Economy//

Feral elites and the culture of ‘I’m worth it’

Written by: Molly Conisbee on 7 February, 2013
Filed under Economy

Only the little people pay taxes – Leona Helmsley, American businesswoman

One critique of the recipients of welfare is that overly generous state support creates cultures of entitlement and dependency, hollowing out the drive to entrepreneurialism, self-improvement and independence. It’s an old argument that well pre-dates the Beveridge Report – Poor Laws and parish support were always criticised for their potential to foster idleness amongst the ‘undeserving poor’, with Poor Law Commissioners exhorted to make workhouses ‘as like prison as possible’.

But as we approach the annual round of banker’s bonuses and usual accompanying guff about retaining and rewarding talent in the UK’s top financial institutions, one must wonder why, at least until our post-2008 Crash world, such criticism has rarely been levelled at, for want of a better description, our ‘feral elites’, and the dependency culture they have created for themselves around the reward of failure, mismanagement and (given recent Libor revelations) possible corruption.

I use the phrase ‘feral elites’ in this context because there appears to be no sense, at least in the upper echelons of our big financial institutions, of any sort of culpability or even responsibility for what went wrong in 2007-08. The admission by Andrea Orcel of UBS that the ‘arrogance’ of banking culture needs to change is the exception that proves the rule, even if such a call begs all sorts of questions about how things can be tightened up. J. K. Galbraith once said that the stock market was out of control, and this claim has now been seen to apply to a good deal of the financial sector.

One of the many precipitators of the current financial mess is surely an inherent sense of entitlement, an almost pathological ‘uber-agency’ that is fostered in our wealthiest citizens. That Anthony Jenkins of Barclays and Stephen Hester of RBS want to turn down their £1m bonuses has to be seen in the context of their wealth, and questionable stewardship of financial organizations. At the same time we have the recent attempt by Goldman Sachs to defer payment of bonuses until after the New Year, so staff could avoid paying higher rate tax at a time of national austerity. Ditto the display of the four big ‘bean counters’ – KPMG, PWC, Ernst & Young, Deloitte at the Public Accounts Committee in January, who have made it their business to help clients evade tax wherever possible.

These things are occurring against a background of the UK’s £500bn state ‘welfare support’ to the banks in the form of bailout and guarantee schemes. The last pillars of free market mythmaking – that the private sector is inherently more efficient, and that it generates rather than sucks wealth from society – must surely now be demolished in the eyes of all except the most ideologically blinkered, or terminally self-interested.

We should look again at how this narrative of private sector efficiency/entitlement and state sector inefficiency/dependency has arisen. No doubt the reasons are complex because of routine attempts by power elites to re-write history, and that fact that such attempts are bound up with covert economic and political decision making. Economists from all sides of the political spectrum have warned about the creation of an elite economic culture with the ability to create its own moral and political frameworks. Adam Smith believed such a culture would operate like ‘an overgrown standing army’. Marx was quite correct to point out that ‘the ideas of the ruling class are in every epoch the ruling ideas…at the same time becoming its ruling intellectual force’. So much of what we take as normal or ‘natural’ in contemporary capitalism and its reward structures deserves to be de-familiarized as a constructed political narrative, which gained considerable momentum with the deregulatory financial policies of the 1970′s and 80′s.

According to Tony Judt, our ‘obsession with wealth creation, the cult of privatization and the private sector, the growing disparities of rich and poor [a]nd above all the rhetoric that accompanies these: uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth’ have been the ideological handmaiden to the creation of contemporary elite entitlement culture. Judt continues: ‘We cannot go on living like this. The little crash of 2008 was a reminder that unregulated capitalism is its own worst enemy: sooner or later it must fall prey to its own excesses and turn again to the state for rescue. But if we do no more than pick up the pieces and carry on as before we can look forward to greater upheavals in years to come’.

American sociologist C. Wright Mills wrote about the emergence of this culture of entitlement in The Power Elite (1956). He explored the (damaging) creation of a monocultural world view as authority (in business, banking, politics, the military etc.) increasingly centralises through the development of shared spaces – these could be literal, such as elite educational establishments, marriage, quasi-Masonic self-help arrangements and so on, or perhaps less tangibly through ‘class identity’, or the idea that somehow the elite were a group apart, and not to be held accountable by the rules of the rest of society. In this he saw a fluidity of elite positions (so one might move seamlessly from a senior business to political post, for example) because the shared culture of the elites defined a socialised life-world that was not even at odds with the masses, but a thing completely apart. A bit like the gated enclaves of homes for the rich, though at least there the barriers are visible.

Mills argued that the powerful maintained a permanent ‘war economy’ to help control post-War capitalism and the capture of its benefits; some contemporary commentators (Naomi Klein, David Harvey) have made the same point about our current ‘crisis capitalism’, which continues to serve the richest as the middle and lower income earners are squeezed. (In 2012 the US Forbes magazine reported a spurt in the number of billionaires: in 2010, 93% of additional income in the US – some $288bn – went to just 1% of taxpayers).

Communities who feel no investment in or sense of responsibility towards the society on which they prey are bad news – the upmarket equivalent of a rioting, sponging, feckless, work-shy, ignorant and nihilistic underclass whose characterization can be seen as an ideological construct designed to shift the blame to where it ‘truly’ belongs. Power-elites are bad for democracy, and bad for building any sense of collective enterprise. And given the piling up of challenges now facing us, to include environmental imperatives which have been scandalously undervalued and airbrushed as we panic about economic growth in a fundamentally unstable economic system, we must question how far we can tolerate entitlement cultures which serve to undermine us all. When most economists are agreed that we cannot return to the credit-fuelled boom of pre-2007, we should be asking where we can possibly go from here. Do we want to subscribe to a situation which survives by disseminating insecurity and anomie, the better to maintain its hold on the terms of debate, and on collective thought and action?