WHENCE COMES THE BANKER'S BONUS?

The other day Matthew Parris was writing in the Spectator about the collapse of the market in llamas. If I remember rightly, he called the piece ‘First the housing market collapsed. Now I fear the trade in llamas will be next.’ Of course, as things have turned out it has been not so much the trade in llamas as the trade in merchant banks that has gone squiffy. All those people in the City making fortunes quite literally beyond the dreams of avarice who now find themselves discomfited, much the same as us ordinary folk who have to fetch our own coal.

Now I always thought that that colourful expression ‘beyond the dreams of avarice’ came from the Bible. It has a suitably chilling ring of satanic temptation about it. But, no, I find that its origins lie with that obscure eighteenth century English dramatist, Edward Moore, with whose works you are no doubt horribly familiar, if only because they include ‘Fables of the Female Sex,’ which he wrote in 1744. A few years later he wrote the play called ‘The Gamester’ and it is there that he penned his immortal line.

In fact he was quite a dab hand at immortal lines, For he also wrote the one about adding insult to injuries which is, I suppose, what he might have felt about the fact that dear old Samuel Johnson seems to have appropriated his avarice quip and is consequently credited with it in some publications despite Johnson writing - or rather in this case speaking - some 37 years later in 1781.

Johnson on that occasion was assisting at the sale of a Thrale’s brewery, for some reason, and quipped to Boswell (standing guard in much the same relationship as Baldrick had with Blackadder), that “we are not here to sell a parcel of boilers and vats, but the potentiality of growing rich beyond the dreams of avarice.” And, he might have added, making a tidy profit for the bankers, too, who have gone on buying and selling money long after the breweries have withered on the vine, if you don’t mind me mixing a metaphor along with the hops.

Because it is bankers and breweries that I want to write about - or rather why it is that bankers are able to make money when there are no longer any real breweries to sell.

Permit me to illustrate with a parable. Let us return to the glorious eighteenth century again and to the first races at Epsom. Two brothers - let’s call them Ed and Sam - owned a village brewery and one of them had the bright idea of sprucing up their local trade by brewing a barrel of special ale and taking it to the Epsom races there to slake the thirst of eager punters.

The barrel was duly brewed and Ed and Sam set out on their way. Evidently trade could not have been brilliant for they had no cart and so were obliged to roll the barrel along the high road. Not long after they had set out, Ed says to Sam. ‘I’s a thirst. Give me a pint o’ yon beer. I’ll pay ye threepence for it.’ And Sam duly pours him a glass of finest ale and receives the threepence. Then, a little further on, Sam says the same thing to Ed. Another pint of ale is poured and the threepence is transferred from the pocket of Sam to the pocket of Ed.

Well, what with the summers being considerable hotter in the 1780s, and the roads considerably more dusty, this trade between two brothers with its accompanying exchange of threepences occurred more than once on the long road to Epsom - so much so, in fact that long before the brothers came in sight of the race course the barrel had been emptied and its contents duly recycled along the hedgerows.

“We mustn’t worry” says Sam. “A’ter all, we paid for the beer.” And so, in a manner of speaking they had. But no matter how hard they searched their pockets they could not find more than a single threepenny bit.

And that strikes me as the problem with merchant banking. A whole lot of people in skyscrapers are exchanging their threepences, betting on things going up or going down, but no one is actually doing anything even as useful as brewing a barrel of beer, still less actually putting any new money into the system. Whence then do the bankers’ bonuses come?

It is no wonder that the whole shebang comes crashing about our ears like a 51 card house. Meanwhile, with bankers out of work, there is no money to buy llamas, which, according to Matthew Parris, do a much better job of keeping down the grass than do sheep. Young male llamas are worth so little now, I understand him to say, that llama owners are giving them away to good homes, though the girls (who breed once a year, punctually and without fuss) still command a respectable price.

But even this depends on people who reason that if they buy a female llama (or two as they are herd animals) they will be able to sell the offspring. And that depends on people with unmown paddocks and those people are (or were) the bankers. It’s enough to add insult to injury.