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It seems there are two types of resentments percolating in the system at the moment. There are those who are furious with bankers and their pay, and just can’t see how it is right that when most of us are so hard-up bankers should be paid so much for running institutions that dragged the economy to its knees. Then there are those who say the backlash against bankers is going to kill the goose (that’s the City) that lays the golden eggs. Who is right?

Actually, I felt Stephen Hester was treated unfairly. It wasn’t his fault that RBS became insolvent under the previous management regime. And the task of turning the bank around he had been charged with  was enormously challenging by anyone’s standards. Economic theory says pay should be a function of the wealth created by labour, and if Mr Hester’s management increased the value of RBS, maybe his pay should reflect that. And actually, in principle, I like the idea of paying people in shares.

Maybe the Hester bonus would have been considered more acceptable if he had been locked out from selling his shares for, say, five years. Better still, if he had been paid a share option with, say, a ten year lock-out,  I think his package would have been a good deal fairer. Although I am not sure that this subtlety would have been picked up by the mainstream media.

But there is another issue. Is it really the case that there are so few people out there capable of running RBS, that the bank had to be offer so much money to have them consider taking on the job? And if it is the case that there is a shortage of talent at the top, maybe the problem is training, and a system of promotion that is too elitist. I recall the film ‘Trading Places’, starring Dan Aykroyd and Eddy Murphy. If you have seen the film you may recall that Aykroyd played a successful trader; Murphy a street-wise, down and out. Aykroyd’s bosses bet that they could take a lowly street beggar and turn him into a brilliant trader. Of course they were successful. But then again, the film was just fiction. But wouldn’t that make the subject of a fascinating experiment? I suspect that, given a degree of help and training, there are many people out there who could hold down a job paying out a zero more in pay than they are currently earning.

And that reminds me of Malcolm Gladwell and his book ‘Outliers’, in which the author maintains the key to becoming very good at anything lies with practise and getting in your 10,000 hours’ of experience. He argues that most successful people have enjoyed their success because of fortuitous circumstances that enabled them to get their experience early. So there is a direct correlation between the number of professional Canadian ice hockey players, and the point in the academic year when they were born. Bill Gates, Steve Jobs and Eric Schmidt were all born within a few months of each other, and, largely down to luck, got in valuable computer experience when the technology was still very new. Or take the three singers/guitar players from Liverpool who were transformed into the backbone of the most successful pop band in history after their stint in Hamburg, playing live for just about every waking hour for many months.

That is not to say Bill Gates or John Lennon were not naturally clever or talented, it’s just that many people are naturally clever, but they don’t all get the thousands of hours of experience when they are so young.

Maybe there are lots of people out there who could run a bank if they were given the appropriate levels of practice and experience. And if banks paid out less money on bonuses for those at the top, and more on training graduates, there wouldn’t be such a shortage of talent.

Others argue that pay is fine when the people being rewarded take big risks. Most people would accept the idea of high reward to entrepreneurs, but not so much for career managers, who rise through the ranks.

But that is just one of many issues. There is evidence from the field of psychology to suggest money is less important than is commonly realised in motivating people to do difficult jobs. Then there is the ethical argument. Maybe high pay would be considered more acceptable if the recipients of this money spent it in a less selfish way. In this respect I think of Victorian philanthropists, and the idea of the puritan work ethic – which suggested there is nothing wrong with making money, you just mustn’t keep it for yourself. On this theme I also think of a scene from the TV series ‘Downton Abbey’:  “I don’t need help getting dressed thank you… But Sir, if you dress yourself, your valet will lose his job.”

There is another point. There is an argument to suggest that the widening divide we have seen in how income is distributed is actually economically inefficient.

Globalisation is part of the problem: individual countries may want to cap pay at the top, but can’t because they fear that the companies employing talent may re-locate.

These are massive issues. And I am going to be returning to this theme over the next few days.

As for the questions I posed at the beginning. The answer I think is pretty obvious. We live in a democracy, and the vast majority of people think bankers are paid too much therefore the government rides the bandwagon.  And there are occasions when the bandwagon is anti business. But equally, in recent years we have seen a kind of greed and selfishness that is not just morally suspect, but inefficient in the long run too.

The government may have an anti business short run agenda. But sometimes I think business itself is anti business in the long term.

These views and comments are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees