At school, I grew up learning in Ekonomi Asas that a mixed economy (free market but with government interference) was the best balance between a capitalist and planned economic system.
Back to Econs 101: An economic system is the combination of a method of allocation of resources (market vs. command) and the ownership of resources (private vs. public). Private = capitalism; public = socialism. (Yes i had to google this up).
Now that I know what i know now (wait… that was a mouthful), I believe this may indeed be true. Perhaps the reason why I’m having increased doubts about my future in finance is because of the increasing lack of humanity in it. Some headlines from today alone:
- America’s richest get richer, study shows While the incomes of 90% of Americans have remained stagnant, the very richest people in the U.S. are piling up a larger share of the nation’s wealth than ever before, research shows. About half of the nation’s wealth in 2009 was held by the 10% wealthiest Americans. Those who make $2 million or more a year, accounting for 0.1% of the population, control 10% of the U.S. economy.
- Public employees are paid less than private counterparts The argument that U.S. government workers are overpaid compared with their private-sector counterparts is false, according to The Economist. The Economic Policy Institute found that public employees make less money but get better benefits, notably for retirement. But many of pension benefits that were promised to government workers will never be paid because states won’t have the money.
- Bank bonuses are “verging on crime,” IMF’s Strauss-Kahn says The bonuses banks are paying are “scandalous,” said Dominique Strauss-Kahn, managing director of the International Monetary Fund. “Let me say this clearly, the types of remuneration in the financial system are verging on crime,” he said. Strauss-Kahn said banks have returned to their pre-crisis behavior.
- G-20 struggles to agree on how to prevent another crisis The Group of 20 nations are struggling to reach a consensus on how to move forward to prevent another financial crisis, as economies recover at different paces. Emerging economies, including China, are rapidly expanding, while Europe, Japan and, to a lesser extent, the U.S., are recovering more slowly.
This indeed encapsulates all that I feel is wrong with the financial sector, day by day. Yesterday i finished rereading ‘What i learned at Harvard Business School’ by Phillip Broughton. And I agreed with almost everything that he said in his last chapter (added after the GFC). Indeed, not all of us failed to realise the impending GFC. Business leaders, regulators and governments did.
And seeing all the protests in the Middle East brought about by repressive regimes and dictators supported by the West, I feel sad but optimistic about the future. It could be a sign that I’m supposed to follow my heart in deciding the change of direction in my career. Borrowing from my son’s beloved Old Puffer Pete from the Chuggington series, “Little by little”.