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

Capital Is No Longer Scarce

continuations.com

Post reply on HN
Print view View original

81–90 of 123 posts

Re: Capital Is No Longer Scarce

#81

Post by theworstshill »

amelius wrote: post #58
erikpukinskis wrote: post #41

Earlier quoted context omitted.

> 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.

The best way to control corruption is transparency. Eventually, IT systems will solve large-scale corruption.

I agree. Although it will be hard to separate the need for transparency to one's rights to privacy. You can deem that some actions inherently leave you no rights to privacy, but I'm afraid it'll be only a matter of time till everything you do is under the watchful eyes. On the other hand, humans are at the best when they know theyre being watched. Its a difficult tradeoff.

Re: Capital Is No Longer Scarce

#82

Post by robotresearcher »

sanxiyn wrote: post #28
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…

> The return on investment for a cancer cure is probably small. This must be a joke. Lipitor generated $125 billion revenue for Pfizer while in patent. A cancer cure will be worth more.

And the costs were what? And the costs of all the failed projects were what?

Your reply says nothing about ROI without that information.

Re: Capital Is No Longer Scarce

#83

Post by finnh »

gherkin0 wrote: post #69
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…

> High frequency trading gets shat on frequently. It's stupid. This is only a tool that evens out price differences across geological distance. 1. That's a valuable evening out prices may be a valuable function, but one reason HFT gets shat on is because of the enormous effort put into attempts to arbirage over shorter and shorter time intervals. How does society actually benefit if the prices are equalized over a 1m…

In contrast to other Michael Lewis fare, Flash Boys sounds poorly researched and based of the anecdotal experience of about 3 people.

You'd have to do a _lot_ of buying on other other exchanges to move exhaust the order book to the point that you can make a profit, and there is no way of knowing that the "buy activity" that your "tripwire" detects is, in fact, a harbinger of larger orders on the way to other exchanges. It could just be a single buy order at your tripwire exchange. You have no way of knowing.

Read "Flash Boys: Not so Fast" for a highy detailed rebuttal of Flash Boys. It's written by an HFT trader, so it's not intending to be unbiased, but from a logical perspective it does seem to demolish Lewis's points.

http://www.amazon.com/Flash-Boys-Insiders-Perspective-High-F...

Re: Capital Is No Longer Scarce

#84

Post by ci5er »

yummyfajitas wrote: post #76
ci5er wrote: post #65

Earlier quoted context omitted.

> Molecular targets are getting harder to find. Is this because we've already harvested the low-hanging fruit? Are there any new paradigms on the horizon that could change this? > If you want more cancer cures, make it easier to become very rich by selling them. It's an odd thing about Americans, though. They really don't seem to mind if Jobs or Zuckerberg get insanely rich (although there was some grumbling about Ga…

It's mostly a combination of low hanging fruit all being plucked, and also the fact that it's harder to measure smaller deltas in efficacy. I.e., if there is already a drug that cures 75% of cancers and a new drug cures 85%, a clinical trial to detect that 10% difference will require a lot more people (and cost a lot more money). Additionally cost-efficiency is not a valid reason to allow a new drug (according to the…

> if there is already a drug that cures 75% of cancers and a new drug cures 85%, a clinical trial to detect that 10% difference will require a lot more people (and cost a lot more money).

That makes sense. Thank you.

> Additionally cost-efficiency is not a valid reason to allow a new drug (according to the FDA), you've got to be better than the last one.

Really? I did not know that. On the face of it, that seems absurd. If Treatment A cures at a 75% rate and costs $1M and Treatment B cures at a 72% rate (worse) and costs $10, it seems as if it would still be valuable to the market, no? Or am I mis-reading you?

Re: Capital Is No Longer Scarce

#85

Post by dragonwriter »

joshuaheard wrote: post #46
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.

EDIT: I recognize this is a second reply to the same comment, it focusses on a different and important aspect and isn't really related to my other reply.

> That being said, labor and capital should be taxed at the same rate, there being no reason to distinguish them for tax purposes.

At least in the US system, there are two main distinctions made (there are some others, too, but these are the biggies) between labor and capital income, and both have some logic though better options, I think, exist.

(1) Between labor income and all other income (including, but not limited to, capital) -- labor income alone is treated as qualifying for certain social safety net program eligibility and benefits calculations (Social Security and Medicare), and is therefore subject supplemental taxes to fund those benefits. Alternative: make all income qualifying for those programs, and tax all income to fund them.

(2) Between long-term capital gains and most other income (including both short-term capital gains, labor, and other taxable income sources). Because the former are earned over a period of greater than one year, in a system with progressive marginal taxation on annual income, taxing them the same as the latter with no mechanism for accounting for the period over which they were earned -- especially when they are returns earned by sale of holding that aren't regularly repeatable, rather than sales of small subsets of a large pool of assets structured so that long-term gains can be extracted every year -- results in overtaxation when compared to regularly repeatable income streams like labor income. Alternative: tax all income equally, but allow taxpayers unlimited freedom to recognize (and pay taxes on) income in advance of realization, and limited -- but some -- freedom to defer recognition and taxation of some portion of windfall income for a period of years after realization. (This stops long-term capital gains from being a dodge to get low taxes on repeatable income from large holdings, while not unfairly taxing non-repeatable long-term gains, and also more fairly treating irregular labor income.)

Re: Capital Is No Longer Scarce

#86

Post by legulere »

amelius wrote: post #58
erikpukinskis wrote: post #41

Earlier quoted context omitted.

> 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.

The best way to control corruption is transparency. Eventually, IT systems will solve large-scale corruption.

Technology rarely solves social problems. It often changes society but not only in the good way and how it does is mostly unforeseeable.

Re: Capital Is No Longer Scarce

#87

Post by jazzyk »

merpnderp wrote: post #55
cryoshon wrote: post #49

Earlier quoted context omitted.

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.

Didn't Jimmy Carter just go into complete remission from what used to be a death sentence, stage 4 melanoma? It was in his brain and liver, and now it's undetectable. He's 91 years old and a decade ago he would have stood almost zero chance of recovery. I'm sorry the situation is so bad in research, but it does produce miracles.

I am very happy for J. Carter, he is a class act.

But it is just one case.

My friend, a Ph.D. with 100+ publications in cancer research told me recently there has not been much progress in the last 30 years.

Re: Capital Is No Longer Scarce

#88

Post by Demoneeri »

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?

The reason why is risk. When you sell your time(labour), collect rent or interest, risk is lower so the tax rate is higher. If you invest in financial assets, like equities, risk is higher so the tax rate is lower. If that were not to happen, not many people would invest. Markets and compagnies would be under capitalized. Jobs and the economy would echo that.

Re: Capital Is No Longer Scarce

#89

Post by vonnik »

The real question is: Scarce for whom? And that's the paradox at the heart of capitalism. It generates surpluses on the condition that they can belong, in large part, to a tiny minority. Solving for scarcity in the aggregate by no means solves for scarcity on the ground.

Re: Capital Is No Longer Scarce

#90

Post by ChuckMcM »

Retric wrote: post #68
ChuckMcM wrote: post #63

Earlier quoted context omitted.

I don't disagree but would like to understand your metric, "substandard returns" suggests you have a metric in mind, how do you arrive at the 'standard' ?

Risk adjusted ROI. The bond market is the classic example, if you look at the class of bonds paying 10% vs 2%. If your risks where in line with the 10% bonds, but the payouts where inline with the 2% bonds it's a low ROI investment. Now, looking ahead you don't know what the risks are. But, you can examine the ROI for 1990 investments and you can see which 2010 investments have already failed.

Ok, fair enough, but today's Risk Adjusted ROI is quite low. And comparing returns from a couple of decades in the past with current returns seems unhelpful to me.

My point is that your standard has to be for your choices of the capital today versus historical returns. So if you compute for expected value of a million dollars sitting in a bond fund today, versus sitting in a basket of startups, are the returns less in the latter case?

Post reply on HN