The bishop and the banker

Bishop Huber has no professional competence to discuss economics, but he does seem to have a point about Deutsche Bank: is there really a safe and honest way to earn 25% on invested capital in a competitive industry?

I generally take a fairly firm line on intellectual specialization. I’m not especially interested in a biologist’s opinion about the Real Presence, or a bishop’s opinions about reproductive biology. Of course, there might always be a biologist with some real expertise in Christian theology or a Pope who knew something about biology, but in general the odds aren’t good, and in any case the case for expertise has to be established, and shouldn’t simply be assumed.

By contrast, when a bishop talks about transubstantiation or a biology professor about the efficacy of various means of birth control, they ought to be presumed by non-specialists at least to know what they’re talking about (which of course isn’t the same as being right): that is, not to be talking complete rubbish by the standards of their respective disciplines.

Similarly, when either the biologist or the bishop expresses a view about the current fiscal crisis, their professional credentials don’t justify giving their opinions any particular weight. So when Bishop Wolfgang Huber, the senior bishop in the German Lutheran church, starts to rag on the Chairman of Deutsche Bank about excessive risk-taking, my first reaction is, “And where’s his economics degree from?”

On the other hand, wouldn’t it be nice to live in a country where influential religious leaders remember that covetousness, as well as theft, is forbidden by the Ten Commandments? (Unlike, for example, same-sex marriage or abortion or marijuana.)

Moreover, whatever his credentials, the good Bishop does seem to have a point: in a world where banking is an internationally competitive business both for customers and for staff, it’s hard to imagine a way to earn a consistent 25% rate of return on invested capital without either taking lots of risks or cutting lots of corners.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: