3 ms·
"But I'm left to ask: is a society that sends so many of its brightest college graduates into a capital markets monkey pit maximizing welfare?" This is the par
by sdurkin 19y ago
"But I'm left to ask: is a society that sends so many of its brightest college graduates into a capital markets monkey pit maximizing welfare?"
This is the part of the argument with which I take issue. Allocation of investment is the heart of a capitalist economy. In a socialist economy, investment is dispensed from a central location. In a capitalist economy such as ours, where there are many competition-driven individual firms, we benefit from each of them making wise investment decisions.
Investment firms literally decide how we spend our accrued wealth. I can't think of a better place to send our best and brightest.
- kingkongrevenge 19y ago> Allocation of investment is the heart of a capitalist economy. Allocation of capital is at the core of a capitalist economy. That's not what most people in finance are doing. They are speculating with funny money. There isn't really that much actual capital involved; savings rates are abysmal after all.
- startingup 19y agoExcellent point. The result of financial speculation of recent years was the allocation of credit to the real estate industry, distorting the real economy in multitude of ways, by pulling resources in an unsustainable fashion. In 2000, there were 100+ optical networking companies in the 10 mile radius around Palo Alto. That was the result of that period's credit bubble, which worked its way through credit -> stock market/debt market -> telecom companies -> start-ups.