The mere fact of the abstract nature of the extraction of surplus should not blind us to an obvious issue: many, many activities in the economy, incl esp finance and law, maybe rent-seeking instead of productive. We may be suffering from a political economy Baumol’s disease.
Does that contribute to society? The claim is that capital allocation thereby becomes more efficient. But does finance really reallocate capital bw real activities? The connection, if it exists at all, is not immediate. Hedge funds have a simple job: trade securities to make
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Esp in finance and law. Not saying either is optional. What I am saying is that our disagreements with each other may lead to a hypertrophy of financial and legal activity that is individually rational but a social loss or zero sum at best.
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@policytensor Actually what about the Real Estate sector? You can say it's even more egregious as most value added isn't from new construction, but securitization, mortgages and re-leasing existing stock.
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This is what 30 minutes a day adds up to💰
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