It’s hip with a lot of people to be snarky about Rand, but I’ve never seen anyone who does it also demonstrate they have the slightest clue what she had to say. I have my own disagreements with Rand, but I’ve appreciated her more and more as time as gone on. She’s more LessWrong than most.
It’s hard to imagine that anyone who’d read Atlas Shrugged could accuse her of thinking that
rich people are rich because they are smarter and worked harder than everyone else, whereas poor people are poor because they are dumb and/or lazy and fucked it up themselves
Exactly, these critiques fascinate me for this reason: Objectivist epistemology, metaphysics, and ethics are deeply flawed and yet people still create straw-men that are easily recognized as such by even casual dabblers in Objectivism like myself (your’s being a good example). What causes people to do that?
I think EY gave the answer in Chapter 83. Harry, the consumate rationalist, was lying to himself and lashing out at Dumbledore because one of his sacred values was questioned, and he couldn’t allow that.
Are we to suppose that it’s only Evangelicals for whom it is a crime to doubt the existence of their God? Rand challenges a number of Gods, and the faithful off all varieties can hardly be expected to listen to the lies of the Devil, can they? To even consider her arguments for a moment is to question the sacred, which mustn’t be done. To do so is to travel halfway down the road to heresy.
I had to double-take because that appeared at first to be exactly the message I took away from Atlas Shrugged. Then I realized that, as far as I can tell, the message is more like:
Only the intelligent and hard-working deserve to be rich and have happy lives.
Yet even if that is so, why are there so many Objectivists swooning over hedge fund managers? Clearly at least some of them think that everyone who is rich automatically is a wonderful person, or they wouldn’t behave this way.
Non sequitur. A lot of people ‘swooned’ over Steve Jobs, or tech entrepreneurs generally. It does not follow that they think that all CEOs are automatically wonderful people, that all technological changes are automatically good for mankind, or any such strawman.
You may wish to consider why they ‘swoon’ over hedge fund managers as opposed to, say, Russian kleptocrats or UN nomenklatura, the inheritors of great wealth, or indeed executives at the major commercial banks, who are all undoubtedly very rich.
I’m not an Objectivist (I’ve never even read any of Rand’s novels), but I certainly think hedge fund managers are far more worthy of praise and emulation than, say, scientists or academics, and that they are unfairly maligned in society.
I certainly think hedge fund managers are far more worthy of praise and emulation than, say, scientists or academics, and that they are unfairly maligned in society.
Can you expand on why you think this? (Both the first and the second claim.)
I don’t really know why hedge fund managers are so unfairly maligned. Very likely, part of it is envy and part of it is incomprehension, but there is probably more to it than that. Blaming rootless cosmopolitans and ‘international bankers’ for all of society’s woes has been a favourite demagogic tactic for so long, and across so many different nominal ideologies, that I think it may well speak to deep primal instincts. But it’s not something I claim much insight into.
As for why they are more worthy of praise and emulation than scientists or academics—basically, on the margin, we have too few hedge fund managers (which is why they earn so much) and too many academics.
We have already discussed at length (see e.g. here and here ) my view of why academics and scientists are overpraised and overemulated, so I don’t intend to repeat that discussion. But basically, the gains from science and academia are no doubt huge, but they are also infra-marginal. You can’t convince me that CERN or academic literary criticism are worthwhile resource allocations, and you can’t convince anyone else to spend their own money on these things either. Ironically, if science and academia were less praised, we’d probably have better science and academia, because then these things would have to justify themselves on their own merits rather than a mere patina.
Hedge fund managers, by contrast, are playing an important role in global resource allocation. We are in the middle of a huge Factor Price Equalization which is slowly making the world a more prosperous place, by increasing the productive capacity and wages of the Third World. We could do with some more of that.
As for why they are more worthy of praise and emulation than scientists or academics—basically, on the margin, we have too few hedge fund managers (which is why they earn so much) and too many academics.
It’s not clear to me that the “why they earn so much” inference is correct. Consider lawyers; we clearly have too many lawyers (as determined by the percentage of law school graduates who are employed in the legal profession and complaints of unemployment and declining wages for the median or mediocre lawyer), but the best lawyers still command significant salaries. This seems to be mostly because law is a competitive field where you hire your champion, they hire their champion, and the champions battle—and in such a field we should expect that the wage of the best champions will always be high because I’m paying for having an edge, and the value of that edge depends on the value of the case times the quality difference, which is insensitive to a worker of non-extreme legal competence deciding whether or not to become a lawyer.
The analogy to hedge funds seems clear: how many mediocre money managers there are doesn’t matter very much to the price of getting the person with slightly higher (expected) alpha to manage your money. It’s also not clear that more hedge fund managers will lead to the FPE happening any faster, as the marginal money manager loses money, just as it’s not clear that more scientists will lead to the singularity happening any faster, as the marginal scientist gets no citations.
(And, in fact, I think science operates in a very similar situation: the best scientists actually do control sizable resources and have very high ‘effective’ compensation, once you take into account status and security, but we seem to be graduating more science PhDs than their fields can support.)
I like your comparison to law, but there are multiple margins here.
Firstly, suppose that a small change in relative respect or pay for academia and finance convinces some bright maths PhD student to go into finance as opposed to seeking tenure. He’s marginal in the sense that he was shifted by that effect, but there’s nothing to suppose he’ll be a marginal financier in the sense of only just clinging to a job. In fact, my experience was that the prestige of academia (plus status quo bias) meant that the very best and brightest were the ones who tried to become professors, whereas the relative dullards (like myself) tried to get a real job. In other words, I suspect the marginal financier by application might well be an above-average financier by results.
Secondly, neither law nor finance are purely champion games. It is possible for the quality of legal advice to go up across the board, and for people to have improved access to legal services, and both these things will improve our quality of life (and the economy) although there are of course costs and diminishing returns. Similarly, it is possible for investment decisions to be more productive across the board, and it is possible for people to have improved access to capital markets. And I say that without denying that there will always be a premium for the very best.
I am certainly not saying that we should set up poorly accredited Hedge Fund Schools across the country churning out thousands of barely-trained financiers based on false promises of millions to come (although come to think of it, that does sound like a good scam).
In fact, my experience was that the prestige of academia (plus status quo bias) meant that the very best and brightest were the ones who tried to become professors, whereas the relative dullards (like myself) tried to get a real job.
This certainly was the case 20 to 30 years ago, but I’m not sure it’s the case now.
It is possible for the quality of legal advice to go up across the board, and for people to have improved access to legal services, and both these things will improve our quality of life (and the economy) although there are of course costs and diminishing returns.
Sure- but for these gains to impact wages they need to be captured by workers, and it’s not clear that this happens on a large enough scale. (It seems to me that many people try to adjust the status of fields mostly to account for these positive externalities.)
(although come to think of it, that does sound like a good scam)
I am under the impression that most of the personal finance seminar offerings of the Rich Dad Poor Dad variety are the slightly less formal version of this.
how many mediocre money managers there are doesn’t matter very much to the price of getting the person with slightly higher (expected) alpha
That’s not self-evident to me. If the supply of money managers increases under the reasonable assumption that the increase is appropriately distributed along the whole skill spectrum, the supply of high-skill managers will increase as well.
the marginal money manager loses money
Huh? The left tail of the money manager distribution loses money, of course, but that’s almost by definition. The average money manager does not lose money. We can argue whether he makes more money than a passive investment in “the market”, but that’s a complicated discussion that involves different markets, risk, etc.
If the supply of money managers increases under the reasonable assumption that the increase is appropriately distributed along the whole skill spectrum, the supply of high-skill managers will increase as well.
Sure, but I explicitly mentioned I was varying the supply of mediocre money managers. What would make you think it’s reasonable to assume that mediocre managers are appropriately distributed along the whole skill spectrum?
I’m specifically poking at the claim that we can tell that we have too few hedge fund managers because they make such high salaries. I think I’m in agreement with Salemicus that some forms of financing are positive sum (and thus provide a valuable social service), that top cognitive talent is heavily influenced by prestige, and that if there were a flatter plateau of extreme competence the salaries would be lower. I’m uncertain whether it’s possible to achieve that by shifting more top talent from academia to hedge funds, since I think that will simply shift what counts as ‘extreme’ competence in that field.
The average money manager does not lose money. We can argue whether he makes more money than a passive investment in “the market”, but that’s a complicated discussion that involves different markets, risk, etc.
I find it remarkable the number of financial concepts you think are complicated that look simple to me and the many experts in economics and finance (who aren’t trying to sell a product) that I’m familiar with.
too few hedge fund managers (which is why they earn so much)
Is there an implicit premise here along the lines of “If any group of people, collectively, earn very large salaries, that indicates that we need more of them”? If so, I would be interested to know why you apply that principle to hedge fund managers but not to
[...] UN nomenklatura, [...] or indeed executives at the major commercial banks, who are all undoubtedly very rich.
(I deleted “the inheritors of great wealth” because of course their wealth isn’t a matter of how well they are paid. I deleted “Russian kleptocrats” because I don’t know how much of their wealth comes from being paid as opposed to (e.g.) making investments and then manipulating regulations to make them grow.)
(I remark in passing that your use of the term “nomenklatura” may land you in the same mental pigeonhole as US politicians who, honestly or not, purport to think that Barak Obama is a communist and that the UN is some kind of vastly powerful world government that the perfidious Democrats want to hand over control of the US to. I dare say that’s a risk you’re prepared to put up with.)
There are different reasons why people get paid large salaries. Sometimes it’s because they earned the money, sometimes it’s because they stole it, and sometimes it’s because they are skilled at abusing the political process to shut out their competitors. By default I assume people are in the first category, but sometimes the evidence indicates otherwise. Russian kleptocrats are in the second and third categories. UN insiders (whose salaries are fairly modest, by the way) are in the second. I suspect that executives at major commercial banks are mostly in the first category, but lots of people believe they are in the third, and not without reason.
As to your final point—I live in a country where it is uncontroversial to mention that the UN is opaque, massively corrupt, and whose permanent agencies are staffed by a connected group of permanent insiders. I didn’t realise I was running up against some strange American taboo.
Not what I said, nor what I meant. I meant: there are a bunch of people around who have some strange and paranoid ideas about the UN and about communism, and if you casually make it clear that you think the leadership of the UN is just like that of the Soviet Union then you are liable to be thought to hold similar views.
(As it happens, we live in the same country unless you have moved very recently. I do not have the impression that it’s uncontroversial here to say that the UN is just like the USSR. I suppose it might be uncontroversial simply because scarcely anyone here cares enough about the UN to have a strong opinion.)
I don’t really know why hedge fund managers are so unfairly maligned. Very likely, part of it is envy and part of it is incomprehension, but there is probably more to it than that. Blaming rootless cosmopolitans and ‘international bankers’ for all of society’s woes has been a favourite demagogic tactic for so long, and across so many different nominal ideologies, that I think it may well speak to deep primal instincts. But it’s not something I claim much insight into.
I very rarely use the word “offensive” to describe something, but I’m going to use it here. You are essentially claiming with your links that people who don’t like hedge fund managers are really antisemites. (And please don’t pretend that’s not what you intended given where your links go.) This is factually inaccurate and attempts to use a heavily emotionally charged historical issues. In the most charitable interpretation, this is due to pattern matching. This is especially irrelevant since no one was asking why you think hedge fund managers are as a group maligned.
If I had to make a guess though I do think you are right that parts are due to envy and to incomprehension. I suspect that part of it is also connected to people conflating all the different “Wall Street” activity and don’t for example distinguish the genuinely productive work (which some hedge funds do) and things like micro-trading which really isn’t productive.
As for why they are more worthy of praise and emulation than scientists or academics—basically, on the margin, we have too few hedge fund managers (which is why they earn so much)
This is at best confused. You seem to be assuming that the only or primary cause for why something would be payed a lot is high demand and low supply. This does not follow. Regulatory capture is one of many ways that a market can produce a situation where this doesn’t occur.
and too many academics.
And this fails for similar reasons. One cannot use how much people are paid as a useful judgment for their worth. The primary problems here are positive externalities and public goods. Scientific research is effectively a public good so making people pay a lot for it is intrinsically difficult. Moreover, the people who go into science are not in general people who are heavily interested in being paid a lot.
We have already discussed at length (see e.g. here and here ) my view of why academics and scientists are overpraised and overemulated, so I don’t intend to repeat that discussion.
Oh right! I forgot you were that person. Too bad you don’t want to continue that. You left a number of sub-issues there hanging where I would have been interested in your responses.
Hedge fund managers, by contrast, are playing an important role in global resource allocation. We are in the middle of a huge Factor Price Equalization which is slowly making the world a more prosperous place, by increasing the productive capacity and wages of the Third World. We could do with some more of that.
That seems like an iffy argument. Yes FPE is important and is a major aspect of what is currently pushing up the economics of the developing world. But hedge funds aren’t by and large specifically involved with that any more than any other aspect of the economic system.
You are essentially claiming with your links that people who don’t like hedge fund managers are really antisemites.
No, that is not my intention. I do think that the language and allegations that people use against ‘banksters’ are stunningly similar to charges anti-semites made against Jews, but I don’t think that means that OWS are anti-semites. Rather, I was suggesting that OWS, anti-semitism, etc, all come from the same place, which is some primal dislike of so-called market dominant minorities.
This is especially irrelevant since no one was asking why you think hedge fund managers are as a group maligned.
??? I was specifically responding to your query about why I thought hedge fund managers are so unfairly maligned.
Regulatory capture is one of many ways that a market can produce a situation where this doesn’t occur.
This is very true, but hedge funds are lightly regulated, so it doesn’t make much sense as an explanation of high salaries for hedge fund managers. In fact, what I think is going on is that regulatory capture and cartelisation of the regular banking and investment markets by huge incumbent players makes it almost impossible for innovation and new entrants to occur. Consequently this activity occurs at the margins, in shadow banking and hedge funds, leading to very high returns for a few innovators, but also lots of risky activity.
Oh right! I forgot you were that person. Too bad you don’t want to continue that. You left a number of sub-issues there hanging where I would have been interested in your responses.
I found our discussion interesting, but it was long, and I was repeatedly downvoted. I felt I was testing the patience of the community.
But hedge funds aren’t by and large specifically involved with that any more than any other aspect of the economic system.
Capital allocation is vital, but you are right that hedge funds are just a small part of that. I certainly wasn’t saying that hedge fund managers are the be-all and end-all. But pnrjulius was claiming that the only reason one could admire them is because one thinks that ‘everyone who is rich automatically is a wonderful person.’ So it seemed natural to contrast this highly productive, but widely maligned group with a highly praised but (IMO) largely parasitic one.
Rather, I was suggesting that OWS, anti-semitism, etc, all come from the same place, which is some primal dislike of so-called market dominant minorities.
One related observation, I noticed that looking at most ethnic stereotypes (by group X of group Y) they tend to fall into two broad categories: “Group Y are subhuman idiots”, and “group Y are evil practitioners of black magic.” Possibly substitute “black magic” with equivalent concept from group X’s worldview. (Note: if the horns affect goes sufficiently far group X may start throwing out both accusations but one is always primary.)
These it seems roughly correspond to whether group X’s system one perceives group Y as less or more intelligent then themselves respectively.
Come to think of it “magic” isn’t a bad description of what intelligence greater than your own looks like from the outside. And unless you have strong reasons to believe that the intelligence’s goals are aligned with your own it might as well be black magic.
No, that is not my intention. I do think that the language and allegations that people use against ‘banksters’ are stunningly similar to charges anti-semites made against Jews, but I don’t think that means that OWS are anti-semites. Rather, I was suggesting that OWS, anti-semitism, etc, all come from the same place, which is some primal dislike of so-called market dominant minorities.
That has to be one of the most tone-deaf attempts to make that last argument or is completely disingenuous and I can’t figure out which. At minimum, the fact that you used links only to examples involving Jews really misses the point, especially given that Jews were hated for many reasons that had nothing to do with economics but were rather religious. You cannot expect people to be telepaths.
I was specifically responding to your query about why I thought hedge fund managers are so unfairly maligned.
Ah! Illusion of transparency. Apparently you aren’t the only person here who doesn’t realize that other people aren’t telepaths. My question was regarding the “unfairly” that is that you normatively consider it to be unfair, and I was curious what your reasoning was there. You did give a pretty decent explanation of your reasoning for that question.
This is very true, but hedge funds are lightly regulated, so it doesn’t make much sense as an explanation of high salaries for hedge fund managers
The problem here is not necessarily the lack of direct regulation of hedge funds but rather the entire regulatory framework for investments as a whole, taken together with things like the capital gains tax.
I felt I was testing the patience of the community.
I do think your viewpoint is an unpopular one here, but I don’t think you were testing community patience. Most of your posts in that thread range from −1 to +2 which is about normal for any mildly controversial topic.
So it seemed natural to contrast this highly productive, but widely maligned group with a highly praised but (IMO) largely parasitic one.
Tangential advice: when one is going to make a comparison to persuade someone of something, using a comparison to something which is itself likely to be controversial.
At minimum, the fact that you used links only to examples involving Jews really misses the point, especially given that Jews were hated for many reasons that had nothing to do with economics but were rather religious.
Yes, but all Salemicus’s examples were specifically about economics.
In the interest of being contrarian, I admit having a fondness for her Romantic Manifesto. I didn’t really understand how aesthetics could be a worthwhile philosophical practice until she linked it to—oh, what was the term? -- a person’s sense of life.
It’s hip with a lot of people to be snarky about Rand, but I’ve never seen anyone who does it also demonstrate they have the slightest clue what she had to say. I have my own disagreements with Rand, but I’ve appreciated her more and more as time as gone on. She’s more LessWrong than most.
It’s hard to imagine that anyone who’d read Atlas Shrugged could accuse her of thinking that
Exactly, these critiques fascinate me for this reason: Objectivist epistemology, metaphysics, and ethics are deeply flawed and yet people still create straw-men that are easily recognized as such by even casual dabblers in Objectivism like myself (your’s being a good example). What causes people to do that?
I think EY gave the answer in Chapter 83. Harry, the consumate rationalist, was lying to himself and lashing out at Dumbledore because one of his sacred values was questioned, and he couldn’t allow that.
Are we to suppose that it’s only Evangelicals for whom it is a crime to doubt the existence of their God? Rand challenges a number of Gods, and the faithful off all varieties can hardly be expected to listen to the lies of the Devil, can they? To even consider her arguments for a moment is to question the sacred, which mustn’t be done. To do so is to travel halfway down the road to heresy.
I had to double-take because that appeared at first to be exactly the message I took away from Atlas Shrugged. Then I realized that, as far as I can tell, the message is more like:
So it’s not that they do, it’s that they should.
Yet even if that is so, why are there so many Objectivists swooning over hedge fund managers? Clearly at least some of them think that everyone who is rich automatically is a wonderful person, or they wouldn’t behave this way.
Non sequitur. A lot of people ‘swooned’ over Steve Jobs, or tech entrepreneurs generally. It does not follow that they think that all CEOs are automatically wonderful people, that all technological changes are automatically good for mankind, or any such strawman.
You may wish to consider why they ‘swoon’ over hedge fund managers as opposed to, say, Russian kleptocrats or UN nomenklatura, the inheritors of great wealth, or indeed executives at the major commercial banks, who are all undoubtedly very rich.
I’m not an Objectivist (I’ve never even read any of Rand’s novels), but I certainly think hedge fund managers are far more worthy of praise and emulation than, say, scientists or academics, and that they are unfairly maligned in society.
Can you expand on why you think this? (Both the first and the second claim.)
I don’t really know why hedge fund managers are so unfairly maligned. Very likely, part of it is envy and part of it is incomprehension, but there is probably more to it than that. Blaming rootless cosmopolitans and ‘international bankers’ for all of society’s woes has been a favourite demagogic tactic for so long, and across so many different nominal ideologies, that I think it may well speak to deep primal instincts. But it’s not something I claim much insight into.
As for why they are more worthy of praise and emulation than scientists or academics—basically, on the margin, we have too few hedge fund managers (which is why they earn so much) and too many academics.
We have already discussed at length (see e.g. here and here ) my view of why academics and scientists are overpraised and overemulated, so I don’t intend to repeat that discussion. But basically, the gains from science and academia are no doubt huge, but they are also infra-marginal. You can’t convince me that CERN or academic literary criticism are worthwhile resource allocations, and you can’t convince anyone else to spend their own money on these things either. Ironically, if science and academia were less praised, we’d probably have better science and academia, because then these things would have to justify themselves on their own merits rather than a mere patina.
Hedge fund managers, by contrast, are playing an important role in global resource allocation. We are in the middle of a huge Factor Price Equalization which is slowly making the world a more prosperous place, by increasing the productive capacity and wages of the Third World. We could do with some more of that.
It’s not clear to me that the “why they earn so much” inference is correct. Consider lawyers; we clearly have too many lawyers (as determined by the percentage of law school graduates who are employed in the legal profession and complaints of unemployment and declining wages for the median or mediocre lawyer), but the best lawyers still command significant salaries. This seems to be mostly because law is a competitive field where you hire your champion, they hire their champion, and the champions battle—and in such a field we should expect that the wage of the best champions will always be high because I’m paying for having an edge, and the value of that edge depends on the value of the case times the quality difference, which is insensitive to a worker of non-extreme legal competence deciding whether or not to become a lawyer.
The analogy to hedge funds seems clear: how many mediocre money managers there are doesn’t matter very much to the price of getting the person with slightly higher (expected) alpha to manage your money. It’s also not clear that more hedge fund managers will lead to the FPE happening any faster, as the marginal money manager loses money, just as it’s not clear that more scientists will lead to the singularity happening any faster, as the marginal scientist gets no citations.
(And, in fact, I think science operates in a very similar situation: the best scientists actually do control sizable resources and have very high ‘effective’ compensation, once you take into account status and security, but we seem to be graduating more science PhDs than their fields can support.)
I like your comparison to law, but there are multiple margins here.
Firstly, suppose that a small change in relative respect or pay for academia and finance convinces some bright maths PhD student to go into finance as opposed to seeking tenure. He’s marginal in the sense that he was shifted by that effect, but there’s nothing to suppose he’ll be a marginal financier in the sense of only just clinging to a job. In fact, my experience was that the prestige of academia (plus status quo bias) meant that the very best and brightest were the ones who tried to become professors, whereas the relative dullards (like myself) tried to get a real job. In other words, I suspect the marginal financier by application might well be an above-average financier by results.
Secondly, neither law nor finance are purely champion games. It is possible for the quality of legal advice to go up across the board, and for people to have improved access to legal services, and both these things will improve our quality of life (and the economy) although there are of course costs and diminishing returns. Similarly, it is possible for investment decisions to be more productive across the board, and it is possible for people to have improved access to capital markets. And I say that without denying that there will always be a premium for the very best.
I am certainly not saying that we should set up poorly accredited Hedge Fund Schools across the country churning out thousands of barely-trained financiers based on false promises of millions to come (although come to think of it, that does sound like a good scam).
Agreed that there are multiple margins.
This certainly was the case 20 to 30 years ago, but I’m not sure it’s the case now.
Sure- but for these gains to impact wages they need to be captured by workers, and it’s not clear that this happens on a large enough scale. (It seems to me that many people try to adjust the status of fields mostly to account for these positive externalities.)
I am under the impression that most of the personal finance seminar offerings of the Rich Dad Poor Dad variety are the slightly less formal version of this.
That’s not self-evident to me. If the supply of money managers increases under the reasonable assumption that the increase is appropriately distributed along the whole skill spectrum, the supply of high-skill managers will increase as well.
Huh? The left tail of the money manager distribution loses money, of course, but that’s almost by definition. The average money manager does not lose money. We can argue whether he makes more money than a passive investment in “the market”, but that’s a complicated discussion that involves different markets, risk, etc.
Sure, but I explicitly mentioned I was varying the supply of mediocre money managers. What would make you think it’s reasonable to assume that mediocre managers are appropriately distributed along the whole skill spectrum?
I’m specifically poking at the claim that we can tell that we have too few hedge fund managers because they make such high salaries. I think I’m in agreement with Salemicus that some forms of financing are positive sum (and thus provide a valuable social service), that top cognitive talent is heavily influenced by prestige, and that if there were a flatter plateau of extreme competence the salaries would be lower. I’m uncertain whether it’s possible to achieve that by shifting more top talent from academia to hedge funds, since I think that will simply shift what counts as ‘extreme’ competence in that field.
I find it remarkable the number of financial concepts you think are complicated that look simple to me and the many experts in economics and finance (who aren’t trying to sell a product) that I’m familiar with.
And why do you think this is so?
Is there an implicit premise here along the lines of “If any group of people, collectively, earn very large salaries, that indicates that we need more of them”? If so, I would be interested to know why you apply that principle to hedge fund managers but not to
(I deleted “the inheritors of great wealth” because of course their wealth isn’t a matter of how well they are paid. I deleted “Russian kleptocrats” because I don’t know how much of their wealth comes from being paid as opposed to (e.g.) making investments and then manipulating regulations to make them grow.)
(I remark in passing that your use of the term “nomenklatura” may land you in the same mental pigeonhole as US politicians who, honestly or not, purport to think that Barak Obama is a communist and that the UN is some kind of vastly powerful world government that the perfidious Democrats want to hand over control of the US to. I dare say that’s a risk you’re prepared to put up with.)
There are different reasons why people get paid large salaries. Sometimes it’s because they earned the money, sometimes it’s because they stole it, and sometimes it’s because they are skilled at abusing the political process to shut out their competitors. By default I assume people are in the first category, but sometimes the evidence indicates otherwise. Russian kleptocrats are in the second and third categories. UN insiders (whose salaries are fairly modest, by the way) are in the second. I suspect that executives at major commercial banks are mostly in the first category, but lots of people believe they are in the third, and not without reason.
As to your final point—I live in a country where it is uncontroversial to mention that the UN is opaque, massively corrupt, and whose permanent agencies are staffed by a connected group of permanent insiders. I didn’t realise I was running up against some strange American taboo.
Not what I said, nor what I meant. I meant: there are a bunch of people around who have some strange and paranoid ideas about the UN and about communism, and if you casually make it clear that you think the leadership of the UN is just like that of the Soviet Union then you are liable to be thought to hold similar views.
(As it happens, we live in the same country unless you have moved very recently. I do not have the impression that it’s uncontroversial here to say that the UN is just like the USSR. I suppose it might be uncontroversial simply because scarcely anyone here cares enough about the UN to have a strong opinion.)
I do not mean to imply that the UN is just like the USSR, nor do I believe that anything I wrote can reasonably be interpreted in that manner.
I very rarely use the word “offensive” to describe something, but I’m going to use it here. You are essentially claiming with your links that people who don’t like hedge fund managers are really antisemites. (And please don’t pretend that’s not what you intended given where your links go.) This is factually inaccurate and attempts to use a heavily emotionally charged historical issues. In the most charitable interpretation, this is due to pattern matching. This is especially irrelevant since no one was asking why you think hedge fund managers are as a group maligned.
If I had to make a guess though I do think you are right that parts are due to envy and to incomprehension. I suspect that part of it is also connected to people conflating all the different “Wall Street” activity and don’t for example distinguish the genuinely productive work (which some hedge funds do) and things like micro-trading which really isn’t productive.
This is at best confused. You seem to be assuming that the only or primary cause for why something would be payed a lot is high demand and low supply. This does not follow. Regulatory capture is one of many ways that a market can produce a situation where this doesn’t occur.
And this fails for similar reasons. One cannot use how much people are paid as a useful judgment for their worth. The primary problems here are positive externalities and public goods. Scientific research is effectively a public good so making people pay a lot for it is intrinsically difficult. Moreover, the people who go into science are not in general people who are heavily interested in being paid a lot.
Oh right! I forgot you were that person. Too bad you don’t want to continue that. You left a number of sub-issues there hanging where I would have been interested in your responses.
That seems like an iffy argument. Yes FPE is important and is a major aspect of what is currently pushing up the economics of the developing world. But hedge funds aren’t by and large specifically involved with that any more than any other aspect of the economic system.
No, that is not my intention. I do think that the language and allegations that people use against ‘banksters’ are stunningly similar to charges anti-semites made against Jews, but I don’t think that means that OWS are anti-semites. Rather, I was suggesting that OWS, anti-semitism, etc, all come from the same place, which is some primal dislike of so-called market dominant minorities.
??? I was specifically responding to your query about why I thought hedge fund managers are so unfairly maligned.
This is very true, but hedge funds are lightly regulated, so it doesn’t make much sense as an explanation of high salaries for hedge fund managers. In fact, what I think is going on is that regulatory capture and cartelisation of the regular banking and investment markets by huge incumbent players makes it almost impossible for innovation and new entrants to occur. Consequently this activity occurs at the margins, in shadow banking and hedge funds, leading to very high returns for a few innovators, but also lots of risky activity.
I found our discussion interesting, but it was long, and I was repeatedly downvoted. I felt I was testing the patience of the community.
Capital allocation is vital, but you are right that hedge funds are just a small part of that. I certainly wasn’t saying that hedge fund managers are the be-all and end-all. But pnrjulius was claiming that the only reason one could admire them is because one thinks that ‘everyone who is rich automatically is a wonderful person.’ So it seemed natural to contrast this highly productive, but widely maligned group with a highly praised but (IMO) largely parasitic one.
One related observation, I noticed that looking at most ethnic stereotypes (by group X of group Y) they tend to fall into two broad categories: “Group Y are subhuman idiots”, and “group Y are evil practitioners of black magic.” Possibly substitute “black magic” with equivalent concept from group X’s worldview. (Note: if the horns affect goes sufficiently far group X may start throwing out both accusations but one is always primary.)
These it seems roughly correspond to whether group X’s system one perceives group Y as less or more intelligent then themselves respectively.
Come to think of it “magic” isn’t a bad description of what intelligence greater than your own looks like from the outside. And unless you have strong reasons to believe that the intelligence’s goals are aligned with your own it might as well be black magic.
That has to be one of the most tone-deaf attempts to make that last argument or is completely disingenuous and I can’t figure out which. At minimum, the fact that you used links only to examples involving Jews really misses the point, especially given that Jews were hated for many reasons that had nothing to do with economics but were rather religious. You cannot expect people to be telepaths.
Ah! Illusion of transparency. Apparently you aren’t the only person here who doesn’t realize that other people aren’t telepaths. My question was regarding the “unfairly” that is that you normatively consider it to be unfair, and I was curious what your reasoning was there. You did give a pretty decent explanation of your reasoning for that question.
The problem here is not necessarily the lack of direct regulation of hedge funds but rather the entire regulatory framework for investments as a whole, taken together with things like the capital gains tax.
I do think your viewpoint is an unpopular one here, but I don’t think you were testing community patience. Most of your posts in that thread range from −1 to +2 which is about normal for any mildly controversial topic.
Tangential advice: when one is going to make a comparison to persuade someone of something, using a comparison to something which is itself likely to be controversial.
Yes, but all Salemicus’s examples were specifically about economics.
In the interest of being contrarian, I admit having a fondness for her Romantic Manifesto. I didn’t really understand how aesthetics could be a worthwhile philosophical practice until she linked it to—oh, what was the term? -- a person’s sense of life.