From the Roosevelt Institute in the United States, a long report that seeks to generate an overall estimate of costs to the US economy of the financial sector, over and above the benefits that the finance sector provides:
“What has the flawed financial system cost the U.S. economy? How much have American families, taxpayers, and businesses been “overcharged” as a result of these questionable financial activities?
After some detailed work, an answer is in:
“In this report, we estimate these costs by analyzing three components: (1) rents, or excess profits; (2) misallocation costs, or the price of diverting resources away from non-financial activities; and (3) crisis costs, meaning the cost of the 2008 financial crisis. Adding these together, we estimate that the financial system will impose an excess cost of as much as $22.7 trillion between 1990 and 2023, making finance in its current form a net drag on the American economy.”
There’s a long article in The Guardian from 2014 by four academics, Ewald Engelen, Sukhdev Johal, Angelo Salento and Karel Williams, entitled How to Build a Fairer City. The purpose of this blog is not so much to dissect this article in detail, but to point to it. Because it’s important for our competitiveness investigations. Its introduction is framed like this:
“The central argument is that we can move towards a fairer city by reframing our problems and rethinking our solutions in two ways:
1. Break with the dominant old problem of the competitive city, which competes economically against other cities and sponsors internal competition for limited opportunities.
2. Stop fixating on redistributive policies which will not deliver fairness, and start thinking about reorganising policies which build a grounded economy in the areas which are not exposed to competition.
The global obsession of our age is competing everywhere with everyone for everything. In the mainstream imaginary, every city has to chase competitive success in a league table where it secures prosperity by getting ahead of others.”