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Comment by lotsofpulp | Hacker News Reader

> The best paying jobs are often parasitic. Like stock manipulation.

Or you could look at it as part of the process of allocating society’s resources towards more productive ventures from less productive ventures.

It is not the perfect mechanism, but if anyone has a better idea, they are welcome to share.

I would credit at least some people working in finance for opening up the ability for any financially illiterate person to participate in a country’s economic growth by easily being able to buy broad equity index ETFs at near zero cost.

A lot of people do not want to spend their time reading 10-K reports to figure out which businesses to invest in.

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In theory that's true, but in practice the people at the top deciding what's profitable aren't working for maximising public good, so it doesn't work anymore

Who are the people at the top? How do they “decide” revenue minus expenses?

Are you claiming there is widespread fraud in SEC filings?

If you are referring to many industries becoming controlled by a handful of large organizations, then people working in trading and finance have nothing to do with that. That is in the political arena.

I presume he's talking about Congress, and by 'deciding' he's talking about them making regulations that effectively have the US government underwrite long tail risks while leaving profits privatized for larger financial institutions.

I understood mcv’s comment about “stock manipulation” being part of the highest paying jobs to refer to people working in finance, such as HFTs.

HFTs are definitely what I was thinking about. I remember reading about "quants", brilliant engineers working for investment banks to optimise their HFT algorithms, because that pays more than using their skills to invent or build things that are actually useful to society.

But the same is true for many other professions. I also remember reading that the highest paid engineers are working for Google and Facebook to optimise ad placement. CEOs get paid a lot even if their company does things that harm society. There's an entire industry just to help large companies avoid paying tax.

I'm not talking about specific people, just in general. People making decisions in companies are looking for revenue, and what brings money isn't necessarily aligned with public good.

A lot of things that would be good for people/society have no good way of really being profitable (unless lawmakers do something to rebalance the game to somehow help them).

And a lot of things that are profitable are objectively bad for society.

I agree, but I did not get that context because it seems unrelated to my response to mcv.

Not the OP, but "the people at the top" fall into a few categories in my mind...

- Career politicians who are more interested in maintaining office than working for the public good.

- Corporate executives who prioritize profit/stock price over the common good. The Sackler family comes to mind.

- Financiers (of various types) who accumulate personal wealth to the detriment of the common good.

It's possible to be a good politician or a good executive and not be "evil", but there are enough notable examples of the worst of both that both careers are somewhat sullied in the public eye. And of course, it's all shades of gray.

It's not the case though that what's most "productive" in the economic sense is also necessarily the most socially desirable outcome. The economy might be optimizing for some objective of productivity (though it's probably imperfect at that by any measure), but I don't think we can reduce it to something simple like "more overall money / goods / services = better", unless we also start looking in more detail at how those are distributed among different groups of people, and what kind of real value it is providing to them.

Of course. But that is again, in the purview of the political arena. Nevertheless, society’s resources are limited, need to be allocated, and hence the work that many do in finance.

A better way is always welcome, but I have yet to read about it or see it.

How exactly are you equating "stock manipulation" with the ability to "buy broad equity index ETFs at near zero cost" ?

That's clearly not what the OP was referencing.

In an adjacent post, OP writes they were referencing quants and HFT. I would credit them with helping increase automation and increasing liquidity that allow for the extremely low expense ratios of index ETFs and target date funds. Investing used to be much more expensive and investments were less liquid.

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