Although finance is essential to a flourishing economy, it is not productive in itself. Its role is to facilitate economic activity by allocating capital to socially useful purposes—new businesses, factories, roads, airports, schools, hospitals, homes. But as finance came to dominate the U.S. economy in the 1990s and 2000s, less and less of it involved investing in the real economy. More and more involved complex financial engineering that yielded big profits for those engaged in it but did little to make the economy more productive.
