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For many years economists have noted how countries rich in natural resources often fail to benefit from their unearned wealth. Indeed, sometimes the discovery of oil and gas can seem more like a curse than a blessing. The Finance Curse shows how countries with oversized financial sectors can suffer a similar fate. The easy money that comes from finance carries hidden costs, For many years economists have noted how countries rich in natural resources often fail to benefit from their unearned wealth. Indeed, sometimes the discovery of oil and gas can seem more like a curse than a blessing. The Finance Curse shows how countries with oversized financial sectors can suffer a similar fate. The easy money that comes from finance carries hidden costs, in form of steepening inequality, political and intellectual corruption, industrial stagnation and periodic crisis and collapse. Nicholas Shaxson, the author of Treasure Islands, and John Christensen, the director of the Tax Justice Network, explore this new paradox of plenty, and show once and for all that there's no such thing as a free lunch, and that those who believe the stories told by bankers are liable to end up on the menu.


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For many years economists have noted how countries rich in natural resources often fail to benefit from their unearned wealth. Indeed, sometimes the discovery of oil and gas can seem more like a curse than a blessing. The Finance Curse shows how countries with oversized financial sectors can suffer a similar fate. The easy money that comes from finance carries hidden costs, For many years economists have noted how countries rich in natural resources often fail to benefit from their unearned wealth. Indeed, sometimes the discovery of oil and gas can seem more like a curse than a blessing. The Finance Curse shows how countries with oversized financial sectors can suffer a similar fate. The easy money that comes from finance carries hidden costs, in form of steepening inequality, political and intellectual corruption, industrial stagnation and periodic crisis and collapse. Nicholas Shaxson, the author of Treasure Islands, and John Christensen, the director of the Tax Justice Network, explore this new paradox of plenty, and show once and for all that there's no such thing as a free lunch, and that those who believe the stories told by bankers are liable to end up on the menu.

30 review for The Finance Curse: How Oversized Financial Sectors Attack Democracy and Corrupt Economics

  1. 4 out of 5

    David Wineberg

    A bright light goes on while reading The Finance Curse. Nicholas Shaxson connects a number of phenomena around the world that collectively oppress billions of people. He likens it all to the petroleum curse, where developing nations’ citizens end up worse off for the discovery of oil. In this case, it is big finance running amok. Only this is global and far worse. The book documents the decline and fall of all but the 1% thanks to the race to the bottom (the most commonly repeated phrase in it). A bright light goes on while reading The Finance Curse. Nicholas Shaxson connects a number of phenomena around the world that collectively oppress billions of people. He likens it all to the petroleum curse, where developing nations’ citizens end up worse off for the discovery of oil. In this case, it is big finance running amok. Only this is global and far worse. The book documents the decline and fall of all but the 1% thanks to the race to the bottom (the most commonly repeated phrase in it). It works at all levels: towns compete in a race to the bottom, so do counties, states and whole countries. Everyone is afraid of being abandoned by companies seeking less taxation, less regulation and more power, all in the name of competitiveness. They are winning it, everywhere – without becoming more competitive. The ones who suffer for it are the locals who are losing schools, clinics, clean water, parks, community - everything so that business can be more profitable. There is no trickledown; it is all one way by design. The facts are stark. The median American is actually poorer than median Italian. Wages are stagnant, savings less than minimal. Outlooks are grim. Hope is rare. The reason is that nearly $23 trillion has been extracted (Shaxson’s word) and sequestered in offshore accounts. Offshore is attractive is because of trusts. By putting assets in trusts managed by lawyers, neither the donor nor the inheritor can be called the owner. So not only are they hidden, but even upon discovery, taxing and justice authorities are unable to seize them or tax anyone. By this trick they exist outside the reach of any authority or law. This massive moneypile does not contribute to the economies or the welfare of citizens or countries. Rather, its missing in action status is detrimental to the state of affairs in the countries it was removed from. The 99% lower classes have to make up the difference in their taxes. Possibly the most important chapter concerns Bretton Woods, the postwar agreement that separated nations, controlled finance and currencies, and allowed everyone to grow. Shaxson shows the greatest universal growth occurred in the fifties and sixties thanks to Bretton Woods: “The countries participating in the Bretton Woods system would collectively enjoy the strongest, most broad-based, and most crisis-free expansion in history, with growth running at nearly 4 percent in the advanced economies and 3 percent in developing nations, more than twice the rate that had been attained in a thousand years of history.” But since then: “Once this awesome intellectual land grab by corporate and financial interests began to enter mainstream politics in the late 1970s, it would lead inevitably to corruption, oligarchy, bank bailouts and the growth of international organized crime,” he says. The finance business is all about wealth extraction, not wealth creation. The shenanigans are legendary. The current madness on Wall Street is share buybacks. Analysts are actually insistent that companies spend every dollar they can buying back their own shares rather than investing in upgrades or expansion. Shaxson uses the example of the venerable IBM, a company currently valued at $100 billion. It has spent $160 billion buying back its own shares rather than investing in itself. The return is, rather obviously, not so great. Similarly, the Trump tax cut has not resulted in general betterment as promised. Worker salaries have risen by $7 billion, it is true, but companies have also spent $850 billion buying back their own shares, with little to show for it. Shaxson has not a single good word for London. It is the sleaze capital of the world, the home of all shady and underhanded schemes and scams. The USA (ie Wall Street) is in a constant race (to the bottom) with London to attract more financial firms. The result is near anarchy. Little oversight, no prosecutions and freedom of movement for cash mean all kinds of dirty money floods in to be laundered and made legitimate. The situation encourages criminality and rewards it handsomely. Scammers can fly in in the morning and be in business by the afternoon, he says. As Americans saw in the financial crisis, bankers are above the law and will not be jailed or sanctioned personally, no matter how many lives they destroy in their endless quest to hoard more money. The UK imposed no fines whatsoever for the financial crisis, though American authorities have fined several British firms. London is Shaxson’s poster child for what is wrong with the world. It is all supposedly about competitiveness, but it really about hoarding cash. He quotes Paul Krugman as early as 1994: “A government wedded to the ideology of competitiveness is as unlikely to make good economic policy as a government committed to creationism is to make good scientific policy.” He tackles situations like the Celtic Tiger period when the Irish economy soared – right into the pockets of Charles Haughey, the prime minister. But Ireland is no worse than USA, the biggest tax haven in the world. States like Delaware and Nevada collect companies like trading cards as they continue to offer more protection, less and less regulation, less prosecution and less taxation. Shaxson also exposes the lengths and depths of private equity, the new name for the disgraced LBO (Leveraged BuyOut) firms. In this case, vulture capital buys up a company with the company’s own money (so the buyers can’t be taxed), raised by asset sales and massive debt offerings. It then gets its money back by paying itself huge dividends, strips out any saleable assets like intellectual property, and closes the remaining shell, throwing hundreds or thousands out of work, but profiting handsomely for its trivial risk. This is currently the sad fate of almost the entire newspaper industry, Shaxson shows, closely examining a key player in the destruction of value in local journalism. There is a fascinating portrait of Iowa, in which Big Ag has taken over farmers as if they were sharecroppers. They provide the raw materials, the financing, the sales deals – and control everything so that the farmer is trapped into sticking with them because of the debt they incurred in signing up. For example, they get ten-year contracts on sales of their pigs, but 20-year debt on their facilities, so they are frantic to re-up lest they be shut down and lose everything. At that point, Big Ag lowers its prices for their pigs and imposes new restrictions on the trapped farmer. Local banks and agencies all disappear, as the Big Ag companies run Iowa operations remotely, spending not a cent inside the state. This is why Iowa is angry. Laws covering these situations are ignored, lessened, or repealed. Anything and everything must be made available for the smooth operation of big finance. Shaxson focuses in particular on antitrust laws that gave governments the power to regulate industry and protect customers. But no one fears antitrust any more. They just threaten to move. Customers are just a cost of doing business. Employees are a thorn in their sides. The unusually excellent Conclusion alone is worth the price of admission. Shaxson is clear and sharp in his criticism and his solutions. US companies are already sitting on a $1.7T cash hoard – tax cuts will not stimulate investment by them, and in fact, investment is down despite the cuts and (record) low interest rates. Importantly, he says a tax is not a cost to an economy, it is a transfer within it. In other words, taxes are a good thing, not something to be jettisoned in the race to the bottom. “There is no tradeoff between financial regulation and economic growth. More democracy means more economic prosperity.” This of course flies in the face of everything we read, see and hear in the news every day, an indoctrination campaign to tranquilize the 99%. The Finance Curse puts everything wrong with the political world into neat, tidy perspective. This is a rare book of substantive answers, even if Shaxson’s disgust shows from time to time. We now know the cause, the effect and the solution. Finance is by itself ruining the world. That’s big. David Wineberg

  2. 5 out of 5

    Ksenia Kulichik

    I really wish I could give this book a better rating. I dove in prepared to agree with the author and discover the nuance of what an overly robust financial sector does to economies, why, how and what to do about it. Some of that Shaxson did deliver and there were a few chapters I found quite engaging and informative, for example, the ones where he talks about the “Celtic Tiger” and offshore finance (makes sense, he authored an entire separate book on the topic of tax havens). His breakdown of s I really wish I could give this book a better rating. I dove in prepared to agree with the author and discover the nuance of what an overly robust financial sector does to economies, why, how and what to do about it. Some of that Shaxson did deliver and there were a few chapters I found quite engaging and informative, for example, the ones where he talks about the “Celtic Tiger” and offshore finance (makes sense, he authored an entire separate book on the topic of tax havens). His breakdown of some key economic ideas of the previous century, neoliberal thought etc. in the beginning of the book also struck me as quite fair and successful. However, the further I went into the book, the more sensationalist, “finger-pointy” and comical Shaxson’s arguments and rhetoric became. He is quick with exclamations of mock horror at companies facing a possible need to file US tax returns, inexplicably insists on using words like “titan” to describe hedge fund managers or junk-bond-fueled raiders and labels anything even remotely complex in the financial world “squirrelly business”. Perhaps, I am just a jaded corporate drone, but a lot of his fist-shaking leaves me shrugging my shoulders. There are many destructive aspects to contemporary global finance (oh wow, who knew?), I am trying to learn more about them, not get an earful of moralistic sensationalizations about pension funds getting swindled and taxes being avoided. Even when his general points are reasonable and true the tabloid language makes them next to impossible to absorb. Here is an especially egregious example of what so irks me: There’s a third reason for all the snaking chains of corporate complexity, which brings that other large stakeholder into view: the shambling, unloved, grouchy giant that invests in the roads, the courts, the education of workers, the sewage pipes under homes and office buildings, and the other essential things that underpin all of the titans’ profits. Government. After it has picked up the human flotsam from the lacerated pension pots and the layoffs, be they burned-out journalists or the victims of rogue doctors, the government is at least supposed to get a payback in the form of tax levied on corporate profits. If this kind of delivery is you cup of tea, you doubtless will enjoy the book much more than I did. Shaxson does a fair bit of introductory explaining throughout the book, which some readers may find very useful, but I personally did not. He is very clear and brief in these summaries, but goes a little too far, for example, breaking down what bank balances are, which seems redundant in a book not targeted at children. I wish he spent time unpacking more complex concepts mentioned in the book, such as different kinds of trusts or some “typical” ways to structure chains of offshore corporations, rather than focused on the simpler foundational terms. Lastly, while I find the whole idea of “the finance curse” compelling and its existence demonstrable, I am concerned Shaxson stretches it too far, for example, concluding the book with a chapter on CAFOs. Are they terrible? Yes. Are contemporary farming and agricultural practices horrid in general? Yes. Are they a manifestation of “the finance curse”? I am not convinced. The book does successfully demonstrate the bloat and questionable practices in the financial sector, but comes up short trying to expose its poisonous influence on the rest of the economy. Again, I am already in agreement with the author’s thesis, and I was hoping he would elegantly put relevant arguments into words, alas, he doesn’t accomplish that in this book. Thanks to NetGalley for a digital ARC of this book.

  3. 4 out of 5

    Keen

    “I listened with great interest to what you had to say but I can assure you if you think Her Majesty’s Government is ever going to prosecute people of my class, you are utterly mistaken. We are a protected species.” So said the director of one high street bank to Rowan Bosworth-Davies, after he had given a speech about money laundering within the City of London. And of course he was 100% correct. Shaxson takes a brave venture into the dark and disturbing world of financial, corporate and politica “I listened with great interest to what you had to say but I can assure you if you think Her Majesty’s Government is ever going to prosecute people of my class, you are utterly mistaken. We are a protected species.” So said the director of one high street bank to Rowan Bosworth-Davies, after he had given a speech about money laundering within the City of London. And of course he was 100% correct. Shaxson takes a brave venture into the dark and disturbing world of financial, corporate and political corruption, and beware this is a right cast of horrors, featuring some of the most awful people you could imagine, with almost every one of them fully protected from the law by their immense wealth and privilege. Shaxson pulls out some really fascinating historical details, starting back at the widespread corruption which swept through America in the 1800s in the era of the robber barons. “Wall Street planned, financed and executed the entire independence of Panama…This episode brought down the Colombian government, created a new republic, shook the political foundations in Washington with corruption and gave birth to American imperialism in Latin America. Essentially, Wall Street interest had harnessed their government’s military resources to build and operate a mighty tollbooth at the choke point of one of the world’s great trade arteries.” Of course the creation of Panama’s shipping registry was the country’s first major step towards the creation of a tax haven. He goes onto talk about other forms of ugly corruption, such as the great American streetcar scandal, where a consortium of oil, bus, car and tyre companies came together to buy up streetcars and electric mass-transit rail systems in 45 major US cities to kill them off. He explains how it was thanks to the excellent journalist Ida Tarbell who first exposed Rockefeller for his corruption. After some shocking attempts to discredit and humiliate her. Tarbell's investigative work resulted in Standard Oil being broken up into 34 different companies. Although this proved to be short-lived after a meeting in 1928 in the Scottish Highlands in a secret deal to carve up the world’s oil industry. “Offshore, crime, money and politics aren’t an aberration of the system; they are the system.” Shaxson also discusses the resource curse, which is particularly bad in places like Angola, which is oil-rich and diamond-rich, yet their vast and lucrative natural resources attract the worst kind of people and result in the worst kind of circumstances where a tiny elite profit to excess at the expense of the vast majority. He shows the ways that this same rule applies to the many tax havens scattered across the globe. “In the era of financialisation, the corporate bosses and their advisers, and the financial sector, have moved away from creating wealth for the economy, and towards extracting wealth from the economy using financial techniques.” Shaxson takes us back to the origins of the London’s financial sector revolution. “Britain entered its greatest period of broad-based prosperity and economic growth at precisely the moment the City of London was at its lowest ebb.” Bretton Woods allowed the UK government to impose strict regulations on the finance sector and high taxes on the rich. The finance industry wasn’t happy about this and so launched the doomed Operation Robot. Even though this was approved by the likes of Churchill, it still failed. Despite the remarkable prosperity the boys in London wouldn’t give up that easily, determined to overthrow the system, the answer arrived in 1956 when the Midland Bank began taking US dollars unrelated to commercial or trade deals. This soon drew the avaricious US bankers who saw an opportunity to flourish without government interference. “The City establishment had quietly turned Britain into an offshore tax and financial haven.” We learn that between 1963 and 1969 US bank deposits in London rose twentyfold and then from 1970 to 1980 it expanded a further tenfold. “If we broke up the big banks tomorrow, would that end racism? Would that end sexism?” So said Hillary Clinton in 2016, in a bizarre speech, during the campaign for her second failed presidential bid. Not only does this sound like something Trump would say, but it also leaves us no doubt as to where the US is and how far removed from reality in terms of regulating the system it is. In 2017 Amazon announced plans to build a second HQ and asked cities to submit bids with incentive packages. At least 238 locations had bid, with the highest offer coming from Maryland, offering $8.5 billion in tax credits and other benefits for a project which Amazon itself says will only cost $5 billion. Elsewhere he discusses The New Deal, Mont Pelerin Society, Hayek, consultant culture, Charles Tiebout, Thorstein Veblen, Richard Bork (who taught both Clintons at Yale), Luxembourg and Jean-Claude Juncker, Charles Haughey and the Celtic Tiger, the Free-rider problem and the Big Four, an elite group of accountancy firms which enjoy a shockingly disproportionate amount of power and influence. “Many other politicians have come to love neoliberalism because the ‘verdict of the market’ absolves them of responsibility for making hard choices, helping them sidestep troublesome notions like fairness or justice.” Explaining the culture of many of the British tax havens, it basically boils down to “You can trust us not to steal your money, but if you want to steal someone else’s money, then you can also trust us to turn a blind eye.” This is an absolutely fascinating book. It does get a little sluggish in the second half, but any writer who dares to write so frankly and clearly on any subject that traditionally thrives on opacity and secrecy will always get my attention. Shaxson has written a powerful and devastatingly insightful piece of work.

  4. 5 out of 5

    Justus

    This is the fourth "Financial Times 2018 best books" that I've read. I have found all of them problematic and not especially worth recommending. This is the worst of the four I've read. It starts by by suggesting that just as there is a "resource curse" -- countries with abundant natural resources often do worse than countries without -- there is also a "finance curse": countries with oversized financial sectors do worse than countries with non-oversized financial sectors. The author is British a This is the fourth "Financial Times 2018 best books" that I've read. I have found all of them problematic and not especially worth recommending. This is the worst of the four I've read. It starts by by suggesting that just as there is a "resource curse" -- countries with abundant natural resources often do worse than countries without -- there is also a "finance curse": countries with oversized financial sectors do worse than countries with non-oversized financial sectors. The author is British and (I believe) the book was originally published in Britain. So it is mostly targeted at British audiences and, based on the introduction, he seems to primarily arguing that Britain has been hurt by the outsized importance of London's financial district. Something similar is happening in Britain ... These top-down wealth flows from the financial sector haven't exactly turned Britain into an authoritarian state but what has happened is that finance is often in conflict with other parts of the economy, and in these battles finance always seems to win out ... It is no coincidence that the decline of British manufacturing since the 1970s has been so much faster than in other industrial economies, at the same time as Britain's financial sector assets have grown so much larger as a share of the economy than in comparable Western nations. (Notice that phrase "it is no coincidence" where isn't supported by any data or arguments; that's something we'll come back to later.) But even if the book is focused on Britain, I think everyone in every country should be at least a little concerned about the impact of the financial sector. Maybe Britain is on the "cutting edge" and lessons can learnt from it and applied to wherever you happen to be living. So even though it is focused on Britain, I was still keen to read on! As chapter after chapter passed I lost my excitement for the book. The chapters follow a similar pattern -- a topic is introduced who relationship to oversized financial sectors is murky, we are treated to a long history of how things got to this point, and then there are a few unsatisfying & lightweight analyses. This is not a book with data or charts or references. Going back to the introduction and that phrase "it is no coincidence". Well...how do you know?! Prove it! Don't just assert it. Don't just say it is obvious. Convince me. Somehow. With something. At times it feels like the author is just talking about any bad thing a business does, even if it doesn't seem to have much to do with oversized financial sectors. One chapter is about how communities increasingly compete with one another to offer tax breaks & subsidies to businesses. Amazon and their recent search for HQ2 is mentioned. But...Amazon isn't part of the financial sector. I don't like the practice but I don't see what it has to do with oversized financial sectors? Likewise, there is another chapter on how old-school anti-trust doesn't seem very effective in the modern business climate. This chapter is primarily about antitrust as practiced in the US. Again, it is hard to see what this has to do with oversized financial sectors (especially the oversized British financial sector). The chapters feel disconnected from one another. If I skip the chapter on anti-trust in the US, do I really miss out on anything in later chapters? And most of these individual chapters have had entire books written about them. (Indeed, chapter 3, about Britain's tax havens has a book written by this author.) Not that you need book-length treatment for everything -- it would be a bit ridiculous to say "instead of reading this 1 book, go read these 11 other books". But these aren't particularly compelling chapters, either. We'll be treated to an excerpt from a 1969 Bank of England memo but when it comes to modern day actions & consequences it all tends to be fairly hand-wavy. "A growing global 'wall of money' is constantly seeking and finding new ways to burrow into the many nooks and crannies of our economy." Okay but how much money are we talking about? What are the effects? Overall, I got the impression that the author was generally more interested in telling the story of how things to how they are -- how British Virgin Islands became a tax haven, how Ireland got its low corporate tax rate, how Robert Bork convinced the world to change how anti-trust was pursued -- than to really delve into the consequences circa 2019. Of course, it probably didn't help that many of these topics were things I already had at least passing familiarity with, so all of those history lessons were even more boring. Maybe someone who is less familiar would find them interesting or eye-opening? I guess I just prefer more numbers & data in my financial non-fiction and less storytelling.

  5. 4 out of 5

    C F

    By any measure it’s obvious that the financial sector “extracts” more wealth out of communities -- entire countries, for that matter -- than it gives back. You don’t have to know how it’s done to see the evidence: Just look at who consistently reap the largest salaries year-over-year. And for what? "Financial Services"?? Please. “Financial engineering” is a euphemistic con, a deceptive way of disguising parasitic chicanery as justly rewarded business innovation. As Paul Volcker once said, the on By any measure it’s obvious that the financial sector “extracts” more wealth out of communities -- entire countries, for that matter -- than it gives back. You don’t have to know how it’s done to see the evidence: Just look at who consistently reap the largest salaries year-over-year. And for what? "Financial Services"?? Please. “Financial engineering” is a euphemistic con, a deceptive way of disguising parasitic chicanery as justly rewarded business innovation. As Paul Volcker once said, the only significant innovation banks have made for decades was introducing ATMs. Every time I hear about some brilliant young college grad getting seduced into working as a quant or derivatives designer on Wall St. I think it's a shame and total waste of talent -- not much better than the many young engineers who put their minds to work on the next weapons system. When you start to ask “how” financial extraction actually works, the story usually starts getting hard to follow pretty quickly. But Nicholas Shaxson is a tremendous reporter and writer who knows how to bring his readers along. In fact, I can’t think of a better explanation of what the “financialization” of the economy means, what’s driving it, and how it damages us and our society. There aren't too many books about capitalism that hold your attention as well. How many people gave Piketty’s “Capital” five stars on Goodreads actually read that entire doorstopper? That’s not to suggest that Picketty’s book wasn’t important or didn't deserve the attention it got. It did, but more for the depth of research Picketty conducted than for his means of communicating the results. I got so much more out of “The Finance Curse” that there’s simply no comparison. Thus, I would put "The Resource Curse" on the top shelf, where I keep Jane Mayer’s “Dark Money,” Nancy McLean’s “Democracy in Chains,” Chris Leonard’s “Kochland,” Naomi Klein’s “The Shock Doctrine,” David Korten’s “When Corporations Rule the World,” Steve Coll’s “Private Empire,” Ralph Nader et al's "Taming the Giant Corporation" and other recent classics books on corporate capitalism. Anyway, back to the topic of “extractivism.” “The Finance Curse” is a reference to “the resource curse,” the notion that countries whose economies are largely dependent upon extracting and exporting oil or valuable minerals almost universally end up saddled with corrupt governments, widespread poverty and misery, and sometimes a cycle of coups and violent upheavals. Just as much damage, although often subtler, has been caused by finance. (Although to be fair, the oil industry's "invisible" damage is also inestimable -- esp. the destruction passed off to future generations...) Shaxson knows enough about oil and finance to draw the analogy. His first book was “Poisoned Wells: The Dirty Politics of African Oil” and his second book, “Treasure Islands,” was about offshore tax havens, a kind of prequel to this book. The irony is that finance probably does more damage than these dirty industries (except in a few cases), but it’s more diffuse and the damage isn’t as easy to see as the messes oil companies have created in places like Nigeria and the Ecuadorean Amazon. And where they don't outright demolish weakened businesses, the damage that private equity, tax dodging trusts, hedge funds and other financial predators create isn't always easy to trace back to its source. Offshore tax havens and new multi-layered legal/financial vehicles, special purpose entities and other forms of speculation and obfuscation are extremely difficult to untangle. The fundamental problem stems from the shift towards neoliberalism that followed the “Golden Age of Capitalism” in the decades that immediately followed WW II. The hollowing out of the productive economy cannot simply be written off as the consequence of free trade and technological change. Or even tax competition. There's more to it than that. The chapter on Iowa and what Big Meat is doing to farmers and rural communities is an example. In most of its 99 counties, Iowa has seen an explosion in CAFOs and extinction of small independent farms. Sure, blame Giant Ag companies that have forced farmers into serfdom. But their enablers include various financial operators. Shaxson is a Brit. He came briefly to Iowa to look at the Ag sector. So perhaps he can be forgiven for not reminding his readers that a century ago people responded to the big industrial trusts and banks with more effective means than pitchforks. They organized to demand an equitable democratic banking system – demands that led to the FDIC and Farm Credit System. (Christopher Shaw writes this history in "Money, Power, and the People") Another thing about financial predation is that it cuts across many sectors in the same communities. For example in Iowa, like many states, private equity also had a mostly invisible hand in driving deregulation and consolidation of radio news stations, a story told in the excellent documentary “Corporate FM.” I remember very little talk about private equity’s role in driving media consolidation back in the early 2000s, when the media reform movement peaked. As movements, we didn’t quite go that deep. That I know. But we saw the damage: Clear Channel cut station staff then started to pipe in national programming, including a steady stream of pro-war propaganda before the invasion of Iraq. For some communities, the damage was direct. In Minot, ND, after the station scooped up by Clear Channel was emptied of staff, there was no one left to answer the phone when first responders called to request an emergency broadcast warning after a train carrying deadly anhydrous ammonia derailed and gassed the town. One person was killed and many more went to the hospital. This is just one example of why we need to keep financial companies from controlling businesses involved in essential services. There are many other examples that led Rep. Garcia and Rep. Tlaib to introduce the “Protecting Consumers From Market Manipulation Act,” which would amend the Bank Holding Company Act by prohibiting large non-financial firms from deriving 5 percent of their revenue from financial activities and restricting banks' ability to own commodities. Because the connections aren’t always clear, the precise cost of “financialization” is not measurable. In one study, economists at UMass (PERI) estimated that by 2023 our supersized financial sector will have cost the US economy a cumulative $13 to $23 trillion since 1990. I don't fault Shaxson for missing these or other specific examples of finance-driven gutting of other businesses. There is plenty of evidence here to make the general point and plenty of threads that readers can pursue further, with tightly referenced footnotes. But he does give a tour of other examples of "financialization" - including the riverside tax-free zone in Dublin that powered Ireland's reputation as the “Celtic Tiger,” a primer in how secretive offshore (and onshore) trusts are used to keep wealth in the family and insulated from taxes, and The City of London (the financial center inside London, treated as an autonomous district) that drives the worst tax avoidance and corrupt money flows in the world -- not just through the City itself, but via its involvement in designing the laws and business vehicles and strategies used to park giant piles of money on small islands. The financial centre's elegant staid architecture houses a festering nucleus of global corruption that keeps politicians in the U.S. from advancing bank transparency laws (because, well, if you do that here, everyone will move their money there). One sidebar note that occurred to me again: Many people mistakenly believe that corporations are LEGALLY required to maximize profits. Not true. (Law Prof. Lynn Stout debunks this myth directly in her book, “The Shareholder Value Myth.”) So then why do companies act like it is true? Partly because maybe some execs believe it. Partly because of the pressures they are under. Telescope back, however and look at the big picture: Neoliberal economics created its own cult of magical thinking that rationalized a masculine and competitive business culture of “short-termism.” Milton Freedman is usually cited here for his 1970 NYT magazine article, “The Social Responsibility of Business Is to Increase Its Profits.” (note that he cites "social responsibility" - not fiduciary duty under the law). I.e. serve shareholders, not the communities they operate in, workers they employ, or (by paying their taxes) the governments that support the infrastructure and services they rely upon. After Michael Milken, Ivan Boesky and other junk bond shysters crashed savings and loan banks and other businesses another important though less well-known proponent of shareholder primacy stepped up as the “intellectual savior” of that myth in the early 90s: Harvard Business School Prof. Michael Jensen published a couple of seminal papers that argued that the interests of shareholders, managers and the company were all aligned. Corporate America just needed a new breed of superstar owner-managers in a financial “market for corporate control” that would boost efficiency across the system. By pursuing profits for themselves they would be doing good for shareholders and others who depended upon the company for employment and spin-off advantages. In the early 90s, soon after Jensen’s paper, executive compensation shifted to reflect his “pay for performance” philosophy: Executives were rewarded with stock options whose value would rise precipitously with the value of the company. (Of course that incentivized execs and their professional enablers aka "gatekeepers" at accounting firms and banks to juice short-term performance – often by cooking the books, as we saw at Enron, WorldCom and a dozen other companies a decade later). And when cable television entered the picture, it added a kind of cultural dimension to the phenomenon, as more and more business observers paid closer and closer attention to the stock market. Corporate executives soon learned to hit quarterly targets (see “The Number” by Alex Berenson). Jensen, meanwhile, said that firms should also borrow heavily, because the “discipline of debt” would make them focus even more intensely on the profits necessary to service that debt. How to get those profits? Financial engineering, destructive mergers and acquisitions (bankers and lawyers always there to help out in exchange for the usual fee-raking), etc. R&D on a technology that might take 5-10 years? No -- let the VC guys do that. We can always borrow and buy them when they're about to launch an IPO. The point is, the "finance curse" is a kind of magical mode of parasitism facilitated by a class of professionals and the rules they have managed to embed in obscure regulatory corners (or the absence of any regulations that would impede systemic risk-taking). It is systemic, multi-dimensional and, importantly, global. Money travels faster and further (and in greater secrecy) than any commodity grown or manufactured. A sample of Shaxson's limpid prose: I’m sure Neoliberalism has been defined as accessibly elsewhere, or maybe as accurately: “Neoliberalism is an outgrowth of classical liberalism, which dates back a couple of centuries. There’s political liberalism, which is all about citizens having equal democratic rights in a system of sovereign law, and there’s economic liberalism, which starts from Adam Smith’s “invisible hand,” by which free exchanges or trade in properly functioning – that is, unsabotaged – markets are supposed to make society better off overall. The more liberal (or free) the exchange, in this view, the better for society as a whole; government’s role is to provide basic functions like defense, to enforce property rights, and to keep a watchful eye out for monopolies, but otherwise to get out of the way. … Neoliberalism put these ideas on steroids and gave them a rather large twist. Its starting point was the theory that government amasses ever more power and heads toward tyranny. … Hayek’s most famous book, The Road to Serfdom, laid this all out. Competition and the price system were the only legitimate arbiters of what was good and true, he said. And soon this became a neoliberal mantra. Cut taxes, deregulate, privatize, and launch all these pieces into competition with one another, then let it rip. … In this framework, explained the writer Stephen Metcalf, humans are transformed from being “bearers of grace, or of inalienable rights and duties,’ into ruthless profit-and-loss calculators, sorted into winners and losers. […] In terms of raw power, neoliberalism takes authority away from politicians and hands it to economists and moneyed interests.” (recall the famous moment at the beginning of Clinton’s first term when he realized that his agenda was limited by bondholders). Although the book is not too difficult, it conveys the sense that the “finance curse” is not simply the growth in the size of the financial sector, but the many and pervasive ways that it injects financial techniques and metrics into the entire economy (and much that lies outside of it). That includes systemic rules like “competition” between tax jurisdictions (forum-shopping is often more of an excuse for companies to avoid taxes than a competitive necessity). And there are no limits – i.e. “the race doesn’t stop at zero” taxes or deregulation. In other words -- without organized people wielding pens and pitchforks -- there is seemingly no end in sight. It's difficult. We are usually fighting symptoms not causes, or if so, only beginning to seriously fight back. But if a lot more people read this book, we would at least begin to see more clearly what we have to contend with. New movement formations like the "Hedgeclippers," the "Stop the Money Pipeline" coalition, Americans for Financial Reform and the global Tax Justice Network (which apparently helped Shaxson understand the world of offshore tax havens), are examples of new activism against the finance curse that we can support if we are too busy working to pay off our credit cards.

  6. 4 out of 5

    Tonstant Weader

    The Finance Curse is the reason I will not achieve my 2019 GoodReads Reading Challenge of 200 books, but it was worth it. This is a very detailed review of the myriad ways the finance industry is undermining democracy, good government, and the economy. It is a well-known truism that resource-dependent economies enrich those in power, impoverish the rest, and tend toward authoritarianism. Russia and its oligarchy are a perfect example of a petrostate of corruption and authoritarian rule by corrup The Finance Curse is the reason I will not achieve my 2019 GoodReads Reading Challenge of 200 books, but it was worth it. This is a very detailed review of the myriad ways the finance industry is undermining democracy, good government, and the economy. It is a well-known truism that resource-dependent economies enrich those in power, impoverish the rest, and tend toward authoritarianism. Russia and its oligarchy are a perfect example of a petrostate of corruption and authoritarian rule by corrupt leaders. Nicholas Shaxson makes the argument that this happens in countries whose economices are dominated by finance as well and he proves his point. So what happens to economies that become financialized. The finance, insurance, and real estate economic sectors explode, this is where finance happens, not in manufacturing. The point of finance becomes extracting value, not creating it. Companies are bought to take on debt, have their assets stripped, their employees laid off, and then allowed to go bankrupt. Asset mining is more profitable than making things. Worse, the ideology of finance become internalized in the culture, so people nod approvingly while their pockets are picked. Shaxon meticulously documents how finance became such an international juggernaut and how it has completely gutted many industries, shuttering newspapers and family farms along the way. It seems they will roll through industry after industry, cannibalizing the productive side of the economy to feed the greed of financiers whose hunger for wealth is infinite. I think The Finance Curse is one of those important books everyone who cares about democracy should read. I also think few will invest the time. I am a fast reader and it took me two weeks to read this. While nearly a fourth of its 384 pages are footnotes, the prose is dense with detail. Then it is also so depressing that I had to put it down after each chapter to shake off the despair. What makes it even more despairing is that so little of the book is devoted to ways to address the plague of financialization and the suggestions are weak sauce. Campaign finance reform is offered as this unversal panacea, but fighting financialization requires far more than getting money out of politics. Financialization is a cultural blight. An entire section of every major newspaper devotes itself to the business of finance with the premise that what’s good for finance is good for the country. There is no such attention for labor or industry. Finance is the be all and end all of the economy. The health of Wall Street is proof the economy is working even though wages are stagnant, bankruptcies increase, and homelessness is rampant. How the country serves the needs of finance has become more important than how it serves the people, not just to the government, but to the public. Farmers who have declared bankruptcy still think the economy must be good because the Dow broke a new record. Finance has not just captured the government and the economy, it has captured the culture. We need cultural weapons to fight a cultural cancer. I received a copy of The Finance Curse from the publisher through Edelweiss. The Finance Curse at Grove Press Nicholas Shaxson on Twitter https://tonstantweaderreviews.wordpre...

  7. 4 out of 5

    Matt_B

    I have never read a book that made me feel so angry. Page after page of outrage, grinding my teeth, ranting at my poor family, and wondering why did I not know about any of this? What's it about? You may look at this book and think it is about economics, tax havens, private equity firms, millionaires, billionaires, monopolies and multinational corporations. Which it is. This may immediately scream 'boring snoozefest' to you, however, it is about much more, about how all those things negatively impa I have never read a book that made me feel so angry. Page after page of outrage, grinding my teeth, ranting at my poor family, and wondering why did I not know about any of this? What's it about? You may look at this book and think it is about economics, tax havens, private equity firms, millionaires, billionaires, monopolies and multinational corporations. Which it is. This may immediately scream 'boring snoozefest' to you, however, it is about much more, about how all those things negatively impact your life. This book is about how you are being cheated, about how your money and taxes are effectively being stolen, and as a result how you, your family, your community and country are all being left poorer. This book is about the 'finance curse', which the author refers to as: “the idea that once a financial sector grows above an optimal size and beyond its useful roles, it begins to harm the country that hosts it. Finance turns away from its traditional role serving society and creating wealth, and towards often more profitable activities to extract wealth from other parts of the economy. It also becomes politically powerful, shaping laws and rules and even society to suit it. The results include lower economic growth, steeper inequality, inefficient markets, damage to public services, worse corruption, the hollowing-out of alternative economic sectors, and widespread damage to democracy and to society.” What is this book not? It is not a door stop. It is not about socialism. It's not about the traditional left versus right in politics, or over simplified arguments about high tax versus low tax. It's about having an economy that works for everyone, not just the rich. Who is it for? Everyone, although it seems to be written more for the UK audience, it is relevant to any country where the 'finance curse' is in action. The book is relevant for everyone as the ideas, ideology, politics and economics behind it are everywhere. It should be taken as a warning of how not to run an economy. You don't need a background in economics or to be any good with numbers (I am definitely not) to understand this book. It can get technical and there are too many abbreviations to remember BUT the outrage will keep you going. I am serious about how this book made me feel and I would recommend you do not read it before bed, because anger does not generally help you get to sleep. If you are an economics student you should definitely read this, as it gives a powerful, well evidenced critique of the mainstream school of thought being taught at present, i.e. neo-liberalism. What does the book cover? The book will take you step by step through the history of the finance curse, how it developed and why it is still so powerful today, despite its clear detrimental impacts to all of us. It will tell you how the rich avoid taxes, explaining: tax havens, charitable trust and regulatory loop holes. The book also explains how the media, politicians, regulators, academia and the evidence they cherry pick are all twisted to keep the status quo. There are in depth case studies, such as the growth and crash of the Irish economy, that clearly demonstrate how false current economic myths are. The myths the book tackles and proves false include: lower taxes are good for the economy, higher taxes will scare big business away, de-regulating markets is good for economic growth, and there are no negative impacts from lowering taxes (Clue: it definitely looks that way if you only look at one side of the story and refuse to measure the negative impacts). This is an incredibly well researched book, 79 pages of notes and references at the end, with lots of evidence to back up its claims, and quotes and stories to keep it engaging. The author also keeps it engaging by pointing the reader back to the negative impacts on daily life, from housing prices to train ticket prices. As such there is a good balance between the abstract and impersonal, tax havens, with the deeply personal, the levels of care given to older people in their homes. Why should I read it? The 'finance curse' impacts every aspect of our lives and this book has so many answers to so many things we should all worry about. If you worry about the level of care your Gran gets from her home visiting carers – you should read this book. If you work as a carer and worry about why you are being asked to visit more and more people in less time, for less pay – you should read this book. If you wonder about all the shops closing in your town centre and why Amazon does not pay tax – you should read this book. If you worry about the rising numbers of food banks, of the rising numbers of working people using food banks – you should read this book. If you are interested in why Brexit happened and why Trump was elected – you should read this book. If you ever wonder why, as UK tax payers, we are paying for the mistakes made by the finance sector – you should read this book. If you ever wonder why no bankers or anyone from the finance sector went to jail, at least in the UK, after the last financial crash – you should read this book. If you care about inequality, poverty, workers rights, global development – you should read this book. If you are concerned about corruption in markets, corruption in politics and cross border organised crime – you should read this book. If you care about national security, democracy, sovereignty, foreign influence on government – you should read this book.

  8. 4 out of 5

    Matt_B

    I have never read a book that made me feel so angry. Page after page of outrage, grinding my teeth, ranting at my poor family, and wondering why did I not know about any of this? What's it about? You may look at this book and think it is about economics, tax havens, private equity firms, millionaires, billionaires, monopolies and multinational corporations. Which it is. This may immediately scream 'boring snoozefest' to you, however, it is about much more, about how all those things negatively impa I have never read a book that made me feel so angry. Page after page of outrage, grinding my teeth, ranting at my poor family, and wondering why did I not know about any of this? What's it about? You may look at this book and think it is about economics, tax havens, private equity firms, millionaires, billionaires, monopolies and multinational corporations. Which it is. This may immediately scream 'boring snoozefest' to you, however, it is about much more, about how all those things negatively impact your life. This book is about how you are being cheated, about how your money and taxes are effectively being stolen, and as a result how you, your family, your community and country are all being left poorer. This book is about the 'finance curse', which the author refers to as: “the idea that once a financial sector grows above an optimal size and beyond its useful roles, it begins to harm the country that hosts it. Finance turns away from its traditional role serving society and creating wealth, and towards often more profitable activities to extract wealth from other parts of the economy. It also becomes politically powerful, shaping laws and rules and even society to suit it. The results include lower economic growth, steeper inequality, inefficient markets, damage to public services, worse corruption, the hollowing-out of alternative economic sectors, and widespread damage to democracy and to society.” What is this book not? It is not a door stop. It is not about socialism. It's not about the traditional left versus right in politics, or over simplified arguments about high tax versus low tax. It's about having an economy that works for everyone, not just the rich. Who is it for? Everyone, although it seems to be written more for the UK audience, it is relevant to any country where the 'finance curse' is in action. The book is relevant for everyone as the ideas, ideology, politics and economics behind it are everywhere. It should be taken as a warning of how not to run an economy. You don't need a background in economics or to be any good with numbers (I am definitely not) to understand this book. It can get technical and there are too many abbreviations to remember BUT the outrage will keep you going. I am serious about how this book made me feel and I would recommend you do not read it before bed, because anger does not generally help you get to sleep. If you are an economics student you should definitely read this, as it gives a powerful, well evidenced critique of the mainstream school of thought being taught at present, i.e. neo-liberalism. What does the book cover? The book will take you step by step through the history of the finance curse, how it developed and why it is still so powerful today, despite its clear detrimental impacts to all of us. It will tell you how the rich avoid taxes, explaining: tax havens, charitable trust and regulatory loop holes. The book also explains how the media, politicians, regulators, academia and the evidence they cherry pick are all twisted to keep the status quo. There are in depth case studies, such as the growth and crash of the Irish economy, that clearly demonstrate how false current economic myths are. The myths the book tackles and proves false include: lower taxes are good for the economy, higher taxes will scare big business away, de-regulating markets is good for economic growth, and there are no negative impacts from lowering taxes (Clue: it definitely looks that way if you only look at one side of the story and refuse to measure the negative impacts). This is an incredibly well researched book, 79 pages of notes and references at the end, with lots of evidence to back up its claims, and quotes and stories to keep it engaging. The author also keeps it engaging by pointing the reader back to the negative impacts on daily life, from housing prices to train ticket prices. As such there is a good balance between the abstract and impersonal, tax havens, with the deeply personal, the levels of care given to older people in their homes. Why should I read it? The 'finance curse' impacts every aspect of our lives and this book has so many answers to so many things we should all worry about. If you worry about the level of care your Gran gets from her home visiting carers – you should read this book. If you work as a carer and worry about why you are being asked to visit more and more people in less time, for less pay – you should read this book. If you wonder about all the shops closing in your town centre and why Amazon does not pay tax – you should read this book. If you worry about the rising numbers of food banks, of the rising numbers of working people using food banks – you should read this book. If you are interested in why Brexit happened and why Trump was elected – you should read this book. If you ever wonder why, as UK tax payers, we are paying for the mistakes made by the finance sector – you should read this book. If you ever wonder why no bankers or anyone from the finance sector went to jail, at least in the UK, after the last financial crash – you should read this book. If you care about inequality, poverty, workers rights, global development – you should read this book. If you are concerned about corruption in markets, corruption in politics and cross border organised crime – you should read this book. If you care about national security, democracy, sovereignty, foreign influence on government – you should read this book.

  9. 4 out of 5

    D.A. Holdsworth

    Warning: do not read this book just before bedtime. It’s not good for blood pressure, nor for sleep. The author is angry about the financial world – how it’s run – in whose interests it’s run – and his anger is, alas, infectious. I started this book pretty sceptical about the City and finance in general, and I ended up feeling downright furious. And I’ve already published a book of my own (a satire) about the iniquities of investment banking. I thought I’d expunged all my anger. Alas, I hadn’t. Thr Warning: do not read this book just before bedtime. It’s not good for blood pressure, nor for sleep. The author is angry about the financial world – how it’s run – in whose interests it’s run – and his anger is, alas, infectious. I started this book pretty sceptical about the City and finance in general, and I ended up feeling downright furious. And I’ve already published a book of my own (a satire) about the iniquities of investment banking. I thought I’d expunged all my anger. Alas, I hadn’t. Through the course of The Finance Curse, Shaxson mercilessly exposes a set of financial scandals and makes plain how one section of society simply live by a different set of rules to the rest of us dupes. He is particularly eloquent when summarising Luxemburg, Ireland and London’s tawdry record in recent decades, with their fingerprints on many of the worst financial scandals. But as well as the geographic finger-pointing, he is also superb when describing the precise mechanisms behind all the legal-but-scarcely-ethical, scams that are used by the financial elites. The great strength of the book lies in its targeting of… - Offshore Trusts. There’s a scathing and often hilarious account of the history, workings, and tax-avoiding iniquities of private offshore Trusts. (Watch out for a gag about the ubiquitous and unbearable Patek Philippe watch adverts, which I found laugh-out-loud funny. - Private equity. There’s a brilliantly clear explanation of how they use offshore accounting and dubious internal loans to reduce reported profits to near zero, scamming both the tax collectors and (…get this…) their own investors in the process. - The auditing scandal. We’ve all known for ages there’s an insane conflict of interest, having the same firm provide other companies with both their audit and consultancy services. Look at Enron. Or Carillion. Or, frankly, any of the big corporate failures – and you generally find an auditor with their fingers in the consultancy till. Shaxson goes deeper, though, showing how far the Big Four’s tentacles reach. Essential reading. - The Govt outsourcing scandal. I hadn’t realised just how much of a rip-off Private Finance Initiatives (PFI) are. Nor the degree to which the outsourcing companies (Capita, et al) are de-skilling government departments. Urgh. There is one other element of this book to highlight: a fantastic summary of the Chicago School of economists (who they were and what they spouted), for which I am hugely grateful. This will be a reference point for me far into the future. All in all: the author scores a straight 10 out of 10 for (1) passion, (2) explaining the exact mechanisms by which the scamming happens, and (3) providing a historical perspective (how we arrived at this state of affairs). At these moments, the author sets aside the fire and brimstone and delivers some of the clearest writing you’ll find anywhere in the genre of popular finance / economics. I can see a few ways to make the book even more persuasive. Not enough to score this edition down from 5 stars, but still a few – which I’m putting here for in the interests of the next edition (you never know who’s reading... I can hope!) Firstly, when the author goes from micro (…"this is how this terrible cheating finance mechanism works”…) to macro (…"here’s how it affects society as a whole, and why it’s damaging our economy”…), he goes from his safe zone of extreme competence to somewhere he’s clearly less comfortable. One of the other reviewers (much less sympathetic than me) calls his writing in these places “hand-wavy” and there’s an element of truth in this. The author is clearly hoping that the evidence he amasses at the micro level must immediately translate to the macro. To paraphrase: “here’s all this barrage of cheating that’s happening – that must surely be damaging our economy?” But economics isn’t that simple. Like any complex system, you get ‘emergent properties’ at higher levels of organisation. And the thing that seemed awful at one level (…grasping businessmen for example…) may be a bonus on a higher level (…competitive and entrepreneurial economy…) This is a non-trivial point. The whole purpose of the book is to explain how a bloated finance sector is a net drain on the economy, the way oil reserves are almost always a drain on the developing world economies which have them. That’s the promise of the title (The Finance Curse), and it’s the promise offered in the cover blurb. We’re told in the Introduction about the alleged cost to the UK economy of the finance sector: $4.5 trn. But it’s never backed up in the book. We don’t even find out over what period of time that money has been (will be?) lost. The $4.5 trn figure is referred to again in the final chapter (‘The Evidence Machine’), but only in passing. There’s no breakdown of how that figure is arrived at. This is a shame as it stops the book from fully delivering on its core promise and its core premise. For the next edition, I truly hope the author teams up with a macro-economist and inserts an additional chapter to cover these points. It would add tremendous heft to what is already a great book. A couple of other points: The book is negative in tone. There’s a lot to be negative about – I get that – but at times, so many things are criticised, it can leave the reader wondering what state of affairs should make us happy – if anything? Is there any form of economic exchange that isn’t inherently scam-prone? This negativity threatens to weaken the book’s arguments ( you might think: “what’s the point in doing anything, if we’re going to end up being scammed anyway?”) – which is a shame. Especially as the author is, outside of this book, such a positive agent for change. The post-war, Bretton Woods settlement (engineered by Maynard Keynes and others) is held up as a paragon of how global society should be organised. I suspect this thesis is sound. But it probably needs deeper explanation and analysis to ensure it stands up. The author needs to tackle and explain the financial shocks that happened during 1945-1975 (the period ended, after all, quite catastrophically, from an economic pov), to ultimately carry the argument. In some of the detail, the author is a touch fast and loose with his arguments. A few additional reviews pre-publication would have tightened things up. As he is – quite rightly – a critic of the loose use of evidence by his City antagonists, he needs to be whiter than white. Examples: - The author periodically switches between GDP and GNP to make points about the lack of growth in financially over-dependant economies. This switch may be justified – but the justification isn’t provided. This leaves a (probably unfair) whiff of suspicion that different indices are cited according to which one gives the right answer. - The long years of Austerity under the Tory administrations are blamed solely on the iniquities of the credit crunch. The credit crunch has a lot to answer for, for sure, but there were also long years of fiscal laxity before the credit crunch, which must be partly to blame (…for example, all those ruinously expensive PFI contracts that the author correctly skewers). - In a similar move, the author implies in the chapter on Ireland that the special economic zone set up in Dublin (the IFSC) is responsible for the towering debts that Ireland was shackled with after the credit crunch. But that’s a stretch: a bigger contributory factor was surely the property boom and the accompanying debt binge. Here are a final few points, which aren’t criticisms but more suggestions for a future edition: (1) The GDP fallacy: one of the finance sector’s biggest claims – but also one of its greatest vulnerabilities – is the contribution it allegedly makes to the UK’s GDP figures. To put it bluntly, the GDP books have been cooked to make banking and finance appear far more important to our GDP (and thus to our economy) than they in fact are. A quick point should help reinforce this: in 2009, after yet another sympathetic tweaking of GDP methodology, the finance industry’s contribution to GDP went up. It went up in 2009 in the wake of the credit crunch and the worst financial crash since 1929. That’s clearly a nonsense, and one that a book such as this should feast on. (2) The ‘free market’ fallacy: I’ve often wondered why so few people ever make the simple point that the very phrase “free markets” has bamboozled proponents and opponents in equal measure over the years. It’s become equated with deregulation – the confusion lying in the word ‘free’. “Surely ‘free’ means free of regulation?” No. It means freedom of choice for consumers, and freedom for producers to enter the market. We all understand that our political freedom requires a huge body of Law and regulation to maintain. Thus it is with our economic freedom too. Without regulation, you don’t get free markets, you get monopolies (and the law of the jungle). Above all, the Chicago School failed to grasp this simple point – which is probably why they ended up arguing in favour of monopolies and effectively eating their own intellectual tail! (3) Why does no-one ever draw a comparison between the modern financial sector of the 21st Century and British heavy industry (coal mining, ship building, steel works) of the 1970s? To me the parallel is so striking, it’s screaming for attention. Take these two sentences: “A vast, unwieldy sector, dominated by a few colluding fat cats, existing solely with the financial support of the government, generating a certain amount of prestige abroad and a huge amount of cost at home. Ripe for reform, if not outright closure, so that the economy can deploy the talent that is currently locked in unproductive industries to more productive ones.” About which industry am I writing? Shipbuilding of the 1970s? Or the City in the early 21st Century? Exactly. Both. I can’t imagine many people have read this far into this review. If you have, understand this: I’ve engaged this deeply with this book because I love it. If you’ve not read it yet, you simply have to. The depravity that Shaxson finds in so many areas of our financial system can ultimately lead to only one thing: another crash – and probably on a scale to match 1929. If and when it happens, I’m glad we’ll have people around like Shaxson to help us reform the system afterwards – as inevitably we’ll have to.

  10. 5 out of 5

    Sebastian

    A good roundhouse kick on the triple woes of financialisation, deregulation, and tax havens and tax evasions, in good company with (and sometimes liberally repeating) Shaxson's own Treasure Islands, Oliver Bullough's Moneyland, or Rana Foroohars Makers and Takers. What I learned: How big and corrosive tax evasion is. That the deregulation of financial markets and creation of deregulated tax havens in British territories and tax-avoiding trust funds interact and were both actively driven by the Ci A good roundhouse kick on the triple woes of financialisation, deregulation, and tax havens and tax evasions, in good company with (and sometimes liberally repeating) Shaxson's own Treasure Islands, Oliver Bullough's Moneyland, or Rana Foroohars Makers and Takers. What I learned: How big and corrosive tax evasion is. That the deregulation of financial markets and creation of deregulated tax havens in British territories and tax-avoiding trust funds interact and were both actively driven by the City of London, against US resistance. That the political rhetoric of a global competition between nations is economically nonsensical but expedient for national economic incumbents who use it to capture regulators and make national markets *less* competitive for them. The further the book goes on, the more it falls into a more general anti-capitalist critique. The main thesis supposedly holding the book together is the titular "finance curse". The idea is plausible and has merit: Like the "resource curse" of developing nations rich in natural resources, a nation's financial industries can grow to a size where they hurt growth and innovation in other economic sectors and wellbeing across society, as it captures regulators, fosters corruption, and absorbs talent, capital, and effort into its profit- but not value-generating activities. The book even reports an estimate of how much the oversized financial sector of the UK has cost the country, to the tune of several trillions of pounds (as always, assess the numbers and underlying assumptions for yourself). But this nice idea then isn't really developed convincingly as a main thread of the book that necessitates and integrates all its other parts. It's more like a preface to an overall decent collection of chapters.

  11. 5 out of 5

    catinca.ciornei

    The financial sector is inflicting a staggering cost on people - how exactly this happens is what Mr. Shaxson's book aims to explains. The title is a witty assimilation with the "resource curse", when resource-rich countries stop bargaining with their citizens because all the money comes from one or two corrupt places - democracy falls apart, living standards dive, lives are devastated. That could very well be the future. The books is a knowledgeable walkthrough into important economic ideas and The financial sector is inflicting a staggering cost on people - how exactly this happens is what Mr. Shaxson's book aims to explains. The title is a witty assimilation with the "resource curse", when resource-rich countries stop bargaining with their citizens because all the money comes from one or two corrupt places - democracy falls apart, living standards dive, lives are devastated. That could very well be the future. The books is a knowledgeable walkthrough into important economic ideas and instruments, such as: the theories of Veblen, Hayek, neoliberalism (as the source of most evil), the history of the Eurodollar trade in the City of London, fiscal paradises (very interesting info here, Mr. Shaxson has written a whole other insightful book about this), the Third Way & Competitive agenda as political messages corrupting past decades, how Ireland became the "Celtic Tiger" and then went bust in 2008' Great Crisis, Basel rules, how CDO's came to exist, trusts, private equity's history, the City of London's very flimsy regulations, Big Four companies, tax cuts and the impossibility to judge their effectiveness. The book is filled with great information, which I've not read elsewhere; at times it's quite extreme, but it does not aim to be mild - its message is that something is deeply rotten in the City, people should worry and act. I've read it after seeing the good review granted by Mr. Martin Wolf, Financial Times' chief economics commentator, who also included it in his 2018' Best Economics Books list (he also said it's been an exceptional year for economic books, oh the joy!).

  12. 5 out of 5

    Shahiron Sahari

    Reading this just after Tom Holland's Dominion, about the role of Christianity in the making of Western values, the similarities are startling: Left to its own devices, the world would be a really horrible place, with the mighty running roughshod over the weak. Not that it doesn't already happen, but there is at least some resistance and some pretence that things are not so bad. If you've ever wondered why, for example, there is so much wealth inequality around, why monopolies are tolerated so muc Reading this just after Tom Holland's Dominion, about the role of Christianity in the making of Western values, the similarities are startling: Left to its own devices, the world would be a really horrible place, with the mighty running roughshod over the weak. Not that it doesn't already happen, but there is at least some resistance and some pretence that things are not so bad. If you've ever wondered why, for example, there is so much wealth inequality around, why monopolies are tolerated so much more, why public services have been gutted the way they have been, then the "over-financialisation" of modern economies is the answer. Finance serves a very important function but the sector has grown too big in many countries and does more harm than good.

  13. 5 out of 5

    Melinda M

    The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson is about how the global Finance Industry is not helping us but making us poorer If you did not know about the greed in the industry , this is a shocker for you. he shows. The money laundering that goes on it so widespread that it makes you wonder who follows the laws and regulations. Nicholas Shaxson shows the stranglehold that the financial industry has on society. A solution in included which helps deal with all The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson is about how the global Finance Industry is not helping us but making us poorer If you did not know about the greed in the industry , this is a shocker for you. he shows. The money laundering that goes on it so widespread that it makes you wonder who follows the laws and regulations. Nicholas Shaxson shows the stranglehold that the financial industry has on society. A solution in included which helps deal with all the bad. It is an interesting read that gets tough to handle but worthy the time and energy to read. I received a copy thru a Goodreads Giveaway.

  14. 4 out of 5

    S Ravishankar

    Brilliant written book. Thought provoking. The movement from focus on creating wealth to extracting wealth from the economy is described. Financialisation - creating money for owners and rent seekers is in vogue while the underlying economy has stagnated. This is the Finance curse. Resource curse is an example of finance curse. In the UK the finance curse is built on the base economy. The myth of competition is exposed; actually the owners work to secure monopoly. Historically this has been the c Brilliant written book. Thought provoking. The movement from focus on creating wealth to extracting wealth from the economy is described. Financialisation - creating money for owners and rent seekers is in vogue while the underlying economy has stagnated. This is the Finance curse. Resource curse is an example of finance curse. In the UK the finance curse is built on the base economy. The myth of competition is exposed; actually the owners work to secure monopoly. Historically this has been the case. London and how it has become the centre of the financialisation and related tax avoidance schemes and controls tax havens.

  15. 4 out of 5

    Matt_B

    I have never read a book that made me feel so angry. Page after page of outrage, grinding my teeth, ranting at my poor family, and wondering why did I not know about any of this? What's it about? You may look at this book and think it is about economics, tax havens, private equity firms, millionaires, billionaires, monopolies and multinational corporations. Which it is. This may immediately scream 'boring snoozefest' to you, however, it is about much more, about how all those things negatively impa I have never read a book that made me feel so angry. Page after page of outrage, grinding my teeth, ranting at my poor family, and wondering why did I not know about any of this? What's it about? You may look at this book and think it is about economics, tax havens, private equity firms, millionaires, billionaires, monopolies and multinational corporations. Which it is. This may immediately scream 'boring snoozefest' to you, however, it is about much more, about how all those things negatively impact your life. This book is about how you are being cheated, about how your money and taxes are effectively being stolen, and as a result how you, your family, your community and country are all being left poorer. This book is about the 'finance curse', which the author refers to as: “the idea that once a financial sector grows above an optimal size and beyond its useful roles, it begins to harm the country that hosts it. Finance turns away from its traditional role serving society and creating wealth, and towards often more profitable activities to extract wealth from other parts of the economy. It also becomes politically powerful, shaping laws and rules and even society to suit it. The results include lower economic growth, steeper inequality, inefficient markets, damage to public services, worse corruption, the hollowing-out of alternative economic sectors, and widespread damage to democracy and to society.” What is this book not? It is not a door stop. It is not about socialism. It's not about the traditional left versus right in politics, or over simplified arguments about high tax versus low tax. It's about having an economy that works for everyone, not just the rich. Who is it for? Everyone, although it seems to be written more for the UK audience, it is relevant to any country where the 'finance curse' is in action. The book is relevant for everyone as the ideas, ideology, politics and economics behind it are everywhere. It should be taken as a warning of how not to run an economy. You don't need a background in economics or to be any good with numbers (I am definitely not) to understand this book. It can get technical and there are too many abbreviations to remember BUT the outrage will keep you going. I am serious about how this book made me feel and I would recommend you do not read it before bed, because anger does not generally help you get to sleep. If you are an economics student you should definitely read this, as it gives a powerful, well evidenced critique of the mainstream school of thought being taught at present, i.e. neo-liberalism. What does the book cover? The book will take you step by step through the history of the finance curse, how it developed and why it is still so powerful today, despite its clear detrimental impacts to all of us. It will tell you how the rich avoid taxes, explaining: tax havens, charitable trust and regulatory loop holes. The book also explains how the media, politicians, regulators, academia and the evidence they cherry pick are all twisted to keep the status quo. There are in depth case studies, such as the growth and crash of the Irish economy, that clearly demonstrate how false current economic myths are. The myths the book tackles and proves false include: lower taxes are good for the economy, higher taxes will scare big business away, de-regulating markets is good for economic growth, and there are no negative impacts from lowering taxes (Clue: it definitely looks that way if you only look at one side of the story and refuse to measure the negative impacts). This is an incredibly well researched book, 79 pages of notes and references at the end, with lots of evidence to back up its claims, and quotes and stories to keep it engaging. The author also keeps it engaging by pointing the reader back to the negative impacts on daily life, from housing prices to train ticket prices. As such there is a good balance between the abstract and impersonal, tax havens, with the deeply personal, the levels of care given to older people in their homes. Why should I read it? The 'finance curse' impacts every aspect of our lives and this book has so many answers to so many things we should all worry about. If you worry about the level of care your Gran gets from her home visiting carers – you should read this book. If you work as a carer and worry about why you are being asked to visit more and more people in less time, for less pay – you should read this book. If you wonder about all the shops closing in your town centre and why Amazon does not pay tax – you should read this book. If you worry about the rising numbers of food banks, of the rising numbers of working people using food banks – you should read this book. If you are interested in why Brexit happened and why Trump was elected – you should read this book. If you ever wonder why, as UK tax payers, we are paying for the mistakes made by the finance sector – you should read this book. If you ever wonder why no bankers or anyone from the finance sector went to jail, at least in the UK, after the last financial crash – you should read this book. If you care about inequality, poverty, workers rights, global development – you should read this book. If you are concerned about corruption in markets, corruption in politics and cross border organised crime – you should read this book. If you care about national security, democracy, sovereignty, foreign influence on government – you should read this book.

  16. 5 out of 5

    Matt_B

    I have never read a book that made me feel so angry. Page after page of outrage, grinding my teeth, ranting at my poor family, and wondering why did I not know about any of this? What's it about? You may look at this book and think it is about economics, tax havens, private equity firms, millionaires, billionaires, monopolies and multinational corporations. Which it is. This may immediately scream 'boring snoozefest' to you, however, it is about much more, about how all those things negatively impa I have never read a book that made me feel so angry. Page after page of outrage, grinding my teeth, ranting at my poor family, and wondering why did I not know about any of this? What's it about? You may look at this book and think it is about economics, tax havens, private equity firms, millionaires, billionaires, monopolies and multinational corporations. Which it is. This may immediately scream 'boring snoozefest' to you, however, it is about much more, about how all those things negatively impact your life. This book is about how you are being cheated, about how your money and taxes are effectively being stolen, and as a result how you, your family, your community and country are all being left poorer. This book is about the 'finance curse', which the author refers to as: “the idea that once a financial sector grows above an optimal size and beyond its useful roles, it begins to harm the country that hosts it. Finance turns away from its traditional role serving society and creating wealth, and towards often more profitable activities to extract wealth from other parts of the economy. It also becomes politically powerful, shaping laws and rules and even society to suit it. The results include lower economic growth, steeper inequality, inefficient markets, damage to public services, worse corruption, the hollowing-out of alternative economic sectors, and widespread damage to democracy and to society.” What is this book not? It is not a door stop. It is not about socialism. It's not about the traditional left versus right in politics, or over simplified arguments about high tax versus low tax. It's about having an economy that works for everyone, not just the rich. Who is it for? Everyone, although it seems to be written more for the UK audience, it is relevant to any country where the 'finance curse' is in action. The book is relevant for everyone as the ideas, ideology, politics and economics behind it are everywhere. It should be taken as a warning of how not to run an economy. You don't need a background in economics or to be any good with numbers (I am definitely not) to understand this book. It can get technical and there are too many abbreviations to remember BUT the outrage will keep you going. I am serious about how this book made me feel and I would recommend you do not read it before bed, because anger does not generally help you get to sleep. If you are an economics student you should definitely read this, as it gives a powerful, well evidenced critique of the mainstream school of thought being taught at present, i.e. neo-liberalism. What does the book cover? The book will take you step by step through the history of the finance curse, how it developed and why it is still so powerful today, despite its clear detrimental impacts to all of us. It will tell you how the rich avoid taxes, explaining: tax havens, charitable trust and regulatory loop holes. The book also explains how the media, politicians, regulators, academia and the evidence they cherry pick are all twisted to keep the status quo. There are in depth case studies, such as the growth and crash of the Irish economy, that clearly demonstrate how false current economic myths are. The myths the book tackles and proves false include: lower taxes are good for the economy, higher taxes will scare big business away, de-regulating markets is good for economic growth, and there are no negative impacts from lowering taxes (Clue: it definitely looks that way if you only look at one side of the story and refuse to measure the negative impacts). This is an incredibly well researched book, 79 pages of notes and references at the end, with lots of evidence to back up its claims, and quotes and stories to keep it engaging. The author also keeps it engaging by pointing the reader back to the negative impacts on daily life, from housing prices to train ticket prices. As such there is a good balance between the abstract and impersonal, tax havens, with the deeply personal, the levels of care given to older people in their homes. Why should I read it? The 'finance curse' impacts every aspect of our lives and this book has so many answers to so many things we should all worry about. If you worry about the level of care your Gran gets from her home visiting carers – you should read this book. If you work as a carer and worry about why you are being asked to visit more and more people in less time, for less pay – you should read this book. If you wonder about all the shops closing in your town centre and why Amazon does not pay tax – you should read this book. If you worry about the rising numbers of food banks, of the rising numbers of working people using food banks – you should read this book. If you are interested in why Brexit happened and why Trump was elected – you should read this book. If you ever wonder why, as UK tax payers, we are paying for the mistakes made by the finance sector – you should read this book. If you ever wonder why no bankers or anyone from the finance sector went to jail, at least in the UK, after the last financial crash – you should read this book. If you care about inequality, poverty, workers rights, global development – you should read this book. If you are concerned about corruption in markets, corruption in politics and cross border organised crime – you should read this book. If you care about national security, democracy, sovereignty, foreign influence on government – you should read this book.

  17. 4 out of 5

    John Fries

    As you read this book, remember there is hope that we can take back America's (and Great Britain's) future from the forces of monopoly, financialization, tax havens, global oligarchic thievery, private "equity", hedge funds, and all the other elements of shadow banking that are extracting the wealth of the country. But to take our country's future back from these powerful, moneyed, and entrenched interests, you need to know what they have done and how they did it. So gird yourself, get brave, and As you read this book, remember there is hope that we can take back America's (and Great Britain's) future from the forces of monopoly, financialization, tax havens, global oligarchic thievery, private "equity", hedge funds, and all the other elements of shadow banking that are extracting the wealth of the country. But to take our country's future back from these powerful, moneyed, and entrenched interests, you need to know what they have done and how they did it. So gird yourself, get brave, and read this book. I am grateful for Nicholas Shaxson's having written this. Fine work.

  18. 4 out of 5

    B

    The book was a natural choice for me as I’m currently reading 2 other books on the same topic (Sabotage and Goliath) 😊 The premise of the book is simple and based on an almost-universally accepted idea: that the over-financialization (i.e. not just the growth in size of the financial sector but also the injection fo financial techniques into many other sectors) in some of the western economies has a deleterious effect on the rest of economic sectors. The concepts touched on the book include brain The book was a natural choice for me as I’m currently reading 2 other books on the same topic (Sabotage and Goliath) 😊 The premise of the book is simple and based on an almost-universally accepted idea: that the over-financialization (i.e. not just the growth in size of the financial sector but also the injection fo financial techniques into many other sectors) in some of the western economies has a deleterious effect on the rest of economic sectors. The concepts touched on the book include brain drain, big business push in creating skewed business-friendly “competitive” taxation environments by coaxing governments to create “national champions”, proliferation of various tax havens, creation of an increasingly debt-dependent economy, inequality, transfer pricing mechanism etc. As could be expected from any serious author, Shaxson builds a healthy argument touching on all of these points with thorough research (Just take a look at the notes section!) I very much enjoyed reading and learning about the tax havens; various trust schemes; the “Irish miracle;” and the predatory turn capitalism took with the rise of ‘private equity’ companies, shedding its “social function” (as per Peter Drucker) – and in particular, Shaxson’s analysis of Veblen’s valiant efforts in dismantling neo-liberal economic ideas with his expose on big capitalists’ genuine disgust of competition. The only flaw of the book is the relative lack of detail and explanation around the more complicated issues such as how trusts work, and the somewhat virulent/populist tone Shaxson adopted. Otherwise, a solid work.

  19. 5 out of 5

    Abdullah Elshamy

    This is an eye opener. A detailed yet to the point guide of how the financial world is works and how we have got to this point of poverty and recess. It also lets you know that taxes are not the same for everyone and that the richer don’t really “suffer”. It’s all a well maintained and played game of connections and politicians working for the bankers not the masses.

  20. 4 out of 5

    Sanjar Kairosh

    Mind-Blowing in its detail.

  21. 4 out of 5

    Mike

    Not bad. Fits nicely on the shelf of other books written in the past few years about the over financialization of economies and a real takedown of tax havens and private equity funds.

  22. 4 out of 5

    Ian Thomson

    They should teach this in schools. 👍

  23. 5 out of 5

    Jacktastic

    Great OVERVIEW of all the probs. Very correct about the failure of economics. Not in-depth though. And very much an agenda piece. But that’s not bad.

  24. 4 out of 5

    Michael Adams

    Excellent book and I could take the next year to absorb all the material This book should be used as a course in economics. This is a very detailed review of the myriad ways the finance industry is undermining democracy, good government, and the economy. Shocking how the uncontrolled greed of the heads of corporate banking, stock markets and the global financial industry are stealing the wealth and future of all. Highly recommended.

  25. 5 out of 5

    Jeff Kaye

    Nicholas Shaxson wrote Treasure Islands in 2011, a book that was critical in the campaigns against tax havens. The Finance Curse has been seven years in the waiting, but its wider theme is well worth that wait. Capitalism has succeeded since the industrial revolution in England in the late eighteenth century in establishing wealth (at least in the lower levels of Maslow's hierarchy) that has freed the majority of the world's population from poverty and slavery. Yet, as the growth in our wealth ( Nicholas Shaxson wrote Treasure Islands in 2011, a book that was critical in the campaigns against tax havens. The Finance Curse has been seven years in the waiting, but its wider theme is well worth that wait. Capitalism has succeeded since the industrial revolution in England in the late eighteenth century in establishing wealth (at least in the lower levels of Maslow's hierarchy) that has freed the majority of the world's population from poverty and slavery. Yet, as the growth in our wealth (at least the goods and services that money can buy) continues, the twentieth century saw the development of capitalism away from the provision of satisfying customers (the people that actually make up the marketplace for goods and services) to a 'financialisation' of the marketplace that worships only financial returns, no matter how it is made. This is the essence of The Finance Curse and Nicholas Shaxson lays out how the many snakes that emanate from the head of the financialisation Medusa have led us to a world of gross inequality, tax evasion, secrecy and corruption. Neoliberalism, the form of faux-economics that sprung up with those like Milton Freedman (exactly the form of economics that I was taught at university by the likes of Laidler and Parkin back in the 1970's) assumed that the market and its pricing mechanisms was always correct and that Government intervention was an anathema. The days of Galbraith's 'Social Balance' were numbered as anything that government did was bound to result in negative consequences. This led to the Tea Party in the USA and to austerity in Europe (and the UK in particular) within a world dominated by banking that, despite the crash of 2007/8, continues. Bankers were salvaged while the rest of the population has been allowed to drown in their wake. The political class, which Shaxson shows to good effect as crossing the boundaries of Blair and Brown's Labour as well as Cameron's Tories, was mesmerised by the idyll, misunderstanding the impact of the bankers' mantra so that quantity (as in shareholder value) overturned any concept of quality or service. I was unfortunate enough to see how that worked in business when, as an MD in part of GEC-Marconi (nurtured by Arnie Weinstock to be at the forefront of British design and manufacturing) was wrecked by Lord Simpson and John Mayo on the altar of shareholder value as £11bn of value was wiped away in sales to Bae and Marconi's name was besmirched by grotesque over-buying of bankrupt US data communications companies. I never heard the word customer mentioned in those days, but the numbers of graphs showing shareholder return hypnotised the Board until the business went bust. I had fortunately left some time before. Whether the tax havens run out of London, via the Spider's Web of overseas territories and Crown Dependencies, or the idiocy of Irish banking, the torment of private equity (the 21st Century's remake of asset strippers) or whatever form of financialisation descends upon the common man and woman, the belief that numbers are all that counts is destroying business, destroying economies (still caught up in a belief that the outmoded concept of GDP is the only measure that counts) and destroying markets through the impoverishment of the buyer and, if the buyer cannot afford to buy, then the seller becomes of no importance. The wide variety of financialised economic fissures is well described by Shaxson along with numerous anecdotes that show the reality behind the general theme. It is a book easy to read but troubling to consider. Those like the Tax Justice Network (in which Shaxson has been involved) are campaigning to right the wrongs of an economic system (at micro and macro level) in need of serious reform along with the accountants, managers, bankers, Board members, governments and those of the top 0.1% that profit in the short-term from this mess. If this book adds to the numbers rightfully agitating for an end to this numbers game, as I believe it should, then we might begin to see the re-emergence of an economics system that aims to serve the general population and an end to pure shareholder additives that place the price of everything (even in the environment with its focus on natural capital) above the value of anything.

  26. 4 out of 5

    Medal4

    First things first: I got this book as a download version from the tax justice network some weeks ago. It was stated as final version, still there are some writing mistakes which usually do not appear in real published versions (such as referring to "the above/mentioned article" when, in fact, there was never an article mentioned anywhere above.) After his first 2 books, Nicholas Shaxson grouped up with John Christensen to publish his first 'real' Scientific Research'. Therein lies the biggest dif First things first: I got this book as a download version from the tax justice network some weeks ago. It was stated as final version, still there are some writing mistakes which usually do not appear in real published versions (such as referring to "the above/mentioned article" when, in fact, there was never an article mentioned anywhere above.) After his first 2 books, Nicholas Shaxson grouped up with John Christensen to publish his first 'real' Scientific Research'. Therein lies the biggest difference compared to his previous work. In Treasure Islands, besides his brilliant & well-grounded research, I valued his excellent writing style a lot. You will still find excellent research (especially the variety of different references get a bonus star from me), however, the writing style gets closer to a scientific publication. I don't consider that a minus point, but you should be aware of that before getting your own copy with wrong expectations. The Finance course comes along with a lot of graphs and tables proving the argument. Shaxsons weakness lies in not having an economic background education. He clearly has deep hands on experience from his previous works, which is far more knowledge valuable than the one from a lot of 'real' economists. However, for a publication like The Finance Curse, some term knowledge would be really helpful. For instance is he talking about the difference of commercial & investment banking. Those are 2 basic terms in economics, still it seems as he doesn't know them as he is explaining these terms in a rather strange way and naming them in an even stranger way. Second, when reading The Finance Curse the reader can easily predict the way this research will go. At the beginning the authors write that they want to identify if there is such a phenomenon as a finance curse. However, after the introduction you can see that the agenda goes towards: 'there is an finance curse and we will prove it to you.' These 2 issues can not conceal that The Finance Curse is a good & well documented research about a very important issue. I regard The Finance Curse more as a concept paper, opening up a new new and interesting issue which needs to be deepend and extended by other researchers or economists, or by the authors themselves. And therefore it clearly does its job.

  27. 5 out of 5

    Kate McGhee

    Eye-opening book about the shadowy world of tax havens, avoidance, financialisation and hollowing out of the economy and the long-term complicity in government policy. Unfortunately explains a lot about where we now find ourselves in the UK and other countries and the unequal conditions we now live under. I found the concluding chapter a little rushed and too hysterical in tone to offer significant hope or solutions. However, the analysis and diagnoses in the preceding chapters, which cover decad Eye-opening book about the shadowy world of tax havens, avoidance, financialisation and hollowing out of the economy and the long-term complicity in government policy. Unfortunately explains a lot about where we now find ourselves in the UK and other countries and the unequal conditions we now live under. I found the concluding chapter a little rushed and too hysterical in tone to offer significant hope or solutions. However, the analysis and diagnoses in the preceding chapters, which cover decades of economic manipulation and build-up of vested interest, make a very compelling, if saddening, read.

  28. 5 out of 5

    Miguel

    The Finance Curse is excellent throughout: it touches on a number of different topics related to financialization in our economy and makes the very basic but very astute case that higher flows of net wealth and financialization of a region or economy will tend to have negative repercussions. I’ve never come across a better source that describes as Shaxon does in plain English how pernicious and toxic many Trusts are and what this has to do with Sioux Falls – it is really fascinating stuff. Equal The Finance Curse is excellent throughout: it touches on a number of different topics related to financialization in our economy and makes the very basic but very astute case that higher flows of net wealth and financialization of a region or economy will tend to have negative repercussions. I’ve never come across a better source that describes as Shaxon does in plain English how pernicious and toxic many Trusts are and what this has to do with Sioux Falls – it is really fascinating stuff. Equally great are the chapters on the Irish economy and Big Ag. Overall powerful stuff.

  29. 5 out of 5

    Ken MacIntyre

    Explaining the dominance of finance If you want to understand why the UK's state pension is amongst the lowest in developed countries or why Germany has four times as many critical care beds per head of population, Nicholas Shaxson provides the evidence in rich but accessible detail. Explaining the dominance of finance If you want to understand why the UK's state pension is amongst the lowest in developed countries or why Germany has four times as many critical care beds per head of population, Nicholas Shaxson provides the evidence in rich but accessible detail.

  30. 5 out of 5

    Igor Kanunnikov

    Very important message, about a topic that pops up every now and then, but somehow no one really cares. The author sheds light on the unfairness and illegitimacy (not illegality) of tax evasion, by people and corporations who can afford cunning lawyers and professionals who can dig the loopholes for them and to what extent the city of London and also whole states are involved in this and benefit from it. Another instrument of wealth extraction, how it is rightfully called in the book, is the min Very important message, about a topic that pops up every now and then, but somehow no one really cares. The author sheds light on the unfairness and illegitimacy (not illegality) of tax evasion, by people and corporations who can afford cunning lawyers and professionals who can dig the loopholes for them and to what extent the city of London and also whole states are involved in this and benefit from it. Another instrument of wealth extraction, how it is rightfully called in the book, is the mindless leveraging by the banking and private equity sector, that leads to reckless behavior and huge losses that are then socialised. The whole financial sector grew too big, behind it's economic purpose of the facilitation of wealth creation through the possibility of financing and investment, to the easiest way to boost earnings, leverage. And that leads to the point I missed in the book, that this is only possible because of the fractional reserve banking system and fiat money creation, which is nowhere mentioned. Minus one star for the slightly populist general resentment against "the rich" and blind faith in the solution of more government and regulations, never specifying how exactly this has to look like.

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