Comment by jondubois | Hacker News Reader

Comment by jondubois | Hacker News Reader

Finance is evil. Day trading, investment banking, venture capital; they don't produce anything for society, they just sit at the intersection of various people, companies and industries and they capture big chunks of the money that flows between them - They rely on information asymmetry and market manipulation to do so; but 'information asymmetry' is just a euphemism for 'deception'.

Even startups which are doing well and generate profit tend to go on to raise money from VCs - This sounds ridiculous; they don't need the VC money but they raise money from the VC anyway because: 1. They need the connections and 2. They need the tech 'media' to promote them with a headline like "W raises $X millions from Y to disrupt/democratize Z!".

This highlights the fact that VCs have an oligolopy when it comes to economic connections and the media and they leverage it for their own needs.

Also the fact that crowdfunding was essentially illegal for so long is also scandalous - Not only do they hoard all important social connections and the media but they also have a stranglehold on politics.

Capital and finance isn't evil. It is a tool, a unified currency to allocate resources. A tool is apathetic to the motivation of the hand that wields it.

Machines for logging = capital

labor = capital

software = capital.

A VCs business model is that of investing and profit. It's not altruistic, its a business. As such it is interested in profit. There are other methods to raise capital for a business but a VC may be a better option.

Finance isn't evil; day trading, investment banking, venture capital are all sharing information with the world and trying to move money to places where its more valuable.

There is a case to be made about "negative externalities"[1] but talking about the whole of finance as unnecessary is throwing out the baby with the bath water.

[1] costs that aren't borne by the producer

Valuable for what?

Valuable for satisfying human desires

The theory is that people spend money on what they desire, and so companies that generate more money satisfy more human values.

You will always find outliers and exceptions (caused by negative externalities usually), but this is true in general.

The allocation of resources is a non-trivial problem and financing, while on the surface can be corrupt, does have value in the world.

Finance is bad, but it's kind of a least-worst situation. What's the alternative that doesn't rely on philosopher-kings or omniscient omnibenevolent central planners?

>What's the alternative that doesn't rely on philosopher-kings or omniscient omnibenevolent central planners?

Distributed sharing economies, like that of most tribal organizations.

How do those systems manage capital-intensive projects? Bridges and dams and airliners and power grids and so on...

>How do those systems manage capital-intensive projects?

The use of the word "capital" here indicates a misunderstanding of the social dynamics of tribal economies.

They produce and consume that which they need together because of shared benefit.

Large scale centralized constructions like the Golden Gate Bridge, the Hoover Dam, or power grids are built to serve the stationary needs of the big city not the small, distributed, mobile tribe.

Such a tribe would either be pre-technological then, or piggybacking on a technological society that did make those investments.

>piggybacking on a technological society that did make those investments.

Indeed, every technological advancement has piggy backed on those before it.

Not the same thing - this tribe can't exist without infrastructure it cannot create or maintain itself. Your caring sharing tribe ain't going to be making a chip foundry or a means of powering it or extracting raw materials for it anytime soon. That needs capital.

What's not the same thing?

Plenty of such tribes exist and have existed without centralized industrial infrastructure.

The parent suggests it as an alternative to what we have now. That's not viable unless we want to regress to pre-agrarian levels.

I'd like to see your anthropology cites for "tribal organisations", please. Especially for those larger than a hundred thousand members.

>I'd like to see your anthropology cites for "tribal organisations"

Look at any hunter gatherer tribe.

The key word here is "distributed". Distributed tribes are light weight and mobile by design. So they are rarely ever grouped into concentrations of 100,000+ members except for the occasional festival-like gatherings.

> Finance is evil

that's a pretty strong viewpoint to take. have you looked at 'the ascent of money' by niall-ferguson to get a more historical perspective on how we got here ?

>Even startups which are doing well and generate profit tend to go on to raise money from VCs - This sounds ridiculous

So how does one expand a profitable business? Save up those earnings until you can buy a factory outright? Good luck with that. Meanwhile, I'll be financing the cost and leaving you in the dust.

This use case you describe sounds reasonable because in that case, to produce the goods, you actually need to have a factory, and for that to happen, you need money.

But how often does such a use case actually come up in the real world (in the tech industry particularly)? Not saying it doesn't happen from time to time but it doesn't seem like the standard case these days.

It seems like a lot of time, VCs are just throwing money at specific companies in order to 'outfund' competitors who are also receiving money from a different set of VCs (they're all trying to run each other into the ground by artificially lowering profit margins).

Eventually, everyone realizes that the funding ultimately did nothing to neutralize the competition; most of the competitors are still alive and kicking (and new ones have since spawned up) - And the market is simply not big enough to meet everyone's projections/expectations.

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