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The Finance Curse
Article

The Finance Curse

How the Outsized Power of the City of London Makes Britain Poorer

The Guardian, 2018

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Editorial Rating

8

Qualities

  • Controversial
  • Eye Opening
  • Overview

Recommendation

A thriving, dominant sector that draws money from around the world should help a country’s economy and benefit most of its people. But nations that boast abundant natural resources have a long history of passing profits to the wealthy as the rest of the populace becomes poorer. Journalist Nicholas Shaxson asserts that a similar pattern occurs in London’s financial sector, where growing wealth has inflated asset prices, promoted tax dodges and enriched a small segment of the population. His call for change may raise some eyebrows, but it may also open some policy makers’ and taxpayers’ eyes to a significant economic imbalance.

Take-Aways

  • In resource-rich nations, wealth from oil and other natural resources trickles through to a small part of the population, while the fortunes of most people deteriorate. Economists call this “the resource curse.” 
  • In London, a thriving financial sector has long been a draw for vast financial resources. But the “finance curse” hurts the British economy. 
  • The laser focus on finance draws the brightest workers away from careers in science or academia in favor of high-paying financial jobs, and it raises the prices of housing and other assets. 

About the Author

Nicholas Shaxson is a journalist and the author of Treasure Islands and The Finance Curse


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