These are dark times to be a politician or a banker. Hedge fund managers, newly relegated to the social wilderness reserved for sex offenders and arms dealers, may or may not be pleased to now be joined by their MPs. The recent national anger at our political and financial elite has been unprecedented: but are we right in our rage? "Anybody can become angry," warns Aristotle, "that is easy. But to be angry with the right person, and to the right degree, and at the right time, and for the right purpose – that is not in everybody's power, that is not easy." In the furore about the failed morals of our political and financial institutions, are we in danger of compromising our own moral standing, or missing a valuable opportunity to fix what went wrong?
The easiest response to wrongdoing is retribution. Several of our expense-fiddling MPs and senior failed bankers have been subject to humiliating public scrutiny of their finances and lifestyles. Such vengeance can feel good, but it plays to the lowest parts of our own character. And establishing guilt, unfortunately, does not always mean establishing remorse: "I pleaded guilty, a secular plea," says JM Coetzee's fallen academic David Lurie in his novel Disgrace. "That plea should suffice. Repentance is neither here nor there." "I accept responsibility for that which I was responsible," wrote Sir Fred Goodwin, former CEO of RBS defending his £16m pension after the treasury used £20bn to bail out the crippled bank. "[T]o voluntarily accept a reduction… is not warranted."
Another attractive response to wrongdoing is deterrence. Punish severely, advised Napoleon, to punish less often. And so Gordon Brown has replaced a parliamentary expenses system of self-regulation with one that carries criminal penalties. But a policy of deterrence does little or nothing to change the underlying attitudes of the wrongdoer: someone who has gamed the system once may modify their behaviour only as much as they need to to game the system again. Less than one year after the collapse of a string of investment banks, and as banking reforms are being drawn up, bailout survivors Goldman Sachs are set to report record bonuses and profits gained largely as a result of rivals being eliminated. And as Jonathan Ford notes in Crisis Watch this month, banks across the board are paving the way for a return to their bad old ways. So much for the idea of a chastened financial elite.
What options are left to us then? One alternative response to wrongdoing is rehabilitation of the wrongdoer. Rehabilitation does not have the immediate visceral satisfaction of retribution or deterrence, but criminal justice studies have shown it to be the most effective way to prevent reoffending.
It is clear that many of our MPs, as public servants, need rehabilitation. Some of the excuses that were offered by MPs in defence of their expense claims betrayed an astonishing ignorance of the concerns and lifestyles of the constituents they claimed to represent. But public disengagement from our political institutions is not the answer, and the national soul-searching after BNP's European electoral victory in early June implies that we do still, however faintly, want our parliamentarians to reflect our values. Rehabilitation must therefore focus on fixing the relationship between MPs and those they represent.
How could this happen? At the moment, most parliamentarians usually only have contact with their constituents at their surgery and at photo ops: this is unlikely to give a balanced picture of life in a constituency. Perhaps the long summer recess—76 days which an MP can spend in Tuscany or at another, more lucrative, job—could be more constructively used in local projects with strong elements of direct engagement: shadowing some constituents in their day-to-day work and lives. An MP who was prepared to put in some hours for local industry, like at a troubled manufacturing firm in the north, or for a local employer like an old people's home, might be better equipped to understand the priorities and concerns of the people they represent.
Rehabilitating our financial elite will be trickier, because our relationship with is them is more complicated. Investment banks are private institutions, not a public service, and so complaints about greedy salaries and bonuses run the risk of looking like envy. Nietzsche says that ressentiment—scorn rooted in envy—is unpersuasive and compromises us by making us hypocrites who would happily do ourselves the very thing that we are complaining about. If we are serious about showing that inequity is inappropriate, rather than uncomfortable, we have to find another way.
Most of our major financial corporations engage with social problems through philanthropy and funding corporate social responsibility programmes. Direct engagement through volunteering and pro-bono programmes is comparatively low—less than 15 per cent of Deutsche Bank's London staff have taken the opportunity to do this, for example. This reliance on chequebook philanthropy has three dangers: it reinforces the idea that money is the chief good; it keeps the wealthy in a state of ignorance about life outside the five-star bubble; and it is vulnerable to reduction in an economic downturn. Volunteering and pro-bono work, by contrast, avoid all these dangers and are also much more likely to bring about a genuine culture shift in these bastions of extreme capitalism: employees would learn a little about the world outside them. Some companies do already take the initiative on this, but much more could be done. Financiers and corporate lawyers have much they could offer the charity sector with their expertise, acting as consultants or trustees, or simply helping with financial or legal literacy and education. Lobbying for this alternative philanthropy, instead of baying for banker blood, would also make the rest of us immune to accusations of ressentiment.
Of course a City with a strong volunteering requirement might initially look like a commercial liability, especially when compared to global competitors. But similar worries were expressed about the Green movement, which defied expectation to become the commercial norm: "sustainability" and "environmental impact" are now standard considerations for big business. This week a record pay deal was announced for the new CEO of RBS, a bank bailed out by the British taxpayer. For a brief period, several of our financial institutions are, in a manner of speaking, on the public payroll. And politicians, of course, have always been. If there was ever a time to reimagine what we can ask of both of them, it is now.
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