> Can you imagine human potential if it was somehow applied to crop harvesting efficiency, new medicines, etc?

We already have very efficient crop harvesting and Eli Lilly is nearly a $1 Trillion dollar company. Interestingly, the new medicine is designed to keep us from eating so many cheap calories (new weight loss drugs).

> Not everything has to be perfectly efficient but it just saddens me to see all these great minds doing what, adversarially harvesting margin from the works of others?

The traders and investors who work in this space also go to where they are need, aka where the big money is. So few of these folks are trading corn and soybeans, though some do, rather most are trading drug stocks, tech stocks, and recently sovereign debt related trading (e.g. things like gold and bonds). The focus is around the big questions of our time, like "Are AI investments going to pay off?", or "Is the US going to default/soft default?", and so on.

Deciding how a society allocates its resources, or places its bets, is an important function. Otherwise, you end up with planned economies by disconnected leaders, which often leads to massive failures and large social consequences. Unfortunately, the US is trending in that direction to some degree with it's giant fiscal deficits, tariffs, and tribal politics creeping into economic policy. Nevertheless, traders will weigh these outcomes in their trades, and you'll see a quick reflection from any major change in policy almost immediately, which is a helpful feedback mechanism. For example, the tariff tantrums caused by trump proposing 100%+ china tariffs where he crashed the markets last spring, leading to a moderation in policy.

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ericd 2 hours ago | parent | next [-]

It’s an important function, but the guys making these bets frequently pull down $10-$100M per year, each. That’s a huge toll to extract from the productive economy for playing this game.

And then there are the guys managing things like pensions, skimming a percentage every year, just because they happen to be locked into that position, meanwhile underperforming a basket of index funds. Just happily eating away at the retirement savings of thousands-millions.

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b112 36 minutes ago | parent [-]

There's no such thing as money being squandered. Money isn't a resource. It's not food, or energy, or even an allotment of work.

If you try to seize or reduce, what you perceive as excess, wasted money supply, that money supply will simply cease to exist.

	▲	thou42o369098 29 minutes ago \| parent [-]
		It is when it gets spent - duh! This endless money-spinning & the larger monetary system is a big scam to steal from actual productive work. How is it fair to normal people that the whole system is rigged such that if they DON'T indulge in all this gambling (ignore the fact that most retail traders are on the sucker-end of the trade), they lose whatever wealth they've stored to inflation ?

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vonneumannstan 2 hours ago | parent | prev [-]

I think the comment was a roundabout way of saying this is a clear market failure. There are more societally important things these people could be doing instead of shaving another ms off a transaction or finding minuscule option pricing inefficiencies. That the market is not correctly remunerating those options is the failure.

> For example, the tariff tantrums caused by trump proposing 100%+ china tariffs where he crashed the markets last spring, leading to a moderation in policy.

"Akshually traders are good bcuz they crash the market when the president does insane things" is not the own you think it is.

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spongebobstoes an hour ago | parent [-]

this undervalues how financial engineering allows more ideas and companies to be funded

compound interest is a rare exponential force, and it is available to most citizens of a developed country through the stock market

financial futures remain important for farmers to have predictable pricing, and increase crop yields

science is limited by funding at least as much as it is limited by ideas or intelligence

I understand why finance is a popular bogeyman, but the world is rarely black and white

	▲	bonsai_spool an hour ago \| parent \| next [-]
		> this undervalues how financial engineering allows more ideas and companies to be funded I think the comment is about the marginal utility of additional workers at Jane St over, perhaps, DE Shaw Research. The caliber and education of roughly the same kind of person might be applied to understanding drug mechanisms, or shaving off trading milliseconds. Is the marginal benefit to the world greater if someone is advancing financial engineering? I don't think it's obvious that our increased complexity is, itself, yielding further increases in 'allowing more ideas and companies to be funded' except in the sense where already-wealthy people gain more discretionary income which they may decide to spend on their pet projects. Futures have existed for much longer than derivative markets; are we helping farmers more when we allow futures to be traded more quickly? But I disagree that the limit is funding—it's simply a lack of concerted interest. We accept that we should spend tax money on rewarding certain financial activities, and we create a system that disproportionately rewards people who facilitate these activities. But we might restructure things so people are incentivized to do research instead of financial engineering. I think the fundamental idea is that things of value need to be extracted or manufactured at some point and we're not set up to reward people studying new extractive tools or new manufacturing processes when those people could instead work on finance products.
	▲	vonneumannstan an hour ago \| parent \| prev [-]
		I think these are totally different things. HFT firms and Hedge Funds are not "allowing more ideas to be funded". Finance in general can indeed be good but I think its much harder to argue for the net benefit of firms like Jane Street or Citadel.