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Comment by takinola | Hacker News Reader

The Mafia makes (made?) a ton of profit but are a net negative on society. The better heuristic may be to consider what would be lost if the industry did not exist. Anything beyond subsistence agriculture would probably be impossible without financialization. There's a reason you had banks even in the middle ages when the average person was poor.

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>Anything beyond subsistence agriculture would probably be impossible without financialization.

This is patently not true. The USSR had no financial markets and engaged in the production high value goods. Whether it did so more efficiently than its capitalist competition is another matter, and I believe the answer is likely no, but it clearly did more than subsistence farming.

It's not a comparison or another matter. It was a disaster and if it didn't fail the way it did, it would have through famine.

This assessment is not based in historical reality. The last famine in the Soviet Union ended in 1947, more than 40 years before its dissolution, and with World War 2 being a major contributing factor.

The broader economic situation of the USSR is a very different question to whether or not they were able to progress beyond subsistence farming. One is a relatively nuanced topic, the other is a question that can be answered trivially by someone with the most basic historical knowledge, or even knowledge of modern Russia which clearly has not developed from subsistence farming to a developed economy in the time between 1991 and today.

That’s the point. They could initiate any massive production but it wasn’t maintainable at the scale they intended.

I agree that banks and many financial instruments are valuable and do facilitate value creation in the world. But that is the extent of it, they facilitate others to create value but do not make any on their own. They are however very well positioned to extract the profit from other industries and that is why the financial world can be so lucrative.

Also, even if some financialization is beneficial that does not mean all of it is. Too much can be very harmful.

That's like saying that, when you farm wheat, the wheat plant did the value creation and the farmer just facilitated it.

Facilitating value creation is value creation.

I get your point, I believe I acknowledged the usefulness of financial instruments.

Nevertheless it is not exactly the same. A carpenter’s apprentice is useful only when paired with his master. He facilitates the carpenter in his value creation but lacks the skills to do anything on his own.

Unlike the apprentice however, finance never actually learns the stuff.

Again, all of this has it’s uses and all, it’s just gotten a bit out of hand in terms of gambling like behaviour and the push the financial world creates towards harmful monopolies.

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