Ignorance is Bliss?

The background of the economic crash that began in the United States in 2008 is revealed to the common reader in the book Swimming with Sharks by the Dutch anthropologist Joris Luyendijk.

Personally, what I found most frightening about the account of events given in the book was the fact that the majority of people do not seem to have any idea how close a total global collapse was back in 2008. And in fact, it doesn't seem to interest anyone much. There has been only general talk about the greed of bankers.

However, the author - being the investigative journalist he is - does not believe that the financial crash was only due to the greed of the bankers.

Instead of simply blaming the bankers of being greedy, the writer illuminates different aspects of the financial sector, its operating culture, and the different types of bankers (which one of these is the most dangerous?), as well as the possibilities (or impossibility) of supervision. The most authentic material is provided in the interviews by Luyendijk with people who have actually been working in the banking sector.

Luyendijk’s interviews reveal points that should make us average citizens utterly worried. First, the scale and complexity of the sector make it difficult to manage. If even the supervisors do not understand the complex financial products created by their subordinates, then how could a customer? In the financial industry, profit maximization is the main goal, and profit is made from customers. If a bona fide customer didn’t read a small print, it’s his own failure. And when the customer is a municipality or state, the victims of exploitation are taxpayers.

Secondly, the bankers have closed themselves into a bubble that is completely detached from the daily lives of ordinary people. I am particularly concerned that, in the banking sector, those who themselves raise enormous sums without considering the morality of their actions are only dealing with like-minded people, who even consider themselves remarkably intelligent. What is more, their operating culture does not include reviewing and managing their own operations from an ethical perspective. The banker does not use the words right or wrong, good or evil, as success at work is only determined by making a profit.

The third problem that occurred to me was that the giants of the financial sector, the so called megabanks, are too big to fail, so they must always be saved with taxpayers' money in the event of a crisis. Luyendijk therefore proposes a solution by breaking up the banking sector into smaller units, so that irresponsible branches would actually go bankrupt.

Internal and external control of megabanks would seem almost impossible. The fourth problem for me as a citizen is that politicians are powerless in the face of the financial sector. If the banking sector in one country becomes more tightly regulated and supervised than elsewhere, banks will simply leave the country.

Luyendijk makes an apt parable: in 2008, the banking sector almost succeeded where al-Qaeda failed in 2001, namely to destabilize our entire Western society. The question is, could a similar collapse happen again, and what would be the consequences then?

Joris Luyendijk: Swimming with Sharks My Journey into the World of the Bankers (original Dit kan niet waar zijn, in Dutch 2015)