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> We don't need more tech companies. We don't need more hedge funds. What we absolutely don’t need, is autocrats dictating what society needs. Luckily we alre

> We don't need more tech companies. We don't need more hedge funds. What we absolutely don’t need, is autocrats dictating what society needs. Luckily we already have this cool innovation called a market economy. It’s not perfectly efficient (especially in the short term), but pretty damn efficient. By throwing off price signals, the market allows us to allocate efforts to things society wants more of. Unfortunately, contrary to the wishes of the King, it turns out society wants more tech companies. But sometimes we do indeed over-allocate resources to tech companies! Luckily we have the hedge funds incentivized to make profit by arbitraging those prices back to reality (As we’ve just witnessed in tech). I guess we also need more hedge funds.

bheadmaster 4y ago
> Luckily we already have this cool innovation called a market economy Market economy got us into the situation where the most brilliant minds in the world are researching best ways to make internet advertisements as addictive as they can be. Very cool innovation, indeed. Ever read The Space Merchants?
- a4a4a4a4 4y ago
  > the most brilliant minds in the world are researching best ways to make internet advertisements as addictive as they can be. They're doing a great job, ads are so addictive I've even turned off my Ad blocker so I can get more of them! Won't someone save me!
  - bheadmaster 4y ago
    I assume you're saying that ads are irrelevant because we have AdBlock? Ads would always exist, but think about how many great (even lifesaving) solutions we're missing out on because market decided they aren't worthy of pursuit.
    - a4a4a4a4 4y ago
      I'm saying ads aren't "addictive", because they're pretty despised. They might be effective, when people see them, but I don't think anyone is "addicted" to ads.
      - adrianN 4y ago
        Every influencer is basically an ad on two legs.
        a4a4a4a4 4y ago
        Are we talking about influencers, or “the world’s brightest minds”?
        bheadmaster 4y ago
        They're working together. Youtube algorithms compute the most likely influencer that is going to occupy your attention and serve you advertisements in the process. "Nobody is addicted to ads" is true if you think only about the pop-ups and couple-second videos as "ads" - but the concept of advertisements is much wider than that. Some adverisements may not even be presented as such - they may be presented as "useful content", but which is chosen above other such useful content by the virtue of being paid for to the advertising company.
      - bheadmaster 4y ago
        You're nitpicking an irrelevant detail. Expand "ads" in my comment to "screen time" (for the sake of serving ads) generally and the "despised" counterargument falls apart. The whole point of my comment is that brilliant minds are working on making stuff more addictive to people, instead of making the world a better place.
      - smcin 4y ago
        It's the content (and personalized curation, based on what the platform's learned you want to see) that's addictive, not the ads. Users are addicted to the content creators, and watching ads is the price they have to pay to sit through to watch free content. Picking ads that are relevant, or at least not annoying enough to make you switch off, is part of the platform's experience. And there are creators who blend ads in as organic content, or at least a personalized endorsement which doesn't come across as phony, which MrBeast said gets the most positive response. I recently turned off tracking, and suddenly started getting served ads for 'green cremation'. I guess statistically few people are interested in that, but conversions are lucrative, although the 99% of users who don't want to see it probably get mildly annoyed.
- jwestbury 4y ago
  How about an even better -- and more salient -- example? Quant trading firms are gobbling up promising researchers in fields like physics and mathematics. These are people getting funded Ph.Ds at top universities (Oxford, Cambridge, Harvard, Yale, etc.), and they end up just going to companies which exist solely for the purpose of making rich people richer.
  - pembrook 4y ago
    Quant firms provide value to society, hence why they are compensated for it. Liquidity and price discovery are useful things. Nobody would pay them otherwise.
    - jabradoodle 4y ago
      If the definition of providing value to society = making a profit, then is selling heroin providing value to society?
    - bheadmaster 4y ago
      > Liquidity and price discovery are useful things. Nobody would pay them otherwise. Is there any other evidence of their usefulness beyond "people pay for it"?
      - sokoloff 4y ago
        On the liquidity side, would you pay more for a security that you could easily and quickly sell with small slippage than you would for a security that could not be easily sold or only sold with a large slippage? "People pay for [that]" because it's a genuinely useful property of an investment vehicle.
onion2k 4y ago
Luckily we already have this cool innovation called a market economy. We don't really though. There are companies, and individuals, with enough wealth and influence to compete with entire markets. A well-funded startup can undermine whole industries by spending VC money to run at a loss long enough that the rest of the market fails (Uber, AirBNB) or they can become so massive that there's absolutely no possibility of competing (Amazon). People can start private companies that do things only governments have done before (SpaceX, Palantir). These businesses are not influenced by pricing, because they're either too well funded to care, or too influential for others to get a foot in the door. Free market economics is a beautiful idea, but every big business (and some small businesses) do all they can to subvert the market and hold a monopoly on something. Heck, Peter Thiel literally wrote a book about how to do exactly that - Zero To One.
- qeternity 4y ago
  > so massive that there's absolutely no possibility of competing Scale has no value unless it offers something to your customer base. What you're ignoring is that Uber, Amazon et al are so huge and dominant because customers flock to them. I can summon a taxi to my location in most cities in the world with a single app. I can have pretty much any item delivered to my door within one or two days. These were unfathomable 10-15 years ago. Amazon has huge amounts of competition, as does Uber. I have absolutely no idea where you get this idea they are not influenced by pricing. Uber hasn't made any money in its entire existence. That is not characteristic of a monopoly.
  - carschno 4y ago
    I think your argument is missing GP's point entirely. The point was that a functioning market economy would evolve so that companies that sell products or services at a self-sustaining price survive, whereas companies that lose money continuously die. However, this is clearly not the case, given that companies like Uber, as you mention, do survive without being profitable at all. Competitors that are not backed by near-infinite money cannot survive this competition, regardless of their product or efficiency. Whether or not a functioning market economy could ever exist in reality if of course another question.
navane 4y ago
The market as implemented in the past, in a world with technology form the past, worked well in the past. This doesn't mean it won't need to be changed ever. No one is saying the complete market should be removed. We always have had rules putting boundaries on free markets (child labour, slavery), and these rules should move with the times.
lordnacho 4y ago
The problem with this is who gets to decide what efficient means. It's not exactly news that the market throws off price signals, the question is whether those signals are the correct signals. After all, the market also decided it wanted opioids, slaves, and a betting shop on every high street in the UK. Are we wrong to question whether Mr Market is right?

bheadmaster 4y ago

> Luckily we already have this cool innovation called a market economy Market economy got us into the situation where the most brilliant minds in the world are researching best ways to make internet advertisements as addictive as they can be. Very cool innovation, indeed. Ever read The Space Merchants?

a4a4a4a4 4y ago
> the most brilliant minds in the world are researching best ways to make internet advertisements as addictive as they can be. They're doing a great job, ads are so addictive I've even turned off my Ad blocker so I can get more of them! Won't someone save me!
- bheadmaster 4y ago
  I assume you're saying that ads are irrelevant because we have AdBlock? Ads would always exist, but think about how many great (even lifesaving) solutions we're missing out on because market decided they aren't worthy of pursuit.
  - a4a4a4a4 4y ago
    I'm saying ads aren't "addictive", because they're pretty despised. They might be effective, when people see them, but I don't think anyone is "addicted" to ads.
    - adrianN 4y ago
      Every influencer is basically an ad on two legs.
      - a4a4a4a4 4y ago
        Are we talking about influencers, or “the world’s brightest minds”?
        bheadmaster 4y ago
        They're working together. Youtube algorithms compute the most likely influencer that is going to occupy your attention and serve you advertisements in the process. "Nobody is addicted to ads" is true if you think only about the pop-ups and couple-second videos as "ads" - but the concept of advertisements is much wider than that. Some adverisements may not even be presented as such - they may be presented as "useful content", but which is chosen above other such useful content by the virtue of being paid for to the advertising company.
    - bheadmaster 4y ago
      You're nitpicking an irrelevant detail. Expand "ads" in my comment to "screen time" (for the sake of serving ads) generally and the "despised" counterargument falls apart. The whole point of my comment is that brilliant minds are working on making stuff more addictive to people, instead of making the world a better place.
    - smcin 4y ago
      It's the content (and personalized curation, based on what the platform's learned you want to see) that's addictive, not the ads. Users are addicted to the content creators, and watching ads is the price they have to pay to sit through to watch free content. Picking ads that are relevant, or at least not annoying enough to make you switch off, is part of the platform's experience. And there are creators who blend ads in as organic content, or at least a personalized endorsement which doesn't come across as phony, which MrBeast said gets the most positive response. I recently turned off tracking, and suddenly started getting served ads for 'green cremation'. I guess statistically few people are interested in that, but conversions are lucrative, although the 99% of users who don't want to see it probably get mildly annoyed.
jwestbury 4y ago
How about an even better -- and more salient -- example? Quant trading firms are gobbling up promising researchers in fields like physics and mathematics. These are people getting funded Ph.Ds at top universities (Oxford, Cambridge, Harvard, Yale, etc.), and they end up just going to companies which exist solely for the purpose of making rich people richer.
- pembrook 4y ago
  Quant firms provide value to society, hence why they are compensated for it. Liquidity and price discovery are useful things. Nobody would pay them otherwise.
  - jabradoodle 4y ago
    If the definition of providing value to society = making a profit, then is selling heroin providing value to society?
  - bheadmaster 4y ago
    > Liquidity and price discovery are useful things. Nobody would pay them otherwise. Is there any other evidence of their usefulness beyond "people pay for it"?
    - sokoloff 4y ago
      On the liquidity side, would you pay more for a security that you could easily and quickly sell with small slippage than you would for a security that could not be easily sold or only sold with a large slippage? "People pay for [that]" because it's a genuinely useful property of an investment vehicle.

onion2k 4y ago

Luckily we already have this cool innovation called a market economy. We don't really though. There are companies, and individuals, with enough wealth and influence to compete with entire markets. A well-funded startup can undermine whole industries by spending VC money to run at a loss long enough that the rest of the market fails (Uber, AirBNB) or they can become so massive that there's absolutely no possibility of competing (Amazon). People can start private companies that do things only governments have done before (SpaceX, Palantir). These businesses are not influenced by pricing, because they're either too well funded to care, or too influential for others to get a foot in the door. Free market economics is a beautiful idea, but every big business (and some small businesses) do all they can to subvert the market and hold a monopoly on something. Heck, Peter Thiel literally wrote a book about how to do exactly that - Zero To One.

qeternity 4y ago
> so massive that there's absolutely no possibility of competing Scale has no value unless it offers something to your customer base. What you're ignoring is that Uber, Amazon et al are so huge and dominant because customers flock to them. I can summon a taxi to my location in most cities in the world with a single app. I can have pretty much any item delivered to my door within one or two days. These were unfathomable 10-15 years ago. Amazon has huge amounts of competition, as does Uber. I have absolutely no idea where you get this idea they are not influenced by pricing. Uber hasn't made any money in its entire existence. That is not characteristic of a monopoly.
- carschno 4y ago
  I think your argument is missing GP's point entirely. The point was that a functioning market economy would evolve so that companies that sell products or services at a self-sustaining price survive, whereas companies that lose money continuously die. However, this is clearly not the case, given that companies like Uber, as you mention, do survive without being profitable at all. Competitors that are not backed by near-infinite money cannot survive this competition, regardless of their product or efficiency. Whether or not a functioning market economy could ever exist in reality if of course another question.

navane 4y ago

The market as implemented in the past, in a world with technology form the past, worked well in the past. This doesn't mean it won't need to be changed ever. No one is saying the complete market should be removed. We always have had rules putting boundaries on free markets (child labour, slavery), and these rules should move with the times.

lordnacho 4y ago

The problem with this is who gets to decide what efficient means. It's not exactly news that the market throws off price signals, the question is whether those signals are the correct signals. After all, the market also decided it wanted opioids, slaves, and a betting shop on every high street in the UK. Are we wrong to question whether Mr Market is right?