Bethany McLean is a contributing editor at Vanity Fair.

In his new book, “The Finance Curse: How Global Finance Is Making Us All Poorer,” veteran journalist Nicholas Shaxson recounts his early years reporting in Angola, when he learned what the “resource curse” was by observing the horrible poverty of that oil-rich nation. “All this money flowing from natural resources such as oil can make their populations even worse off than if those riches had never been discovered,” he writes. Now, he argues, that same phenomenon afflicts modern economies like the United States and Britain, because we have encouraged our financial sectors to flourish at the expense of the broader population. Hence, the finance curse.

Shaxson isn’t the first one to make this argument. In 2016, the Financial Times’s Rana Faroohar published “Makers and Takers: The Rise of Finance and the Fall of American Business.” In it, she argued that what she called “financialization” — in essence, the increased share of the economy that is caught up in finance — is devastating the bigger economy it is meant to serve. But especially in this uncertain, insecure climate, the thesis is important and worth repeating.

As even a big bank chief executive like JPMorgan Chase’s Jamie Dimon has noted, the economy certainly is not working for everyone. That’s at least correlated with the rise of finance. Back in the 1970s, financial corporations earned little more than a 10th of all corporate profits; today, around a third of all corporate profits flow to finance, says Shaxson. For sure, a functioning economy needs the services of a healthy financial sector — but have we become the servants to our Lord Finance?

Correlation is one thing, and causation another. Shaxson doesn’t prove the latter. But he makes some provocative arguments. Among them: that “London and its offshore satellites [have] played a central role in turning global markets into a hothouse for organized crime, corruption, tax evasion and the cross border stashing of looted wealth”; that the decline of farming and the concurrent destruction of rural America are a result of a deliberately engineered strategy of mechanization, consolidation and increased debt, siphoning off profits to lenders in big cities; that Ireland’s stunning economic success before the financial crisis was not actually a result of corporation-friendly tax cuts, as the conventional wisdom has it, but rather other policy choices compounded by some good luck.

Shaxson also makes one of those wonderful points that is so insightful, it seems obvious in retrospect: The idea of “competition” has come to stand for everything, yet nothing. We’re often told that our big banks and big technology companies have to be big because they have to be able to compete. Shaxson highlights a little-noticed excerpt from Facebook chief Mark Zuckerberg’s congressional testimony, in which Zuckerberg argues that breaking up Facebook would — you guessed it — strengthen China. So, Shaxson points out, we are supposed to “improve American competitiveness by restricting competition in America.” Which raises the larger question: When politicians and CEOs talk about competitiveness, what do they mean? Does competition mean a better life for a country’s citizens, or does it just mean more profits for big corporations? As Shaxson writes, “Improving the fortunes of Goldman Sachs won’t necessarily improve the fortunes of America.”

How this relates to financialization, rather than the broad category of obsequiousness to big business, is somewhat fuzzy. But it’s certainly true that one of the more pernicious forms of competition is how entities from municipalities to countries are made to compete for the privilege of having businesses choose to locate there. That often results in a race to the bottom, where “secretive consultants,” who Shaxson says can get paid up to 30 percent (!) of the subsidy package the business is offered, operate by “playing local areas off against one another” and “jimmying more corporate subsidies from the public purse.” He quotes one city official saying, “We are now at a point where there is an expectation pretty much from every company that comes along that there is going to be some financing.” All men may be created equal, but between big business and your average taxpayer, there is no equality.

The most direct evidence of the damage done by financialization is the way the modern private-equity business operates. Shaxson explores this via Alden Global Capital, the financial firm that has bought up local newspapers and stripped them bare. It’s clear how financialization has transferred wealth: A private-equity firm like Alden can load a company up with debt, pay the proceeds to itself, crush the company — and walk away rich. Or as Shaxson writes, “The main event in this game is borrowing.”

Ironically, a business whose existence was enabled by Milton Friedman, the economist who famously argued that a corporation’s sole duty is to increase its profits for shareholders, has been subverted into one in which the main purpose seems to be extracting payments for the private-equity overlords and leaving the rest of the shareholders, not to mention employees and other stakeholders, with a broken, bankrupt mess. (Yes, investors in the private-equity fund share in some of the spoils, but the real rewards go to the fund’s executives.)

Shaxson, who works with an entity called the Tax Justice Network, which focuses on the damaging effects of tax avoidance, also is obsessed with offshore tax havens like the Cayman Islands. His obsession might be to the detriment of this particular book. He asks: Is Alden Global “being funded by criminals” in offshore locales? As he writes, there’s no way to tell because of all the laws enabling secrecy.

About Cook Islands, one of the places that exists as a result of its tax status, he writes that users include “a monkey house of fraudsters, billionaire Ponzi schemers, hedge fund swindlers, spiteful patriarchs in vicious divorce battles, snake oil salesmen peddling weight loss nirvanas and many others.” He identifies one of these nefarious characters as a man named Dr. Dread, who apparently made a fortune doing botched plastic surgeries, but who are the rest of these people? Are they real, or are they rhetorical flourishes?

More to the point, does it matter whether Alden Global is funded by criminals? Does it matter whether disreputable characters — or superficially reputable bankers — are using tax havens? Shaxson’s main point seems to be that laws have been written in ways that enable destructive behavior. “Financial globalization isn’t just about mobile capital inevitably flowing effortlessly through and around the restraining bonds of the state; it requires intergovernmental deals to guarantee that creditors will be paid back and endless decisions to remove impediments to these flows,” he writes. “All these are solid policy choices, made deliberately by states — and all are reversible.” In that case, tossing in unsavory characters who may or may not be figments of his imagination, along with random and unprovable references to possible criminality, only muddies the issue.

Shaxson has some simple, lovely lines, such as this description of Robert Bork: “What mattered to Bork was not reality but elegant models of reality.” But for the most part, he prefers to bounce quickly from one scandal to another and to pile on descriptors. In just a few pages, he goes from the BCCI scandal, which readers are supposed to know is bad without any explanation as to why it was so bad, to “deep mysteries” involving Margaret Thatcher’s finances, to the supposedly rampant corruption in Luxembourg, to the “thoroughly rotten Banco Ambrosiano Holdings,” to “the Elf affair, Europe’s biggest corruption scandal since World War II,” to Bernie Madoff.

In his section about Ireland, he writes, “The story of Ireland’s role in the global financial crisis and its aftermath is a truly blood-curdling tale of greed, corruption, hubris, ignorance, arrogance, austerity, secrecy, and competitiveness fetishism, the finance curse at its finest and most loathsome.”

It’s exhausting. More important, it loses the reader who is looking for clear analysis, rather than fevered rhetoric, the reader who wants to be shown how it is, rather than told how it is. And so, while Shaxson’s book grapples with one of the most critical economic issues of our day, he ultimately may not convince anyone who doesn’t already agree.

The Finance Curse

How Global Finance Is Making Us All Poorer

By Nicholas Shaxson

Grove.
376 pp. $27