great wealth, the destruction of

Newsweek’s Fareed Zakaria writes:

The financial industry itself is likely to shrink, and that’s not a bad thing, either. It has ballooned dramatically in size. Curry points out that “30 percent of S&P 500 profits last year were earned by financial firms, and U.S. consumers were spending $800 billion more than they earned every year. As a result, most of our top math Ph.D.s were being pulled into nonproductive financial engineering instead of biotech research and fuel technology. Capital expenditures went into retail construction instead of critical infrastructure.” The crisis will stop the misallocation of human and financial resources and redirect them in more-productive ways. If some of the smart people now on Wall Street end up building better models of energy usage and efficiency, that would be a net gain for the economy.

And I’m thinking quants – quantitative analysts – where did that come from? Then I remembered this short story from Technology Review from about a year ago:

This summer, as a meltdown in the subprime credit market spilled over into other markets, all eyes were on the mathematically trained financial engineers known as “quants.”

It’s stuck behind a paywall (we actually have one of these quaint, old thingies: a subscription), but the writer lays out, unintentionally I think, a pretty bleak picture of what these people described by Zakaria were up to, what pulled them into it and… kind of how the bathroom we all just woke up in was initially plumbed and wall-papered. It’s a dystopian existence all the way around, predicated on mere and seemingly harmless greed, infinite consumption and numbers… real and imagined.

So, we say green is used as slang for money, but we need to unpack that a little. Wealth should stand for much more than financial holdings. There is a wealth of highly educated people, or at least people with access to higher education, who simply want to see the money. And this is only some of the wealth we’re squandering; political ideologies program people, who in turn have little people whom they program. By programming these people only to look out for themselves, to move in for the kill as a career move, we’re cutting corners on key ingredients to democracy and civil, functioning society, green or otherwise. When we, through language, teach them to see their fellow citizens only as consumers, we’re making our own beds.

And if you think this sounds Socialist, listen to Soros say it.

Oh, and along these lines major props to Krugman today. Congratulations.