I came face to face with the real banking problem a month ago when speaking in Oxford to an audience of undergraduates. ‘Well, I suppose one good thing about the last three years is that you won’t now all be applying to work in banks,’ I joked. It seems I was wrong. At these words, about half the people in the audience stared sheepishly into their laps.
I can’t say I blame them. Of my own college contemporaries, leaving aside one or two barristers and a brilliant technology entrepreneur, I think it would be accurate to say that every single person who went to work in banking wound up earning more than every single person who did not.
This can’t be good. It is more than just a question of inequality (any competitive or innovative business sector will produce some insanely rich people): instead it suggests a large-scale distortion where the economy is rigged in favour of one area of activity.
A rigged economy is perceived differently to an unequal one — a distinction people on the right often fail to make. Many (though not all) less fortunate people are surprisingly tolerant of quite extreme inequalities of outcome, even when they are quite arbitrarily bestowed. Nobody much complains about Steve Jobs’s absurd wealth or David Beckham’s — or even that of lottery winners — where it is believed that the same chances are available to everyone. People even enter casinos and poker competitions precisely to increase overall inequality (in my visits to gambling dens I have yet to meet anyone campaigning for a more egalitarian distribution of the poker pot).
However, no one willingly plays in a casino that is rigged against them. If even a modest distortion were detected where, say, friends of the croup-ier on average received a 5 per cent bonus on their winnings, no one else would play there ever again.
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