As we brace for yet another Mansion House speech, we already know what’s coming. Once again, the City will pitch its well-rehearsed line: that economic growth depends on feeding financial capital—diverting wealth from citizens into markets so the financial sector can extract its cut in fees. But despite years of trying, this strategy isn’t delivering. The economic indicators are clear—stagnant productivity, widening inequality, and faltering public trust.
It’s time for a different approach. A strategy rooted not in siphoning wealth from citizens, but in investing in them. One that understands that true growth begins with full pockets, not empty ones.
The Problem: A Growth Model That Extracts
The prevailing strategy has been to unlock so-called ‘dormant capital’—pensions, savings, and other assets—and channel it into the City. The justification? That doing so supports “productive finance” and drives national growth. In reality, it too often means shrinking the financial cushions of everyday people to inflate asset prices and industry profits.
This trickle-up approach enriches a few while leaving households exposed. It’s a model that celebrates record stock prices while food banks report record demand. A model where the growth of financial capital comes at the cost of social cohesion and long-term resilience.
The Alternative: Growth Through Human Capital
If the City is fixated on financial capital, we should remind them of a more potent engine of prosperity: human capital.
Economic research from across the globe, including the detailed work by Miculescu and Boldea (2015) on Romania’s development, demonstrates that investment in human capital—education, health, skills, and emotional wellbeing—correlates strongly with economic growth. In fact, studies like those by Edward Denison and T.W. Schultz show that over a fifth of economic growth can be directly attributed to improved education and workforce capability.
Moreover, human capital is not just about schooling. It encompasses psychological capital—traits like resilience, optimism, and confidence—and social capital, which strengthens trust and collaboration in communities. These aren’t soft values. They are the glue of functioning markets and the preconditions for innovation, entrepreneurship, and civic participation.
Why This Matters Now
In the post-pandemic world, we are facing unprecedented change—technological disruption, ageing populations, geopolitical instability. The old playbook won’t get us through.
If we want sustained growth, we must fuel the very people who drive it:
- Boost lifelong education and re-skilling initiatives
- Invest in physical and mental health infrastructure
- Support civic engagement and community development
- Build trust-based systems that value cooperation over extraction
A strong society is a productive economy. Citizens with full pockets spend more, innovate more, and need less state support. Growth, in this model, is not extracted—it is generated.
Conclusion: The Confidence That Comes From Justice
The current model promotes a different kind of confidence—the kind that assures the financial sector it will always be prioritised. But the confidence we need is public confidence. Confidence that justice will be done. That work will pay. That the system is not rigged.
So ahead of the Mansion House declarations, let’s ask: what if we stopped emptying citizens’ pockets in the name of growth, and instead filled them—so they could grow it themselves?
Now that’s a strategy worth investing in.
If this resonates, join us at the Academy of Life Planning. We’re building a world where planning means purpose—not just portfolios.
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