Sunday, July 19, 2009

Does society need monsters?

In May we remarked on "independent" reviews on the role of the financial services centre in the heart of Britain's economy: the epicentre of the corrupt global offshore phenomenon. Insiders, it seems, agree with us. Regarding reviews on London's "competitiveness", a former investment banker says today:

"The combined results are exactly what you would expect from asking a group of practitioners how to rectify faults that were of their own industry’s making. . . This is an inevitable consequence of the government’s decision to use insiders to lead and inform its response.

The notion that those deeply involved in the inception of the problem should now be entrusted with leading the public debate on its solution is astonishing."

So what is to be done?

"commission an over-arching independent review that looks at the structure and scope of the financial services industry and the role it plays it Britain’s social and economic fabric."

That is a bit more like it. Instead of looking at just the financial services industry, under an assumption that it can only be good for Britain -- the author suggests looking at whether it is good for Britain as a whole. It ain't rocket science.

Instead what we have now is an industrial policy to support Britain's financial services industry and especially its many offshore characteristics. This policy is based - astonishingly for something so central to the direction of a major economy - upon an entirely bogus notion of competitiveness. (Read more on that here.) And this policy looks with indulgence at outright abuse (see a very recent example here.)

We have said it before and we will say it again - Britain's politicians seem to be captured -- utterly captured -- by this one narrow, self-serving and powerful sect. There is nothing wrong with financial services per se - they usefully channel savings to where they can be productively invested, for example - but Britain has created something truly monstrous. As the article continues:

"An independent review may decide that society does indeed need monsters, but if so it would be much more reassuring if we did not have to rely on the monster’s own word for it."

It will require real leadership to challenge this Godzilla élite. Now is the time for leadership.

We'd add a further element to the necessary all-encompassing review. Look at it not only in Britain's narrow interests, but in the much wider and even more important context of international development, capital flight, security threats, and so on. Then we will really start to see the heft and claws of the monster. And we will understand why British society, and the wider world, does not need it.

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