“Profit is not satanic.”
Those are the words of John Varley, chief executive of Barclays; they were addressed to an audience at the church of St. Martin-in-the-Fields. Varley is one several bankers who are now taking the case for free-market capitalism to churchgoers. Brian Griffiths, an adviser to Goldman Sachs International, recently told listeners at Saint Paul’s Cathedral in London that “the injunction of Jesus to love others as ourselves is an endorsement of self-interest,” adding “we have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all.” Why is that? Because, as Varley puts it, “talent is highly mobile.” If we don’t let talented bankers pay themselves outrageous amounts of money, they go will find someone who will let them: “If we fail to pay, or are constrained from paying, competitive rates, then that talent will move to another employer.” This old argument is now coming from the same people who are fighting against international regulations that would prevent financiers from going to “another employer” or another country that doesn’t limit executive compensation.
The claim that inequality is a necessary condition for a higher general standard of living is disputable; it depends on the strange claim that GDP is the best way to measure a country’s standard of living. But whatever the merits of this claim, it is one that sounds much better coming from an economist than from a banker. As the late G.A. Cohen pointed out, when financiers talk this way, it sounds a lot like extortion. One could argue, Cohen wrote, that parents should pay ransom to a kidnapper because, unless they do, he won’t return their child. But there’s one person who isn’t in a position to make this argument: the kidnapper himself — since, in making the argument, he would be offering not an innocent prediction but an ultimatum. Similarly, it may or may not make sense to allow bankers to be paid enormous sums in order to advance the material welfare of the rest of society, but there is no law of economics that requires bankers to accept or demand enormous sums. Those who, fulfilling their own prophecies, demand much, much more money than anyone needs violate a principle of distributive justice that does not depend on GDP. Jesus has nothing to do with it.
(The New York Times has the story about the bankers’ new gospel here.)