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The entire trading industry is a zero-sum game bro. For someone to win someone else has to lose. As is the advertising industry and surveillance capitalism indu

by EGreg 3y ago

The entire trading industry is a zero-sum game bro. For someone to win someone else has to lose. As is the advertising industry and surveillance capitalism industry that powers the “free web”. (Only at the edges is new value created. Most of it exists to have large institutionals take money from the small newbs, you’re the fish at the poker table.) And more broadly, capitalism exploits people. This is like blaming Andrew Tate for exploiting women but throwing up your hands when Amazon Nike and Apple were running sweatshops and warehouses at scale, exploiting people in general. Technology just made it easier to extract the rents (eg tax the uber drivers and passengers to pay the shareholder class of Uber). And generative AI just automates that further. Thanks for all your creativity, judgment and input, humans. You can be fired now thanks! Hey, if you look at the man behind the curtain, you’ll see all your favorite stuff needs it to even function. For example for Sam Altman’s ventures we have: Kenya’s cheap brains: https://time.com/6247678/openai-chatgpt-kenya-workers/ https://time.com/6247678/openai-chatgpt-kenya-workers/ Kenya’s cheap eyeballs: https://www.bbc.com/news/world-africa-66383325.amp https://www.bbc.com/news/world-africa-66383325.amp Don’t shoot the messenger

voisin 3y ago
I concur - we as a society have agreed implicitly (since I think around the 1980s) that it’s everyone for themselves so take whatever the hell you can for yourself, consequences be damned. If you’re lucky, you’ll be dead before the world burns and society devolves into chaos.
- nullstyle 3y ago
  In the immortal words of Booker T: “don’t hate the playa, hate the game”
- seadan83 3y ago
  There are places in the world that is an apt description. The US is closer to that than previously (as judged by effective tax rates on millionaires comparing the 1950s to today), but nonetheless, the US us not "there" yet and still has a ways to go
Thorrez 3y ago
>The entire trading industry is a zero-sum game bro. For someone to win someone else has to lose. Traders add liquidity. That liquidity allows me to easily buy and sell stocks without waiting long periods or worrying about getting ripped off by the spread. And since the economy isn't zero-sum, it's possible for everyone to end up better than before.
- peteradio 3y ago
  Does trading stocks somehow cause an increase production of actual stuff? If not, I don't see how everyone ends up better off.
  - hallway_monitor 3y ago
    People are saying that pump and dump schemes are unethical even if they're not always illegal. I would assert that investing for short-term gain is always unethical and the only way the stock market really benefits retail investors is when people invest and hold for long-term gains.
  - AnthonyMouse 3y ago
    > Does trading stocks somehow cause an increase production of actual stuff? Sure it does. If the price of a stock changes, it becomes easier/harder for that company to raise money relative to other companies. If it's a good company then making their shares go up can increase production of actual stuff because they can afford to build more factories etc. If it's an inefficient company and its shares go down then the people who sold it can go invest that money in something else. There is a net increase in production if the company who gets the money is the one more efficient at using it to make stuff than the alternative, i.e. share price becomes "more accurate" as a measure of the company's market efficiency.
  - jokethrowaway 3y ago
    You have to buy stocks or you'll money will go to the government thanks to inflation. Without the government the stock market would be less crowded.
everforward 3y ago
> The entire trading industry is a zero-sum game bro. It's not, and even a cursory understanding of what zero-sum games are and how the stock market works would tell you that. How does the market grow if all trades are zero-sum? How do recessions happen if all trades are zero-sum? Some portion of trades are zero-sum, maybe even most of them. Stock markets don't function if every trade was zero-sum. Pump and dump schemes are bad because they distort information in the marketplace. The tradeoff is supposed to be that these major firms perform price discovery, and in exchange for providing accurate prices to the market, they are allowed to arbitrage off the difference between the current price and the "true" price. Pump and dump schemes don't do any price discovery, they do the opposite. They create a fake new price, arbitrage off that difference, and then leave the followers holding the bag.
- amne 3y ago
  it's not, but only because someone keeps printing more money.
- Solvency 3y ago
  It's almost like a financial system that is so incredibly prone and vulnerable to manipulation shouldn't form the backbone of our entire economy. Oh wait. This is by design so the elite can retain all money and power.
- __MatrixMan__ 3y ago
  > How does the market grow if all trades are zero-sum? The same way a cancer does: by repurposing adjacent systems in service of propagating itself, often to the determent of the function of those systems. In the case of a financial market this means people spending their time watching lines squiggle around on a screen instead of finding real problems to solve. Referring to the increase of stock prices as an indicator that markets are positive sum is a little like referring to an increase in hit points as an indicator that D&D is positive sum It's not useful to use a system's own abstractions to measure its effectiveness.
  - gmd63 3y ago
deleted 3y ago
[deleted]
gmd63 3y ago
Incorrect. Capitalism allows economies to accelerate the birth of new companies that benefit people. When it's policed and regulated poorly, yes, scammers can proliferate. So don't vote for politicians who lie without apology, and don't let people you don't trust manage your money or provide you with goods or services. Predatory people will exist with or without capitalism, only Capitalism is fine-grained democracy where you vote literally every day with your dollar. I should also add, don't do any scamming or predatory behavior yourself. Because the most important vote you make for how society is run is with your own actions.
- Supermancho 3y ago
  > only Capitalism is fine-grained democracy where you vote literally every day with your dollar. I'm not sure where you get that from. Every economic model has trading, wherein the participants make trades (goods for goods). Capitalism is not democratic. Communism isn't democratic for a similar reason. The pareto principle (and natural hierarchies) appears and equality goes out the window for the traders.
  - gmd63 3y ago
    It certainly is more democratic than any alternatives I'm aware of. If you don't want someone to accumulate more economic influence, do not pay them. The government will not jail you for doing so. If business is controlled by a democratically elected government, and 49% of the country voted against those officials, there is no way for them to start their own alternative business to articulate those preferences in the market.
    - Supermancho 3y ago
      > It certainly is more democratic than any alternatives I'm aware of It's no different at all, to any other economic system. > If business is controlled by a democratically elected government, and 49% of the country voted against those officials, there is no way for them to start their own alternative business to articulate those preferences in the market. If you have 1 dollar and I have one hundred thousand, the same problem exists. This has nothing to do with capitalism or democracy, per se.
dragonwriter 3y ago
> The entire trading industry is a zero-sum game bro. It isn’t in utility terms, which are the only terms that matter for whether something is actually zero sum. Under certain assumptions, it is in (e.g.) dollar (or other specific commodity) terms, but the whole reason markets work at all is that the no specific commodity (including any fiat currency at any point in time) has a consistent relationship to utility across market participants.
- peteradio 3y ago
  How well does that utility argument play out when companies see fit to grant 0 dividend?
  - AnthonyMouse 3y ago
    If you buy shares for $100 and they increase to $200 without paying you a dividend, you've still made $100. If you prefer to have $100 in shares and $100 in cash rather than $200 in shares, you can sell half of your shares.
  - dragonwriter 3y ago
    Dividends or not are irrelevant, what matters is that the marginal utility of market value measured in monetary terms (or in market equivalent in any other commodity, but money is the most common one for people to mistake for a direct measure of utility) differs between market participants, and for the same participant (relative to others, not just by, e.g., inflation that applies in the same way to all market participants) at different points in time.

by EGreg 3y ago

voisin 3y ago

I concur - we as a society have agreed implicitly (since I think around the 1980s) that it’s everyone for themselves so take whatever the hell you can for yourself, consequences be damned. If you’re lucky, you’ll be dead before the world burns and society devolves into chaos.

nullstyle 3y ago
In the immortal words of Booker T: “don’t hate the playa, hate the game”
seadan83 3y ago
There are places in the world that is an apt description. The US is closer to that than previously (as judged by effective tax rates on millionaires comparing the 1950s to today), but nonetheless, the US us not "there" yet and still has a ways to go

Thorrez 3y ago

>The entire trading industry is a zero-sum game bro. For someone to win someone else has to lose. Traders add liquidity. That liquidity allows me to easily buy and sell stocks without waiting long periods or worrying about getting ripped off by the spread. And since the economy isn't zero-sum, it's possible for everyone to end up better than before.

peteradio 3y ago
Does trading stocks somehow cause an increase production of actual stuff? If not, I don't see how everyone ends up better off.
- hallway_monitor 3y ago
  People are saying that pump and dump schemes are unethical even if they're not always illegal. I would assert that investing for short-term gain is always unethical and the only way the stock market really benefits retail investors is when people invest and hold for long-term gains.
- AnthonyMouse 3y ago
  > Does trading stocks somehow cause an increase production of actual stuff? Sure it does. If the price of a stock changes, it becomes easier/harder for that company to raise money relative to other companies. If it's a good company then making their shares go up can increase production of actual stuff because they can afford to build more factories etc. If it's an inefficient company and its shares go down then the people who sold it can go invest that money in something else. There is a net increase in production if the company who gets the money is the one more efficient at using it to make stuff than the alternative, i.e. share price becomes "more accurate" as a measure of the company's market efficiency.
- jokethrowaway 3y ago
  You have to buy stocks or you'll money will go to the government thanks to inflation. Without the government the stock market would be less crowded.

everforward 3y ago

> The entire trading industry is a zero-sum game bro. It's not, and even a cursory understanding of what zero-sum games are and how the stock market works would tell you that. How does the market grow if all trades are zero-sum? How do recessions happen if all trades are zero-sum? Some portion of trades are zero-sum, maybe even most of them. Stock markets don't function if every trade was zero-sum. Pump and dump schemes are bad because they distort information in the marketplace. The tradeoff is supposed to be that these major firms perform price discovery, and in exchange for providing accurate prices to the market, they are allowed to arbitrage off the difference between the current price and the "true" price. Pump and dump schemes don't do any price discovery, they do the opposite. They create a fake new price, arbitrage off that difference, and then leave the followers holding the bag.

amne 3y ago
it's not, but only because someone keeps printing more money.
Solvency 3y ago
It's almost like a financial system that is so incredibly prone and vulnerable to manipulation shouldn't form the backbone of our entire economy. Oh wait. This is by design so the elite can retain all money and power.
__MatrixMan__ 3y ago
> How does the market grow if all trades are zero-sum? The same way a cancer does: by repurposing adjacent systems in service of propagating itself, often to the determent of the function of those systems. In the case of a financial market this means people spending their time watching lines squiggle around on a screen instead of finding real problems to solve. Referring to the increase of stock prices as an indicator that markets are positive sum is a little like referring to an increase in hit points as an indicator that D&D is positive sum It's not useful to use a system's own abstractions to measure its effectiveness.
- gmd63 3y ago

deleted 3y ago

[deleted]

gmd63 3y ago

Incorrect. Capitalism allows economies to accelerate the birth of new companies that benefit people. When it's policed and regulated poorly, yes, scammers can proliferate. So don't vote for politicians who lie without apology, and don't let people you don't trust manage your money or provide you with goods or services. Predatory people will exist with or without capitalism, only Capitalism is fine-grained democracy where you vote literally every day with your dollar. I should also add, don't do any scamming or predatory behavior yourself. Because the most important vote you make for how society is run is with your own actions.

Supermancho 3y ago
> only Capitalism is fine-grained democracy where you vote literally every day with your dollar. I'm not sure where you get that from. Every economic model has trading, wherein the participants make trades (goods for goods). Capitalism is not democratic. Communism isn't democratic for a similar reason. The pareto principle (and natural hierarchies) appears and equality goes out the window for the traders.
- gmd63 3y ago
  It certainly is more democratic than any alternatives I'm aware of. If you don't want someone to accumulate more economic influence, do not pay them. The government will not jail you for doing so. If business is controlled by a democratically elected government, and 49% of the country voted against those officials, there is no way for them to start their own alternative business to articulate those preferences in the market.
  - Supermancho 3y ago
    > It certainly is more democratic than any alternatives I'm aware of It's no different at all, to any other economic system. > If business is controlled by a democratically elected government, and 49% of the country voted against those officials, there is no way for them to start their own alternative business to articulate those preferences in the market. If you have 1 dollar and I have one hundred thousand, the same problem exists. This has nothing to do with capitalism or democracy, per se.

dragonwriter 3y ago

> The entire trading industry is a zero-sum game bro. It isn’t in utility terms, which are the only terms that matter for whether something is actually zero sum. Under certain assumptions, it is in (e.g.) dollar (or other specific commodity) terms, but the whole reason markets work at all is that the no specific commodity (including any fiat currency at any point in time) has a consistent relationship to utility across market participants.

peteradio 3y ago
How well does that utility argument play out when companies see fit to grant 0 dividend?
- AnthonyMouse 3y ago
  If you buy shares for $100 and they increase to $200 without paying you a dividend, you've still made $100. If you prefer to have $100 in shares and $100 in cash rather than $200 in shares, you can sell half of your shares.
- dragonwriter 3y ago
  Dividends or not are irrelevant, what matters is that the marginal utility of market value measured in monetary terms (or in market equivalent in any other commodity, but money is the most common one for people to mistake for a direct measure of utility) differs between market participants, and for the same participant (relative to others, not just by, e.g., inflation that applies in the same way to all market participants) at different points in time.