“I was in this game for the money,” wrote Andrew Lahde, a hedge fund manager, in a letter to the Financial Times last year as the global economy went into meltdown. “The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking.”
“These people who were [often] truly not worthy of the education they received [or supposedly received], rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the aristocracy only made it easier for me to find people stupid enough to take the other side of my trades. God Bless America,” he wrote.
The fruit doesn’t hang much lower than Britain’s Prince Andrew. The best education money can buy and an intellect worthy of the gene puddle from which he was fished. Few look on him for leadership. But the apparent absence of a filter that might temper the more blatant expressions of his regal privilege makes him an interesting indicator of class entitlement at times.
“I don’t want to demonize the banking and financial sector. Bonuses, in the scheme of things, are minute,” he told the Daily Telegraph on the weekend.
“They are easy to target. A number will have abused their privilege of a bonus, so get rid of the excesses but don’t throw the baby out with the bath water,” he said.
For a man who used £30,000 (US$49,000) of taxpayers’ money for an 80km helicopter ride so that he could have lunch with Arab dignitaries, the million-dollar bonuses received by bankers probably do seem trifling. But the rest of us see extortionate rewards for incompetent people not as the “abuse of privilege” but of abusive privilege — wanton venality embedded in a corrupt system.
CONTEMPT
Bonuses are the most stark illustration of an economic culture that treats those who actually create wealth — workers — with contempt, while handsomely rewarding those who profit from that wealth. While perfectly competent public sector employees who are doing useful jobs face lay-offs because of the economic crisis, the overpaid people responsible for creating the crisis are getting huge rises.
Resentment is both justified and predictable. On its own, however, it is not particularly productive. The furore over AIG bonuses in March, or Royal Bank of Scotland’s former CEO Fred Goodwin’s lavish pension, provided an effective vent for widespread outrage. Governments joined in their expressions of disgust, as though the issue were one of bad manners, and then floated all sorts of palliatives that they knew would offer no cure.
Today the bonuses are back because banks that were too big to fail are even bigger, having swallowed the minnows and basked in the oligopoly that greeted the survivors. One of the few things that has changed since this time last year is that we now know just how completely rotten this system is.
So the populist anger at inflated executive pay acted as a diversion from the crisis, rather than tackling the root causes of the popular distress it had caused.
For there is a difference between class envy and class struggle. The former is rooted in the popular antipathy towards the rich on account of their wealth; the latter, meanwhile, targets the system that makes some people rich by making others poor. Envy can lead to struggle. But it doesn’t have to.
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