Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Too much finance is bad for the economy

economist.com

Post reply on HN
Print view View original

11–20 of 214 posts

Re: Too much finance is bad for the economy

#11

Post by S4M »

bhouston wrote: post #3

Summary: > In short, the finance sector lures away high-skilled workers from other industries. The finance sector then lends the money to businesses, but tends to favour those firms that have collateral they can pledge against the loan. This usually means builders and property developers. Businessmen are lured into this sector rather than into riskier projects that require high R&D spending and have less collateral t…

> R&D-intensive industries - aircraft, computing and the like - will be disproportionately harmed when the financial sector grows quickly. By contrast, industries such as textiles or iron and steel, which have low R&D intensity, should not be adversely affected

So, buy barrier puts on those R&D intensive industries that is activated by a high growth of the companies in the financial sectors (bank...). As someone who used to do pricing, I find it pretty ironic that I can get investment tips from an article criticizing finance - I am not working in finance anymore and tend to agree with the article, though.

Re: Too much finance is bad for the economy

#12

Post by danbruc »

Meh. What do we need economic growth for anyway? Producing and throwing away another hundred million tons of food every year? New phones every six months or once a quarter? A third car? More shoes? We have enough of everything and much more, there is absolutely no need to grow western economies any further.

Re: Too much finance is bad for the economy

#13

Post by marbletiles »

bhouston wrote: post #9
gumby wrote: post #7

Basically bankers are like lawyers, gardeners, cooks, doctors, pool cleaners etc: service jobs to help other people get things done. When you elevate the sector to have implicit value you get a terrible distortion.

I agree with a caveat. In the grand scheme of things everything is a service to help others get things done (there is no final all important job) and there needs to be a balance.

Isn't there a sense in which the jobs that serve the bottom of Maslow's hierarchy are the final all-important ones.

If we don't have food production, heat production and shelter production, the lack of financiers or telephone sanitizers is going to pale.

Re: Too much finance is bad for the economy

#14

Post by msandford »

bhouston wrote: post #9
gumby wrote: post #7

Basically bankers are like lawyers, gardeners, cooks, doctors, pool cleaners etc: service jobs to help other people get things done. When you elevate the sector to have implicit value you get a terrible distortion.

I agree with a caveat. In the grand scheme of things everything is a service to help others get things done (there is no final all important job) and there needs to be a balance.

Except farming! That's a means and an end.

Re: Too much finance is bad for the economy

#15

Post by [deleted] »

danbruc wrote: post #12

Meh. What do we need economic growth for anyway? Producing and throwing away another hundred million tons of food every year? New phones every six months or once a quarter? A third car? More shoes? We have enough of everything and much more, there is absolutely no need to grow western economies any further.

[deleted]

Re: Too much finance is bad for the economy

#17

Post by guardiangod »

Reminds me of a story.

One of my local universities (top 3 in the country) had a chemistry lab competition and invited high schools from local cities to participate. My younger sister was selected to be part of her school's team.

So she went and won the competition. The deen of science was so impressed by her performance that after the reward ceremony he invited her to enrol in the science program. She replied no and that she was already accepted into the university's school of business (like most of her overachieving classmates).

According to my sister, the deen was both taken aback and looked sad at the same time. So here's an anecdote to you.

Re: Too much finance is bad for the economy

#18

Post by CalRobert »

danbruc wrote: post #12

Meh. What do we need economic growth for anyway? Producing and throwing away another hundred million tons of food every year? New phones every six months or once a quarter? A third car? More shoes? We have enough of everything and much more, there is absolutely no need to grow western economies any further.

I generally agree with the sentiment you express, but I think you're not really addressing the issue at hand. People moving in to finance does not seem likely to reduce our environmental impact.

Even so, you are right that western economies don't really have a shortage of goods, per se. The idea that low birth rates are a bad thing or that houses should go up in price, etc. are lunacy. Why do we want it to be hard to afford a secure home? Why do we need even more than 7 billion people? Maybe someday I'd like to not have to rent, but I won't be able to because houses will be $3 million by the time I can afford to buy what's out there now.

Re: Too much finance is bad for the economy

#19

Post by cynicalkane »

badloginagain wrote: post #5
bhouston wrote: post #3

Summary: > In short, the finance sector lures away high-skilled workers from other industries. The finance sector then lends the money to businesses, but tends to favour those firms that have collateral they can pledge against the loan. This usually means builders and property developers. Businessmen are lured into this sector rather than into riskier projects that require high R&D spending and have less collateral t…

Can't say I agree with these statements. I would wager that the scale of money a rapidly growing finance sector is using is more important than an unsubstantiated claim of industry brain-drain.

Brains are part of the real economy. Money is just money, and large amounts of it flows through institutions of various brain quality without being "eaten".
Post reply on HN