I think we were supposed to be impressed by Cameron’s ringing declaration at yesterday’s Prime Minister’s Question Time that “reckless” bankers should go to prison. I disagree: like much of the talk about taxation at the G8 summit last weekend, this is about embedding existing practices, not challenging them.
It’s a classic example of the “one bad apple” argument: blame systemic failings on “rogue” individuals, and you avoid the need to challenge collective practises and mindsets. And, by invoking criminal sanction, it’s necessary to codify what is acceptable and what is not, redefining what is “legitimate” in way that allows practices to become entrenched. In this case, the question is about how far is it acceptable to risk the savings of investors – and the idea that it is acceptable to do so in the pursuit of reward is of course part of the warp and weft of market capitalism; this is about setting boundaries for individuals, rather than addressing issues of corporate responsibility – and least of all about democratic accountability of finance. What talk of jailing bankers does is steer debate away from the fundamentals, while creating an ethical framework centred on individuals’ not getting found out.
The big issues about corporate banking are untouched by this kind of gesture politics that gives the impression of action while ensuring that the fundamentals of banking go unchallenged – in particular structural issues and whether it is acceptable that institutions are too big to fail. The world banking system remains intact – and continues to reward its participants handsomely – because after the 2008 crash, taxpayers shouldered the burden of debt and austerity economics continues to blight lives. Throwing a few, relatively junior individuals to the wolves is a price that I’d have thought most investment bankers are willing to pay for that situation to contiune.
Talk of jailing bankers is just that – talk, designed to allow a failed banking model to continue enriching a minority at the expense of the many; and above all to continue the sort practices that led to that crash without scrutiny or redress. We deserve better than politicians who are content with this kind of cheap rhetoric, and offer palliatives rather than real structural reform.