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I like the fact that this article identifies that finance serves a purpose, that it can do a lot of good. At the same time, it also recognizes that not all fina

I like the fact that this article identifies that finance serves a purpose, that it can do a lot of good. At the same time, it also recognizes that not all finance is useful or good from a societal point of view. This distinction always seems to get lost in the arguments that result when articles like this are posted on HN. Take HFT, the perennial point of controversy. It is true that it provides liquidity (though, I would suggest not necessarily when you need it), but is it true that more liquidity is always better? At some point, I would argue that the market is liquid enough, and continually pushing the limits of HFT is quite simply rent seeking and may have other detrimental market and/or societal effects. To bring my comment back to the article in question, I have to agree with the author that it is somewhat sad to see people pursue careers in fields of dubious societal value, but if I were offered the paycheque, I would almost certainly take it, too.

HarryHirsch 12y ago
but if I were offered the paycheque, I would almost certainly take it, too One would think everyone would take the paycheck if offered a position on Wall Street. There's almost nothing left that pays equally well.
- tsotha 12y ago
  I'm not so sure the pay is that much better after you factor in taxes and the cost of living. The difference would have to be enormous before I moved to NYC.
- goodcanadian 12y ago
  There are plenty of people for whom money is not the driving factor in their decisions. However, for me, finance is a very interesting field, and I would probably quite happily play the game for a fat paycheque regardless of what I think of the societal value of what I am doing.
- xxxyy 12y ago
  Well, considering: the extreme working hours (that can in extreme cases result in death, or a psychiatric disease), high risk of exposure to drugs, the fact that the starting banking positions do not pay that much money, the fact that you often do things you absolutely do not care about, well, the answer is not that simple. http://www.businessinsider.com/wall-street-to-silicon-valley-movement-2014-1?IR=T http://www.businessinsider.com/wall-street-to-silicon-valley...
  - HarryHirsch 12y ago
    The trouble is this: with the price of NYC real estate being what it is, how can you afford living in NYC, except by working in finance? Of course you can live elsewhere, but the cultural offerings in NYC are really exceptional.
- foobarqux 12y ago
  Many people voluntarily leave Wall Street to do other things.
  - s73v3r 12y ago
    After they've built up a stockpile of money taking that Wall Street paycheck.
- yodsanklai 12y ago
  Don't think everyone wants to earn a lot of money. There are many other things to take into account when choosing a career. Conversely, some people choose finance because they find the job interesting, and not for the money.
  - gress 12y ago
    You talk as though earning a lot of money was just a lifestyle choice. The problem is that as income inequality increases, not earning enough money becomes career limiting in itself, regardless of what you would like to do in your career.
- pingswept 12y ago
  I would not. I prefer engineering, even for less money. It's not even close.
seeingfurther 12y ago
The liquidity benefit is a straw man in the entire HFT debate. It's easy to poke holes in liquidity as a value add. The real benefit from HFT is what it has replaced. Before HFT & direct access trading we had a closed system run by specialists and market-makers. Every single trade had to go through a specialist or MM. Spreads were wide and the system made incredible returns skimming each trade. That system was replaced by HFT which had the effect of opening the market up to anyone willing to run an HFT operation, tightened spreads and yes added liquidity. The fact that HFT 'skims' of trades is nothing new to the system, the real benefit is how much less we all get skimmed today than we did 20 years ago. Is it perfect? No. But it's a step in the right direction.
- kevinskii 12y ago
  Unless I misunderstand it seems you're pointing out a benefit of automated electronic trading, not HFT. Most people distinguish between the two when arguing that HFT is detrimental.
  - dlp211 12y ago
    And on top of that, how many of us are actively trading day in and day out? The added value there doesn't benefit the vast majority of society. EDIT: People with pension funds, 401k's, IRA's, and the like are not trading day in and day out. They typically purchase funds which do the trading on their behalf. Most of these funds are controlled by institutions that aren't subject to be skimmed by the MM's as they are the MM's themselves.
    - bboreham 12y ago
      Anyone with a pension fund?
    - seeingfurther 12y ago
      I'll say it more plainly. Long term or short term holders of stock... doesn't matter... if you are invested in the market you need to exit or enter a trade. Today you get less screwed than you did twenty years ago, that's a fact.

HarryHirsch 12y ago

but if I were offered the paycheque, I would almost certainly take it, too One would think everyone would take the paycheck if offered a position on Wall Street. There's almost nothing left that pays equally well.

tsotha 12y ago
I'm not so sure the pay is that much better after you factor in taxes and the cost of living. The difference would have to be enormous before I moved to NYC.
goodcanadian 12y ago
There are plenty of people for whom money is not the driving factor in their decisions. However, for me, finance is a very interesting field, and I would probably quite happily play the game for a fat paycheque regardless of what I think of the societal value of what I am doing.
xxxyy 12y ago
Well, considering: the extreme working hours (that can in extreme cases result in death, or a psychiatric disease), high risk of exposure to drugs, the fact that the starting banking positions do not pay that much money, the fact that you often do things you absolutely do not care about, well, the answer is not that simple. http://www.businessinsider.com/wall-street-to-silicon-valley-movement-2014-1?IR=T http://www.businessinsider.com/wall-street-to-silicon-valley...
- HarryHirsch 12y ago
  The trouble is this: with the price of NYC real estate being what it is, how can you afford living in NYC, except by working in finance? Of course you can live elsewhere, but the cultural offerings in NYC are really exceptional.
foobarqux 12y ago
Many people voluntarily leave Wall Street to do other things.
- s73v3r 12y ago
  After they've built up a stockpile of money taking that Wall Street paycheck.
yodsanklai 12y ago
Don't think everyone wants to earn a lot of money. There are many other things to take into account when choosing a career. Conversely, some people choose finance because they find the job interesting, and not for the money.
- gress 12y ago
  You talk as though earning a lot of money was just a lifestyle choice. The problem is that as income inequality increases, not earning enough money becomes career limiting in itself, regardless of what you would like to do in your career.
pingswept 12y ago
I would not. I prefer engineering, even for less money. It's not even close.

seeingfurther 12y ago

The liquidity benefit is a straw man in the entire HFT debate. It's easy to poke holes in liquidity as a value add. The real benefit from HFT is what it has replaced. Before HFT & direct access trading we had a closed system run by specialists and market-makers. Every single trade had to go through a specialist or MM. Spreads were wide and the system made incredible returns skimming each trade. That system was replaced by HFT which had the effect of opening the market up to anyone willing to run an HFT operation, tightened spreads and yes added liquidity. The fact that HFT 'skims' of trades is nothing new to the system, the real benefit is how much less we all get skimmed today than we did 20 years ago. Is it perfect? No. But it's a step in the right direction.

kevinskii 12y ago
Unless I misunderstand it seems you're pointing out a benefit of automated electronic trading, not HFT. Most people distinguish between the two when arguing that HFT is detrimental.
- dlp211 12y ago
  And on top of that, how many of us are actively trading day in and day out? The added value there doesn't benefit the vast majority of society. EDIT: People with pension funds, 401k's, IRA's, and the like are not trading day in and day out. They typically purchase funds which do the trading on their behalf. Most of these funds are controlled by institutions that aren't subject to be skimmed by the MM's as they are the MM's themselves.
  - bboreham 12y ago
    Anyone with a pension fund?
  - seeingfurther 12y ago
    I'll say it more plainly. Long term or short term holders of stock... doesn't matter... if you are invested in the market you need to exit or enter a trade. Today you get less screwed than you did twenty years ago, that's a fact.