Jews have been an integral part of finance since at least the middle ages. The fact has been used against them for just as long, but Niall Ferguson’s new biography, "High Financier: The Lives and Time of Siegmund Warburg," of the once-prominent London i-banker, raises the question of whether finance can ever be pure.
It appears that Ferguson hues closer to the answer yes, it can be, as he writes of Warburg (1902-1982): "An intellectual whom fate rather than free will had made into a financier, [Warburg] was always more interested in the organisational challenge of running a firm than in the bottom line."
Curious, you might say. Most reviewers, many of them prominent economic writers, have heaped praise on Ferguson’s book. And there is no doubt that, either explicit or implicit, their praise is meant to the advance a larger aim of Ferguson’s: to offer a counter to today’s rapacious financial mandarins.
To be sure, there are some critics who are less thrilled. Writing in the current TLS, Tom Cogdon, an economist and former advisor to England’s Conservative party, argues that there’s no getting around it: "Much of high finance is tacky. … Its distinctive activities … are riddled with conflicts of interest, and accompanied by decisions on executive remuneration, and the hiring and firing of individuals."
Can any mensch do work like that?
New Yorkers are not likely to know Siegmund Warburg, though they certainly will know his cousin, Felix Warburg, former partner of Loeb, Kuhn, & Co. (which was bought out by Lehman Brothers in 1977, and is, obviously, no longer), and once prominent patron of the arts. Every time I visit The Jewish Museum in particular, I’m reminded of Felix’s good works; the building is his former Manhattan mansion. But Siegmund was struck out in London, where he arrived after fleeing his beloved Germany, a place his family had lived in since at least the 16th century.
When the Nazis came to power, Felix fled to London where, by 1946, he established his own investment bank. Within a decade he was considered one of London’s leading financial tycoons, buying out, restructuring and selling off once-failing companies. That is what investmant bankers do, and, in addition, they give: to the arts mainly, and a bevy of other causes.
Perhaps naturally, Siegmund was also a philanthropic Zionist, and Ferguson apparently spends some time assaying these commitments. It turns out that Warburg was increasingly dismayed by the hawkish turn the country had taken in the late-1960s, but he nonetheless continued to denounce its more vociferous critics.
When Arab countries began boycotting Warburg, he told called up some fellow European bankers and said: "I hear you seem to be giving in to the blackmail of the Arabs. I think that is very unfair to us and it’s wrong in itself. . . . Don’t kid yourself, we can—in the end—place [an issue of bonds] just as well as those Arabs."
Which is to say, Warburg knew how to fight. Just because he’d rather read Trollope, Dostoyevsky and Flaubert rather than grovel about his bottom line, doesn’t mean he didn’t throw a punch. So maybe that’s the real question for our high financiers of today: can they throw a punch, without biting an ear?