It’s no wonder bank chiefs end up as whipping boys

From Mr H. Kousa and Ms A. Lahtinen.

Sir, Martin Dickson (“The burn-a-banker frenzy is tempting – but wrong”, February 4) cited Thomas Macaulay, who warned against singling out scapegoats. It might be useful to think about the discussion started by another historian of the Victorian era.

The high salaries and bonuses of business leaders are often defended with the argument that they are irreplaceable key personnel who must be kept motivated, otherwise they will leave and the business will falter. The argument seems to echo the Great Man Theory by Thomas Carlyle, who in On Heroes and Hero Worship and the Heroic in History (1841) stated that “the history of the world is but the biography of great men”. The thought was that history is shaped by exceptionally able characters. At its simplest, the thought was that there would not have been, say, a united Italy or the theory of relativity if Garibaldi or Einstein had died before their time.

The theory has long since been abandoned by serious historical research. Wouldn’t it be time for a more realistic view on what influences the success and failure of businesses, as well? It makes no sense to pay huge amounts to a Fred Goodwin or a Stephen Hester, if there are others able to achieve similar results for a considerably smaller amount of money. Any money not spent on excessive salaries could be invested more productively according to the interests of the business and the shareholders. It is no wonder people end up seeing bank leaders as “whipping boys”, as Macaulay put it, if they have been singled out as some kind of miracle makers in the first place, and then fail to deliver.

Harri Kousa and Anu Lahtinen, Hyvinkää, Finland