More about the Vampire Squid.
First, some acknowledgements.
“Vampire squid” as a metaphor for investment banking, the sociopathic financial system (pace Umair Haque), and for Goldman Sachs in particular, is not mine. Its origin is in “The Great American Bubble Machine“, an article published in Rolling Stone in June 2010by Matt Taibbi , to whom all the credit is due. He said,
“The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
I’m afraid I really only became aware of it in March this year, when Greg Smith published his attack in the New York Times and other commentators started using the term more widely.
Next, some apologies,
for not making this clearer in my last piece. I had assumed it was a commonplace, because it deserves to become one, through use by merit.
And now, a story
A true story.
Back when it was real, money was gold. Kings needed gold to pay the retinue of retainers who kept them in power. And sometimes more than they could get from tithes and taxes in the normal course of events; so they have borrowed gold from the merchants, promising to repay it with interest. The merchants who owned the ships and the docks which brought the fine goods to the Kingdom and which took its manufactures and its fleeces to the four corners of the world, for thus did the merchants have ample gold.
The merchants were happy, for they had no use of the gold, yet bore the cost of defending it from thieves.
The King was happy, for he had great use of the gold, to pay the armourers and fletchers, the saddlers and the farriers who were equipping the knights he mustering to go and fight the Turk.
The people were happy, because the craftsmen and soldiers were being paid by the King and would spend their gold in the taverns and on fine things for their mistresses and family, and bestowed gifts on the clergy, who bestowed blessings in return, for the Church said that it was God’s Will that the Turks should be driven from the Holy City.
Then the King and his Knights set out to fight the Turk, and there was much blood lost, and many were slain, and the caravans and ships that came from East came back not, for they were sunken by pirates, in the pay of the Turk. And the merchants were wanting gold, but they had none, their trade being disrupted by the war. So they asked of the King, “return us our gold, the gold that we lent to you for your wars, and which you promised to repay, for we have none”; and the King said, no, I have none, but verily, it is you who should pay me the taxes that I am due, for I have fought the wars that God commanded me to.
And the King also said to his people, I need gold to repay the merchants that are demanding it of me, therefore shall you pay me taxes. But since the King was departed for the Turk, he had no more need of armour, nor of arrows, nor of saddles, nor of shoes for the cavalry; neither called the knights for this provision, since they were slain. And thus there was no work for the armourers and fletchers. And there was no gold in the land, and many did go hungry, yet there were crops in the field, rotting for the want of gold to pay the smiths to beat the sickles to harvest them.
From time to time, wars stopped and then, on the whole, things got better. And then the armourers and the fletchers and the cannon-founders and the shipwrights prospered again, as the Kings prepared anew for war. And when the merchants prospered, the nation prospered; but only so long as the King did not hoard the gold, but used it to pay for his Kingdom, and the armies that he kept, and the monasteries that he endowed,
Some Kings were good. Under their reigns, the nation prospered. Such Kings eschewed war, never seeking to conquer, but to expand the trade of the merchants by treaties of friendship. Under their wise government, the merchants felt no need to demand of their gold, but gladly let the King retain it for his purposes.The Kings endowed great foundations, of scholarship, charity and religion, and the armourers and cannon-founders cast not their iron to weapons, but to manufacture and to machinery.
The merchants also put their gold to the craftspeople, to advance their industry.
The merchants prospered, and with much gold in the land there was also much danger, for there were highwaymen and vagabonds who would take the gold for themselves. For not all could find favour with a foundation or work in a mill. So they agreed not to carry gold, but to carry instead writings of promises of gold at some date, or none, ahead. And the King said, I am the power of the Kingdom, therefore shall writings of my promises of gold be the only promises that all shall take, and ye all shall take my writings, for I am the King, and I cannot break my promise. And the merchants said, that is good, but we shall keep the gold for you, for we have strongrooms. And the King said, no you dont; I shall keep the gold, but you shall know that I have it, so I shall keep it among you, in the bank which you will create for me to do so.
The story will continue. We will get to the squid.