You don’t have to look that far these days to find someone wondering why we have financiers, bankers, a financial sector at all in fact. There’s definitely a subcurrent of thought (well, thought might be a little to strong a word, emotion perhaps) that we’d all be better off if we simply hung them all.
So why do we have these parasites upon the economy? Chris Blattman looks at why Ethiopian industry isn’t developing as perhaps it might:
You could give the farmers bonds, but you’d better inflation-protect them. Now you need a liquid financial market……Sounds great. Now I just need accountants to do the audits, I-bankers to do the due diligence, lawyers to write up the contracts. A whole class of financial professionals who… basically don’t exist…….
These aren’t the only problems he mentions but as we can see, the absence of that group of financiers, experts and bankers, means that business cannot expand and grow: and thus a place remains poor.
It’s still possible to argue, I suppose, that we have too many bankers and they don’t have enough: thus we should export our surplus bankers to them. Which is, of course, exactly what we do do. The City is our largest net export sector, we’re just exporting the services rather than the actual people, just as Rolls Royce exports jet engines rather than engineers.
Putting the world to rights would therefore mean supplying more of that expertise that we have in abundance, that financial knowhow, to those places where such knowledge is in deficit. Which, entirely contrary to the usual tale told, means that we want a larger City, one exporting even more, rather than one "reined in" as some seem to desire.