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> I honestly think the finance industry could be half the size It is strange that an industry whose only purpose is to service the productive economy should be
by beejiu 8y ago
> I honestly think the finance industry could be half the size
It is strange that an industry whose only purpose is to service the productive economy should be 20% of GDP.
Here's an interesting take of the downsides to having such a large financial sector within an economy: https://www.theguardian.com/news/2018/oct/05/the-finance-curse-how-the-outsized-power-of-the-city-of-london-makes-britain-poorer https://www.theguardian.com/news/2018/oct/05/the-finance-cur...
- tonyedgecombe 8y agoTo be fair that's not all on the back of the UK, finance is an international business in the UK.
- taneq 8y agoThe human brain consumes 20% of our total energy budget in exchange for allocating our resources, so maybe it's not too out-of-whack?
- kochikame 8y agoNot really a good analogy. The brain does far, far more than marshal resources and distribute the where they are needed, which in essence is what the financial sector does for the economy.
- regularfry 8y agoI think it's a perfect analogy. From the point of view of a species as a whole, the majority of what we see as the brain's functions are only relevant because humans are amazingly inefficient compared to smaller organisms. We need our brains because our reproductive cycle produces "too big to fail" output.
- sova 8y agoYes this analogy would work if every brain became a cancerous growth that realigned laws and basic pathways to serve the survival and growth of the brain, but this is not the case, the brain in the body has a maximum size (proportionality) and also serves the rest of the body. Not only the brain's satisfaction, but the skin, the gut, the sense organs all rely on the brain however the brain serves them primarily before serving "itself"
- gnode 8y agoAn organism's reproductive gain factor isn't that sensible a metric of its success. A better one is how adaptable it is. Because of our brains, humans are extremely adaptable. Even with primitive technology we spread throughout the globe, and unlike wild cats or bears we haven't needed to speciate into each climate, develop camouflage fur, etc. The biological investment in an advanced brain gave us the opportunity to thrive everywhere.
- andrepd 8y agoOnly the "brain" on your analogy is extremely inefficient at locating resources, and the people that compose it are utterly unsuited for that responsibility, driven by amoral greed (with no thought to other considerations), and in that place mostly by a mixture of birth and luck rather than competence.
- closeparen 8y agoIt turns out that resource allocation tuned to maximize value outperforms resource allocation tuned for fairness in terms of material standard of living.
- openfuture 8y agoIt turns out that 'value' as defined by central banks treats the enslavement of the species as more valuable than the survival of the species.
- closeparen 8y agoCentral planners don’t get to define value... that’s the point.
- dmos62 8y agoIt's been pointed out that this is the first time in history that the financial industry has become the most powerful.
- KaiserPro 8y agoThe finance industry has _always_ been powerful. Thats why the city of london is older than England it's self. because it provided finance for various powerful people to do "powerful people" things Venice for example was ruled by a mercantile banking dynasty.
- umichguy 8y agoNot many non-UK (and even UK) people realize that the City of London is actually a separate entity from London. It has it's own administration, police force etc.
- dmurray 8y agoThis seems like it should be an interesting curiosity to foreigners but is actually completely mundane to anyone from the US, where everything larger than a village is its own "city" with its own municipal government and - of course - at least one police force.
- apexalpha 8y agoI don't know I think it'd be pretty interesting to find out that Wall Street is not actually part of NYC but has it's own police, government etc... purely for benefit of the banks.
- deleted 8y ago[deleted]
- portent 8y agoYou might then be interested to know that the Federal Reserve bank has its own dedicated police force/ https://en.m.wikipedia.org/wiki/Federal_Reserve_Police https://en.m.wikipedia.org/wiki/Federal_Reserve_Police
- HillRat 8y agoAs my father — a development economist — says, “We used to call it the ‘financial services industry.’ You can pinpoint when the US economy changed irrevocably when they dropped the pretence of serving and just became ‘finance.’”
- wpietri 8y agoPerfect. Yes, that's exactly my beef with it. Sort of like the difference between the views of running for office as public service vs seeking authority.