Money is a tool, it's part of the game but it's not the output or payoff of the game. The payoff of the game is the consumption of goods and services.
The payoff of the stock market 'game' is the cash you make when you 'cash out' and sell off stock. I think you are expanding 'the game' to include the separate issue of capturing labor value in the form of hard currency.
No, the payoff of the stock market game is what you can buy with the sale proceeds and dividends. This differs in two ways from your definition of payoff: I'm including dividends and you're not, and I'm expressing them in terms of goods and services and you're not. Narrowing it to sale proceeds only is not legitimate, for obvious reasons. Describing payoffs in terms of money would be legitimate if the correspondence between money and what you can buy with it were fixed no matter what you do in the game. This is untrue because investors change the cost of capital and return to entrepreneurs through their behaviour by changing prices. So, payoff is affected by the behaviour of market participants as a whole in two ways: 1. their behaviour changes companies' and entrepreneurs investment decisions and therefore dividends. 2. their behaviour changes companies' and entrepreneurs investment decisions and therefore the products available for sale in the economy.
I don't understand what 'capturing labor value in the form of hard currency' means.
The point I was making about currency value being fluid is akin to the issue of measurements when dealing with relativistic physics. One of the analogies that physicists will use is to describe measuring thing with rubber rulers. It seems to be very similar to what is happening in the market, where on a micro transaction level, the game is strictly zero-sum, but on a larger level you are measuring your losses and gains with the 'rubber ruler' of currency value.
Yes, on a small level you can imagine equivalences between certain amounts of money and certain bundles of output which break down completely on a whole economy level. Similarly, equivalences between currencies don't work on whole economy levels. Logic which works on a personal finance level no longer works at an economy level.
The only money that actually has any possibility of being used for productive work is in the initial sale of a share from the issuing company. Every other trade of that share is a zero-sum game.
No, it isn't, because:
- As I've said many times in this thread: Trading behaviour affects prices, prices affect decisions by various people (eg, 'do I start a dot com?'), those decisions affect production.
- Even if production were not affected the trade can be mutually beneficial to the trading parties. eg: Person A is 70, owns shares, produces nothing (is retired) and would like to consume. Person B is 40, produces output, has some money and would like to give up some of his right to consume this year's economic output in exchange for a probability of having something to consume when he himself is 70. This may be zero sum in terms of amounts of output, but not in terms of the welfare of these two parties.
A 'game' is a scenario in which interacting participants choose actions which, taken together, result in a set of payoffs to those participants. In what way is 'gold' such a thing, zero sum or otherwise?
It is an interesting statement. At first i was going to disagree with the parent poster like you did, but consider the broader question, what is money? In the contemporary sense, money is issued by governments base on GNP projections and other factors. Sure, the market is zero sum in the sense that every time a transaction occurs, one person goes up x ducats and one person goes down x ducats, but it is being purchased with money from a central money source that just wills money into and out of existence on whim.
Money is a tool, it's part of the game but it's not the output or payoff of the game. The payoff of the game is the consumption of goods and services. If the game participants' behaviour affects the amount of consumption that happens then the game is not zero sum.
If there were an exact formula that governed the creation of money down to the last cent, I might agree with you, but it is really just a lot of really educated guesswork. Since the money is the medium that defines market values, I don't think that you can divorce the two, and money is very much an non-zero sum game.
Money is the unit in which all market prices are expressed, but absolute amounts of money get their meaning from the market prices expressed in that currency. Is $1m a lot? That depends on what you can buy with it. Is something worth $1m? That depends on how it compares to the other things you could buy with $1m. All prices are ultimately relative. Double all the numbers and they carry the same information. If you could define the absolute intrinsic value of an object you could define the absolute value of money. It's not obvious the question even makes sense.
Your argument is remarkably similar to the "evolution violates the laws of entropy (2nd law of thermodynamics)" one.
How? My argument is: stock market participants' behaviour affects stock market valuations, stock market valuations affect decisions, those decisions affect real output, variation in real output affects human welfare. Therefore stock market participants' behaviour which produces good valuations results in higher welfare. Therefore the game is not zero sum: the total payoff varies depending on participants' behaviour.
You're not looking wide enough.
What do you believe are the boundaries to the area at which I'm looking and what outside them do you believe I should be including?
I don't want to deal with the extremely complex socio-economic arguments in an argument about whether the stock market makes money vanish or not.
Good. Nor do I. It's not money that's important, except as a mechanism. The payoffs to the game are goods and services people consume, not money. I claim two things: 1. These payoffs are not zero sum. 2. The total of these payoffs across all players are affected by the existence and operation of the stockmarket.
The stock market is not a place where money goes to die; it is a place where people go to gamble... or, not quite, more of a game of skill against risk. Risk is controllable, whereas in gambling it's stacked such that risk is fixed. Still, the model fits: you put money in, someone else puts money in, and the lot of you hope to get your hands in the pot when it's full of everyone else's money.
No, it doesn't fit. The pot varies in size based on whether the investments are good investments or not and whether stock market pricing is good or not. It does this because it affects the investment decisions of firms, amongst other things, which in turn affects the productive capacity of the economy and dividend paying capacity of the companies. Finally, there is a time delay element which does not exist as a necessary part of gambling.
Gambling: the act of paying someone to deliberately increase the risk to which you are exposed for your pleasure (or through addiction). (The opposite is insurance). The risk is typically purely synthetic. No doubt some people do use the stockmarket for this. Most people do not. Saving: the act of giving up your ability to consume some of your share of current economic output in exchange for the ability to consume part of future economic output, possibly with some sort of risk element attached. Typically this risk is real risk (of product failure, crop failure, changes in consumer tastes, refusal of a borrower to repay his mortgage) which has to be borne by someone. Investment: the use of some of current economic resources to product something (a factory, a new house, a new product) which will produce a stream of future output.
Most stock market participants on the demand side are savers - they do it to exchange consumption now (eg, while working) for consumption in the future (eg, while retired). Companies participating are investors. They try to use the current resources the savers have chosen not to consume in order to create things which produce future output (part of which is the future output those very same savers will end up consuming in the future). Participants on the supply side (brokers, liquidity suppliers, exchanges, etc.) are, collectively, suppliers. Not necessarily good ones. They supply the mechanisms necessary for savers and companies to make their exchanges in exchange for as much of the right to consume output as they can get. These three things are not gambling.
All of your arguments apply to the gambling industry as well: people show up, dump money in, and a few come out rich; most come out poor; and for the most part the bulk of the money goes to the casino. The casino produces no useful output (arguable: it provides valuable entertainment; however, the gambling aspect is damaging and most people aren't coming to spend $500 on the privilege of enjoying blackjack so much as they're coming with a fantasy that they'll make $5000 on blackjack).
No, my arguments do not apply to gambling. Take my hypothetical scenarios, A and B. Whether you bet on red or black or not at all makes no difference to the size of economic output, except for any entertainment value and the resources used supplying casinos. Whether you choose poor investments (A) or good ones (B) does. The amount you get to consume in the two cases is different, and that extra output in case B does not come at the expense of someone else. It is not zero sum.
The money isn't disappearing though. The stock market is a zero sum game: any money you put in will come out, one way or another.
Again: what has money got to do with it? Why does the conservation of money mean that the game is zero sum?
The stock market doesn't affect the amount of wealth in the real world - it just lets you exchange tokens that represent that real world weath.
Of course it does! It affects decisions, including investment decisions. These affect wealth. If it misprices shares it can cause poorer investment decisions, which causes resources to be poured in to activities which increase wealth by less than the best alternative activities.
The amount of iron in the universe doesn't suddenly triple if someone issues 3x as much iron stock. Just like the number of tons of iron in a warehouse doesn't suddenly triple if the stock of the warehouse operator triples.
Indeed not. Though wealth isn't measured in amount of stuff, it's the value of stuff that's important. And, of course, iron can go round and round, being recycled, producing new and better products or infrastructure each time.
Quite right. The 'gain' or 'loss' (or 'payoff', as it'd normally be called) from your engagement with the economy is not money. Money is part of the 'game' not its outcome. Consumption of goods and services, your provision of labour, the effect on you of economic decisions which affect your physical environment and so on are your payoff. It's too easy to see 'gain' and 'loss' and thing 'money.
Dot-com shows up IPO'd overvalued at $100. Shrewd investor spends $100. I: -$100; IPO: +$100. Total: $0.
Add up all the money people give to others. Take away all the money people receive from others. Total: $0. (Neglecting changes to the money supply which isn't really relevant here). This doesn't mean your economy has zero output. It doesn't mean your economy is a zero sum game. Prices affect decisions. Decisions affect production and consumption. Production and consumption affect human welfare. Human welfare (ideally, but conceptually tricky) or output is what you're summing, not transactions.
Market frenzy overvalues dot-com at $350/share. Shrewd investor sells his stock to Sucker for $350. I:+$250. IPO:+$100. S:-$350. Total: $0
Hypothetical Situation A: Market frenzy overvalues dot-coms in general. Investors pile money in to starting and buying dot-coms, thus causing resources available for investment to be used to start dot-coms. Dot-coms consume economic resources: developers' work, office space, computers, bandwidth. Dot-coms produce few useful products. Add all the transactions: Total: 0. Add up output: amount 'a'.
Hypothetical Situation B: Market correctly values all companies. Resources available for investment are channeled to the best possible investments, all decisions correctly risk and value adjusted. Those companies consumer resources. Some of those companies product useful products. People use those useful products. Add all the transactions: Total; 0. Add up output: amount 'b' > 'a'.
Result: not zero sum
The IPO gained the company $100 per share. Investor spent $100, so he was down by $100. Then the value went up to $350. Investor sold, got $350, some other sucker went down by $350. The investor has made $250, as he just got $350 after giving $100 to the IPO. The IPO got $100. Suckerballs is at -$350 and if the stock drops to $250 and he sells then he's at -$100 and someone else has -$250 and a $250 valued stock, bringing the total value overall to... the value of the stock ($0 plus stock valued at $250).
You missed out: company spent $100 dollars per share (or the founders founded or VCs invested in the company in the hope of receiving $100 per share) on getting people to do stuff. The stuff they did produced no useful output. Had the company not got them to do that most (or possibly all) of those people would have done other stuff....stuff which quite possibly would have produced useful output.
If you ever add the value of stock to the value of money that's gone into and come out of the market, you find it always equates to zero.
Erm, no. Your terms don't appear to be conceptually sound, but I'll try. Suppose you define the 'value of stock in the market' as (current trading price) x (outstanding shares). Let's say $100m goes 'in to the market', as you put it, in an IPO (money transferred from investors to company and/or original owners) in the form of 100m shares x $1. Then suppose that one trade of 100 shares goes through at $2. Current trading price = $2. Outstanding shares = 100m. 'Value of stock in the market' = $200m. Suppose you define 'money in to the market' as 'money spent on shares' and 'money out of the market' as 'money received by individuals selling shares plus dividends', and suppose that we neglect commissions and so forth. Money in = $100m+$200. Money out = $200. Money in + money out + value of stock in the market = $100m+$200 - $200 + $200m != 0. Possibly you mean money in - money out = value of stock in the market ($100m+$200-$200=$200m), which still isn't true. And I haven't even started on dividends.
You need to start with better terms, at least. The '(fundamental) value of a stock' is the net present value of all of its future dividends (including any final one on liquidation). This is determined by its products, its decisions, future consumer sentiment and preferences, t
This industry is riddled with perverse incentives toward taking on outsize risk loads(that hopefully won't blow up until you leave, or will blow up in somebody else's face) in exchange for rewards now.
I rather suspect it's more like 'Let's give myself a chance of saving my own arse by covering up that $10m loss I shouldn't have made by making an even bigger bet' repeated with exponentially increasing losses than 'Let's see if I can become a hero by making lots of money with a monstrously huge bet which breaks all the rules'. I suspect that breaking the rules imposed on you in a really big mult-$bn way is going to get you fired whether you're successful or not.
Ultimately, it is, because ultimately, every trade has a winner and a loser, and ultimately, the value of every stock goes to zero. We just haven't seen the game played out long enough yet (though we came pretty close recently).
No, it isn't (except in the 'in the long run we are all dead' sense). Consider the dot com boom. Over-inflated dot com stock valuations caused large amounts of additional investment in dot coms which were never going to make money, or quite possible provide any useful service at all. The economy wasted resources in pointless rubbish, thus reducing the amount available for consumption and investment in other things.
Stock market valuations and stock market investors motivated by them affect many decisions. Things like: should company x buy company y? What minimum rate of return should we require internally on our investments/what should we take our internal cost of capital to be? Should the current managers be retained? Should we raise money via a new share issue or IPO? What should I, as a VC or private equity investor, invest in and how much money do I get (from sales of businesses) to spend on new investments? What interest rate must the government pay me for me to lend to it instead of buying stocks?
I'm not going to claim stock markets do these well. I don't know the answer and I don't know what to compare them to. Nor will I claim there isn't a great deal of zero-sum or near zero-sum activity going on - that described in the article is almost certainly near-zero-sum (probably somewhat negative). It's quite plain, though, that these decisions have to be made and that they're important. They affect economic growth rates. They affect the distribution of wealth (amongst ordinary people, not just those in the industry). They are most certainly not zero sum.
Their problem is that it's expensive, time consuming, and hard to prove in court so they want freedoms curtailed instead.
From the article:
According to reports, if a court deems a site to be unlawful the government wants search engines to push it down the rankings to stifle traffic and at the same time cut off advertising or payment revenues to make the site economically unviable.
But you are, of course, right that there's a large disparity between smaller companies and individuals and large ones that would be difficult to change without a lighter-weight procedure than the one 'reports' suggest, and that's where things get difficult.
No it really isn't. Copyright makes a fundamental error in thinking, and that is thinking that ideas are equivalent to property.
No, it doesn't. Property is a legal concept. Copyright is a legal concept. Copyright laws can define something which behaves like property without any 'fundamental error in thinking'. The question isn't 'can I find a silly argument that claims a conceptual flaw in the concept of copyright' but 'does the existence of copyright law improve the welfare of individuals'. The non-rival nature of things subject to copyright (plus others, like streetlighting) is significant in how it must be analyzed, but doesn't come even close to properly examining whether copyright is a good thing or not.
If Remington knowingly supplied continuing shipments of razor blades to drug barons who then publicly used them to help them supply drugs, do you really thing there wouldn't be a judicial response? And in this case it's partly about Google buying advertising space from (and therefore being a source of funding to) websites which have been ruled to be unlawful by a court. They're not being asked to 'stop [others] copyright infringement', they're being asked not to collude in it and profit from it.
But why would they do that? Google itself relies on copyright, too. It's what stops a competitor just taking whatever they feel like of their software any way they can, for example. And, of course, without copyright there might be a little less for them to index and advertise. Obeying a court order requiring them not to buy advertising space from someone who brings traffic to those adverts by using someone else's work without permission or recompense isn't particularly unreasonable. Why would they be so utterly exasperated with it?
As a relative of (classical, in this case) musicians I can tell you that for most musicians performing is quite a tough job, with long hours of travel and practice and a great deal of stress and pressure. For a profession that's difficult to break in to - many people spent huge amounts of time concentrating on practicing, having lessons and at music college and then end up having to find something else they can do with their life and their not very transferrable skills - it isn't usually paid very well, typically much less than any surgeon or doctor is likely to earn. There are certain a few popular music peddlars intent on nothing but ruining their bodies and receiving ludicrous incomes for no obvious reason, but you shouldn't judge a whole industry by a few visible figures....there are probably even a few semi-celebrity doctors out there earning huge sums, too.
And both are things for which the human brain has a built in propensity but is then paramaterized primarily through early life socialisation.
So presumably the GNU people's parents babbled at them in scheme when they were toddlers whilst preaching that JavaScript developers will burn in the eternal fire. It's the only logical explanation.
Probably innate. Slashdot is largely pro-atheism, and subconsciously, if not consciously, the average subscriber knows they need to deal with the "human" versus "animal" differentiation issue at some point, as naturalism gives them no basis to create a distinction.
Have you eaten a steak, and still maintain you have "rights"? Why you, and not the cow?
Hmm. And how would you make the human/animal distinction in our ancestral past? Was there a creature which, in a sharp and religiously-defined human-animal or immortal soul-vs-unsouled(?) sense, had rights but had parents who did not? Or was there some level of continuity, from non-human apes to human apes as we evolved?
I mean that women accuse men of being more superficial than women. We're as superficial as women are (IMO, I have no references to cite here and it's rather subjective anyway). However, I think we define superficiality in gender specific ways. Women spread their superficiality across assessments wealth, status, power, ability to dominate others (via personality) and looks whilst men concentrate most of it on looks. Then women use a definition of superficiality which fits male superficiality better than their own.
As far as looking for women with brains or a personality we like is concerned, I'd make a distinction between being sexually appealing and being appealing as a partner.
Also, I remember an OKCupid survey which found that women have a much higher barrier for men's physical attractiveness than men do for women's. Men spread their assessment of women evenly with most in the middle and equal numbers at the top and bottom of the scale. Women put most men in the bottom half.
There's one way to bring competition back: allow polygamy.
Especially in the absence of polyandry there will be considerable competition anyway in parts of China and India, thanks to their sex ratios.
Polygamy has some serious problems when it comes to human welfare. It tends to lead to a lot of violence and criminality - and, of course, to huge sacrifices of male welfare in order to be the wealthiest or most successful mate. Given that human welfare is the goal it doesn't seem very appealing.
Additionally, the fraction of mate selection (white, histpanic, asian, other) among those who do intermarry is nearly identical between the genders.
Hispanic+non-hispanic white is intermarrying? Wow! Maybe it's my European perspective but it'd never have occurred to me to divide people in to hispanic and non-hispanic if Americans hadn't done it first. I can see physical, cultural and temperamental differences between Brits, Spaniards, French, Italians, Greeks, Swedes and so on but I'd never have put marrying a French or Italian woman in a different category to marrying a Spanish or Portuguese woman.
Slashdot Mirror
Money is a tool, it's part of the game but it's not the output or payoff of the game. The payoff of the game is the consumption of goods and services. The payoff of the stock market 'game' is the cash you make when you 'cash out' and sell off stock. I think you are expanding 'the game' to include the separate issue of capturing labor value in the form of hard currency.
No, the payoff of the stock market game is what you can buy with the sale proceeds and dividends. This differs in two ways from your definition of payoff: I'm including dividends and you're not, and I'm expressing them in terms of goods and services and you're not. Narrowing it to sale proceeds only is not legitimate, for obvious reasons. Describing payoffs in terms of money would be legitimate if the correspondence between money and what you can buy with it were fixed no matter what you do in the game. This is untrue because investors change the cost of capital and return to entrepreneurs through their behaviour by changing prices. So, payoff is affected by the behaviour of market participants as a whole in two ways: 1. their behaviour changes companies' and entrepreneurs investment decisions and therefore dividends. 2. their behaviour changes companies' and entrepreneurs investment decisions and therefore the products available for sale in the economy.
I don't understand what 'capturing labor value in the form of hard currency' means.
The point I was making about currency value being fluid is akin to the issue of measurements when dealing with relativistic physics. One of the analogies that physicists will use is to describe measuring thing with rubber rulers. It seems to be very similar to what is happening in the market, where on a micro transaction level, the game is strictly zero-sum, but on a larger level you are measuring your losses and gains with the 'rubber ruler' of currency value.
Yes, on a small level you can imagine equivalences between certain amounts of money and certain bundles of output which break down completely on a whole economy level. Similarly, equivalences between currencies don't work on whole economy levels. Logic which works on a personal finance level no longer works at an economy level.
The only money that actually has any possibility of being used for productive work is in the initial sale of a share from the issuing company. Every other trade of that share is a zero-sum game.
No, it isn't, because:
A 'game' is a scenario in which interacting participants choose actions which, taken together, result in a set of payoffs to those participants. In what way is 'gold' such a thing, zero sum or otherwise?
It is an interesting statement. At first i was going to disagree with the parent poster like you did, but consider the broader question, what is money? In the contemporary sense, money is issued by governments base on GNP projections and other factors. Sure, the market is zero sum in the sense that every time a transaction occurs, one person goes up x ducats and one person goes down x ducats, but it is being purchased with money from a central money source that just wills money into and out of existence on whim.
Money is a tool, it's part of the game but it's not the output or payoff of the game. The payoff of the game is the consumption of goods and services. If the game participants' behaviour affects the amount of consumption that happens then the game is not zero sum.
If there were an exact formula that governed the creation of money down to the last cent, I might agree with you, but it is really just a lot of really educated guesswork. Since the money is the medium that defines market values, I don't think that you can divorce the two, and money is very much an non-zero sum game.
Money is the unit in which all market prices are expressed, but absolute amounts of money get their meaning from the market prices expressed in that currency. Is $1m a lot? That depends on what you can buy with it. Is something worth $1m? That depends on how it compares to the other things you could buy with $1m. All prices are ultimately relative. Double all the numbers and they carry the same information. If you could define the absolute intrinsic value of an object you could define the absolute value of money. It's not obvious the question even makes sense.
Money is not created or destroyed here; it's only moved around.
Please, please, PLEASE, tell me WHY you believe that the conservation of money implies that the game is zero sum!
Your argument is remarkably similar to the "evolution violates the laws of entropy (2nd law of thermodynamics)" one.
How? My argument is: stock market participants' behaviour affects stock market valuations, stock market valuations affect decisions, those decisions affect real output, variation in real output affects human welfare. Therefore stock market participants' behaviour which produces good valuations results in higher welfare. Therefore the game is not zero sum: the total payoff varies depending on participants' behaviour.
You're not looking wide enough.
What do you believe are the boundaries to the area at which I'm looking and what outside them do you believe I should be including?
I don't want to deal with the extremely complex socio-economic arguments in an argument about whether the stock market makes money vanish or not.
Good. Nor do I. It's not money that's important, except as a mechanism. The payoffs to the game are goods and services people consume, not money. I claim two things: 1. These payoffs are not zero sum. 2. The total of these payoffs across all players are affected by the existence and operation of the stockmarket.
The stock market is not a place where money goes to die; it is a place where people go to gamble... or, not quite, more of a game of skill against risk. Risk is controllable, whereas in gambling it's stacked such that risk is fixed. Still, the model fits: you put money in, someone else puts money in, and the lot of you hope to get your hands in the pot when it's full of everyone else's money.
No, it doesn't fit. The pot varies in size based on whether the investments are good investments or not and whether stock market pricing is good or not. It does this because it affects the investment decisions of firms, amongst other things, which in turn affects the productive capacity of the economy and dividend paying capacity of the companies. Finally, there is a time delay element which does not exist as a necessary part of gambling.
Gambling: the act of paying someone to deliberately increase the risk to which you are exposed for your pleasure (or through addiction). (The opposite is insurance). The risk is typically purely synthetic. No doubt some people do use the stockmarket for this. Most people do not. Saving: the act of giving up your ability to consume some of your share of current economic output in exchange for the ability to consume part of future economic output, possibly with some sort of risk element attached. Typically this risk is real risk (of product failure, crop failure, changes in consumer tastes, refusal of a borrower to repay his mortgage) which has to be borne by someone. Investment: the use of some of current economic resources to product something (a factory, a new house, a new product) which will produce a stream of future output.
Most stock market participants on the demand side are savers - they do it to exchange consumption now (eg, while working) for consumption in the future (eg, while retired). Companies participating are investors. They try to use the current resources the savers have chosen not to consume in order to create things which produce future output (part of which is the future output those very same savers will end up consuming in the future). Participants on the supply side (brokers, liquidity suppliers, exchanges, etc.) are, collectively, suppliers. Not necessarily good ones. They supply the mechanisms necessary for savers and companies to make their exchanges in exchange for as much of the right to consume output as they can get. These three things are not gambling.
All of your arguments apply to the gambling industry as well: people show up, dump money in, and a few come out rich; most come out poor; and for the most part the bulk of the money goes to the casino. The casino produces no useful output (arguable: it provides valuable entertainment; however, the gambling aspect is damaging and most people aren't coming to spend $500 on the privilege of enjoying blackjack so much as they're coming with a fantasy that they'll make $5000 on blackjack).
No, my arguments do not apply to gambling. Take my hypothetical scenarios, A and B. Whether you bet on red or black or not at all makes no difference to the size of economic output, except for any entertainment value and the resources used supplying casinos. Whether you choose poor investments (A) or good ones (B) does. The amount you get to consume in the two cases is different, and that extra output in case B does not come at the expense of someone else. It is not zero sum.
The money isn't disappearing though. The stock market is a zero sum game: any money you put in will come out, one way or another.
Again: what has money got to do with it? Why does the conservation of money mean that the game is zero sum?
The stock market doesn't affect the amount of wealth in the real world - it just lets you exchange tokens that represent that real world weath.
Of course it does! It affects decisions, including investment decisions. These affect wealth. If it misprices shares it can cause poorer investment decisions, which causes resources to be poured in to activities which increase wealth by less than the best alternative activities.
The amount of iron in the universe doesn't suddenly triple if someone issues 3x as much iron stock. Just like the number of tons of iron in a warehouse doesn't suddenly triple if the stock of the warehouse operator triples.
Indeed not. Though wealth isn't measured in amount of stuff, it's the value of stuff that's important. And, of course, iron can go round and round, being recycled, producing new and better products or infrastructure each time.
Quite right. The 'gain' or 'loss' (or 'payoff', as it'd normally be called) from your engagement with the economy is not money. Money is part of the 'game' not its outcome. Consumption of goods and services, your provision of labour, the effect on you of economic decisions which affect your physical environment and so on are your payoff. It's too easy to see 'gain' and 'loss' and thing 'money.
Dot-com shows up IPO'd overvalued at $100. Shrewd investor spends $100. I: -$100; IPO: +$100. Total: $0.
Add up all the money people give to others. Take away all the money people receive from others. Total: $0. (Neglecting changes to the money supply which isn't really relevant here). This doesn't mean your economy has zero output. It doesn't mean your economy is a zero sum game. Prices affect decisions. Decisions affect production and consumption. Production and consumption affect human welfare. Human welfare (ideally, but conceptually tricky) or output is what you're summing, not transactions.
Market frenzy overvalues dot-com at $350/share. Shrewd investor sells his stock to Sucker for $350. I:+$250. IPO:+$100. S:-$350. Total: $0
Hypothetical Situation A: Market frenzy overvalues dot-coms in general. Investors pile money in to starting and buying dot-coms, thus causing resources available for investment to be used to start dot-coms. Dot-coms consume economic resources: developers' work, office space, computers, bandwidth. Dot-coms produce few useful products. Add all the transactions: Total: 0. Add up output: amount 'a'.
Hypothetical Situation B: Market correctly values all companies. Resources available for investment are channeled to the best possible investments, all decisions correctly risk and value adjusted. Those companies consumer resources. Some of those companies product useful products. People use those useful products. Add all the transactions: Total; 0. Add up output: amount 'b' > 'a'.
Result: not zero sum
The IPO gained the company $100 per share. Investor spent $100, so he was down by $100. Then the value went up to $350. Investor sold, got $350, some other sucker went down by $350. The investor has made $250, as he just got $350 after giving $100 to the IPO. The IPO got $100. Suckerballs is at -$350 and if the stock drops to $250 and he sells then he's at -$100 and someone else has -$250 and a $250 valued stock, bringing the total value overall to ... the value of the stock ($0 plus stock valued at $250).
You missed out: company spent $100 dollars per share (or the founders founded or VCs invested in the company in the hope of receiving $100 per share) on getting people to do stuff. The stuff they did produced no useful output. Had the company not got them to do that most (or possibly all) of those people would have done other stuff....stuff which quite possibly would have produced useful output.
If you ever add the value of stock to the value of money that's gone into and come out of the market, you find it always equates to zero.
Erm, no. Your terms don't appear to be conceptually sound, but I'll try. Suppose you define the 'value of stock in the market' as (current trading price) x (outstanding shares). Let's say $100m goes 'in to the market', as you put it, in an IPO (money transferred from investors to company and/or original owners) in the form of 100m shares x $1. Then suppose that one trade of 100 shares goes through at $2. Current trading price = $2. Outstanding shares = 100m. 'Value of stock in the market' = $200m. Suppose you define 'money in to the market' as 'money spent on shares' and 'money out of the market' as 'money received by individuals selling shares plus dividends', and suppose that we neglect commissions and so forth. Money in = $100m+$200. Money out = $200. Money in + money out + value of stock in the market = $100m+$200 - $200 + $200m != 0. Possibly you mean money in - money out = value of stock in the market ($100m+$200-$200=$200m), which still isn't true. And I haven't even started on dividends.
You need to start with better terms, at least. The '(fundamental) value of a stock' is the net present value of all of its future dividends (including any final one on liquidation). This is determined by its products, its decisions, future consumer sentiment and preferences, t
This industry is riddled with perverse incentives toward taking on outsize risk loads(that hopefully won't blow up until you leave, or will blow up in somebody else's face) in exchange for rewards now.
I rather suspect it's more like 'Let's give myself a chance of saving my own arse by covering up that $10m loss I shouldn't have made by making an even bigger bet' repeated with exponentially increasing losses than 'Let's see if I can become a hero by making lots of money with a monstrously huge bet which breaks all the rules'. I suspect that breaking the rules imposed on you in a really big mult-$bn way is going to get you fired whether you're successful or not.
Ultimately, it is, because ultimately, every trade has a winner and a loser, and ultimately, the value of every stock goes to zero. We just haven't seen the game played out long enough yet (though we came pretty close recently).
No, it isn't (except in the 'in the long run we are all dead' sense). Consider the dot com boom. Over-inflated dot com stock valuations caused large amounts of additional investment in dot coms which were never going to make money, or quite possible provide any useful service at all. The economy wasted resources in pointless rubbish, thus reducing the amount available for consumption and investment in other things.
Stock market valuations and stock market investors motivated by them affect many decisions. Things like: should company x buy company y? What minimum rate of return should we require internally on our investments/what should we take our internal cost of capital to be? Should the current managers be retained? Should we raise money via a new share issue or IPO? What should I, as a VC or private equity investor, invest in and how much money do I get (from sales of businesses) to spend on new investments? What interest rate must the government pay me for me to lend to it instead of buying stocks?
I'm not going to claim stock markets do these well. I don't know the answer and I don't know what to compare them to. Nor will I claim there isn't a great deal of zero-sum or near zero-sum activity going on - that described in the article is almost certainly near-zero-sum (probably somewhat negative). It's quite plain, though, that these decisions have to be made and that they're important. They affect economic growth rates. They affect the distribution of wealth (amongst ordinary people, not just those in the industry). They are most certainly not zero sum.
Oh /that/ Remington. That makes the OP make more sense. They're not widely known here. My reply still stands, though.
Their problem is that it's expensive, time consuming, and hard to prove in court so they want freedoms curtailed instead.
From the article:
But you are, of course, right that there's a large disparity between smaller companies and individuals and large ones that would be difficult to change without a lighter-weight procedure than the one 'reports' suggest, and that's where things get difficult.
No it really isn't. Copyright makes a fundamental error in thinking, and that is thinking that ideas are equivalent to property.
No, it doesn't. Property is a legal concept. Copyright is a legal concept. Copyright laws can define something which behaves like property without any 'fundamental error in thinking'. The question isn't 'can I find a silly argument that claims a conceptual flaw in the concept of copyright' but 'does the existence of copyright law improve the welfare of individuals'. The non-rival nature of things subject to copyright (plus others, like streetlighting) is significant in how it must be analyzed, but doesn't come even close to properly examining whether copyright is a good thing or not.
If Remington knowingly supplied continuing shipments of razor blades to drug barons who then publicly used them to help them supply drugs, do you really thing there wouldn't be a judicial response? And in this case it's partly about Google buying advertising space from (and therefore being a source of funding to) websites which have been ruled to be unlawful by a court. They're not being asked to 'stop [others] copyright infringement', they're being asked not to collude in it and profit from it.
But why would they do that? Google itself relies on copyright, too. It's what stops a competitor just taking whatever they feel like of their software any way they can, for example. And, of course, without copyright there might be a little less for them to index and advertise. Obeying a court order requiring them not to buy advertising space from someone who brings traffic to those adverts by using someone else's work without permission or recompense isn't particularly unreasonable. Why would they be so utterly exasperated with it?
As a relative of (classical, in this case) musicians I can tell you that for most musicians performing is quite a tough job, with long hours of travel and practice and a great deal of stress and pressure. For a profession that's difficult to break in to - many people spent huge amounts of time concentrating on practicing, having lessons and at music college and then end up having to find something else they can do with their life and their not very transferrable skills - it isn't usually paid very well, typically much less than any surgeon or doctor is likely to earn. There are certain a few popular music peddlars intent on nothing but ruining their bodies and receiving ludicrous incomes for no obvious reason, but you shouldn't judge a whole industry by a few visible figures....there are probably even a few semi-celebrity doctors out there earning huge sums, too.
And both are things for which the human brain has a built in propensity but is then paramaterized primarily through early life socialisation.
So presumably the GNU people's parents babbled at them in scheme when they were toddlers whilst preaching that JavaScript developers will burn in the eternal fire. It's the only logical explanation.
Probably innate. Slashdot is largely pro-atheism, and subconsciously, if not consciously, the average subscriber knows they need to deal with the "human" versus "animal" differentiation issue at some point, as naturalism gives them no basis to create a distinction.
Have you eaten a steak, and still maintain you have "rights"? Why you, and not the cow?
Hmm. And how would you make the human/animal distinction in our ancestral past? Was there a creature which, in a sharp and religiously-defined human-animal or immortal soul-vs-unsouled(?) sense, had rights but had parents who did not? Or was there some level of continuity, from non-human apes to human apes as we evolved?
I mean that women accuse men of being more superficial than women. We're as superficial as women are (IMO, I have no references to cite here and it's rather subjective anyway). However, I think we define superficiality in gender specific ways. Women spread their superficiality across assessments wealth, status, power, ability to dominate others (via personality) and looks whilst men concentrate most of it on looks. Then women use a definition of superficiality which fits male superficiality better than their own.
As far as looking for women with brains or a personality we like is concerned, I'd make a distinction between being sexually appealing and being appealing as a partner.
Also, I remember an OKCupid survey which found that women have a much higher barrier for men's physical attractiveness than men do for women's. Men spread their assessment of women evenly with most in the middle and equal numbers at the top and bottom of the scale. Women put most men in the bottom half.
Except that opposites don't attract. People generally choose similar partners.
There's one way to bring competition back: allow polygamy.
Especially in the absence of polyandry there will be considerable competition anyway in parts of China and India, thanks to their sex ratios.
Polygamy has some serious problems when it comes to human welfare. It tends to lead to a lot of violence and criminality - and, of course, to huge sacrifices of male welfare in order to be the wealthiest or most successful mate. Given that human welfare is the goal it doesn't seem very appealing.
Additionally, the fraction of mate selection (white, histpanic, asian, other) among those who do intermarry is nearly identical between the genders.
Hispanic+non-hispanic white is intermarrying? Wow! Maybe it's my European perspective but it'd never have occurred to me to divide people in to hispanic and non-hispanic if Americans hadn't done it first. I can see physical, cultural and temperamental differences between Brits, Spaniards, French, Italians, Greeks, Swedes and so on but I'd never have put marrying a French or Italian woman in a different category to marrying a Spanish or Portuguese woman.
(Different AC here).
Doh! Oh well, I didn't care about those moderations anyway....