Quakers seem to be in vogue at the moment. John Plender wrote about them in the FT last week; Aditya Ckakrabortty has done so today in the Guardian. Both, admittedly, did so in the context of Barclays once being a Quaker bank.
As Plnder put it:
The sober values of the Barclays, Bevans, Gurneys, Tukes, Trittons, Thomsons and other Quaker families that helped turn [Barclays] into a great national institution over 300 or so years now seem remote
In one sense, Mr Diamond has more in common with his Quaker predecessors than it might first appear. Back in the 17th century, members of this nonconformist denomination were treated as renegades by the political establishment — something about which Mr Diamond knows a thing or two. The strong Quaker presence in banking stemmed from their exclusion from professions such as the law and, because of their pacifism, the army. They derived a competitive edge from their reputation for integrity and mutual trust.
As he also notes, by the mid 20th century those same Quaker families were using their familial links to block meritocracy at the bank: I'm not going to over sentimentalise this process. But there is a point in all this which is important. So, as a Quaker let me try to make that point.
Quakers focus their attention on the outcomes of faith, not on faith itself. The impact of that is significant: Quakers made their impact in the secular world because they explicitly took their principles into it. And so the Quaker testimonies are about peace, equality, simplicity and truth. Peace has not much to do with this tale; the others have.
If you believe in equality you most certainly don't end up with Barclays pay structure.
And if you believe in simplicity you don't avoid tax with hundreds of subsidiaries in the Cayman Islands as Barclays has.
And if you believe in truth then you don't mis-sell as Barclays has.
The Quaker ethics may have been sober, but they were the basis for business success. We could do with a lot more of them now. And we'd win if our City was still based on them.
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Totally agree; I’d equate the Quaker businesses with mutuals, friendly societies and co-operatives here, as enterprises founded on the basis of being means to an end, not the end itself.
Isn’t the correlated problem that mature market capitalism invariably leads to a focus on competition rather than creativity? In any field you end up with lots of business each basically doing the same thing but trying to do it slightly better/more efficiently than each other. And the end result is not choice for the customer, but convergence on the same way of doing something (aided and abetted by regulators and educators and concepts such as “best practice”).
I know there are a small number of exceptions, but we seem to have ended up with a lack of choice through the erosion (in the name of efficiency) of characteristics that once made institutions distinct. It’s a bit like F1 racing, where all the cars have converged on a single form of design and the spectacle has ended up becoming utterly boring. Or football, where most clubs no longer have any identity or tradition at all and instead the sole mantra is to win at all costs.
It is called progression to the mean
You’re right
The revelations by Martin Taylor the former Chief Executive of Barclays that back in 1998 Diamond asked for an increase in the limit for exposure to Russian debt, was refused such an increase and then incurred losses for trading beyond the limits set by the Board when Russia defaulted and that Taylor was forced out while Diamond’s star was in the ascendant suggests that Board of Barclays forgot its Quaker roots a long time ago. The regulators were even aware of the matter at the time and chose not to act. And this was in the days before the FSA was given its powers — so it speaks volumes for the system of regulation that the Tories had established that George Zinoviev Osborne and his smear puppets would lead us to believe was such a paragon of virtue.
The forgetfulness began about a generation ago
Call it 1980
Any coincidence?
I would agree – although I’m not sure whether Mrs Thatcher was the symptomm or the cause. Today does in many ways feel very similar to the period in the run up to 1979 when it was clear that things were changing but the direction wasn’t clear. We should’t make the same mistake and assume that the change when it comes will necessarily be in the rght direction.
Agreed – entirely
The great story that illustrates Quakerism at work is this: the man whose cart hit a pothole and one wheel broke, tipping the cart on its side. A series of people walked past and expressed their sorrow for the man whose livelihood was in jeopardy. A Quaker walked up, and said, “I too am sorry for your misfortune. In fact, I am sorry five dollars”, gave the man the money (enough to have the wheel repaired) and walked off.
I can’t recall where I got that from – it might have been the theological commentator William Barclay.
At what rate of interest ?
From the second Pinder quote:
“They derived a competitive edge from their reputation for integrity and mutual trust.”
Quite so. And why to today’s bankers, regulators or government ministers imagine that they can somehow gain competitive edge by doing the exact opposite of their forebears?
The answer I fear is that too may highly placed people are involved in the looting of the economy.
Transparency International’s report, Transparency in Corporate Reporting: “The lowest scoring companies in Europe, Asia and America were all banks.” http://www.transparency.org/news/feature/shining-a-light-on-the-worlds-biggest-companies