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If the stock market doesn't create real wealth, then why is it so successful? Is it merely siphoning real wealth away to the pockets of parasites? The stock m
by yters 18y ago
If the stock market doesn't create real wealth, then why is it so successful? Is it merely siphoning real wealth away to the pockets of parasites?
The stock market is about giving money to those who will use it most effectively, so, when done right, it can be seen as very efficient resource allocation.
- gaius 18y ago"When it's done right" being the operative words there. When it's not you get the subprime crisis. Those bankers might not be getting a bonus this year, but they won't be handing back the millions they made when they were setting us all up.
- jleyank 18y agoAt best, the market's the place where funding originates. It helps others create wealth. At worst, it's merely a middleman, pocketing a cut of other people's transactions. This is accepted as it's useful to have a "market for money", but I would not say it creates wealth in the same way as something that processes ideas to sellable code or raw materials to finished product.
- yters 18y agoBoth code and the market create value by processing information. Code can break too, but that's not an argument against writing code. So, I'm not seeing a strong argument that the market is essentially different than any other sort of value creating information processing we do.