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View Poll Results: People in finance are typically:

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  • Wealth creators

    4 33.33%
  • Wealth takers

    8 66.67%
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  1. #21

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    Quote Originally Posted by ptgatsby View Post
    Ah, then there is no particular disagreement over the core of it.

    I'd say that, in general, the culture is negative but corruption is about average... when compared to politics. That can be taken as dismal or good, depending on your view on it. I'd use much the same description as fashion and technology. Backdoors in operating systems? Providing huge echelon monitoring software? Targeted malware? Industrial espionage?

    The reality of the world is that it is "corrupt" to a certain degree. I mean, echelon was used for financial manipulation. That's not corruption "in finance". A lot of corruption trickles into finance: is identity (selling other people's homes?) financial? Is lying on a mortgage application, or mis-interpreting a mortgage application financial fraud? Is overlending or overextending fraud or caveat emptor? Same with credit cards. Is bitcoin currency bouncing financial fraud? I mean these rhetorically, and they are just the starting point. Insurance is open-ended; overcharging? Denying claims? Does it exceed the number of false claims? It's not easy to define, even in aggregate. Yet each of those items are beneficial (being able to borrow capital, risk aversion, etc.)

    The other major issue, as seen with the LIBOR, is that very few people need to be involved to perpetuate massive fraud. This often leaves the impression of "wide spread" corruption although it often is "deep" corruption that is rare. OTOH, wide spread corruption due to a lack of regulation does happen, as seen in the US mortgage collapse. It is a serious issue but it tends to be systemic. Deregulating food safety has the same effect.

    The central problem I have is that finance and politics are intertwined so deeply. It becomes an issue of "who watches the watchers". That's my bottom line and why finance is different. True corruption lives at the top of the finance chain, and I believe that is very systemic and very present in most of the world.

    So, my opinion is: finance is a necessary evil. It does good, but is dangerous. A country lives or dies by it and the people eat or starve by it. Unfortunately that means it is political, and politics carries corruption with it.
    I apologize if this thread seems sporadic. I tend to log in far less frequently than I used to.

    I get what you are saying about a lot the corruption "in finance" being brought in by other factors. I can possibly buy that the LIBOR corruption as being "deep" instead of "wide spread" corruption, but the nonchalant manner in which traders went about their price fixing seems to me to be a marker of a culture rather accepting of things like this.

    Certainly, corruption happens in every field. You mention echelon, but I get the impression that energy is another sector that has the same sort of accepted corruption. (You can imagine my impression of energy traders, then)

    It happens in technology too. In my opinion, however, as far as the "white hat" and "black hat" hackers communities go, it is usually pretty easy to know which type of hacker community you are dealing with. Also, the types of scandals that are typical include teenage rebellion, and clandestine efforts by pockets of people, not the major brand names.

    Although I have my reservations about the Facebook leaders regarding privacy, and, in the past, both Microsoft and Intel may have done some things that many would consider shady regarding anti-trust legislation, I never got the impression that the only thing they were after was to line their own pockets.

    I would be surprised if facebook employees had, "violate people's privacy" on their calendars, or that Microsoft and Intel employees would have "price small competitors out of market" on their calendars (though I think this is more likely than the former). However, it does not surprise me at all that LIBOR traders had "fix rate" on their calendars.

    I suppose, if we want to narrow in on a particular sub-culture, I would say I go mainly off of the culture of traders. Trading is what I am most familiar with, since I dabbled in it myself. What would you say most traders would see their role in society as? I got the impression the vast majority of them would be perfectly fine if people saw them as leaches.

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  2. #22
    meh Salomé's Avatar
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    Quote Originally Posted by Mal+ View Post
    The belief that wealth is static is based in false Marxist propaganda which is easy to knock down. And such a simplistic falsehood exemplifies why I can never be a Marxist.

    http://www.city-data.com/forum/polit...th-static.html
    'A conservative friend recently told me he had a liberal friend who believed that wealth in the world is static and cannot be created. If this argument were true, then the liberal argument would make more sense regarding redistribution of wealth.

    The problem as I see it is that this is a totally bogus argument to begin with. Take the following example:

    Only two people live on a deserted island. In year one, person 1 works 80 hours per week building a house, making tools, planting a crop, building a boat for fishing, and making a fire-starting device.

    Person 2 spends the first year eating fruit and leftover fish from person 1 and the rest of their time lying on the beach and relaxing.

    At the end of year one, the island has more wealth than it had at the beginning. The island has shelter from storms, fire for heat and cooking, crops for variety of food to eat, and a boat for transportation around the island. Converting some of the islands resources into more usable items while creating creature comforts "created wealth".

    Now whether person 1 should be forced to share his wealth with person 2 or whether person 2 should get off their ass and get to work is a different argument. My question is, how would a person who believes in static wealth get around this simple scenario? Would honestly like to hear the other argument.'
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  3. #23
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by ygolo View Post
    I get what you are saying about a lot the corruption "in finance" being brought in by other factors. I can possibly buy that the LIBOR corruption as being "deep" instead of "wide spread" corruption, but the nonchalant manner in which traders went about their price fixing seems to me to be a marker of a culture rather accepting of things like this.
    I agree about the culture.

    I think that there is a very systemic nature to corruption in general (using your example of calenders down below). It's very rare that someone will enter "Go to conspiracy meeting", however it isn't unusual to have a meeting about "Competitive advantages" or "meet with government official". Printer toner to the military industrialists will have those calender meetings, for instance.

    Certainly, corruption happens in every field. You mention echelon, but I get the impression that energy is another sector that has the same sort of accepted corruption. (You can imagine my impression of energy traders, then)
    And shipping, at least by sea. And entire industrial (chemical, processing, etc) sectors. It depends where you are and who are the current market leaders. Those are the ones I'm familiar with; everytime I become more familiar with a market, I see it repeated over and over.

    It happens in technology too. In my opinion, however, as far as the "white hat" and "black hat" hackers communities go, it is usually pretty easy to know which type of hacker community you are dealing with. Also, the types of scandals that are typical include teenage rebellion, and clandestine efforts by pockets of people, not the major brand names.
    I would say the same about finance. It's not like black hats aren't commercialized, even outside of organized crime. It's endemic - companies hiring them for industrial espionage, malware groups and so forth. These are full fledged organizations with enormous market caps.

    Right now they aren't public, exactly, but it's certainly systemic and organized.

    Although I have my reservations about the Facebook leaders regarding privacy, and, in the past, both Microsoft and Intel may have done some things that many would consider shady regarding anti-trust legislation, I never got the impression that the only thing they were after was to line their own pockets.
    I think that is highly subjective on the technology side;

    https://www.eff.org/nsa-spying among many. This is what I would compare to echelon level political corruption running deep into an industry.

    I suppose, if we want to narrow in on a particular sub-culture, I would say I go mainly off of the culture of traders. Trading is what I am most familiar with, since I dabbled in it myself. What would you say most traders would see their role in society as? I got the impression the vast majority of them would be perfectly fine if people saw them as leaches.
    No argument; traders think they are smarter than everyone else and operate under huge pressures. Not a good environment at all. Trading as a whole though, is pretty legitimate. It's the backbone of commerce.

    Can we quantify the level of corruption relative to legitimate business? Can we compare that (meaningfully) to general black markets? How do we define corruption (ie: does the drug trade count)? Is it corruption if no laws were broken - what makes LIBOR corrupt, but not a drug trade? What makes a police officer selling drugs corrupt, but not a high school student?

    It's a bit subjective, and finance is nebulous enough to make it both bad, and seem worse, all at the same time.

  4. #24
    ^He pronks, too! Magic Poriferan's Avatar
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    Quote Originally Posted by Mal+ View Post
    So nobody is actually saying that real wealth is static, only monetary wealth is? Hmmm...
    I'm sure somebody on this planet is saying that, just not most anyone I've heard from who stated that wealth isn't created or is a zero-sum game.
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  5. #25
    Alexander the Terrible yenom's Avatar
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    This is like asking does investing creates wealth. Yes and no. Investing creates wealth in the sense that it pours money into industries that can enlarge their operations and dominate markets. Yet it play no direct part in the wealth creation process.

    workers produce all the material wealth in society, yet they get accumulated into hands of a few.
    The finance industry only allocate money where it makes the most profit. you think about it.

    The free market allocates resources to where most profits are made, and the finance industry plays an instrumental role in this. There is no denial. But it does not change the fact that workers produce all the wealth. It is only because people are motivated by money that the finance people can accumulate large profits, when they play no direct part in the wealth creation process.
    The fear of poverty turns people into slaves of money.

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