[quote=harvey][quote=spdrun]Personally, I hope that a slowdown in the financial industry would force a diversification of the city into things like tech firms and R&D. A lot of creative effort put towards the finance industry (shifting Monopoly money around) is actually wasted effort — imagine if more of our best and brightest went into engineering and hard science vs finance. We have the world-class universities and a lot of damn smart people.[/quote]
Many people don’t seem to realize that much of the financial system that drives our world had to be invented, just like any other technology.
Example: One of the most important innovations in human history was the notion of the cost of money, i.e. charging interest for a loan. Today we think nothing of the idea that one can borrow money to start a business, etc. But like any other technology, debt capital had to be “invented” and perfected over centuries. And our world today simply would not function without it.
It took a lot of smart people to develop the technology of pricing financial risk — an essential aspect of business lending that happens every day. Naysayers like to point out the failures, but claiming that financial technology is dangerous because of an occasional market crash is like saying internal combustion engines should have never been invented any time Toyota does a recall.
Today we have our best and brightest doing all sorts things that could easily be labeled as “wasted effort.” Social media websites are a perfect example – how many Stanford grads go to work for Facebook?
But the meaning of “wasted effort” is subjective. If millions of people use Facebook, then they must derive some value from it. Same with what goes on in the financial world. If there is someone on the other side of the table paying for something, it has value, by definition.[/quote]
I’d say Facebook like heroin takes more than it gives.
Still heroin must have value…
Who’s on the other side of the magic bean trade
