The Prime Minister used the word ‘snobbery’ to deride what he referred to as anti-business rhetoric. By which he was meaning the arguments that business ‘has no inherent moral worth’, that it ‘isn’t really to be trusted’, and that it had ‘no social concerns’ but was solely to do with ‘making money that pays the taxes’. He was addressing the charity, Business in the Community, attended by the Prince of Wales. ‘Snobbery’ seems a curious word to use. Maybe it is some left-over frisson from the landed gentry, even royalty, of old England, for whom the idea of making money, rather than inheriting it, may be thought somewhat beyond the pale. But surely the Prime Minister doesn’t take such ideas seriously!
So far as is known, Milton Friedman was never accused of snobbery. But it was he, more than anyone, who persuaded business that it should have no social concerns and not strive after moral worth, but focus exclusively on making as much money as possible for shareholders. He was less enthusiastic about paying taxes, but snobbery played no part in his argument. It purported to emanate from the cold logic of economic theory, if such a thing were possible.
Messrs Cameron and Friedman both appear to conflate all forms of making money simply as ‘business’. Both fail to distinguish between the real business of making things, and the synthetic business of betting on things. Real business, supported by the traditional financial sector, has all the virtues claimed by the Prime Minister and more. Real business employs real people, relieves poverty, pays for universal education, health and social services, gives individuals opportunities to develop and grow, increases technical knowledge and understanding – the list is endless. Being anti-real business would not be snobbery so much as gross stupidity. And if such anti-business rhetoric had any effect it could be hugely damaging.
The synthetic business of financial trading is different. It has none of those virtues. Synthetic business has been aptly described as ‘socially useless’. It merely serves to make the rich richer without side benefit of any kind. In fact the richer the rich get, the more it pays them to spend money on avoiding taxes. But it’s not just that synthetic business is socially useless, it is also predatory, sucking the lifeblood out of the real economy. It diverts money and highly educated intelligent people away from the real economy where they would contribute positively, into betting on derivative, synthetic and even imaginary financial ‘products’ that could only ever benefit the punter.
This predatory action is unavoidable while ever synthetic business is enabled to make such high returns while the bubble is inflating, and even, if traders are quick enough, continue when the bubble bursts and the real economy has to pick up the pieces.
But as well as being socially useless and predatory, synthetic business is also corrupting. For the people it employs, it crowds out intrinsic human motivations, replacing them with extrinsic, monetarised incentives. So the people are debased, and associated in the public consciousness only with greed. And it’s that greed which ex-boss of Greggs bakery, Sir Michael Darrington, has identified as truly anti-business, a case he makes persuasively in his ‘pro-business anti-greed’ campaign.
Cameron’s failure to discriminate between the real and synthetic is the true ‘snobbery’ that enables him to feel comfortable supporting trader friends in the City, at the expense of the real economy.