Status Anxiety | 4 February 2012

I write this having just returned from the BBC, where I spent a hairy six-and-a-half minutes sticking up for Fred the Shred on Newsnight. Or, rather, attacking the Forfeiture Committee’s decision to strip him of his knighthood. My antagonist was Will Hutton, former editor of the Observer and currently the Principal of Hertford College, Oxford. Referee: Jeremy Paxman.

Hutton’s view, like Ed Miliband’s, is that this is a victory for ‘moral capitalism’. What that boils down to, as far as I can tell, is bankers forgoing their bonuses and, in some cases, being stripped of their honours. To me, it feels more like political opportunism. Not a decision based on a dispassionate analysis of the role Fred Goodwin played in the collapse of RBS, but a cack-handed attempt by Downing Street to defuse some of the public’s anger about bankers by tossing them a sacrificial lamb.

I say ‘cack-handed’ because punishing people like Goodwin plays into the hands of those trying to pin the blame for our current economic woes on capitalist fat cats rather than spendthrift politicians. Yes, bankers bear some responsibility for the global financial crisis of 2007/08, but the reason GDP has gone into reverse again is largely due to the crisis in the eurozone and that, in turn, is the fault of Europe’s political elites, particularly the leaders of Ireland, Greece, Portugal, Italy and Spain. They failed to address the underlying problems of the single currency, and instead took advantage of the borrowing powers conferred upon them by monetary union to run up huge debts, thereby bankrupting their countries.

The problem with left-wing intellectuals like Will Hutton, wringing their hands with concern about the economic consequences of unregulated markets, is that they’re four years too late.