

From the resource curse to the finance curse - ekm2
http://www.trust.org/item/20130626080141-1guvz/

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Nursie
It has seemed to me (for a long time) perverse that the most profitable
industries, and the ones where people have the most ridiculous salary and
bonus structures, are the ones that involve shuffling figures around. The ones
involved in moving and speculating with and on money itself. None of this
activity produces actual goods or services, yet those that play get to acquire
and consume a lot of both because of their games.

I'm not saying "all finance is parasitical!" or anything puritan/socialist
like that, it's just always struck me as odd.

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joonix
"Finance" in the US pays well because it's on a national scale. Wall Street
holds the money of the whole country, and some of the rest of the world's. So,
like anything else that has a national market, people at the top are going to
be paid well. Local bankers in Topeka aren't drowning in cash.

Look at NBA stars, famous film actors, top musicians, CEOs of national retail
stores, etc. Anyone that can scale their abilities to the national/global
market is going to be paid more money.

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D_Alex
No, silly! "Finance" pays well largely (most certainly not exclusively, but
largely) because the of the opportunities for smart and unscrupulous people to
exploit the systems they themselves helped to create, for personal gain. Often
using methods of uncertain legality. The fact that the same people have a big
say in what rules they should operate under makes things worse. If you think I
am overstating the case, google "Libor scandal" (eh... here you go:
[http://en.wikipedia.org/wiki/Libor_scandal](http://en.wikipedia.org/wiki/Libor_scandal))
or read "Where are the customers' yachts?" or "The wolf of Wall Street".

There are many examples of people who matter on a national scale not being
well paid (certainly not by the finance sector standard). Physicists (and
other scientists) for example. Top law eforcement officials, army generals.
Perhaps people like Snowden fall into the same category.

Of course I expect you to claim "That is not what I meant when I said whatever
it was I said!" Well... feel free to restate your point more clearly.

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jdmitch
> "Oversized financial sectors also “capture” the economies and the political
> systems of finance-dependent countries, crowding out alternative sectors.
> The political “capture” is particularly strong in small financial centres
> and tax havens, where I have seen it veer towards authoritarianism."

Surely "capture" is not unique to finance though - in fact it seems that
political opportunists line up corporations with similar financial interests
from across sectors. It doesn't take just finance to make a plutocracy with
narrow interests.

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tome
This is definitely true of the UK. I'm surprised to hear its true of the US
though which has a much wider economic base. Is it true of Singapore or Hong
Kong?

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justincormack
From memory 40% of the profits of US businesses (public I presume) are in
financial services. That's a huge sector.

I think Singapore still has a smaller financial services business than you
might think, although growing.

(Need some references but on train)

