British Labour Party would force a return to the dark ages by taxing the automation of brokerages
Britain’s Labour party will do everything it can to stop your brokerage, institution or financial services firm modernizing itself. In an age in which efficiency, cost saving, and regulatory adherence are all key factors, London should not welcome this odious proposal. Here is a blunt and candid explanation
1970s socialism and modern technologically advanced private enterprise mix as well as magnesium and dry ice.
There could not be a more volatile mismatch and indeed thus far, the City of London’s highly evolved and world leading electronic financial services sector, right through from the Tier 1 banks of Canary Wharf which handle over 49% of global FX order flow, to the industry-standard commercial ECNs which nestle among them, the institutional non bank prime of prime brokerages and of course the publicly listed retail FX giants, have managed to fend off the socialist aspirations of vast proportions of other parts of the country.
The City’s business orientated environment hosts the world’s finest and most elevated financial infrastructure, and powers the world from just one square mile, generating £176 billion in revenues, with a £76 billion trade surplus per annum, created by the brilliant minds of just 0.0009% of the workforce of the European Union.
Brilliant minds they are indeed. The entire landscape of the world’s financial markets, and their technologically empowered future, depends on London.
However, the current government, which although very bland and often criticized for inability to demonstrate genuine leadership abilities, is at least business-friendly and recognizes London to be the absolute jewel in the crown of world business across the financial sector, as well as being a vital kingpin across many other global industry sectors.
The opposition party, however does not.
The Labour Party, led by staunch socialist Jeremy Corbyn alongside equally staunch 1970s trade unionist and anti-business relic John McDonnell, has made clear its intention to damage London’s standing as a world business center by putting obstacles in the way on purpose.
London is recognized by various global trade organizations and management consultancies as being one of the world’s most business friendly cities for both start ups and long-established publicly listed institutions, leading the way in its ultra-modern and large scale environment.
Streamlining the electronic financial services industry is a current and very vital dynamic, allowing firms to remove old fashioned procedures and replace them with artificial intelligence, specifically robots which ‘learn’ and have cognitive abilities, in order to not only reduce costs but increase the ability for firms to be more accurate, process requests faster and spot errors quicker, as well as maintain regulatory compliance with aplomb, thus saving a fortune and contributing to maintaining the good name of London’s financial services business globally.
Labour party leader and shadow prime minister Jeremy Corbyn (perish the thought he should ever gain power) has once again demonstrated his odious view in insinuating that “greedy” corporations are sacrificing the wellbeing of society in exchange for profit. This is inaccurate, and his recommendation to penalize companies that utilize “incredibly advanced technology” with added taxes is utterly counter-intuitive.
And while there’s no question that certain types of jobs will be displaced by robotics, artificial intelligence (AI), and other advanced technologies, the idea that these innovators are not “sharing the benefits with society” is absolutely incorrect.
The McKinsey Global Institute recently estimated that more than 90 per cent of jobs will not be able to be fully automated.
When looked at through a sensible pair of eyes, rather than from the point of view of a bigot who detests success, progress and meritocracy, because the labor force has steadily decreased since 1980 (and that trajectory is not expected to change), economists are most worried about a labor shortage in the next few decades – not unemployment. Robots and AI are poised to help fill this growing gap in the labor force that, without their help, could be a major economic issue.
Clearly this is a policy aimed once again at carrying out Mssrs Corbyn and McDonnell’s promise to damage London’s business environment, and rake in taxes whilst putting one in the eye of the ‘greedy capitalists’ that work very hard, continue to hone their skills via their own will and succeed on their own merit to advance the cause of London’s standing, and pay for not only the rest of England, but most of Mr Corbyn’s beloved all-consuming economic deserts in mainland Europe.
A tax on the very progressive and welcome use of artificial intelligence by financial institutions is another left wing ball and chain in the Labour Party’s armory against freedom of commercial innovation which would join their equally unwelcome plans for implementation of the Tobin Tax, which is a transaction tax on all financial trades, which is popular among socialist countries in Europe, all of which have absolutely no financial markets economy at all.
Spanish automated trade reporting repository anyone? Italian post-trade processing company perhaps? Belgian algorithmic exchange connected to Equinix and all of the major venues worldwide? ….. Silence…. That’s right, they don’t exist. What does exist in Spain and Italy is zero technology, massive debt, 57% youth unemployment, socialism and the Tobin Tax.
Meanwhile professionals of the same demographic in London are not referred to as ‘youth’ and neither are they unemployed. Instead, many are completing internships at Merrill Lynch, Goldman Sachs, PriceWaterhouse Coopers and Accenture, working out exactly how to develop the corporate infrastructure of the future as the next stage in their contribution to modernity following first class degrees from London’s top academic centers.
Bearing this in mind, it is worth looking at Mr Corbyn’s choice of Chancellor, John McDonnell’s credentials and viewpoint.
Mr. McDonnell is a former trade unionist who backs renationalizing banks and imposing wealth taxes. He actually lists “generally fomenting the overthrow of capitalism” as one of his interests in the Who’s Who directory of influential people. He also advocates the complete public ownership of all banks.
Mr McDonnell has served as Chair of the Socialist Campaign Group in Parliament and the Labour Representation Committee, and was the chair of the Public Services Not Private Profit Group. He is also Parliamentary Convenor of the Trade Union Co-ordinating Group of eight left-wing trade unions representing over half a million workers
The thought of Tier 1 FX desks being run by teams of ‘entitled’, unaccountable gray cardigan-wearing Caravan Club members with civil service pension plans should be enough to send the entire industry striking up prime brokerage relationships in Hong Kong, New York and Singapore.
Mr McDonnell has also said publicly that if he was able to, he would have assassinated Margaret Thatcher in the 1980s, a comment that when challenged, he retracted and said it was “a joke”.
Well, Mr McDonnell, that kind of extreme anti-business mentality combined with a will to bring the entire financial markets sector to its knees in the rebellious quest for overthrowing capitalism is not welcome.
Mr McDonnell wrote in 2012 that a financial transaction tax would halt “the frenetic, madcap speculation in the City” and raise money for infrastructure investment.
“If the City resists then let’s make it clear that capital controls would follow,” he said in a piece for Labour Briefing, a left-wing website.
Not only would Corbyn’s proposed tax slow the development of these valuable technologies, but it’s clear that the evidence points to a future in which the impact of robotics and AI is more positive than negative—both for the workers themselves and for global productivity.
If any doubt can be cast over the validity of this, one only has to look at the successful AI projects that have been implemented by several institutions globally, to the greater advancement of their cause and efficiency, and then in contrast look at the economic state of Venezuela, a country in which zero progress is ever made, crime is rife, inflation out of control and has a starving population.
Then remember that Mr Corbyn’s leadership idol is Hugo Chavez.
Image: FinanceFeeds welcomes an intuitive AI solution that hosts conferences in Guangzhou, China, and has a good understanding of questions asked by delegates, and can even help executives network.