HSBC and the virtue of profit.
I think this blog is going to be about economics. I’m not an economist. But since they seem to know bugger all anyway, I don’t see why any entirely unqualified bloke-in-the-pub shouldn’t chip in, and make just as little sense as anyone else.
The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate that it has over the last fifty years, the economy will be 80 times its current size by the year 2100.
Is that going to happen? It seems unlikely. So the rate of growth has to slow, doesn’t it? Or, what seems much likelier to me still, is that ‘growth’ will shrink and go into reverse. Already we learn that our living standards in the UK in 2011 are the same as they were in 2001. In those terms, there has been no growth for ten years.
To most economists, growth is a virtue, but I can’t find it listed as such in Aristotle, in any of the world’s religious systems, or in any humanist account of what virtue might be. You see things like justice, temperance, hope, compassion, equanimity, cleanliness, etc. but no one, not even Ayn Rand, lists limitless profit and endless growth as virtues. In fact, limitless profit and profligate growth look a lot more like vices than virtues.
And yet bankers and politicians treat profit and growth exactly as though they were virtues, rather than monstrous vice.
HSBC, the World’s Local Bank, are closing their branch here in Presteigne. This year, we lost our biggest employer, and times are hard for the town. So the Presteigne branch of HSBC has lost business, and is no longer as profitable as it once was. Account holders, (like me), all got letters apologising for any inconvenience caused by forcing us on a 12 mile round trip to our nearest branch, by making our lives yet more impersonal through ‘internet banking’, by taking away the town’s only ATM. But, the letter implied, the thing is, HSBC Presteigne is not making as much profit as we’d like, so, as I’m sure you’ll understand, we are morally obliged to close it, because profit is our only virtue.
In their terms, HSBC are right to close their branch, a closure which will do great damage to our fragile economy, because they have no striving after virtue other than the making of profit. Therefore, their terms are wrong. Limitless profit, cancerous growth – are not virtues. They celebrate only the vice of greed, which is not good in any sense of what a virtue might be.
Companies have the legal status of individuals. In the eyes of the law, HSBC is a person. Most persons are more interested in being virtuous (loving their children, for example, or trying to be just in their dealings with other people) than in simply piling up more profit. Either companies should lose their status as individuals, or they should start aspiring to virtue. Virtues such as compassion, justice or temperance, for example.
HSBC whine that they are answerable to their shareholders; that they only act on their shareholders’ behalf. Who are their shareholders? I very much think that you and I might be, through the agency of pension funds. And who buys government bonds, the sale of which is faltering across the world, and is threatening to bring banks down, banks like HSBC, with their £11.8 billion pre-tax 2010 profits? Pension funds buy bonds, so that government can fund pensions. Then governments pay back the pension funds at interest, so that the pension funds can fund pensions thirty, forty, fifty years from now.
Pension funds reach into the far future. Now that permanent unfettered growth is seen to be unattainable, pension funds need to be concerned with virtue: cleanliness, (i.e, companies need to be environmentally responsible), honesty, compassion, temperance, and whatever else we might agree to be virtuous. They need to behave as individuals; as good neighbours, members of the community. Concerned with a wider idea of what well-being might mean in thirty, forty, fifty years from now than profits. We all pay into these funds one way and another, so we all need to be able to have a say in how they invest our money.
Perhaps we need to examine whether or not pensions are themselves virtuous. Compassion towards the elderly certainly is, but does that necessarily mean a great pension for everybody? I’m not sure it does. Maybe we, all of us, legal persons like companies and useless hypocrites like myself, need to show greater compassion towards the young, and to teach them compassion for the elderly.
In Hindu tradition, the third stage of life is Vanaprastha. This stage begins when household duties come to an end. The householder has become a grandparent, the children are grown up, and have established lives of their own. At this age, individuals should renounce all physical, material and sexual pleasures, retire from social and professional life, leave home, and go to live in a forest hut, spending their time in prayers.
Yes, well, I’m not sure I want to go all the way down the Vanaprastha route, (and, without even asking, I think my wife might agree with me), but I don’t think I’d mind giving the house to the children and grandchildren, and going to live in a mobile home park up the road, so long as the family popped by, helped out, put up with my knock knock joke about mayonnaise etc.
If growth has had its day, so, I wish to argue, has the usefulness of tribes. The world is one people now. The vast majority of the members of our global tribe live in familes, in communities, in an environment, and it is these that need to be sustained; not states, not banks, not money. As individuals, we need to ‘grow’, and I do mean that in its hippy sense, I’m afraid. We need better education, not so that we can get better jobs and produce greater profit, but so that we are just – better educated. We need access to resources, not just to set up our own businesses or for blue sky research, but also to improve our parks, get traffic off the road; or to learn the violin, or to study lichens, or learn how to cook. We need time with our kids, so that they want to spend time with us. We need good lives, not the bad money for which we have been taught to strive.
And so, HSBC, goodbye and good luck with the remorseless hunt for profit. May it bring you all the happiness you deserve.