Re:The Crash of ’87, from the Wall Street Players Who Lived It
by gjulianm on Tuesday October 17, 2017 @08:38AM
(#15490397)
Sorry but I have to make the precision: market optimized for monetary output and not necesarily social good. Companies doing well in the stock market might be exploiting workers, unnecessarily exposing consumers to different dangers, destroying the environment or a plethora of any other bad things and the stock market would not care as long as it does not create a PR problem that could affect sales of the company.
Similarly, a company that does well socially (e.g, a public hospital) but not economically would get obliterated in the stock market.
Re:The Crash of ’87, from the Wall Street Players Who Lived It
by liotier on Tuesday October 17, 2017 @09:02AM
(#15490533)
> Companies doing well in the stock market might be exploiting workers, unnecessarily exposing consumers to different dangers, destroying the environment or a plethora of any other bad things and the stock market would not care
That would be regulatory failure - it is not the market's fault if the government is weak... Fix the government, get decent labor laws, let companies internalize externalities, regulate environmental impact !
> Similarly, a company that does well socially (e.g, a public hospital) but not economically would get obliterated in the stock market
Which is why, in civilized countries, public services are provided by the government or on behalf of the government.
Foisting government responsibilities upon the market is bound to create disappointment...
Prediction markets are the most efficient way to make societal decisions; they allow everyone to combine their information and predictions without having to directly coordinate with each other. There's academic literature arguing they'd be the best way to do politics etc. At the moment all we do with them is capital allocation, but that has real-world effects: ultimately the idea is to give more money to companies that can use it better (so that they then e.g. build more factories, hire more people, make relevant buyouts) and less money to companies that will make less good use of it.