BY STEWART SLATER
One of the more depressing discoveries of the post-pandemic era, for those of a libertarian/classical liberal/Thatcherite persuasion, has been the innate authoritarianism of the British public.
The pandemic revealed that large swathes of the population were more than happy to restrict the freedom of their fellows, and many wished to carry on doing so – 25% of poll respondents wanted to close nightclubs permanently. In truth, this streak has long roots in the national character – Ealing comedies such as Passport to Pimlico satirise our petty authoritarianism – but it is, perhaps, less fertile ground than those of the Hong-Kong-on-Thames persuasion might wish.
At first sight, therefore, the reaction to the Farage farrago should be encouraging. According to YouGov, 62% of people agree with the statement, “banks should not be allowed to remove clients who have personal or political beliefs which do not align with the bank’s values.”
Not only do a majority of respondents agree, but so do majorities of all political parties, and both Leavers and Remainers. Score one for the Libertarian Paradise.
But consider the form of the question, “banks should not be allowed…” and compare it to the slightly different version, “Banks’ freedom to remove clients should be restricted when they do so on the grounds of personal and political values which do not align with their own.” In the latter, banks inherently have the freedom, which the government may seek to limit, while in the former, banks do not, unless the government chooses to extend it to them. A small difference perhaps, but a fundamental one. For, as Churchill may (or may not) have put it, “In England, everything is permitted except what is forbidden. In Germany, everything is forbidden except what is permitted.”
Much as libertarians might wish to take comfort from the polling result, once you’ve accepted that freedom comes from the government, you ain’t no libertarian, bruv.
Sir Isaiah Berlin, the great modern philosopher of liberty, argued that the most intractable issues were those which involved clashes of values and rights. Abortion is an emotive subject because half the world prioritises the right of the mother to do as she wishes with her body, the other the right to life of the foetus. We might look at the Farage matter in a similar way – Coutts’ freedom to choose their client versus his freedom to choose his bank, but does that really make sense?
The problem is that rights for me can often impose an obligation on thee. By allowing me freedom, we can restrict that of others and that does not seem entirely fair. The traditional way of negotiating this has been to argue that individuals have general rights, but that does not impose a burden on any specific individual to fulfil them. This is not a left/right issue. The former will argue that an individual’s right to free speech does not force any particular publication or venue to give them a platform, while the right will argue that gay peoples’ freedom of expression is not restricted if a Christian baker refuses to make a cake celebrating their marriage.
Nigel Farage may well have a right to a bank account, but he does not have a right to a bank account at Coutts. That the bank is an institution and Farage a person does not really make much difference. The majority of the shareholders in the parent company are private individuals and investors. To insist that Farage be allowed to retain his account is to insist that their property is used in a way which the managers (their advisers) think is unwise.
In part, we have reached this consensus because we live in a plural society, there are very few monopolies. If the Old Vic will not rent me space for a reading of my published works, I can always approach another theatre, of which there are many. Private banks are slightly different, because there are few players in the market. However, they effectively aggregate two separate services, banking and investment advice. Both of these markets are well served, by retail banks and IFAs respectively. Disaggregating the two may cause inconvenience for the individual, but inconvenience is not a sufficient reason to trample freedom. An issue would arise if the individual was unable to replace the service removed from them.
Farage does seem to be having problems opening a new account, but the context is important here. Are other banks refusing to take him on because, as the conspiratorially-minded might believe, they are trying to drive him out of society, or because he has made it public that Coutts has closed his account? If it is the latter, given the burden placed on institutions to “Know Your Client” and the fines imposed for failing to do so, it would be irresponsible for new bankers to take him on without knowing exactly why he has left Coutts. There would be an irony in insisting that the government intervene if it were government intervention which had caused the problem. Even in the worst case, where no bank is willing to provide services, it might be best that the government serves as a “banker of last resort”.
In 2001, the Bank of England stepped in to provide banking services for Huntingdon Life Sciences, when intimidation by animal rights’ activists led their lenders to withdraw credit. Even the most ardent libertarian would accept the state providing services which the market cannot or will not. Such a role may not be long-lasting. Part of the genius of capitalism is that it encourages new entrants to serve uncovered corners of the market. Judging from the reaction in the media and online, there would be no shortage of clients for a bank which undertakes not to “do politics”.
This is not to give Coutts a free pass. It has questions to answer. That the matter is being fought out in the media raises questions about its commitment to client confidentiality and, if any of the stories about Farage prove untrue, their source would struggle to pass the honesty and integrity component on the fit and proper person test.
More generally, there seems to be a misunderstanding about the nature of capitalism. It exists to allow people to trade together in a mutually beneficial relationship, regardless of their other characteristics. As Voltaire raved after a visit to the London Stock Exchange, “Here Jew, Mohammedan and Christian deal with each other as though they were all of the same faith…and everybody is happy.”
A system designed to promote the optimum distribution of resources does not function if the owners of some of them are excluded because of their beliefs. For having a right and using a right are different things.
The Emperor Augustus once visited a wealthy Senator and found him threatening to feed a slave to his fish. Enquiring what the problem was, he was told that the slave had broken a glass at which Augustus summoned his guards and instructed them to smash every glass in the house. The slave was the Senator’s property and, as such, he could do to him whatever he wished, including murdering him. There was no legal restriction on how one might kill a slave. If he wished to feed the unfortunate to his fish, he had every right to do so. And yet, to Augustus, it was not appropriate to use that right in this case. He did not attempt to remove the right from the Senator, he merely showed him that his behaviour was socially unacceptable.
Let it be so with Coutts.
Let there be pressure from clients, prospective clients and the media. The implosion of Bud Light shows what happens when brands find themselves on the wrong side of society. We do not extend freedom by restricting freedom. To misquote that great Frenchman (or, for the pedants out there, his biographer), we might disagree with debanking Farage, but we should defend to the death Coutts’ right to do so.