Banker to Public: Inequality Leads to Prosperity

Lord Griffiths of Fforestfach (and Goldman Sachs). Photo: Princeton University.

Lord Griffiths of Fforestfach (and Goldman Sachs). Photo: Princeton University.

In a now-famous talk at St Paul’s Cathedral in London, Lord Griffiths, the vice chairman of Goldman Sachs International and a former advisor to Margaret Thatcher when she was prime minister, gave the audience a pep talk, urging them to buck up, take the long view, and soldier on. There is nothing to be ashamed of here, he said. The hard-working bankers ought rightfully claim their big bonuses. As for the British public, they should get real and “tolerate the inequality as a way to achieve greater prosperity for all.”

Lord Griffiths of Fforestfach (his full title) said he knew what he was talking about, having been brought up in poverty a miners’ family in Wales. Presumably, what this taught him about inequality was not to be on the wrong end of it.

His Lorship urged people to think of  bonuses as part of the long-term investment in Britain’s economy.

I believe that we should be thinking about the medium-term common good, not the short-term common good … We should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people.

The British public, he said, should pull themselves together and realize that if the bankers did not get their bonuses at the same rate as last year—before they were bailed out by the taxpayers—then they might well toddle off to some other more favorable spot.

If we said we’re not going to have as big bonuses or the same bonuses as last year, I think then you’d find that lots of City firms could easily hive off their operations to Switzerland or the far east.

What’s gotten less play are the worries His Lordship expressed over the notion that the government might actually want to own the banks in return for bailing out their sorry arses. Or that they might institute restrictions exactly like those imposed by the Glass-Steagall Act. This, of course, was the Depression era law separating commercial banking from investment banking, whose repeal in the waning days of the Clinton Administration paved the way for the current recession.

There is a move in the UK now to nationalize all the banks, and if not that, then separating them into two parts. Each existing bank could be broken in two, one section functioning as the banking utility, and the other an investment firm.

Another interesting tidbit about Lord Griffiths is his membership on the advisory board of something called the Faith and Work Initiative at Princeton University, which seems to be aimed at bringing religious morality and ethics into the workplace.

The purpose of the Initiative is to equip students and leaders to integrate the resources of their faith with their work to transform their organizations and serve the greater good. This is in line with Princeton University’s unofficial motto, “in the nation’s service and the service of all nations.” For many, faith is what shapes and informs their value system, ethics, character, leadership, and attitude toward work. For many, faith is the key to find meaning, purpose, and even joy in their work, transforming it from being “just a job” to being a calling.

Apparently, the spirit moves Lord Griffiths in mysterious ways.

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