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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8

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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.

Summary

The United Kingdom and Angola may not appear to have much in common, but one feature unites them: the impact a dominant sector has on wealth distribution and the economy. In Angola, wealth from oil and other abundant natural resources trickles through to a small part of the population, while the fortunes of most people deteriorate. The pattern is so predictable that economists call it “the resource curse.” In London, a thriving financial sector has long attracted vast wealth. But like the resource curse in Angola, the “finance curse” in Britain hurts the economy in a number of ways: It draws the brightest workers away from careers...

About the Author

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


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