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I often wonder to what extent scams like this have positive externalities, insofar as the people who get scammed were perhaps unlikely to allocate capital in so
by wyager 5y ago
I often wonder to what extent scams like this have positive externalities, insofar as the people who get scammed were perhaps unlikely to allocate capital in socially efficient ways.
- ceejayoz 5y agoAre the scammers now in possession of $7.7B likely to "allocate capital in socially efficient ways"?
- wyager 5y agoPerhaps more likely than the scammed. For example, the scammers may purchase equities.
- Mvandenbergh 5y agoWould be quite funny if the scammers were hard-core Bogleheads dumping everything into ultra-low-fee index funds.
- AlexandrB 5y agoIn an economy where companies prefer to invest in R&D with credit and buy back stock, purchasing equities seems less beneficial than stimulating demand by just buying stuff.
- wyager 5y ago“Stimulating demand” is nonsense - applied Broken Window Fallacy. The net effect of equity investment is to increase the amount of capital targeted towards the production of capital goods; i.e. deferring consumption makes humanity richer in the long term.
- surfingdino 5y agoThey now have a public, cryptographically protected record of their activities, available for inspection using automated tools by anyone who's interested, including law enforcement.
- ceejayoz 5y agoSure. https://en.wikipedia.org/wiki/Cryptocurrency_tumbler https://en.wikipedia.org/wiki/Cryptocurrency_tumbler
- tata71 5y agoEugenics-like slippery slope, there.
- deleted 5y ago[deleted]
- unbanned 5y agoInteresting point. Would you rather have few unscrupulous, enterprising individuals have a significant proportion of wealth, or have this distributed between many people who are mentally challenged (easily conned)...
- AlexandrB 5y ago> people who are mentally challenged (easily conned)... I think the biggest predictor for being conned is not low IQ but high greed.
- gokdisjtrdcvv5 5y agoI didn’t think of that but you are totally right! I’d say greed has much more to do with it than IQ
- wyager 5y agoPeople who are smart and greedy have much more effective ways of satisfying their greed than investing in fly-by-night crypto schemes. This typically looks like selecting a career path based primarily on its expected return.
- malfist 5y agoYeah, but did you see the dress she was wearing? She wasn't dressed in socially efficient ways, we should look at the positive externalities.
- Geee 5y agoFrom a game theory perspective, I believe that dishonest players are always a net negative for all other players. It might seem that it's good when capital transfers from stupid to smart people, but actually it moves from honest to dishonest people, which results in less efficiency. All this capital is now used to perpetrate more scams, which means that more capital will be allocated to these scammers instead of something honest. And because of these scammers, all honest people have now less capital to work with.
- wyager 5y agoA fair point - unless scams tend to be one-shot, it’s relatively likely that the capital accumulated from a scam will go towards unproductive ends (other scams). However, I still think it’s plausible that the allocation of scam profits is better than the allocation of scamee wealth. The sort of people who buy into NFT monkey rugpulls or whatever might just spend any surplus wealth on a new TV or something.
- Sohcahtoa82 5y agoDefine "socially efficient ways", because that sounds like a dog whistle.
- wyager 5y agoPerhaps you have tinnitus.