3 ms·
Allocation isn't exactly at the center. Capital is at the center. Things like factories, mines, offices, homes, computers, code, infrastructure and other equipm
by fennecfoxen 12y ago
Allocation isn't exactly at the center. Capital is at the center. Things like factories, mines, offices, homes, computers, code, infrastructure and other equipment to make things effectively form the core of our economy. The capitalists are at the core of the remuneration (sometimes this is rich guy investing instead of buying another yacht, sometimes this is a retirement fund).
But still, allocating that well is tricky. Imagine if you did poorly, say, if you provided the capital to make millions of loans on overvalued housing, like FNMA. Instead of something useful that would help the nation prosper, the economy ends up with a bunch of houses that weren't as valuable as people thought. Also, the people doing the allocation would go bankrupt and lose everything... just kidding!!! they'd go run to the government whining for a bailout and get it!!! -cough- did I call them allocators? I meant more like leeches.
Those are the stakes, at least. :P