaha.”
All photos show installations exhibited during the 2017 annual “Winter Lights” festival at Canary Wharf in London, England.
