The unacceptable face of capitalism

Philip Augar has found a snappy title for this forensic examination of the sins of the investment banking fraternity, and a startling figure: $180 billion. That is the amount he reckons the big hitters of Wall Street and the City harvested in the 1980s and ’90s in the form of excessive profits for their firms and excessive remuneration for themselves.

They did not make this fortune as more admirable entrepreneurs do, by creating value that would not otherwise have existed or providing goods and services that improved their customers’ lives. They did it by skimming fees and commissions and trading profits out of corporate clients, retirement funds and individual investors like you and me, and very often by bending rules or simply breaking them. If Augar’s analysis is correct, this behaviour constitutes a bigger pattern of scandal than anything else in the modern financial world, whether it be the peculations of African potentates or the £5 billion-a-year raid on British pension funds by our own Chancellor of the Exchequer.