The whole automated trading thing that @taskmaster4450 just called attention to in his excellent post makes me so uneasy.
He writes about all the high-paying stock trader jobs that are in jeopardy as a result of robots taking over trading tasks. The fact that these jobs can be outsourced so easily now just highlights how absurd trading has become.
I mean, the whole point of stock trading was to do some research, invest in an enterprise you believed would produce good, solid returns, and then sell your shares and move on when you found something better.
This is how it was described to us in school, anyway. It seemed like a good enough explanation for why capitalism was so successful.
Image by Ant Rozetsky via Unsplash.com
Someone has a great idea for producing widgets. (It's always "widgets" in these examples.) They don't have much money, but their idea is so good, and they're so persuasive that they get a bunch of people with money to invest in their plan. Those people really are invested. They're sharing in a big risk, but with enough of them sharing, the risk is acceptable. And if things work out, they get a share of the returns.
This way, capital increases the welfare of everyone while serving the self-interest of the investors. Seems pretty solid to me.
But it's a rose-colored scenario. Clearly, investing for the long-term well-being of an enterprise was never really the point of trading. The real point is to get as rich as you can, as fast as you can.
And now there are increasingly complicated ways to do this. Ways that are so complicated, they can only be understood by computers.
Why can't we just accept this?
Well... when capital's not being invested to grow successful companies, it erodes the idea of a free market being something that benefits society. Before long, it doesn't even benefit the caste responsible for managing the mechanisms of capital!
The stock market has always been a den of gamblers. At least those gamblers could say, "Hey, some of us are getting rich. Maybe you can get rich too! It's all just a game, but you're all free to play!"
But when that den of gamblers becomes a den of gambling algorithms, no one can even try to pretend that the game's not rigged. And then, how can we justify the prominent position of finance in our economy?
It doesn't even benefit the gamblers, any more. It only benefits the people who own the gambling computers. That's a tiny clique, indeed.
How long can we pretend this is an equitable system? And what will happen when no one has faith in it, anymore.
It might be satisfying to see it all collapse.
But it'll be mighty terrifying, too. Does it scare you as much as it does me?