A Whole New World of Social Parasitism
Published at 09:14 on 17 February 2012
That’s what nanosecond trading amounts to.
There’s this whole world below 650 milliseconds. It’s like landing on another planet
Looks more like a whole new world of social parasitism on the part of the capitalist class to me.
What value to society does this produce? None, so far as I can see. For the sake of this discussion, let’s be generous to capitalists and take their claim of financial markets being the most efficient way to raise capital at face value. Market forces which are said to work just fine at time scales that humans can perceive (in fact, that’s the scale that all the economic analyses capitalism fans cite as evidence in favor of the utility of such markets work on). There is absolutely no need to go beyond that, and going beyond that consumes labor and resources that could be devoted to producing genuine value.
In fact, by making it more difficult for humans to understand financial markets, such trading actually destroys value, so it is indeed nothing but wasteful social parasitism. There’s actually an effective reformist measure that would put a swift end to it: having a tax on the value of every financial transaction, as France is proposing to do. That would be harmless to long-term investing but take an onerous bite out of short-term trading frenzies.
The question is if and whether it will happen. Those who run markets are sufficiently in the laissez faire mindset that it is ideologically inconvenient for them to be able to see how market forces have naturally evolved in such a way as to destroy value, and to admit the need for intervention to correct this. On the other hand, capitalists have, when presented with the choice between ideological purity and either profit maximization or self-preservation, tended to consistently choose the latter over the former.