I'm no economist but here's what I think:

First of all, there are two sorts of employment: fruitful and useless.

Either case is better than unemployment, since in both cases someone is getting paid for doing "something", and this is necessary for the distribution of wealth and to stop people either dying of starvation or burdening the wellfare state. Fruitful employment, however, produces something which is of use. Useless employment does nothing for society except the wealth distribution bit.

Fruitful enterprises employ people to produce those goods and services which other people want. Useless enterprises employ people to either waste time or to produce goods and services which nobody wants, needs or can afford.

The purpose of all those city-chaps shouting their heads off in the city is to move the wealth of the world away from useless enterprises towards fruitful ones. At least, that is their purpose as far as our society / world is concerned. It's what makes them fruitful and what persuades the rest of us not to choke on our cornflakes when we hear some broker calling himself a "wealth creator".

Of course, there is no over-all ruler-of-the-world employer instructing all those brokers to work towards this end. Instead, an act of faith takes place whereby we all believe (and hope) that if they are incentivised in the right way then this little neural network of greedy little robots will magically produce what we need. The only reason we believe this goes something like this: brokers wanting to make money for themselves will naturally back the enterprises which have the best chance of making money as well and these should be the fruitful ones since the useless ones ought to go bankrupt.

As an act of faith it is massive because it is so reductionist. There are probably a great many different outcomes for a broker-network to converge on, which we'll only discover when they happen. Right now we have a recession caused by one particular outcome: the emergence of a gamble which benefits the brokers without benefitting society.

Brokers know that when they succeed in making a gamble which wins, they gain, but if they lose, they lose their job. How much they gain depends on how much they win. On a loss, they lose their job, regardless of how big the loss is.

So it makes sense to arrange things so that the losses are rare even if that means they have to be huge. In fact, even if it means that the gambles are ultimately bad, as long as no one knows any better until it's too late. These gambles started with derivatives but have now become so complicated that it's very difficult to work out what the odds and gains are. All that any broker has to do is keep on winning and he will keep his job. Unfortunately his boss, or the person whose funds he's playing with, either lacks the expertise or doesn't care enough to ask how the actual odds weigh up.

Eventually, of course, the loss happens, funds disappear, the world goes pear-shaped, the economy re-establishes its win/loss balance, money moves about randomly as panic sets in, frequently over to useless enterprise or sitting in great big bank vaults doing nothing, and we get a recession.

The broker loses his job, of course, but by then he's rich.

All the best

Richard