Job cuts are the order of the day in finance. The shrinkage may mark a welcome reversal of a long-running trend.

Finance has been a growth industry for six decades. In 1947, the sector accounted for 2.3% of US gross domestic product, or GDP. In 2007 it was 8.1%, and the increase has been remarkably steady.

To listen to some politicians, finance may sound like a bad thing. That’s wrong. Banks, brokers and their ilk collect money from those who have and distribute to those who need. But finance helps the economy in much the same way a police force or an army helps keep the peace. Finance is a cost—not a benefit—of maintaining a complicated economy.

Some policemen and soldiers think the glamour and danger that come with their jobs make them worthwhile. Some financial types, especially those at the top of the heap, are similarly enthusiastic.

But how many of them really earn that generous keep by increasing economic efficiency?

The answer probably can’t be calculated precisely, but any gains have to be set against three sorts of harm.

First, a distressingly large portion of activity in the financial world is little more than gambling. As in organized gambling, the losses in financial trading are actually a bit greater than the gains, because the house takes its share. In recent years, the financial house—brokers, exchanges, fund managers—has augmented its gains by playing from the inside.

The second problem is that finance works primarily with credit, and credit has been expanding dramatically. The ratio of debt outstanding to GDP in the US has risen from 161% in 1974 to 354% in mid-2008.

Finally, there is a psychological, even a moral, problem with finance. A country gets rich by making stuff, not by seeming to make money from money. But when people see huge financial profits, they tend to want more of them.

So will the US, and the world, decide that it has had too much of this not particularly good thing?

Not necessarily, since a four-decade trend has the momentum of a speeding train. But the current hurricane of financial destruction might just be strong enough to derail it.

There’s more than money involved. For at least a generation, finance has been taken up as a career by a large proportion of the world’s most talented people. If more of the best and the brightest were to take up careers in industry, education or the arts, everyone would be better off.