Want to reform finance but maintain capitalism? Then you may have a problem.I have seen many critics of capitalism, most notably Michael Hudson, focus exclusively on the finance sector and its need for drastic reforms in order to make capitalism function smoothly. In this book Norfield examines the City of London, which is one of two major capitalist financial centers of the world, to conclude that "finance is unreformable because it is an essential feature of capitalism".
Haines-Doran in this review writes:
...all too often these arguments take on a reformist hue, suggesting that if only we could moderate the excesses of the financial sector then the type of collapse that the banking system went through in 2008, and the social disaster known as ‘austerity’ that followed, could in future be averted, leaving a nicer and crisis-free form of capitalism. Accompanying these analyses have been feeble attempts by international institutions and national governments to introduce financial regulation.This insight is precisely why Hudson is allowed so frequently to write and talk about the destructive role that finance (also insurance and real estate) is playing in today's economies. By limiting his critique to finance (I grant that he has shed much light on its corrosive influence), he is ultimately heading toward a dead-end. Hudson is leading people nowhere that threatens our ruling class's beloved system of capitalism. If his critiques did threaten their system, he would no longer have his job at the University of Missouri.
With great skill, Norfield demonstrates that the financial sector is unreformable.