What Hamlet teaches you about bankers

published 5 October 2018

Shakespeare's Hamlet was written between 1599 and 1602 and tells the story of Hamlet, Prince of Denmark, whose father has died in suspicious circumstances, with Claudius, Hamlet's uncle, assuming the crown. Hamlet meets his father's ghost, who informs him that he was murdered by Claudius. Later on Hamlet mistakenly kills Polonius, a government minister, prompting Polonius's son Laertes to challenge Hamlet to a duel. This culminates in the death of Hamlet, his mother, Laertes, Claudius, as well as the invasion of Denmark by a Norwegian army.

In Act 2 Scene 3, Polonius is giving lectures to his daughter Ophelia and son Laertes. He tells Ophelia, who is in love with Hamlet, that she should not take the "trifling of his favour" seriously since it is "the perfume and suppliance of a minute, no more". He says Hamlet's words "are brokers/Not of that dye which their investments show/But mere implorators of unholy suits/Breathing like sanctified and pious bonds/The better to beguile".

The financial-services industry at the start of the 17th century was much less sophisticated than it is now, but people still issued and traded various financial instruments, such as bills of credit and insurance policies. Indeed, there were flourishing bond markets in France, Italy and the Netherlands, with Amsterdam hosting the first publicly traded company in 1602. Evidently, brokers and bankers were as little regarded then as they are now. Some modern editors think Shakespeare meant to say "bawds" instead of "bonds". Still, this edit actually strengthens the force of the comparison between bankers and pimps.

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The same scene is notable for Polonius's advice to his son that "neither a borrower nor a lender be/For loan oft loses both itself and friend/And borrowing dulls the edge of husbandry". Naturally, it is impractical to follow this advice to the letter. Studies by American investor James O'Shaughnessy, however, have shown that companies with high levels of debt tend to have low future returns. There may be something in Polonius's advice after all.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri