Imagine a world where some magic firehose of money gives everyone $100k/year for free. And now suppose you have the skill of redirecting that firehose a bit, wi

Imagine a world where some magic firehose of money gives everyone $100k/year for free. And now suppose you have the skill of redirecting that firehose a bit, with the result that you can make one lucky person get $200k/year instead, while 11 other people get $90k/year instead of $100k/year. Then your firehose-manipulation skills are worthless to society at large -- they reduce the net influx of money by $10k/year when you practise them -- but I bet you'd have no trouble finding someone sane and willing to pay you $50k/year to point the firehose their way. (Of course in this exact scenario you would do better just to take the extra yourself; the real-world counterpart of the skill, though, produces gains roughly in proportion to the amount of money put in, and you can do better by persuading thousands of people to get you to point the firehose their way than by just working for yourself.) I make no claim that the real-world finance industry is like that. But it illustrates schematically how something can be (1) of negative value to society as a whole and (2) something sane people are willing to pay for. And it's not unreasonable to conjecture that a lot of the things investment banks and hedge funds do have something like the same structure. Oh, one other thing. Suppose that actually the firehose distributes money very unevenly. Then you might do this: manipulate the firehose to benefit one set of rich people at the expense of another, take their money, and give some of it to poor people. Doing that might be substantially net positive to society. So even taking this rather cynical view of the finance industry, some people in it might be doing a whole lot of good on balance. (It's called "earning to give" by the cool kids these days. But even if you don't explicitly give anything away, the magic of income tax -- if the government spends reasonably wisely -- may turn a slightly-negative-sum activity into something that benefits society on the whole.) [EDITED to insert an accidentally omitted word and clarify slightly. No change in substance.]