The Occupy Wall Street movement kicked off the global Occupy movement and targets a brand that almost everyone in the world knows and understands–Wall Street. Yet close attention should be paid to the evolution of the Occupy dialogue in London where protesters, because they could not take the nearby London Stock Exchange, are camped out on the steps of the the famous St. Paul’s Cathedral. Here’s why I think Occupy London is critical:
- It’s London, not New York, that’s considered by many to be the true financial capital of the world. It’s certainly the capital of the largest financial market–the foreign exchange market that turns over almost $4 trillion daily.
- The UK’s economy is even more influenced by the financial services industry than the U.S. Financial services add more value to the UK’s GDP (9% vs. 8% for the US.)
- Their very choice of location forces the issues they raise to be sharply framed by questions of ethics, morality and social justice.
Now their progress hasn’t been straightforward. But they recently won a victory when they succeeded in having an eviction called off and also inspired a few high-ranking clergy members to resign in support of their right to stay. So when thinking about whether the Occupy movement could have a long-lasting effect on the way we view finance, capitalism and economic justice, Occupy London could be the bellwether.
Here’s the thing–there’s no way that the Occupy movement, on its own and in its current form, will be the magic movement that leads to true change. It’s not the dirty hippies story–any person who visits the sites will see for themselves that the Occupiers are drawn from a broad spectrum of society. Rather, it’s this question: Can the Occupy Movement win the support of the less-than-diehards that make up a majority of society? Can it take hold to the point that its aims become an accepted view of simply “the way things should be”?
To do this, it’s going to have to win over the very people that it ostensibly targets–the bankers, the politicians–the Very Serious Supporters of the Status Quo. Likewise, to win them over, the Occupiers will need to better understand what motivates them to be a part of an industry whose contribution to the social good does not seem to match up to its influence. So, it’s with this in mind that I think a new London-based report published today is really very interesting. It shows that some in the finance industry hold closer views to the Occupy movement than you might expect.
St. Paul’s Cathedral’s own think-tank, the St. Paul’s Institute, commissioned a report to look at how 515 financial services professionals in the City of London viewed the ethics of their work. Note that this survey was commissioned and carried out in the first two weeks of September–before the Occupy movement was even launched. (They meant to publish it two weeks ago but postponed it when one of the senior clerics resigned over the planned eviction of Occupy.)
Now a sample of only 515 people cannot be the last word in an industry that employs tens of thousands. Still, what might the following mean, especially in the aftermath of Occupy?
- A majority of the financial services professionals viewed their professions as being overpaid. On the other hand, they believed that teachers were paid too little.
- Industry deregulation was seen by a slight majority (51%) as leading to less ethical behavior.
- A great majority (75%) of those surveyed agreed that there was too great a gap between rich and poor in the UK.
- The majority believed that bonuses led to increased risk-taking and should only be given for long-term, not short-term, performance.
So it seems that bankers and financial services professionals are aware of the truth of some of the criticisms leveled at their industry. Yet unsurprisingly, it’s the $$$ that keeps them there:
“[S]alary and bonuses is the most important motivation for working in the financial services sector in London. Indeed, around 2 in 3 professionals (64%) say that this is their number one motivation and a further 21% say it is number two.”
Human nature being what it is, it’s unlikely that the Occupy Movement will convince those working in the banking industry to volunteer for pay-cuts. That’s why the government’s role is crucial: salaries and bonuses are paid out of profits and, relying as it does on a cost of capital made lower via explicit government guarantees, the industry is falsely profitable. Let’s talk seriously of an end to Too Big To Fail. Do this and it will help to bring the pay structure more in line with other industries that are of more value to society. For example: teachers.
Circumstance has placed St. Paul’s at the center of the Occupy movement in London and moved the insights mentioned in their report from the realm of the hypothetical to the realm of “happening right now, on your very doorstep.” It will be interesting to see what happens next.