“We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all”
This astonishing remark was made today in London (where I’m visiting) by Lord (Brian) Griffiths, vice chairman of Goldman Sachs International. He was defending massive bonuses in financial services that are estimated to be exceeding £6bn this winter in Britain, despite the recent international banking collapse and government-funded rescues.
Maybe the statement’s not surprising, coming from Goldman Sachs which has just produced massive profits of $3.2bn in the third quarter of the current year, and is reported to be on track to pay its 31,700 employees salaries nearing an astonishing $700,000 average this year.
But Griffiths has a wider brief than just making money, or so it would seem, because he is also chairman of Christian Responsibility in Public Affairs, as well as the Archbishop of Canterbury’s Lambeth Fund. So he’s a leading figure in the Church of England as well as a banker. Less surprisingly, he was also once a top adviser to Margaret Thatcher, one of Britain’s most socially uncaring prime ministers.
But is it Christian to defend inequality in Griffiths’ terms? Do the large cheques received by him and his colleagues and other bankers really create wealth And, in any case, is it acceptable in any religion, stated as blatantly as this? Surely it is it even more indefensible when the gaps in wealth are as huge as they are now between financial services and other equally stressful but often more productive occupations.
Stephen Green, Chairman of HSBC and a Church of England priest, has shown more Christian consciousness. He has said banks owe what he called the “real world” an apology for the past year’s crisis. Banks, he said recently, need to “learn the lessons” related to “governance and ethics and culture within the industry” – and that included the way that banks award and control bonuses.
Even in India, international banks have been paying relatively astronomic salaries in recent years to people ranging from top executives to new recruits from management colleges. Top Indian businessmen have been debating salary levels, having been urged by prime minister Manmohan Singh to curb them at the top.
But only one, Mukesh Ambani of Reliance International (RIL), has volunteered to cut his salary – by 66% to $3.2m (in 2008-09) which itself is astronomic for India and totally unnecessary in terms of giving enough headroom for his top executives to be well rewarded. And his gesture was probably just that, aimed at polishing his image.
Of course, it is inevitable that any push for economic growth will create riches for some while leaving others behind. That has been increasingly evident in India since the 1991 economic reforms boosted unequal growth. The social price of this growth are vastly widening the gaps that are developing between the rich and the poor and that are beginning to show up in violent social and political rifts across South Asia.
One would not of course wish the Naxalites on Griffiths and his colleagues, but his arrogant remarks today in London surely deserve to be dammed internationally.