<story><title>The Rent Is Too Damn High: The Enormous Cost of Letting Finance Rule</title><url>https://www.jacobinmag.com/2014/02/the-rent-is-too-damn-high-2</url></story><parent_chain><item><author>randyrand</author><text>&amp;gt;on making more money. Not making society better. Not allocating capital effectively.&lt;p&gt;The simple flaw in your argument is that you assume that these things are usually mutually exclusive. In fact, it is typically the opposite; they usually are one in the same. The things that are &amp;quot;best&amp;quot; for society also tend to make the most money. People pay for things because they want (or need [2])them, because it makes their lives better [1]. To extend this to investments, smart investments are investments to companies who will eventually make money, because their products are worth buying.&lt;p&gt;Investing money is an incredibly rewarding but very risky activity. Smart investments will make upwards of 100x ROI, bad ones will lose every penny. Having smart investors is an imperative to maximizing the usefulness of money. Just look at Solyndra ;)&lt;p&gt;1. since people are having trouble understanding how to interpret this sentence let me clarify. &amp;quot;Better&amp;quot; is completely subjective. For the purpose of making buying decisions, &amp;quot;better&amp;quot; is whatever the person making this buying decision defines as &amp;quot;better&amp;quot; for them. All in all the point of &amp;quot;better&amp;quot; not really being &amp;quot;better&amp;quot; is irrelevant (as it the distinction between want and need). If you want to make the argument that investors are investing in companies that actually make our lives &lt;i&gt;worse&lt;/i&gt;, then the solution is typically banning those companies and products directly, not banning investments to those companies.&lt;p&gt;2. thanks to &amp;#x2F;u&amp;#x2F;revscat (yes I know this is not reddit)</text></item><item><author>soup10</author><text>&amp;quot;Those who work in banking, venture capital, and other financial firms are in charge of allocating the economy’s investment resources. They decide, in a decentralized and competitive way, which companies and industries will shrink and which will grow. It makes sense that a nation would allocate many of its most talented and thus highly compensated individuals to the task.&amp;quot;&lt;p&gt;The simple flaw with this idea is that wall street is squarely focused on making more money. Not making society better.  Not allocating capital effectively.  Not even on creating wealth(which is distinct from money).  The single guiding equation for all deals and transactions is &amp;quot;how can we make as much money as possible with as little risk as possible and also stay out of jail&amp;quot;.&lt;p&gt;That wall street occasionally invests in companies that actually do create wealth and allocate capital to the betterment of society is more a case of broken clock sometimes being right.</text></item></parent_chain><comment><author>glesica</author><text>To me, the problem with this argument is that there is, in fact, no connection between what is best for society and what is profitable. In theory, there should be, but it isn&amp;#x27;t an intrinsic thing, it&amp;#x27;s created deliberately and must be maintained.&lt;p&gt;When you have the money, you make the rules. That sums up the problem. Markets are not magical creatures, they exist within the context of social rules and norms. Selling human beings was once seen as rather profitable. Then society decided that selling human beings was wrong, even though it was profitable. You clearly understand this, we banned slavery, we didn&amp;#x27;t just ban investing in slavery-related businesses.&lt;p&gt;What I think you are missing is that there are a ton of things that are between &amp;quot;good for society&amp;quot; and something along the lines of slavery that is clearly a bad thing. The problem with these middle &amp;quot;bads&amp;quot; is that they aren&amp;#x27;t bad enough to be universally and energetically rejected.&lt;p&gt;This means that there is plenty of room for people with money to get these things made legal, or kept legal, and it is these things that often seem to be more profitable than other, more socially beneficial, activities (possibly because fewer people are morally willing and able to do them). I think of this sort of thing as &amp;quot;meta-competition&amp;quot; because it is competition among those with money to most efficiently turn their money into influence and power that can be used to allow them to make even more money.&lt;p&gt;As long as money can be converted to power, you can&amp;#x27;t assume, as you have done, that whatever is legal is socially beneficial (or at least not socially destructive).</text></comment>
<story><title>The Rent Is Too Damn High: The Enormous Cost of Letting Finance Rule</title><url>https://www.jacobinmag.com/2014/02/the-rent-is-too-damn-high-2</url></story><parent_chain><item><author>randyrand</author><text>&amp;gt;on making more money. Not making society better. Not allocating capital effectively.&lt;p&gt;The simple flaw in your argument is that you assume that these things are usually mutually exclusive. In fact, it is typically the opposite; they usually are one in the same. The things that are &amp;quot;best&amp;quot; for society also tend to make the most money. People pay for things because they want (or need [2])them, because it makes their lives better [1]. To extend this to investments, smart investments are investments to companies who will eventually make money, because their products are worth buying.&lt;p&gt;Investing money is an incredibly rewarding but very risky activity. Smart investments will make upwards of 100x ROI, bad ones will lose every penny. Having smart investors is an imperative to maximizing the usefulness of money. Just look at Solyndra ;)&lt;p&gt;1. since people are having trouble understanding how to interpret this sentence let me clarify. &amp;quot;Better&amp;quot; is completely subjective. For the purpose of making buying decisions, &amp;quot;better&amp;quot; is whatever the person making this buying decision defines as &amp;quot;better&amp;quot; for them. All in all the point of &amp;quot;better&amp;quot; not really being &amp;quot;better&amp;quot; is irrelevant (as it the distinction between want and need). If you want to make the argument that investors are investing in companies that actually make our lives &lt;i&gt;worse&lt;/i&gt;, then the solution is typically banning those companies and products directly, not banning investments to those companies.&lt;p&gt;2. thanks to &amp;#x2F;u&amp;#x2F;revscat (yes I know this is not reddit)</text></item><item><author>soup10</author><text>&amp;quot;Those who work in banking, venture capital, and other financial firms are in charge of allocating the economy’s investment resources. They decide, in a decentralized and competitive way, which companies and industries will shrink and which will grow. It makes sense that a nation would allocate many of its most talented and thus highly compensated individuals to the task.&amp;quot;&lt;p&gt;The simple flaw with this idea is that wall street is squarely focused on making more money. Not making society better.  Not allocating capital effectively.  Not even on creating wealth(which is distinct from money).  The single guiding equation for all deals and transactions is &amp;quot;how can we make as much money as possible with as little risk as possible and also stay out of jail&amp;quot;.&lt;p&gt;That wall street occasionally invests in companies that actually do create wealth and allocate capital to the betterment of society is more a case of broken clock sometimes being right.</text></item></parent_chain><comment><author>Jare</author><text>&amp;gt; The things that are &amp;quot;best&amp;quot; for society also tend to make the most money. People pay for things because they want them, because it makes their lives better&lt;p&gt;The things that make the most money are the things most desired by the people with the most money to spend. That group of people can only be equated with &amp;quot;Society&amp;quot; if that group of people does in fact form the majority of the society. That&amp;#x27;s why a large middle class is so important, and why growing differences in income are so threatening.</text></comment>