Dispatches: How the Banks Won (or, How the Liberals are Winning the Argument About the Banks)

This post was written by Richard on June 23, 2010
Posted Under: Capitalism,Economy

Some friends of mine have told me to watch the Channel 4 Dispatches show on the banks, aired last week, but still available online. It took me a while to get through – I kept falling asleep in the long segments of zooming in and out of buildings, the dark filter shots over the London skyline, and the print-style dots effect which seemed to be a necessity at least once every ten seconds. However, in-between all this there was content. For your sake, I’ve condensed it down. It can be covered in four main points. I’ll take the good one first, mainly to show that I’m not just a big moaner:

1. The financial sector only produces half the capital as good ol’ fashioned production
Despite the fact that the show pretty much polarised the economy into banks and factories, it did point out that the City’s constant claim that they make loads of money for everyone and provide huge amounts of jobs is basically a lie, and that it doesn’t deserve the special treatment the government gives them. Right, gloves off.

2. The people suffering in the recession are small business owners
Though there is a quick reference to shops closed because ‘the banks have disengaged’, the main sob story of the piece (which comes very near the end) is for the small business that can’t get a bank loan. The idea of ‘British businesses’ and entrepreneurs is championed throughout the second half of the show as the solution to our recession woes: investment in new ideas, creative profit and business innovation will save us all. The business owner in a hard-hit town in the Black Country is interviewed, and tells of how he has had to mortgage the family home in order to keep his business going. I couldn’t help but wonder if the factory workers had homes to mortgage.

3. Clandestine institutions have too much power
The culprits of the piece are the bankers of the City of London. There are lots of shots of the Corporation of London coat of arms, and plenty of the inside and outside of the Guildhall, showing it as some big splendid ancient hall. They failed to show that it’s actually a rather gloomy place, pretty empty, almost entirely reconstructed in the 19th century, and with some of the ugliest sculptures available in London. But never mind. The point was that the bankers all dine and wine together, pat each other on the back, and collude and lobby, and the 800 year history of the Corporation is mentioned, as if it has some longevity. The problem here is that it uses the pomp and ceremony of the Corporation not to mock the bankers but as proof that they have some kind of special powers beyond capital and privilege. This is all backed up the constant use of pseudo-voyeuristic close up shots from behind box files and beneath desks, as if these sneaky secretive bankers are alluding our attention with their clever hidden clubs and societies. And here is where the real mistake kicks in.

4. The banks fooled and control the government
The central premise which runs through the analysis (until, and only until, the very last sentence, strangely) is that politicians were fooled by the cleverness of the bankers, and that consequentially the bankers control the government, making it do their will. The state is basically admonished of responsibility for the crisis, and we the people are left out until right at the end, in a quick add-on of ‘will the government do what the people (i.e. the ex-Editor of the Observer) want?’

The reason I think all of this is important is that this isn’t unusual. It’s the liberal concept of finance: the bankers have the money, the ordinary people don’t have the money. The solution? Let’s go back to good old fashioned liberal capitalism, the way it used to be. Reform the banks so that small business and business ideas can thrive even better (as the Dispatches show seems to propose), let’s break up the nationalised banks and let lesser known banks have a go at it; you know, trustworthy people like Tesco, Virgin and Santander (that’s Abbey National to anyone not born yesterday).

And, I hate to say, it’s not just a liberal response – there’s a good deal of bad economics in there, showed up by the middle segment’s obsession with the Corporation of London. Clandestine societies that control the government? It’s really the same kind of nonsense as in Zeitgeist the Movie or any other self-respecting conspiracy theory.

These arguments are becoming standard both on the left and the right. The net effect of this is the liberals in power and much of the left out of power are ending up making demands for us all to go back 4 or 5 years, to a land where capitalism worked nicely; all we have to do is target this small group of rich miscreants, and all will magically be reversed. I hope that the readers of this blog know otherwise.

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Reader Comments


“The financial sector only produces half the capital as good ol’ fashioned production”

I haven’t seen the show, but that’s an astonishing claim. Are you able to elaborate on it at all?

Other than that, sounds like the programme was up to the usual low standard, but a word in defence of focussing on small businesses. A certain level of focus is certainly justified, because this is where a good chunk of the much-needed new jobs are going to be created. Make no mistake, small businesses today are not run like Victorian mills. Small business owners take large risks, and generally aren’t particularly well rewarded for it considering the benefits they bring to the country. Yes, there are exceptions, but in general the only way to create significant numbers of jobs other than to subsidise multi-nationals to come here is to encourage small business creation/expansion.

Written By Dave on June 25th, 2010 @ 1:39 pm

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