Saturday, 23 November 2013

Guardian view of the Co-op





Moments ago, the Guardian’s Deborah Orr published an article entitled, “I switched to the Co-op bank as an ethical alternative.   What a joke.”
Kudos to Orr and The Guardian. They have summed up in a headline, what the Right has been saying about institutions like the Co-Op, their trade union and Labour buddies for decades.  Pseudo-morality, feigned-ethics, and a holier-than-thou approach to business and politics has been the hallmark of the Left since the Labour movement first came to fruition.
Now it seems, the mask of morality is finally slipping, and the Left’s own skeletons are being dragged clattering and shrieking from its own dusty closet.
The Guardian writes in its sub-head for Orr’s article, “It’s virtually impossible to be without a bank account, so why is it so hard to find a good one?”
The question, at first, seems like a good one. But the premise is faulty, and it reveals the wrong-headed approach to financial and political institutions that plagues much of the Left.
In Orr’s search for “a good one [bank]” she applies specious notions of morality to institutions she disapproves of, and takes the Guardian reader on a journey of banking over the past generation, ending with the comment, “The saddest thing is that, in the recent past, the Co-op bank has been a progressive, admirable institution. It was the first bank to introduce free banking for customers in credit, in 1974. It was the first to offer interest-bearing current accounts, in 1982. Its ethical policy, barring it from investing in all manner of dodgy enterprises, from arms trading to sweatshops, is – on paper at least – exactly the direction that all financial institutions should be heading in.”
But Co-Op’s “ethical”  banking was and always has been a marketing ploy, as is most of  “corporate social responsibility”.  The British public is generous, and banks, politicians, and other firms are keen to exploit our generosity and guilt by turning it into a sales pitch. “Bank with us,” they scream. We boycott Israel!”or something of the sort. Playing on individual’s politics and preoccupations is the mindset of an effective marketer. The bank’s introduction of free banking and interest-bearing accounts is further evidence of this.
Orr claims that arms trading and sweatshops are “dodgy” as if such things a) would disappear if banks didn’t invest in them, and b) are wholesale “immoral”.
Of course, no one is comfortable with much of what they hear about arms trading and sweat shop conditions, but isn’t is “progressive” to be relativistic about things? Shouldn’t we take into account that arms trading is a reality, and has often led to the overthrow of dictators? Where would the Left’s murderous Che Guevara have been without an efficient arms trade? And sweatshops? Bad sure, but better than starvation, destitution, unemployment and economic ruination? Probably not.
It is of course natural, be you Left or Right, to feel that you have the answers to the injustices that plague the world, but the Left’s selective moral outrage is encapsulated perfectly by Orr’s search for the perfect bank. No such thing can exist. Humans are flawed and therefore human institutions will be flawed.
Moreover, Orr acts as if organisations such as banks have a duty to her sense of morality, as a customer and a commentator, over their duties to their shareholders and their bottom lines. It is this method of thinking that causes the epic flaw in her moral standpoint. To assure morality is to allow free markets – and therefore customers and shareholders – to act in unison, not protect institutions like the current political establishment protects the banks.
Without investment in “dodgy” things, banks may not be able to return as much to the shareholder or provide as good a service to their customers as they do.
Of course, Orr’s answer to this would no doubt be to simply extricate the idea of shareholders: creating instead a “People’s Bank”. But that is exactly what the Co-Op was, and inevitably, being run by humans, it was fallible.
If the Left truly wants to change the nature of banking in this country, it should start by advocating for a break-up of the corporatist government-banking nexus. Big banks should be allowed to fail, not be bailed out, and customers would be further empowered in the knowledge that their tax money wasn’t going to pick up the pieces of banks embroiled in “dodgy” practices, be they sweatshops or sub prime mortgages.
The best way to affirm morality is not to extricate the shareholders, but to empower them. Government is what must be removed from the banking sector, and then the clever marketing managers can play to Orr’s need for a Guardian Bank with free quinoa on sign-up, while the rest of us can go to where the interest rates and dividends are highest.