The Unspeakable In Pursuit Of The Class Struggle

All history is the history of the class struggle - the political class struggling to oppress the people

The cynicism is breathtaking. Lord "we're intensely relaxed about people getting filthy rich" Mendacity now says:

“If you look at Bob Diamond, who took £63 million in pay — that to me is the unacceptable face of banking. He hasn’t earned that money, he’s taken £63 million not by building business or adding value or creating long-term economic strength, he has done so by deal-making and shuffling paper around.”

Needless to say, the £63m figure is untrue. But more fundamentally, it is chokingly obvious why Mandy has come out with the communist manifesto this morning. It's because the latest public school educated NuLab Tristram he's forced down the throats of a local Labour Party up North has proved a Tristram too far. There is open rebellion, with the chairman of the local party pledging to stand against Trist in the election. Worryingly, it's a rebellion that could spread.

So Mand has a bash at the bankers: "there you are, you simple  plebs up North, I believe in the class struggle too - trust me - I'm right there on the barricades with you".

Yeah, right.

Almost as cynical as Bliar buying the support of his left-wing MPs for his illegal war with a ban on fox-hunting.

Bankers are of course fair game. Cam and Dave have happily laid into them, St Vince has made banker bashing his stock-in-trade, and bankers are the villains of virtually everything that appears on the BBC.

And of course, the bankers have not behaved well. They have happily gorged themselves during the emergency support operations over the last 18 months, despite the fact that taxpayers are screaming in pain all around (although we should note that Bob Diamond is actually one of the bank bosses who has waived his personal bonus this year).

But we do need a sense of perspective here. Banking and its offshoots have been by far and away Britain's most successful industry over the last two decades. As last week's Treasury Select Committee Report reminded us:

"More than one million people work in the industry, each contributing to GDP more than double the average for all employees. The industry accounts for around 8 per cent of UK output and contributes 14 per cent of tax revenues."

Yes, true, the financial crash has exposed taxpayers to a big loss. But even that loss - estimated at $200bn by the IMF - isn't that big when set against these gains. In sterling terms a loss of £130bn should be viewed against tax revenues from the financial sector which reached £67bn pa before the crisis broke (see here).

And oddly enough the guys that work in this industry don't altogether like being bashed. As BOM's correspondent on the Wharf so elegantly put it in a recent email:

"Fecking Peston was always a communist as far as I'm concerned. As is the sainted Martin Wolf. They all agree with Adair Turner that bankers are "Socially Useless". Let's see how fecking far they get without them then."

Which is why, along with his neighbours, said Wharfman is currently reviewing his wider options.

Interestingly, the Treasury Select Committee asked Turner to explain on what basis he could possibly judge banking to be "socially useless". He replied:

"to determine in concrete terms what is valuable or not is incredibly difficult, but at least if you are aware that the financial system is capable of generating activity that does not have value added for the economy... you are on your guard... It does not provide you with a nice, easy rubric to determine what is and what is not socially useless... but it means we are not open to the alternative argument that everything that exists must exist."

Er... well... thank you for that my Lord. Most helpful. Some bankers' activities may not add value to the economy, but we have no practical means of working out which.

Brilliant.

Almost as brilliant as My Lord Mandy.

PS As we've noted before, Tyler has developed an unhealthy addiction to podcast lectures delivered by left-wing academics. He's currently listening to another lecture course from Berkeley, this time on European history given by Prof Margaret Lavinia Anderson (see here - available free from iTunes U). It's excellent - wide ranging, well informed, and entertaining. And it's really stimulating to hear a serious account of history recounted from the left's perspective. The latest lecture was on Capitalism and its Critics, focusing on early socialists like Robert Owen. Anderson naturally presents the man as a hero, standing up for oppressed working people against the evil capitalists of Coketown's industrial revolution. But in doing so, she also mentions a couple of things that have been showstoppers with socialism ever since. First, its grotesque inefficiency and vulnerability toproducer capture and outright fraud - as happened when the naive Owen got defrauded out of his fortune while trying to establish his grandiose model town of New Harmony. And second, its inevitable progression to Stalinism - Owen believed children should be removed from their parents to be educated in state boarding schools, where young minds could be shaped in the paths of righteousness. We've since had plenty of opportunities to see how that one works out.