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This is the common theme in the comments on this story: The argument we have socialized risk but privatized the successes is invalid, because when those succes
by tessierashpool 12y ago
This is the common theme in the comments on this story:
The argument we have socialized risk but privatized the successes is invalid, because when those successes pay off, the taxes paid by those success stories repay the individual investments in those individual success stories.
That is not what the term "risk" means. "Risk" also includes all the investments which did not pay off.
- bsbechtel 12y ago>>That is not what the term "risk" means. "Risk" also includes all the investments which did not pay off. That's certainly true, but I'm not sure what you're getting at. I'd appreciate it if you could clarify. Diversifying your investments to hedge against those that don't pay off is the foundation of modern portfolio theory. You can see it in action at virtually every level of society: individual firms have employees that don't generate returns, but they hope that the collective productivity of the entire company can generate a positive return, angel investors and VCs invest across a broad spectrum of companies hoping that a few big wins will offset those investments that don't pay off, and governments invest in a variety of projects, research, and (sometimes) companies that they hope will generate positive returns for the economy as a whole.