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Capital Is No Longer Scarce

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Re: Capital Is No Longer Scarce

#41

Post by erikpukinskis »

merpnderp wrote: post #39
cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

Capitalism has never been about making the world a better place. All systems deal with humans and humans inevitably prefer helping out themselves and people close to them over others, which leads to corruption regardless of the system. And capitalism seems the best method for controlling innate human corruption (see China's incredible economic growth once socialism was all but abandoned for capitalism in the 80's pul…

> capitalism seems the best method for controlling innate human corruption

Capitalism seems better than past failures. But it is surely a local maximum. We have thousands of years of social evolution in front of us. Experiments have hardly been exhaustive, and material conditions seem to be changing faster than ever.

Re: Capital Is No Longer Scarce

#42

Post by anonmeow »

yummyfajitas wrote: post #25
cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

It's not about 5 year return, it's about the fact that the potential cancer cure simply has low returns and huge risks. People are absolutely willing to make long term bets (e.g. snapchat, which has negligible revenue right now, and is entirely just hope for the future), they just need to be good bets. Molecular targets are getting harder to find. Getting a drug through the FDA is insanely difficult, costs huge amoun…

It's more straightforward to tax snapchats and facebooks some more and put the money into cancer research.

Re: Capital Is No Longer Scarce

#43

Post by lumberjack »

cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

Exactly and then people wonder why the economy is not growing enough:

https://news.ycombinator.com/item?id=10686732

I think two big contributing factors are the so called "active investors" and corporate taxes.

Active investors force companies to optimize for short term gain which of course hurts growth.

Corporate taxes are too low. The private sector is not generating enough growth and to fix that the government does the exact opposite of what it should do. It hands the private sector more capital instead of taking it away. The private sector is already at a loss with the capital it already has at its deposition. I bet most of it goes into speculative Wall Street financial vehicles and I do not think any of it ever gets to entities that are short on capital or it goes to the wrong entities that are short on capital because most academics would be more than happy to get 0.01% of the capital that goes to social media startups.

Re: Capital Is No Longer Scarce

#44

Post by norea-armozel »

I follow @Damn_Jehu and I've been talking with him about it. What I find scary about the situation is the fact that if all that "dead money" ever gets into the wider economy you can kiss the current capital valuations goodbye. It could possibly result in the largest devaluation in history (larger than the Great Depression and the several panics/scares before then combined).

For me this is amusing in a way since I work in financial services as a developer. So if/when that shoe drops my job is first to go for sure. Oh joy!

Re: Capital Is No Longer Scarce

#45

Post by bko »

cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

Why would a cure for cancer be a small return on investment? You're assuming that the only people who could enter the market and find a cure would be the current players who are profiting from the current treatment or some global conspiracy to keep the cure hidden. If someone were to discover a very effective treatment, they would surely profit nicely. Hepatitis C was recently cured, a brutal disease that affected some of the most marginal people in society [0]. And it was done thanks to a profit motive. Barring extreme price controls on drugs by politicians, this type of progress can be greatly encouraged by the profit motive.

[0] http://www.scientificamerican.com/article/we-now-have-the-cu...

[edit] I would also like to add, the non-profit approach [IMO] has failed to produce anything but the abundance of the color pink and self congratulatory galas for wealthy donors. Perhaps the profit motive and choice that has served society so well in practically all aspects of our lives can be equally leveraged on solving hard problems like disease.

Re: Capital Is No Longer Scarce

#46

Post by joshuaheard »

badsock wrote: post #37

And yet there's a 50% tax break for capital gains in my country. What possible reason is there for such a massive subsidy for something that we don't need, other than corrupt influence on the political system by the wealthy to give themselves a tax break?

Letting you keep your own money is not a subsidy. That being said, labor and capital should be taxed at the same rate, there being no reason to distinguish them for tax purposes.

Re: Capital Is No Longer Scarce

#47

Post by snowwrestler »

DannoHung wrote: post #14
vlehto wrote: post #4

High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. If someone buys significant amount of AAPL stock in New York, the price goes up in NY. Then someone from London can profit by buying small amount of AAPL stock in London and selling it in NY. High frequency trading is this, but with very high speeds and lots of competition. Thi…

Oh give it a break. If you had to rest orders for a second, then HFT would evaporate.

It would not change anything significant about HFT besides removing the H. There would still be a technology race to execute trades as close to exactly 1 sec as possible.

HFT firms make money by being the first to grab trades for tiny price deltas. If the law said trades could only execute on one-second intervals, the deadline to be first to grab a trade would become a tempo defined by human law, instead of a steady lag due to physical law. But there would still be a deadline, so companies would still race.

Re: Capital Is No Longer Scarce

#48

Post by theothermkn »

cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

> Misallocation is a massive problem.

A little girl and her grandfather, an economist, are walking down the street. Suddenly, the little girl tugs on her grandfather's tweed blazer and says, "Look, Grandpa! There's a $20 bill on the sidewalk! Somebody must have dropped it!"

"Nonsense!," said the grandfather. "If that were a real $20 bill, someone would have already picked it up!"

Re: Capital Is No Longer Scarce

#49

Post by cryoshon »

merpnderp wrote: post #39
cryptica wrote: post #20

Misallocation is a massive problem. I think a significant amount of money is going into advertising, pointless startups, entertainment and social media. Basically, we are spending huge amounts of money getting numbed out of our minds instead of solving real fundamental problems. In general, I think it reveals a deeper problem about capitalism; none of us understand value anymore (we have more junk in our lives than w…

Capitalism has never been about making the world a better place. All systems deal with humans and humans inevitably prefer helping out themselves and people close to them over others, which leads to corruption regardless of the system. And capitalism seems the best method for controlling innate human corruption (see China's incredible economic growth once socialism was all but abandoned for capitalism in the 80's pul…

I left medical research science because it isn't survivable... the world cares nothing for curing diseases, and incentivizes people to do so as such.

Re: Capital Is No Longer Scarce

#50

Post by bluetomcat »

norea-armozel wrote: post #44

I follow @Damn_Jehu and I've been talking with him about it. What I find scary about the situation is the fact that if all that "dead money" ever gets into the wider economy you can kiss the current capital valuations goodbye. It could possibly result in the largest devaluation in history (larger than the Great Depression and the several panics/scares before then combined). For me this is amusing in a way since I wor…

Such heaps of money could only be meaningfully invested in case of a large technological breakthrough that would enable the emergence of entirely new industries, skill-sets and supporting businesses. Think of the internal-combustion engine, electricity, and (we are already exhausting the potential of this one) the Internet.

Otherwise, the mere existence of that money (even if it never gets spent) serves no other purpose than to reinforce the status-quo.

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