Earlier quoted context omitted.
General rule: work spent on getting better at a zero-sum game is valuable to the player doing it, but if all players do it, the result is waste. Example 1: companies spending on advertising to increase their share of a fixed market. Example 2: managers hiring more people for their team to look more important within the larger company. Example 3: if social status is determined by looking tougher than others, everyone…
Advertising encourages people to spend, even in some times to do it by going into debt. This in turn leads to more economic activity, more widgets ordered, which in theory should mean we can reap benefits of economies of scale, we can better amortize costs, etc. Which leads to R&D and innovation, which helps technological change, which leads to a more efficient economy, which leads to more surplus, which means more w…
You made a leap of logic here. The technological innovations in finance directly contributed to a more volatile economy that crashed and inflicted massive losses on huge swaths of the global population, many of whom never recovered.