‘The Finance Curse’
Nicholas Shaxson, Grove, 376 pages, $27. In his new book, “The Finance Curse: How Global Finance Is Making Us All Poorer,” veteran journalist Nicholas Shaxson recounts his early years reporting in Angola, when he learned what the “resource curse” was by observing the horrible poverty of that oil-rich nation. “All this money flowing from natural resources such as oil can make their populations even worse off than if those riches had never been discovered,” he writes. Now, he argues, that same phenomenon afflicts modern economies like the U.S. and Britain, because we have encouraged our financial sectors to flourish at the expense of the broader population. Shaxson isn’t the first one to make this argument. Even JPMorgan Chase’s Jamie Dimon has noted the economy certainly is not working for everyone. Back in the 1970s, financial corporations earned little more than a 10th of all corporate profits; today, around a third of all corporate profits flow to finance, said Shaxson. Correlation is one thing, and causation another. Shaxson doesn’t prove the latter. But he makes some provocative arguments about the effects of consolidation of power among multinational banks. The idea of “competition,” he said, has come to stand for everything, yet nothing. We’re often told that our big banks and big technology companies have to be big because they have to be able to compete. But does competition mean a better life for a country’s citizens, or does it just mean more profits for big corporations? However, in the end Shaxson’s book will not convince anyone who doesn’t already agree with his premise.