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.

14 Responses

  1. Mike says:

    What is needed is our own bank in which we are the shareholders who share in any profits at the end of the year. As it would be our bank the managers would only be able to earn 10 times what the lowest paid earn and there would be bonuses paid – but they would be in the form of dividends which everyone who banks there would get.

    But the slimy set of corrupt creeps who call themselves politicians would rather drown their own families in cesspools rather than allow a democratic system based on need and not greed to start. Gone would be their extra’s, their directorships etc.

  2. Ian Marchant says:

    You could be onto something there, Mr S. Do you remember that little shiver of fear that went through the City last year when Cameron suggested we all pay back our debts? Economists came out of the woodwork to point out that this would be the ruination of the economy, ie, their mates in the banks. Cameron backed off by lunchtime.

  3. andy stocks says:

    here’s what we can do: do all your trade in cash. close your bank account and put your money into the nearest credit union. if we all paid off our credit cards, they’d go bankrupt – they need that interest like a junkie needs a fix. if we collectively refused to pay off loans on over-valued assets, as in iceland, then they’d soon crash….

  4. Ian Marchant says:

    Yep. what to do is still the problem. Don’t know. We continue to do the best we can in a broken world, I guess.

  5. Chas Ambler says:

    I think most of us have known this all our lives but the same question remains – what the **** do we do about it? Just revealed – 2 executives at Barclays got larger bonuses (boni?) than Diamond – over 6 million. I can’t see a way of stopping them. Given the choice between caring what people say about them and 6 million they make a rational choice.

  6. Ian Marchant says:

    Great idea, Ms Francse! Look forward to it…

  7. rachel says:

    Mr marchnat
    do you know exactly when HSBC in Presteigne is closing and anything about the meeting with presteigne chamber of commerce? i was thinking of OCCUPY HSBC for Broad Sheep’s green.

  8. Dan says:

    Don’t they (economists, politicians, bankers eve) like growth because it ‘allows’ (is it helps?) the poor to get better off without re-distribution? And they never want to talk about re-distribution.

    I’m not sure about this but recall someone saying it to me once, poss in a pub, when I was in 6th form etc….

  9. Graham says:

    Ho, Ian. So you’re losing banks too? After March there will only be an HSBC left in N’haven, and I doubt that they’ll stay long, seeing as they will be very lonely in a High Street full of residential conversions. Very handy for those of us with cash only businesses, eh?

    Tribalism’s on the rise, economists are blind to the abyss that’s just around the next corner, education’s failing, money’s getting tight, the weather’s not too bad but it could always be better, yeah, life is good!

    Happy Christmas to you and yours, dear boy.

  10. Tom says:

    It seems odd that it is only the ‘entirely unqualified bloke-in-the-pub ‘ and blokette) who seems to be making any sense. Usually they are a fount of right and left wing nonsense, tempered by an expertise on football.
    It seems blindingly obvious that you cannot have a world economy based on perpetual growth linked to an increasing population and money borrowed against future economic growth.
    Margaret Thatcher moved the economy from manufacturing to services and this worked well for the middle and upper classes (What defines middle class these days? I mean those earning above the national average wage.) and
    badly for the poor, widening the rich/poor gap. So, we need some new economic thinking.
    So, can we expect your next book to be A New Treatise on Money? Someone needs to write it, and soon.
    Two more things. You may well be right and we may see a growth in tribalism. But having spent a year in Java I am not entirely happy with the thought. Tribalism often has a rigid class structure and can be very oppressive towards those outside the tribe.
    Finally, we didn’t want Prestigne anyway, or we would have given it a sensible name ages ago.

  11. Ian Marchant says:

    There we are…. job done. Thank you for your grand-motherly kindness.

  12. ublix says:

    Yes, this is progress unt neccarium. But WHY tag england when of zip mention in das article? REMOVE? FEEDBACK TO ME

  13. Ian Marchant says:

    Good point well made. Wales tag going up now…

  14. ublix says:

    interezting artcle. BUT i need to ask why you have ‘ENGLAND’ as one of the tags at the bottom? YOU live in Radnorshire, Wales am I not right? FEEDBACK TO ME please.

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