5 ms·

I think getting a bunch of smart people to work on making automated trading strategies 24/7 is a tremendous waste of talent

2sk21 8y ago
That and figuring out which ad to show you...
- wizzairflyer 8y ago
  I see your points but then the question becomes how to give them an incentive to leave those fields. It feels that they are the only one that pay and consider you to your true value.
  - Joe-Z 8y ago
    No, that does not become the question. They chose money over morals, that's it. It's not like they are helpless victims to economic principles, so they have no other choice than to work for the scummiest types of companies because they offer good pay.
    - samatman 8y ago
      Sure, you can stop there, if your interest is in moral judgement. If you’re more interested in shifting the landscape, changing the incentives becomes the priority. Only one of these puts a stop to the objectionable behavior and wasted talent. So I know which I prefer.
      - cousin_it 8y ago
        > If you’re more interested in shifting the landscape, changing the incentives becomes the priority. Or changing laws to make the bad stuff illegal. I'd be happy to make most ads illegal. In some places they banned all roadside billboards and you know what happened? It made the view better and didn't hurt the economy.
        samatman 8y ago
        That's certainly one way to change the incentives, and it's one I happen to be open to.
      - sgt101 8y ago
        The strange thing is the addiction, people make several million dollars, and then keep going.... Doing bad things for no real motivation (if you v concede that fear of poverty is a fair driver)
  - diafygi 8y ago
    I work in energy, and there's a big debate raging now about the externalities of fossil fuels. People working for the fossil industry make substantial salaries because their industry is not adequately taxed for the externalities their products are causing. If the fossil industries were properly taxed for externalities, my guess would be that salaries would be significantly affected. Perhaps we should consider fintech and adtech to be similar scenarios? Fintech seems to have externalities that lead to ever growing income inequality. Adtech definitely has externalities on society in the form of increased susceptibility to foreign propaganda and mass surveillance. I suspect the higher salaries in fintech and adtech are similarly inflated to fossil industry salaries due to the lack of taxing externalities.
    - ForHackernews 8y ago
      Why would higher industry-specific taxes lower salaries in that industry?
ericsoderstrom 8y ago
I recently read The Idea Factory [1] which covers Bell Labs in its heyday. Many of the most brilliant human beings of that era worked for very modest salaries, and seemed content to do so. I wonder why it is that nowadays the "smartest" people tend to work in tech or finance and mostly pursue wealth. A few possibilities: 1. The rate of meaningful new discoveries in basic research has slowed significantly compared to the mid 1900s. Most important advances now involve enormous groups of researchers, and require decades of work. So the basic research route is less appealing overall. 2. Technology and finance provide clear avenues for outsized financial returns that simply weren't available in the past. Enrico Fermi, for example, was fairly enterprising. He wasn't an academic ascetic at least, and made some effort to amass wealth. But the best strategies he came up with were publishing textbooks and maybe some dabbling in the stock market (That is if I remember my details from The Last Man Who Knew Everything [2] correctly) [1]: https://www.goodreads.com/book/show/11797471-the-idea-factory https://www.goodreads.com/book/show/11797471-the-idea-factor... [2]: https://www.goodreads.com/book/show/34746094-the-last-man-who-knew-everything https://www.goodreads.com/book/show/34746094-the-last-man-wh...
- dual_basis 8y ago
  On the other hand, why should brilliant people work for modest salaries, creating wealth for others?
  - deogeo 8y ago
    The needs of the many outweigh the needs of the few? A society grows great when old men plant trees whose shade they know they shall never sit in? From each according to their abilities, to each according to their needs? It is a very recent idea that the best society is created by everyone pursuing only their own self-interest.
    - TuringNYC 8y ago
      >> From each according to their abilities, to each according to their needs? Honestly curious about which country you live in? I know some Nordic countries operate this way, but certainly not the US. Here in the US the above strategy would be a crushing losing one -- because the latter half of the "agreement" does not hold. Suppose you do offer from your abilities and dedicate your live to research, non-profits, education, whatever. There is no social agreement on the other side "to each according to their needs." It is not as if dedicating your life to good social causes suddenly causes massive medical co-pays/co-insurance/deductibles to disappear. It is not as if dedicating your life to good social causes suddenly lands your children a good education (more likely, you'll end up in an impoverished school district with lots of problems.) What you're proposing works well when both sides of the agreement are in place. Other than that, people have go into social good knowing full well they may pay the cost. I have a relative who runs a non-profit community medical clinic for those without insurance. From what I can see, the family lives paycheck to paycheck. If the roof breaks or boiler goes bust I can see them being in a lot of trouble. They accepted this fact and still do it. But that is a very personal and risky decision. One cannot browbeat others into taking such risky decisions.
roenxi 8y ago
Allocation of capital is one of the most important roles in society, bar possibly the judicial system and maybe the government legislature. Not the most powerful role, but quite possibly the one that has the biggest practical impact on people's daily lives along with entrepreneurs. We want smart people working on it. There is a lot to say on the subject of whether the financial system regulation is creating the right incentives. But there isn't really much room to debate that designing trading strategies is a waste of talent.
- ackbar03 8y ago
  Yes, that and improving efficiency of markets, the go to arguments for wall Street types. I used to be a sell-side trader, allocation of capital was the last thing on our minds. It might add value to the economy in the long run but I'm pretty sure it's way too crowded now with little marginal benefit. If we took the underlying technology and man hours used to make something more useful I think the world would be better off. Something is seriously twisted in its current state
  - roenxi 8y ago
    > I used to be a sell-side trader, allocation of capital was the last thing on our minds. Bit risky telling someone what their job is, but nevertheless I'd suggest you missed the forest for the trees. The profitability of a trading firm is directly linked to their ability to allocate capital in a way the market likes, and someone with great information thinks that hiring lots of smart people achieves their goals more effectively than hiring small numbers of smart people. > Something is seriously twisted in its current state 100%, but it isn't the concentration of smart people in finance. That is a good thing - better more scheming bankers than lawyers. Free market capitalism gives capitalists perfect freedom to operate in the sliver of the Venn diagram that connects what is possible with what customers will pay for. If they step outside that, they go bust. If there is a problem is probably that the US government didn't let enough companies go bankrupt in the aftermath of the 2008 crisis, and the same idiots that were in charge then are still in charge, or their protegees.
    - 8y ago

2sk21 8y ago

That and figuring out which ad to show you...

wizzairflyer 8y ago
I see your points but then the question becomes how to give them an incentive to leave those fields. It feels that they are the only one that pay and consider you to your true value.
- Joe-Z 8y ago
  No, that does not become the question. They chose money over morals, that's it. It's not like they are helpless victims to economic principles, so they have no other choice than to work for the scummiest types of companies because they offer good pay.
  - samatman 8y ago
    Sure, you can stop there, if your interest is in moral judgement. If you’re more interested in shifting the landscape, changing the incentives becomes the priority. Only one of these puts a stop to the objectionable behavior and wasted talent. So I know which I prefer.
    - cousin_it 8y ago
      > If you’re more interested in shifting the landscape, changing the incentives becomes the priority. Or changing laws to make the bad stuff illegal. I'd be happy to make most ads illegal. In some places they banned all roadside billboards and you know what happened? It made the view better and didn't hurt the economy.
      - samatman 8y ago
        That's certainly one way to change the incentives, and it's one I happen to be open to.
    - sgt101 8y ago
      The strange thing is the addiction, people make several million dollars, and then keep going.... Doing bad things for no real motivation (if you v concede that fear of poverty is a fair driver)
- diafygi 8y ago
  I work in energy, and there's a big debate raging now about the externalities of fossil fuels. People working for the fossil industry make substantial salaries because their industry is not adequately taxed for the externalities their products are causing. If the fossil industries were properly taxed for externalities, my guess would be that salaries would be significantly affected. Perhaps we should consider fintech and adtech to be similar scenarios? Fintech seems to have externalities that lead to ever growing income inequality. Adtech definitely has externalities on society in the form of increased susceptibility to foreign propaganda and mass surveillance. I suspect the higher salaries in fintech and adtech are similarly inflated to fossil industry salaries due to the lack of taxing externalities.
  - ForHackernews 8y ago
    Why would higher industry-specific taxes lower salaries in that industry?

ericsoderstrom 8y ago

I recently read The Idea Factory [1] which covers Bell Labs in its heyday. Many of the most brilliant human beings of that era worked for very modest salaries, and seemed content to do so. I wonder why it is that nowadays the "smartest" people tend to work in tech or finance and mostly pursue wealth. A few possibilities: 1. The rate of meaningful new discoveries in basic research has slowed significantly compared to the mid 1900s. Most important advances now involve enormous groups of researchers, and require decades of work. So the basic research route is less appealing overall. 2. Technology and finance provide clear avenues for outsized financial returns that simply weren't available in the past. Enrico Fermi, for example, was fairly enterprising. He wasn't an academic ascetic at least, and made some effort to amass wealth. But the best strategies he came up with were publishing textbooks and maybe some dabbling in the stock market (That is if I remember my details from The Last Man Who Knew Everything [2] correctly) [1]: https://www.goodreads.com/book/show/11797471-the-idea-factory https://www.goodreads.com/book/show/11797471-the-idea-factor... [2]: https://www.goodreads.com/book/show/34746094-the-last-man-who-knew-everything https://www.goodreads.com/book/show/34746094-the-last-man-wh...

dual_basis 8y ago
On the other hand, why should brilliant people work for modest salaries, creating wealth for others?
- deogeo 8y ago
  The needs of the many outweigh the needs of the few? A society grows great when old men plant trees whose shade they know they shall never sit in? From each according to their abilities, to each according to their needs? It is a very recent idea that the best society is created by everyone pursuing only their own self-interest.
  - TuringNYC 8y ago
    >> From each according to their abilities, to each according to their needs? Honestly curious about which country you live in? I know some Nordic countries operate this way, but certainly not the US. Here in the US the above strategy would be a crushing losing one -- because the latter half of the "agreement" does not hold. Suppose you do offer from your abilities and dedicate your live to research, non-profits, education, whatever. There is no social agreement on the other side "to each according to their needs." It is not as if dedicating your life to good social causes suddenly causes massive medical co-pays/co-insurance/deductibles to disappear. It is not as if dedicating your life to good social causes suddenly lands your children a good education (more likely, you'll end up in an impoverished school district with lots of problems.) What you're proposing works well when both sides of the agreement are in place. Other than that, people have go into social good knowing full well they may pay the cost. I have a relative who runs a non-profit community medical clinic for those without insurance. From what I can see, the family lives paycheck to paycheck. If the roof breaks or boiler goes bust I can see them being in a lot of trouble. They accepted this fact and still do it. But that is a very personal and risky decision. One cannot browbeat others into taking such risky decisions.

roenxi 8y ago

Allocation of capital is one of the most important roles in society, bar possibly the judicial system and maybe the government legislature. Not the most powerful role, but quite possibly the one that has the biggest practical impact on people's daily lives along with entrepreneurs. We want smart people working on it. There is a lot to say on the subject of whether the financial system regulation is creating the right incentives. But there isn't really much room to debate that designing trading strategies is a waste of talent.

ackbar03 8y ago
Yes, that and improving efficiency of markets, the go to arguments for wall Street types. I used to be a sell-side trader, allocation of capital was the last thing on our minds. It might add value to the economy in the long run but I'm pretty sure it's way too crowded now with little marginal benefit. If we took the underlying technology and man hours used to make something more useful I think the world would be better off. Something is seriously twisted in its current state
- roenxi 8y ago
  > I used to be a sell-side trader, allocation of capital was the last thing on our minds. Bit risky telling someone what their job is, but nevertheless I'd suggest you missed the forest for the trees. The profitability of a trading firm is directly linked to their ability to allocate capital in a way the market likes, and someone with great information thinks that hiring lots of smart people achieves their goals more effectively than hiring small numbers of smart people. > Something is seriously twisted in its current state 100%, but it isn't the concentration of smart people in finance. That is a good thing - better more scheming bankers than lawyers. Free market capitalism gives capitalists perfect freedom to operate in the sliver of the Venn diagram that connects what is possible with what customers will pay for. If they step outside that, they go bust. If there is a problem is probably that the US government didn't let enough companies go bankrupt in the aftermath of the 2008 crisis, and the same idiots that were in charge then are still in charge, or their protegees.
  - 8y ago