Full Marx to Karl – and Woody Allen was right as well

AT A dinner party recently the unfortunate girl beside me asked me how long I had been working for my firm. Ignoring witticisms such as "about half the time", I confirmed I had left school in the summer and joined my office in the autumn of 1966. She looked suitably startled, not as a confirmation of my great age, which was no doubt apparent, but because I had stayed with a single firm for more than 40 years.

When I joined Bell Lawrie, staff mobility within the professional classes was most uncommon. Solicitors, accountants and stockbrokers tended to be in "a job for life". What was more, their modus operandi hardly changed from the day they completed their Articles, until the day the frustrated junior Partners finally managed to lever the venerable old boy out of the door, with the forlorn hope that they might actually then be able to charge his client base some fees.

In my case, in 1966 my contact with the London Stock Exchange was then a pricing string, which came through twice a day, at 10.30am and 2.30pm. This was the only occasion during the day when we knew the movements of the market. Deals were largely transacted through our agent in London, although there was a domestic market in Edinburgh which traded in local issues. It was not practical, moreover, to have a true idea of what was in a client's portfolio. Valuations were produced by hand every six months.

Portfolios were largely invested in a range of collective funds – investment trusts – the Bank of Scotland, perhaps, and possibly Burmah Oil. "Management" was reactive in response to a call confirming that a client either had some funds to invest – more investment trusts, Bank of Scotland and Burmah Oil – or needed money for a wedding or something similar. The concept of research was quite alien.

It was a pretty leisurely existence for a partner, one of the reasons why I found the job prospect so appealing. Woody Allen described a stockbroker as "someone who spends your money until it's all gone"; at that time it was not really accurate. A stockbroker was principally a custodian of a client's investment portfolio, a source of administration and management, perhaps, but not investment advice. Discretionary management was left to investment trusts, the managers of which one occasionally took to lunch to see how the land lay.

Today, we are no longer "stockbrokers" but quasi financial engineers, offering myriad investment and allied advice. Research is an integral part of portfolio management, sponsored by analysts, supported by asset allocation models and overseen by an investment director. Discretionary clients receive regular updates from an investment manager operating on a proactive basis.

Dealing costs have come down with a clatter, partly as a result of technological advances, when the calculation of a redemption yield on a Government Bond no longer requires the toil of 40 individuals but the push of a button.

These changes in the financial industry are matched by an astonishing re-balancing of the global political structure. The Cold War ended, the Berlin Wall came down, Communism imploded and Nelson Mandela became president of South Africa. Any one of these prospects would have been regarded as inconceivable when I joined my firm. Today, even with a client's details, portfolio, cash balances and the like, available instantaneously, the process continues to evolve. In consequence, my dining partner's question prompted me to consider where my 18-year-old doppelganger would be some 40 years hence.

Karl Marx said socio-economic change occurred through organised revolutionary action. He believed in the power of labour, which he thought capitalism exploited. This apparent exploitation is perhaps one of the reasons why some members of the US House of Representatives chose initially to vote down Henry Paulson's plan. Not only was it seen as a bailout of profligate Wall Street bankers but the trigger for so-called "moral hazard", potentially indemnifying an individual from his or her own errors. It was also seen as being paid for by the American taxpayer.

What they failed to understand is the American taxpayer was effectively being asked to bailout, not Wall Street, but the American taxpayer. A state has only the tax revenues it can extract from its corporate and private citizens, unless it becomes embroiled in the sort of borrowing plans which have brought the international financial community to its knees.

Unfortunately, that is what has occurred, with both US and UK public sector budget deficits of terrifying proportions. They, too, have to be funded, and are being so today by a huge flow of funds from the better-heeled sovereign areas in the Middle and Far East. If this were to dry up, the Western financial economic system would suffer another serious blow. Could this be the revolution to which Marx referred? Could it be that the evolution of global economic structure which saw the passing of communism is now, as the consequences of reckless acts of capitalism, reopening the door to state financial ownership?

With the nationalisation of banks in the UK and US, this looks possible. That politicians can already legislate over financial matters is bad enough; I would find it truly alarming if they were to "own" the system as well. I hope my doppelganger is not part of some vast state apparatus 40 years hence.

• Bryan Johnston is a director at Bell Lawrie