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>“People should be compensated for the value they produce. Profits are a signal of how much people value what is produced." I’m hoping you might expand on this
by skadamou 10y ago
>“People should be compensated for the value they produce. Profits are a signal of how much people value what is produced."
I’m hoping you might expand on this a little. I’ve never quite understood this line of reasoning mostly because it seems like there is a lot of money to be made in finance and yet I’m not sure how hedge funds “produce” anything. I really do mean this earnestly, I don’t know a whole lot about economics so from my laymen’s perspective it is unclear how fund managers are compensated for the value they produce if they are just buying a selling stocks.
- jpttsn 10y agoFrom an economist's perspective, bankers can create value. If you want to lend money and I want to borrow, but we don't know/trust each other, a banker can "produce" a big help to match us together and price the risk. Those are two examples; there are tons of other services bankers provide their customers. I believe bankers add value this way. To my eyes "bankers don't produce" is just as unfair as "coaches don't score any goals."
- Kalium 10y agoIt's not buying and selling stocks that's producing value, as you think of it. It's that the money they produce funds, for instance, someone's retirement.