How global finance is making us all poorer.
The must-read summary of “The Finance Curse: How Global Finance Is Making Us All Poorer,” by Nicholas Shaxson.
As a country’s financial sector develops, it improves the nation’s economic well-being and quality of life—but only up to a point. After that point, it reduces economic growth and inflicts much damage. We call this the finance curse. The United States, Britain, and many other Western economies passed this optimal point long ago. The 2008 Great Recession was part of the damage.
As an economy becomes financialized, there is a massive growth in the financial, insurance, and real estate sectors, but not in the manufacturing and industrial sectors. Rather than creating wealth, the goal of finance becomes extracting value from the underlying economy. This way of thinking also becomes internalized into the economy, society, and culture, generating economic discrimination that underpins all discriminations—racial, gender, sexual, and geographical.
This book documents the story of how finance got a stranglehold on society and reveals how we might release ourselves from its grasp.
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Value-added from this guide:
In the early 1990s, Angola was one of Africa’s wealthiest nations, supplying over 5 percent of all U.S. oil imports. But it was also the most poverty-stricken, suffering from the world’s worst civil war. Ninety-nine percent of Angola’s exports were oil and diamonds. Between 1993 and 2007, the oil sector pumped up some parts of its economies and drained the life out of others. High-salaried oil jobs were sucking the best-educated and talented people out of manufacturing, agriculture, government, civil society, and the media. A venal leadership in Luanda was stealing the oil money, while the population was destitute.
Many countries dependent on income from natural resources grow slower and suffer more corruption and greater poverty than their resource-poor peers. Too much wealth from natural resources can make you poorer. We call this the resource curse.
Today, some finance-dominated countries, such as Britain and the United States, are exhibiting symptoms akin to Angola’s resource curse. As an economy becomes financialized, there is a massive growth in the financial, insurance, and real estate sectors, but not in the manufacturing and industrial sectors.
Already translated. Translated by Jose Saul Agis Garcia