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I agree. Disparaging speculation as "zero-sum" and therefore inherently bad is non-sense. In almost all mature industries such as grocery stores, auto sales, l

by dmfdmf 16y ago

I agree. Disparaging speculation as "zero-sum" and therefore inherently bad is non-sense. In almost all mature industries such as grocery stores, auto sales, lumber, appliances, etc., any individual seller's gain is some other seller's loss. So what? They are providing a valuable service and if profitable in the long-run are doing so at lowest cost, highest value to their customers. Financial speculation has a long history of being disparaged by various anti-capitalist demagogues. Speculation is a zero-sum activity between speculators but, from an economy-wide perspective, speculators nevertheless perform a valuable function in the dissemination of new information and the formation of prices. This latter function is why it is so hard -- the identification of an arbitrage opportunity and acting in the markets to make profits means that price differentials fade away and thus the potential for profits. A speculator has to continually find new opportunities in order to make money over the long term.

jeromec 16y ago
> Speculation is a zero-sum activity between speculators I agree. > any individual seller's gain is some other seller's loss I disagree. A farmer can sell to a grocer and both can gain.
- chc 16y ago
  I think you don't disagree. The grocer is not in a seller in the same ecosystem as the farmer. The grocer is one of the external people who benefits from the zero-sum game the farmers are playing.
  - wooster 16y ago
    Farming is pretty much the opposite of a zero sum game.
    - chc 16y ago
      The growing part isn't, but the selling part can be seen that way in the right conditions. I agree, though, it isn't the example I would have chosen.
shasta 16y ago
> any individual seller's gain is some other seller's loss. How do you figure? Generally, the way one seller beats out another is by providing some combination of increased value or decreased cost.
- dmfdmf 16y ago
  In a mature market sellers are competing for a fixed number of customers. For example, a grocery store that wants to increase sales (above local population growth) must "steal" customers from its competitors. So my gain of a customer constitutes your loss of a customer, i.e. zero sum. Sellers achieve this (take customers from competitors) by offering higher value and/or decreased costs as I also mentioned.

by dmfdmf 16y ago

jeromec 16y ago

> Speculation is a zero-sum activity between speculators I agree. > any individual seller's gain is some other seller's loss I disagree. A farmer can sell to a grocer and both can gain.

chc 16y ago
I think you don't disagree. The grocer is not in a seller in the same ecosystem as the farmer. The grocer is one of the external people who benefits from the zero-sum game the farmers are playing.
- wooster 16y ago
  Farming is pretty much the opposite of a zero sum game.
  - chc 16y ago
    The growing part isn't, but the selling part can be seen that way in the right conditions. I agree, though, it isn't the example I would have chosen.

shasta 16y ago

> any individual seller's gain is some other seller's loss. How do you figure? Generally, the way one seller beats out another is by providing some combination of increased value or decreased cost.

dmfdmf 16y ago
In a mature market sellers are competing for a fixed number of customers. For example, a grocery store that wants to increase sales (above local population growth) must "steal" customers from its competitors. So my gain of a customer constitutes your loss of a customer, i.e. zero sum. Sellers achieve this (take customers from competitors) by offering higher value and/or decreased costs as I also mentioned.