As my father — a development economist — says, “We used to call it the ‘financial services industry.’ You can pinpoint when the US economy changed irrevocably when they dropped the pretence of serving and just became ‘finance.’”

Perfect. Yes, that's exactly my beef with it. Sort of like the difference between the views of running for office as public service vs seeking authority.

To be fair that's not all on the back of the UK, finance is an international business in the UK.

It's been pointed out that this is the first time in history that the financial industry has become the most powerful.

The finance industry has _always_ been powerful.

Thats why the city of london is older than England it's self. because it provided finance for various powerful people to do "powerful people" things

Venice for example was ruled by a mercantile banking dynasty.

Not many non-UK (and even UK) people realize that the City of London is actually a separate entity from London. It has it's own administration, police force etc.

This seems like it should be an interesting curiosity to foreigners but is actually completely mundane to anyone from the US, where everything larger than a village is its own "city" with its own municipal government and - of course - at least one police force.

I don't know I think it'd be pretty interesting to find out that Wall Street is not actually part of NYC but has it's own police, government etc... purely for benefit of the banks.

You might then be interested to know that the Federal Reserve bank has its own dedicated police force/

https://en.m.wikipedia.org/wiki/Federal_Reserve_Police

You’re not getting it. “The City of London” is not what you think of as London. It’s a tiny square mile that is essentially sovereign and outside national law. Corporations are allowed to vote there and there are more corporations than people. It’s sort of like if you had Switzerland embedded in Manhattan.

I've been to the City of London many times (though I worked outside it, in Mayfair).

It's really not "essentially sovereign" or "outside national law" as you might argue of an embassy or a military base or even, say, the Channel Islands. People and businesses there are subject to all the laws of the land. Financial firms there are regulated by the FCA, which is based outside the City and appointed by the Treasury, definitely not by the City of London Corporation.

Prestigious financial firms have offices in the City because everyone else does, not because there's some legal or regulatory benefit from being incorporated there - again, very different from those who choose other Crown jurisdictions like Jersey or IOM or the Caymans.

You're right, that was more of a knee-jerk reaction to a statement that it's like regular city governments in the US. The truth is more subtle: the UK benefits from The City's position as a world financial centre, and so parliament is incentivized to give The City a large degree of independence when it comes to setting financial regulation. By keeping them at arm's length they can have their cake and eat it too by setting strict tax rules for the entire country, but leaving loopholes to allow all the international money to flow in.

You can replace "The City" by "the financial sector" here. Once again, the historical curiosity that the City of London has its own local government has nothing to do with the UK's approach to financial regulation. Barclays, Citigroup, and HSBC - all headquartered 3 miles to the east in Canary Wharf, like the FCA itself, instead of in the City - get just the same regulatory benefits and disadvantages as Lloyds or NatWest.

> essentially sovereign and outside national law

This is definitely not true. Maybe you confused it with Isle of Man or Channel Islands, which are crown dependencies with certain autonomy, often accused to be British tax havens.

Not literally true, you are right; but The City is also accused of being a tax haven.

If I had stayed working for a company that was in the city I was interested in standing for election :-)

yes I am a wonk

I was an elector for a company in the City once. But i quit before i had a chance to vote in an election!

Most cities don't have their own unelected delegate in Parliament to represent their interests.

https://en.wikipedia.org/wiki/City_Remembrancer

That's why there's the Met police vs the City of London police, no? (I blame a wikipedia dive into policing in the UK for knowing that piece of trivia)

"powerful" isn't "most powerful".

How do we know that? Consider that if there's a pattern of 'financial industry becomes the most powerful | financial industry arranges society to serve its interests | society collapses | end of history, not even records remain of the catastrophe (hey, keeping records detracted from profit-taking)' then we'd observe similar results.

Not sure how seriously I'm arguing that, but it does seem that if the situation was sustainable/survivable there would be records of previous instances of that situation.

Really? I personally believe that the Roman Republic would never have collapsed into Empire if not for the incredible destabilizing risk-rewarding weight of the Roman finance industry in the Republic’s final years.

Really?

https://en.wikipedia.org/wiki/Pujo_Committee

The human brain consumes 20% of our total energy budget in exchange for allocating our resources, so maybe it's not too out-of-whack?

Only the "brain" on your analogy is extremely inefficient at locating resources, and the people that compose it are utterly unsuited for that responsibility, driven by amoral greed (with no thought to other considerations), and in that place mostly by a mixture of birth and luck rather than competence.

It turns out that resource allocation tuned to maximize value outperforms resource allocation tuned for fairness in terms of material standard of living.

It turns out that 'value' as defined by central banks treats the enslavement of the species as more valuable than the survival of the species.

Central planners don’t get to define value... that’s the point.

Not really a good analogy.

The brain does far, far more than marshal resources and distribute the where they are needed, which in essence is what the financial sector does for the economy.

I think it's a perfect analogy. From the point of view of a species as a whole, the majority of what we see as the brain's functions are only relevant because humans are amazingly inefficient compared to smaller organisms. We need our brains because our reproductive cycle produces "too big to fail" output.

Yes this analogy would work if every brain became a cancerous growth that realigned laws and basic pathways to serve the survival and growth of the brain, but this is not the case, the brain in the body has a maximum size (proportionality) and also serves the rest of the body. Not only the brain's satisfaction, but the skin, the gut, the sense organs all rely on the brain however the brain serves them primarily before serving "itself"

An organism's reproductive gain factor isn't that sensible a metric of its success. A better one is how adaptable it is.

Because of our brains, humans are extremely adaptable. Even with primitive technology we spread throughout the globe, and unlike wild cats or bears we haven't needed to speciate into each climate, develop camouflage fur, etc. The biological investment in an advanced brain gave us the opportunity to thrive everywhere.