There has been a lot of anger about banks this week, this piece by Mathew Parris in Saturday’s Times is one of the more eloquent analyses of what is going on.
Do you know what Libor is? Be honest. Can you unblushingly claim not just to have furrowed a studious brow over the little potted summaries in this week’s newspapers, but to have a well-founded understanding of what the London Interbank Offered Rate means in the world of the City?
How grounded are you in the business culture surrounding such matters? Have you made any calculation of what Libor-rigging might have cost (or indeed benefited) you yourself? Have you any real feel for how much it matters?
I haven’t. And so I surprised myself by the depth and spontaneity of my fury on learning this week that Barclays has been manipulating Libor. My indignation felt genuine but I confess that had I read that it was the Robil rate — or indeed the Brilo or Orbil rate — I would have been just as cross. Incandescent, in fact.
For all of us, press and public, the sequence is becoming a habit. First the anger. Then a scramble to find out what precisely it is we’re going to be angry about. And finally a bit of hasty cramming so we can express the anger with fluency and apparent authority. Again and again, that has been the story for the past four or five years. We seize upon an abuse, rip it out of context, kick aside the caveats and explanations, stamp our feet, pucker our faces with rage, do a little homework on Wikipedia — and shout. Somebody must swing for this!
The point that Parris makes – that our indifference and ignorance blinds us to what is happening until it is too late to avert disaster – also applies to our reaction to technological change. Can many people claim to understand nanotechnology, genetic engineering or synthetic biology any more than they understand how the Libor and Eurobor are calculated? Is there any better understanding among politicians of what goes on in a pharmaceutical research lab or a City dealing room? Probably not.
The parallel between finance and science continue. Both are global in nature, and the imposition of regulations on one country just results in the transfer of activities to another, friendlier jurisdiction. In fact any thoughts of regulation feel futile – the only people with sufficient knowledge of the banking industry are bankers and the only people who can claim to understand science are scientists.
The danger, as Parris points out, is the angry backlash, the thirst of politicians for a scapegoat…
But when I look at the suddenness and intensity of each succeeding squall, the arbitrary way in which groups of offenders are plucked from context and skinned alive as public enemies, and — this is very telling — the careless shrug of shoulders when it subsequently turns out an accusation was false or unfair (it’s by no means certain that the News of the World deleted Milly Dowler’s messages), I see something deeper is at work.
This is the Age of Disenchantment. We’re all going to hell in a handcart and it wasn’t meant to be like this; it wasn’t what we were promised. We’re furious, but we don’t quite know about what. We’ve been robbed, but we’re not quite sure how. We want to settle scores, but we can’t decide with whom. Destiny has dumped on us and we don’t know why. We secretly wonder whether it might be a little bit our fault and that makes us even angrier.
And that neatly sums up my fears for a variety of new and emerging technologies that have the potential to do far more good than harm. GM crops are a prime example of an arbitrary technology being made a scapegoat for public ignorance of technology, and it probably won’t be the last. GMO’s, nuclear power (especially post Fukushima where how many people died as a result?) have all been collectively demonised, with no distinction being made between leaky soviet era reactors and improving crop yields in drought prone areas.
Can anything be done, short of compulsory science education to age eighteen?