Christmas bonus

What are we to make of the furore surrounding the bankers’ bonus saga? Bankers have had a bad time of it recently – mostly at the hands of politicians (who are, no doubt, very glad to have something to detract from their own expenses scandal) and at the hands of the media, who are only too happy to find someone to blame for the economic mess in which we find ourselves. RBS have found themselves particularly in the firing line. There was the fuss about Fred Goodwin and Harriet Harman’s ridiculous comment about his pension failing in "the court of public opinion" and now they wish to pay bonuses totalling £1.5bn, which has sparked rumours of government action in this week’s pre-budget statement.

The ever informative and reliable Robert Peston is forecasting a super-tax on bankers’ bonuses, which is an interesting development. If it does happen – and we’ll find out in a few days – it may well be a sign that the court of public opinion has indeed handed in a verdict. A super-tax will not clear the country’s debt; even at rates of 80% to 90%, the total raised will only be a couple of hundred million pounds – no small amount, clearly, but insignificant compared to the overall debt. The tax will purely be a punitive measure and possibly, if we’re to be cynical, a grab for popularity.

Let me be clear: some of you reading this may well be bankers and I make no comment on whether you deserve a bonus. I’m not even going to comment on whether bonuses are an effective way of motivating individuals. What I find fascinating is that we’re seeing played out, on a grand scale, the principle of reciprocity. There is a perception, rightly or wrongly, that “bankers” have brought about the current economic crises: people have lost their jobs, businesses have closed down. There is a further perception that, having been “bailed out” by the public, bankers are now taking advantage and being unfairly rewarded for what they’ve done.

The key word there is “unfairly” – reciprocity demands that any exchange be perceived as fair by both parties. If it isn’t, then the party on the losing end will take action – even at their own expense – to punish the party seen to be winning. The City of London, despite recent events, has been a source of income for this country for hundreds of years. In the coming weeks, it’ll be interesting to see how far society is prepared to go to punish this income generator in the search for reciprocity.