Is there a 'Finance curse' similar to the 'Resource curse'?

Yes, according to this well produced booklet which, however, signally fails to address the elephant in the room- in this context, the fact that things like petrol are nothing like financial services because

1) optimal depletion theory has no relevance to services. You can't 'just leave it in the ground'. Either you develop it or you condemn yourself to importing it or doing without it- in which case the rest of the economy suffers.

2) Commodities are not like services. The former but not the latter are inelastic in supply and demand, subject to random shocks,  and arise from natural as opposed to acquired or comparative advantage. They can't be geographically relocated. A British manufacturer can shift operations to China, Nigerian oil can only be got from Nigeria. Price volatility is going to be greater in Commodities because of random supply shocks including technological ones e.g. fracking. Demand, too, may collapse because of a change in technology.

Finance is much more plastic and sees profit volatility arising from cyclical processes which are not random- thus there should be and has been till recently 'a great moderation' in this respect- i.e. by its nature Financial volatility can be tamed whereas commodities are always going to be risky.

3) Physical control of a resource rich piece of ground permits the capture of the economic rent. True, unless the infrastructure is maintained, that economic rent diminishes, still it potentially exists and so the cost of rent contestation is going to be high. In practice this means a higher recurring cost of securing possession. In the case of Finance, the ability to implement Capital controls is crucial in order to capture Economic rent. That can't be done just by 'boots on the ground' or 'occupy Wall street'. Indeed, the rent to Finance disappears if one adopts the sort of  dirigiste regime in which Capital Controls become optimal. India and Pakistan went in for Bank nationalization. Did they capture any rents? No. The rents disappeared along with dynamism in the economy. The Seventies were a wasted decade Economically for both countries. 

The authors fail to show that the Resource Curse is a good analogy for what is wrong with Finance through no fault of their own. The thing can't be done.

Their arguments about Finance also misfire because of their reliance on arguments from crowding out and rent seeking theory.

Crowding out arguments fail because

1) Jobs in finance aren't a perfect substitute for other vocations. I want to teach kids. I can't do that in Finance. Yes, some 'rocket scientists' get jobs in Finance. They were second rate to start with. An Einstein or Von Neumann doesn't go into Finance. He may do a spot of consultancy, but that's the end of it. Finance is as boring as shit. Everybody knows this. Better a second-rater goes into Banking than the local Bureaucracy.

2) Financial services may MISALLOCATE resources, e.g. investing too little in domestic manufacturing and too much in colonial plantations- but that isn't crowding out. Competition within the Financial sector ought to redress the misallocation, if it doesn't that's MARKET FAILURE not Crowding out.

3) Financial Services have a preference for high density geographical concentration- they don't physically crowd out more productive activities e.g. manufacturing or mining or agriculture. It is ridiculous to suggest it. Wealth generated by Financial Services may lead to higher house prices, fancy restaurants etc and that can feel like crowding out, but any type of Wealth is going to do the same thing. It is isn't a Finance specific problem.

Now for the author's arguments from rent-seeking. They themselves admit that Finance prefers countries with good Law and Order and a fiscally responsible Govt. If we are likely to elect a Chavez like nut-job determined to squeeze Finance, nothing will be there for him to squeeze except his own cronies' rent.

The problem with the author's thesis is that we already have

1) an independent Judiciary perfectly willing to send not just financial criminals but also corrupt politicians to jail. 

2) a parliamentary democracy whereby we can kick out corrupt or stupid politicians

3) a regulatory mechanism which could, and in my view should, ensure that, absent quality innovation, oligopolistic Finance takes a declining share of National Income.

In conclusion, though this is a well-written booklet and my sympathies are entirely on the side of the authors, still the arguments presented are silly. As for their policy recommendations- they are a catastrophe waiting to happen- stupid stuff like Govt. intervention to equalize factor returns across industries.

Dies illa, dies irae

You never thought your wrath would have its day

The Woe you wrought have its say

  Till your Saqi's lips sullied the wine 

Of Zephaniah 3.9

Edward Said & the Zahirites

 A lover more in love with Love than any actual fair one found, as all such lovers must, that love was in the words of Love, its gestures, its language but those words, those gestures, that language were as a veil on both sides of which stood vanity and feigning.

   But what if that veil was the Koran? God might feign from behind that veil but God's feigning yet is Man's Law. Thus was born in this lover, now out of love with Love, a zeal for the Zahiri School of Jurisprudence which, from love-of-the-Veil, postulated that God might lie and, to keep open that possibility, permitted no imperative avenue of closer approach, thus banishing both analogical qiyas reasoning and esoteric batini  hermeneutics as a blasphemous availing against that Veil.

   In an incoherent chapter of an incoherent book, Edward Said abruptly declares a fascination with Ibn Hamz, this Zahirite. Why? Violence appeared suddenly as that Veil truer than Literature's Love for one whose motherland was- like Ibn Hamz's Andalus at the time of the Arab Berber wars- now ruled by the wrong bunch of Semites.

   In the end the great Professor ended up throwing stones like a barefoot gamin.

 Better, the Batini say, the street urchins throw stones at us, for it is Majnun's nakedness alone which veils Lailah from him and ever of such weaving is the tapestry of true Zahiriyat- an Emergence which never Emerges- such that tears are but tears and that tearing up of what is inward, all Violence as aught avails.

Genus irritabile

Hammer struck sparks of Strife's Heraclitean fire

A dog in the manger is our inner poet's ire 

Tho' Philosophy's leash is no less choking

All give up Love to take up Smoking

The Pinchas paradox

Abihu and Nabadh, the two eldest sons of Aaron, the brother of Moses, offered an improper sacrifice to the Lord and were themselves consumed in the flame. They left no offspring.
Pinchas was a grandson of Aaron, but he was not a 'Kohain' (part of the hereditary priesthood, because his father was elevated to the Priesthood after he was born). However, he was raised to the Priesthood by the Lord after he killed Prince Zimri who was co-habiting with the beautiful Kosbi.
Pinchas' action was correct because the Lord approved it even though the Law did not. In other words, by reading the Bible we know that it is algorithmically verifiable that Pinchas acted correctly- because that is what the Text says- yet his action is not algorithmically computable by the Laws revealed in that same text- i.e. there is no process of halachic reasoning that can arrive at the same conclusion.
Thus, at least on one interpretation, it is a paradoxical sort of action- a halachah vein morin kein- a teaching which, if known, prohibits the very action it would otherwise enjoin.
When Pinchas realized the terrible nature of what he had done, according to a mystical interpretation of the Bible, his soul fled him in fear. The Lord then caused the ibbur (entry into his body) of the souls of Nabadh and Abihu who thus became the spiritual progenitors of the Kohain- or Cohens.
Interestingly Pinchas is said to lose this ibbur at a later time for somehow failing to avert the tragedy of Jephthah sacrificing his own daughter as a holocaust to the Lord as a result of a rash vow. In other  words, the Hassidic commentators are making clear that Jephthah's fire sacrifice was not legitimate or ordained by God, just as Abihu and Nabadh had made an improper sacrifice.
The interpretation given by the Zohar, or other mystical sources, may seem bizarre or superstitious to a lot of ordinary Christian people. However there can be no doubt as to the humane message of the Rabbis which we can summarize thus
1) Yes, Abihu and Nabadh did something improper from the ritual point of view. Maybe they'd had too much wine. But their intentions were good and so though they perished in the flesh yet the Lord's mercy was upon their Spirit. They could still serve the Lord- which was their only desire.
Thus, on this interpretation, from the Spiritual point of view, the Cohens- who are their descendants in the direct male line- need not fear that the Lord will judge them too harshly for some small ritual mistake or over hasty halachic decision- i.e. there is no grounds to hold Judaism to be a 'fossil' religion inculcating Kantian 'heteronomy'. On the contrary, the teaching of the Hassidic Sages is that Autonomy, Creativity, unremitting Zeal for Universal Welfare is what is pleasing to the Lord. The nightmare vision of a capricious God who punishes you for an unknown or unintentional crime has no place in our reading of the Old Testament because the keepers and transmitters of that text- who surely know more about it than ordinary people like you and me- have given a far more closely reasoned and hermeneutically rich interpretation which we can all feel to be more in consonance with the promptings of our own humble and heartfelt Faith in our Creator.
2) Political assassination, or Religious persecution or whatever it was that motivated the slaying of Zimri and Kosbi- though perhaps 'necessary' in some sense, is nevertheless very strictly forbidden precisely to those who know of this legal precedent and who might use it to justify fanatical persecution, or even genocide, of other peoples.
The paradoxical halachah here does not have the effect of crashing the whole deontic system, rather it enables it to evolve in a more humane manner. Yet, from the logical point of view, this is a very difficult problem. After all, the Rabbis say if we break one law we break all laws. If we slay one person we slay all humanity. Furthermore, though ignorance of the law can be an excuse, surely knowledge of it can never be so. Yet, there are situations where something which is enjoined is forbidden because it is known to be enjoined. This paradox resolves itself under the gentle guidance of the Rabbis who show that the only way to escape from the quicksand of Legalism is through moral and spiritual evolution- by opening oneself to the ibbur of the self-less tzadikkim. I have written more about this here.
3) The concern shown for the daughter of Jephtah indicates that the truly enlightened person- even if born in barbarous times, when the weaker was enslaved by the stronger- rejects the creed of Male supremacy. It has no place in Religion and Spirituality.

One interesting aspect of the manner in which the Hassidic Sages enrich our reading of the Bible is that, like Umaswati, they formulate the problematic of 'incarnation' (ibbur is actually more like partial incarnation as found in the Mahabharata) as a 'matching problem'. Essentially, a resource is cached in a liminal state- like the Bardo of the Tibetans or the Barzakh of Ibn Arabi- so that it can be drawn upon to resolve paradoxes in a manner that 'climbs the local hill', on the relevant Hermeneutic landscape, so as to grant the reader an expanded Moral and Spiritual horizon.

Virginia Woolf & Judith Butler

I suppose my own initial inculcation in to the English literary canon could be considered a vindication of Judith Butler's theory of performativity, albeit in an abstracted sense, in that though I represented a hyper-mechanistic male phenotype, my reception landscape was markedly hypo-mechanistic and 'feminized'.  

This was because my elder sister was reading English literature at Delhi University and I got into the habit of flicking through her set texts and joining in the discussion when her College friends came to visit. True, some of these bluestockings were rather low brow in their tastes- preferring 'the Mill on the Floss' to 'Middlemarch', for example, or Charlotte Bronte to Mrs. Gaskell- but there were others whose intellectual horizons were already spiraling towards the vertiginous mise en abyme of Spivak's Derrida, though not, at that time, the strong meat of Judith Butler.

It is interesting that my sister's friends, though prepared to take my devotion to Joyce and D.H.Lawrence at face value (I should mention, Joyce was particularly well taught at my School because it was run by the Irish Christian Brothers) expressed a sullen incredulity at my cult of Virginia Woolf. '''Flush' is a charming book,' they'd say, 'but you can't tell me you liked 'the Waves' or 'to the Lighthouse'?
'He does too like 'the Waves'.' my sister would loyally reply, taking umbrage on my behalf, 'Vivek is very intelligent. He drew a picture of Leonard Woolf constructing a specially big typewriter so Virginia could get her paws on the keyboard and type out her masterpieces while still tearing the heads off chickens and devouring rabbits with her slathering fangs.'

To my mind it is that aspect of the divine Virginia which Judith Butler's theorizing fails to grasp.

So little its rending does the Veil resent

So little its rending does the Veil resent

As the Unseen to All ay represent

That Eyes might drink at Beauty's fount
Tears flow to my arrears' account.

That Autumn is-  of aught else dumb

I am Summer's worn out drum

I don't mind it's getting cold

But its doing what I'm told

Wine is bitter in Morning's cup

As is, to Anthems alien, standing up

Love's luck is that it so often die

In the bed where yet I lie.