Do the people who work in the City of London add value?

The City of London claims it is the powerhouse of the UK economy. Rachel Reeves has called it our ‘Jewel in the Crown’. But actually, it’s much more like a parasite, extracting value from the rest of the economy to for the advantage of a few at cost to most in this country.

#uk #money #economy #politics #government #tax #labour #starmer #keirstarmer #old #health #life #finance #london

ABOUT RICHARD MURPHY
Richard Murphy is Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best known book is ‘The Joy of Tax’.

This video was edited by Thomas Murphy.

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[bluepeter]

We live in a post industrial dystopia where one is paid in inverse proportion to our utility to society.

[panicbutton]

From what I hear, most science, maths and engineering PhDs are being sucked into the financial sector as quants. It's not just that the salaries are eyewatering, but that there are so few other opportunities and academia sucks. We desperately need these people's skills to address real problems; instead their minds are entirely occupied making the rich richer

[murunbuch]

One word: Fees. The people in the City of London move money from A to B to C then back to A for no reason. Every time they move the money they charge a fee. Practically none of their investment strategies beats just putting the money in tracker funds and leaving it alone. But you can't blame intelligent young people from wanting to work in The City, when being a hard-working productive member of society is no longer enough to put a roof over your head.

[cobbler]

We all know what happens when they get too greedy. The system collapses and we bail them out to the tune of £897 billion.

[paulperry]

As someone who left the financial industry (share analyst) in 1972, I couldn't agree more. I still feel that a major driving force behind Brexit was a fear of the London City based dodgy tax avoidance schemes would be closed down by the EU. Most of the "work" is expended on zero-sum trading games, artificial avoidance schemes, and chiseling undeserved fees from pension funds.

[bhasb]

The late great Davin Graeber wrote a book called Bullsh!t jobs. He asked "if you stopped doing your job, how long before people noticed?"
I suspect it'd be a very long time before we noticed people in the city stopped working.

[kmac]

Back in th 90's I was on the edge of this as an IT bod in a UK Bank.. The trading floor room terrified me because even then it was obvious it was a house of cards built on a shell game maintained by the arrogance and self confidence of the traders.. Then in 2008 the music stopped... for a while..

[DragonWorksOfficial]

I guess that's how other nations felt during the British Empire days providing back-breaking labor and getting their resources stripped for the sole benefit of an island far, far away. Now it's the island that gets exploited for the sake of a more metaphorical island, far, far away, in the center of London. History doesn't repeat itself, but sometimes it poetically rhymes.

[beggarslexicon]

The problem, in my opinion, is that when people make money but do not produce anything, then there is a fundamental imbalance in the society's economy. In a healthy society, people make money by providing goods or services of equal value to the society or earn wages in return for labour or services provided. This is a natural balance. When they make money without providing anything of value in return, then they are, as you stated, a parasite.

[SimonWallwork]

They are like fleas on a dog- and we are the dog.

[Chemdawg]

Another great video, Professor! Much love from Canada 🇨🇦

[SarahBaker-qk]

"Parasite" is the correct term. And it applies to ALL banks and financial services.

[gordonholding]

Spot on, well done. I wish more people would listen to you.

[Barbarossa_]

Lots of things have got lost over the past 50 years.

My father worked in the city in the 1970s and early 80s. He worked for company that was a member of the Corn Exchange. The company that he worked for dealt in grass seed, so when Wimbledon, Lords, Upton Park, or the Highways Agency (for the M11, M25 embankments) needed grass seed, they would come to this company.

At this time, the City, it made complete sense (way before the internet). The seed would usually be grown in Canada, or New Zealand, and the crop would need financing ('futures' on the Corn Exchange), it would need shipping - the Baltic Exchange (shipping) was a few streets away, so space could be bought on a ship that was doing that route at that time. It would need to be insured - so Lloyds was close by to get the insurance. It all made sense back then and was genuinely useful.

Maybe there are tiny parts of The City that are genuinely useful. Probably not much though...

[dorcusmallorcus]

Brilliant. Thank goodness someone so qualified is saying this out loud.

[RichardBergson]

There will always be people for whom making money is more important than any negative consequences of doing so for others. This is embodied in the narrow view of competition - I win, you lose, bad luck (sucker!). The trick is to keep this section in the minority and align the majority of profit-making with activities that add value to society. Unfortunately, the financialisation of markets set the trend for this parasitic mode of profit making which has been taken up by big internet businesses such as Amazon and Youtube as well as individuals in the form of 'influencers' who all make a profit without producing anything and acquire in their sphere vast amounts of power.
Power and money are a very old combination.

[lancefenton]

Here in Australian we call it the rise of middle management they do not add to a countrys productivity they just push paper around and help government to stay at arms length

[JaneAustenAteMyCat]

The City is the Mecca of capitalism. Fascinating video. I have learnt so much from you in the week since I've discovered your videos! My dad worked in the City when I was a child. He even worked in the Lloyds building for a little while. He actually worked in research, so not quite one of the parasites (he always said he didn't have the personality for it, which is very telling). One thing he used to say was that the vast majority of the people he worked with were from wealthy families. It was not really a case of talent and skill as much as your background and who you know. That can't be good for anyone.

[patrickbarrett]

Archaeologists considered an address on ‘London Wall’ as a matter of status. Many firms like to quote ‘with offices in New York, London and Paris’ they are probably Shell Companies with shell addresses.

[MsSpiffz]

I see the City as being the Wealthy's Betting Shop. Where the working class have always been looked down upon for betting on, say, dog-racing, the Wealthy put a lot of their wealth into betting on money itself.