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That we have an article that discusses people providing no value to society yet working the system to extract billions of dollars (and the political power that

That we have an article that discusses people providing no value to society yet working the system to extract billions of dollars (and the political power that comes with it) as if it were fascinating and cool rather than obscene tells us how fucked up our society is right now. Imagine reading a newspaper in 1840 reporting on a group of scientists who are making a killing in cotton because they figured out, using statistics Moneyball style, how to maximize profits by buying slaves that nobody else wants. Imagine the article tells it as a story of smart guys who amazingly did what no one else could do, with nary a comment or even awareness about the evil of slavery.

mistermann 10y ago
Don't worry, they provide liquidity. Surely you remember how dysfunctional and the financial markets were before we had sufficient liquidity? I mean heck, it could take minutes, MINUTES, to execute a trade.
- eevilspock 10y ago
  Exactly. That 1840 article, I forgot to mention, has a sidebar on increased SLAVE LIQUIDITY.
ryuker16 10y ago
This needs to be an onion article badly. Perhaps a parody of modern ads put in the context of 1830 southern America. IBM: outthink slave rebellions before they even happen. Apple: ichain. Manage your slaves without even leaving your Manor.
- deleted 10y ago
  [deleted]
pgwhalen 10y ago
I'm not gonna argue that financiers are curing cancer, but it sure does bother me that so many intelligent people who understand nothing about the industry have just grown to assume that it provides no value to society.
- chii 10y ago
  I don't think they don't provide value - just that the value provided isn't commensurate with their payment. It's as if they extract every bit of surplus value they create, which means they produce no net value to society. It's as if they are an "employee" of Society Inc., but is paid exactly what they produced.
- SomeStupidPoint 10y ago
  I actually think it's a net negative, in the current US. Now there are good things that capitalism and markets do, but the way it's currently functioning no longer provides those benefits, because algorithmic trading has driven the signal to noise ratio in to bedrock. Wall St at this point is basically just a social noise amplifier stuck in an ugly feedback dynamic with the rest of the country. We long ago stopped hearing music from the underlying economy, we're on to mic static screaming at full volume. If I could wave my magic wand, Id switch to a single exchange which resolves all outstanding bids/orders once every 10 seconds in a single transaction. (You could create a single virtual exchange out of many actual ones using smart contracts.) I just don't believe Wall St would stop generating any real value by being forced to slow down and take a breath (and allow humans to act on relevant time scales). Instead, we have a noise amplification arms race.
qwrusz 10y ago
How do you define providing value to society here? Curious who and what types of jobs make the cut.
- eevilspock 10y ago
  Let's first tackle something a bit easier than absolute value, which is relative value. If we can't agree on the answers to these questions it's unlikely we can agree on anything: 1. Does it make sense that four hedge fund guys got more money than all the kindergarten teachers in America combined? [1] (I used the word "got" instead of earned because "earned" presumes an answer.) 2. Does it make sense that Zuckerberg is worth tens of billions and Albert Einstein maybe had a net worth of one million at death? Or that Einstein earned a modest professor's salary for his enormous contributions to science, but his estate earns $10-12 million on royalties for his name and likeness (photo, Baby Einstein license, etc)? You can't answer that it makes sense because that is what the market determined, because that would be begging the question (whether the market reasonably and fairly compensates people). -- [1] http://www.vox.com/2014/5/6/5688794/these-four-hedge-fund-guys-out-earned-every-kindergarten-teacher-in http://www.vox.com/2014/5/6/5688794/these-four-hedge-fund-gu...
  - bbcbasic 10y ago
    It does "make sense" in that I am able to make sense of it. It doesn't make me think "WTF how is that possible". Are you really wanting to ask "is it fair" or "is it just" or "is it good for society"?
    - JabavuAdams 10y ago
      > Are you really wanting to ask "is it fair" or "is it just" or "is it good for society"? Yes, of course that's what the eevilspock is asking.
  - oli5679 10y ago
    Another way of thinking about this is marginal value. Imagine a world where person X has a heart attack and the next best person qualified to do their job steps in and paid their wage demands. The fall in social benefits less change in wages is their marginal contribution. For Einstein, this is presumably astronomical. For the best primary school teachers this will also be high (it might be low/negative for some of the worst). These are not directly relevant to the question of whether the quant traders have a positive marginal contribution to society.
pg314 10y ago
It gets even worse when you see how those billions of dollars are then used. One of the founders of Renaissance is Robert Mercer [1]. He invested millions in the Heritage Foundation, Breitbart and Trump's campaign. [1] https://en.wikipedia.org/wiki/Robert_Mercer_(businessman) https://en.wikipedia.org/wiki/Robert_Mercer_(businessman)
- brohee 10y ago
  Then Simons contributed loads to math education, it's not all bad...
bbcbasic 10y ago
Adding slaves into the analogy is a bit strawmanesque
- eevilspock 10y ago
  It's an analogy, not a logical proof. Whether it is an appropriate analogy depends on whether you think it obscene that they make so much, especially for what they do. See my other comment: https://news.ycombinator.com/item?id=13034873 https://news.ycombinator.com/item?id=13034873
lordnacho 10y ago
Why do people have to be held accountable to some notion of social contribution? As long as people aren't burdening society, isn't that enough? You walk into a grill bar, like my parents' place. You give them money and they give you a burger. Apart from the various taxes, how has society benefitted?
- PeterisP 10y ago
  "As long as people aren't burdening society" doesn't apply to an organization that has extracted $55 billion of 'rent' from the society - if there's nothing comparable that the rest of society is getting for that fee, then it is a burden that they've managed to put on everyone else. In the grill bar example, the rest of society has received a lot of tasty burgers and pleasant dinner experiences. Where is the $55bn-sized beneficial service that the rest of stock market has received from Medallion?
JabavuAdams 10y ago
Jim Simons funds a lot of basic research with his gains. Not sure whether the others do anything as useful or interesting. There are billionaires who do more useful things than just buying more houses, planes, etc. E.g. Bill Gates, Elon Musk, etc.

mistermann 10y ago

Don't worry, they provide liquidity. Surely you remember how dysfunctional and the financial markets were before we had sufficient liquidity? I mean heck, it could take minutes, MINUTES, to execute a trade.

eevilspock 10y ago
Exactly. That 1840 article, I forgot to mention, has a sidebar on increased SLAVE LIQUIDITY.

ryuker16 10y ago

This needs to be an onion article badly. Perhaps a parody of modern ads put in the context of 1830 southern America. IBM: outthink slave rebellions before they even happen. Apple: ichain. Manage your slaves without even leaving your Manor.

deleted 10y ago
[deleted]

pgwhalen 10y ago

I'm not gonna argue that financiers are curing cancer, but it sure does bother me that so many intelligent people who understand nothing about the industry have just grown to assume that it provides no value to society.

chii 10y ago
I don't think they don't provide value - just that the value provided isn't commensurate with their payment. It's as if they extract every bit of surplus value they create, which means they produce no net value to society. It's as if they are an "employee" of Society Inc., but is paid exactly what they produced.
SomeStupidPoint 10y ago
I actually think it's a net negative, in the current US. Now there are good things that capitalism and markets do, but the way it's currently functioning no longer provides those benefits, because algorithmic trading has driven the signal to noise ratio in to bedrock. Wall St at this point is basically just a social noise amplifier stuck in an ugly feedback dynamic with the rest of the country. We long ago stopped hearing music from the underlying economy, we're on to mic static screaming at full volume. If I could wave my magic wand, Id switch to a single exchange which resolves all outstanding bids/orders once every 10 seconds in a single transaction. (You could create a single virtual exchange out of many actual ones using smart contracts.) I just don't believe Wall St would stop generating any real value by being forced to slow down and take a breath (and allow humans to act on relevant time scales). Instead, we have a noise amplification arms race.

qwrusz 10y ago

How do you define providing value to society here? Curious who and what types of jobs make the cut.

eevilspock 10y ago
Let's first tackle something a bit easier than absolute value, which is relative value. If we can't agree on the answers to these questions it's unlikely we can agree on anything: 1. Does it make sense that four hedge fund guys got more money than all the kindergarten teachers in America combined? [1] (I used the word "got" instead of earned because "earned" presumes an answer.) 2. Does it make sense that Zuckerberg is worth tens of billions and Albert Einstein maybe had a net worth of one million at death? Or that Einstein earned a modest professor's salary for his enormous contributions to science, but his estate earns $10-12 million on royalties for his name and likeness (photo, Baby Einstein license, etc)? You can't answer that it makes sense because that is what the market determined, because that would be begging the question (whether the market reasonably and fairly compensates people). -- [1] http://www.vox.com/2014/5/6/5688794/these-four-hedge-fund-guys-out-earned-every-kindergarten-teacher-in http://www.vox.com/2014/5/6/5688794/these-four-hedge-fund-gu...
- bbcbasic 10y ago
  It does "make sense" in that I am able to make sense of it. It doesn't make me think "WTF how is that possible". Are you really wanting to ask "is it fair" or "is it just" or "is it good for society"?
  - JabavuAdams 10y ago
    > Are you really wanting to ask "is it fair" or "is it just" or "is it good for society"? Yes, of course that's what the eevilspock is asking.
- oli5679 10y ago
  Another way of thinking about this is marginal value. Imagine a world where person X has a heart attack and the next best person qualified to do their job steps in and paid their wage demands. The fall in social benefits less change in wages is their marginal contribution. For Einstein, this is presumably astronomical. For the best primary school teachers this will also be high (it might be low/negative for some of the worst). These are not directly relevant to the question of whether the quant traders have a positive marginal contribution to society.

pg314 10y ago

It gets even worse when you see how those billions of dollars are then used. One of the founders of Renaissance is Robert Mercer [1]. He invested millions in the Heritage Foundation, Breitbart and Trump's campaign. [1] https://en.wikipedia.org/wiki/Robert_Mercer_(businessman) https://en.wikipedia.org/wiki/Robert_Mercer_(businessman)

brohee 10y ago
Then Simons contributed loads to math education, it's not all bad...

bbcbasic 10y ago

Adding slaves into the analogy is a bit strawmanesque

eevilspock 10y ago
It's an analogy, not a logical proof. Whether it is an appropriate analogy depends on whether you think it obscene that they make so much, especially for what they do. See my other comment: https://news.ycombinator.com/item?id=13034873 https://news.ycombinator.com/item?id=13034873

lordnacho 10y ago

Why do people have to be held accountable to some notion of social contribution? As long as people aren't burdening society, isn't that enough? You walk into a grill bar, like my parents' place. You give them money and they give you a burger. Apart from the various taxes, how has society benefitted?

PeterisP 10y ago
"As long as people aren't burdening society" doesn't apply to an organization that has extracted $55 billion of 'rent' from the society - if there's nothing comparable that the rest of society is getting for that fee, then it is a burden that they've managed to put on everyone else. In the grill bar example, the rest of society has received a lot of tasty burgers and pleasant dinner experiences. Where is the $55bn-sized beneficial service that the rest of stock market has received from Medallion?

JabavuAdams 10y ago

Jim Simons funds a lot of basic research with his gains. Not sure whether the others do anything as useful or interesting. There are billionaires who do more useful things than just buying more houses, planes, etc. E.g. Bill Gates, Elon Musk, etc.