Parasites get lost!
Posted by Dave Bath on 2008-10-08
There are similarities between the relationship of microorganisms to hosts and the relationship of economic sectors to the body politic.
The degree of benefit/harm to one party is describable on the spectrum of:
Just as the relationship between bacteria and a human host can change over time (either with evolution of both species, or changes to the balance of different species within an individual host), different sectors can change from being beneficial to the host society, through merely commensal, to frank pathology.
The evolution of the financial system, from standard capitalism where risks are clear and reflect potential profits and losses and moving capital to where it is more productive, to the current state best described as pathological, mirrors the changing relationship between a tolerable population of a bug (such as Candida albicans) when it forms a small proportion of the total microbiological count, and the pathology of candidiasis that often occurs when the balance of different microbes is upset, such as after other microbes are killed by antibiotics affecting only prokaryotes.
If my memory is correct, data in The Economist suggests that in this analogy, the financial services industry has shifted from a mutualistic symbiote to a parasite of the body politic.
In the 1980’s, the profits from the US financial services sector made up only 10% of total US corporate profits. By the time the you-know-what started hitting the fan, this had increased to 40%.
So, the value proposition to society of the financial services sector has definitely altered with respect to productive economic activity. In the 1980s, at 10%, it was possible to argue that this sector was, at worst (unless you take my self-identified socialist position), commensal. Most pro-capitalists would support the proposition that 10% "cream off the top" is acceptable for a sector that makes other (productive) sectors more efficient.
But with 40%, and with patently disastrous effects on the real economy that satisfies human needs (even the affluenza-related desire for bigger plasma TVs), it is clear that the financial services industry is a significant, if not the most significant, parasite of the body politic. Consider too that the indirect benefit to society from taxation of those profits is probably much smaller than for other sectors, given the ability of the financial services sector to engineer artificial constructs and exploit tax loopholes.
When a commensal becomes a pathogen by dominating the microbial ecosystem in the body, and we fix the problem by reseeding a gut with "good bacteria" (e.g. L. acidophilus in probiotic yoghurts), or limit the growth of candida with antimycotics, it’s time to ensure that the financial services sector is constrained enough to allow the real economy ("good sectors") to dominate.
Little lefty old me would go further – it’s time to vaccinate!