I recently had lunch with a man who said the rich are getting too much stick. This concerned him. The problem, as he saw it, was that all wealthy people are being lumped together with bankers. A loathing of pinstriped hucksters who made their money rigging markets, dodging tax, or staring at screens is reasonable, I think he believed. What concerned him is that this rational dislike is bleeding over into a hatred of those who made their money doing useful things that improve people’s lives. Firstly, he thought, that’s not fair. And secondly, a dislike of business is bad for society.
My lunch companion was right. In the UK the rich do largely get bad press. Perhaps it’s because over here the rich people with high profiles are mainly bankers (Bob Diamond, let’s say) or oligarchs, who usually made their cash in – ahem – opaque ways. So it’s hardly surprising that being rich is becoming connected with being dodgy. But there is a better way of talking about wealth.
Recently people have resurrected the categories of the deserving and the undeserving poor. The former are those who live on benefits and sit about all day watching television, the latter those who struggle in low-paid jobs and resent their lazy neighbours. We should also talk about the deserving and the undeserving rich. In the first camp will be businesses that make useful things like prosthetic limbs and superconductors, the latter are those whose enrichment benefits nobody except themselves.
How do we decide what is beneficial? Lord Turner, head of the UK’s financial regulator the Financial Services Authority, was roundly mocked in the City of London a few years ago for saying that much of what goes on there is “socially useless”. The hard-nosed, slick, free-marketers sneered that such thinking was naive, and argued that its efficiency per se is socially useful, ensuring prices are correct and so on.
But nobody can believe any more that the City is efficient. Crookedness is rampant. Banks’ primary function is to siphon capital to people and businesses that need them, but we’ve also seen this week that Barclays, HSBC, Lloyds and Royal Bank of Scotland sold complicated instruments to small businesses, instruments which are now crippling those businesses. The banks can’t even do their core job properly. Plus the more light that is shed on the amazingly shoddy way that important numbers like Libor are produced, the less the City looks like a super-efficient capital-distributing machine and the more like a Heath Robinson contraption held together with string and sticking plaster. The City has had its Wizard of Oz moment, and nobody will let bankers bamboozle them with odd definitions of social usefulness any more.
Social usefulness is easy to spot, and don’t let anybody tell you otherwise. There are plenty of deserving rich whose businesses are socially useful. But either because they are modest or are fearful of being in the public eye, those people normally don’t like to shout about it. If they don’t, though, then the cash-flashing nouveaux riches will take their place, and wealth will become even less socially acceptable. Punitive taxes, anti-business rhetoric and a culture that’s reflexively hostile to business would be a terrible mixture. We’re heading that way. If they want to prevent it, the deserving rich need to start standing up for themselves.