There is a sick game in the world. The cause is not the workers, it’s the elites. However cold water washes away the crabs.
Just think about how many truly awful competitors there are in any market or product sector. If you noticed, don't you think they've noticed?
Is it really "enabling" when there's a metaphorical (and often literal, in the case of police) gun to one's head? Most of us can't opt out of this arrangement, and that's by design. There isn't even a "run away into the forest" option, because all the forests are already owned by someone. Being homeless is effectively illegal. Being dispossessed in general is illegal, even though the system is predicated on dispossessing the populace to enrich those at the top.
It's less like a dysfunctional relationship and more like a hostage situation. Don't blame the hostages, please.
If labor never walks, it has no power.
Agreed, the power we have must ultimately be exercised. There are more of us than there are of them. Getting organized is the hard part.
I'll stop here as HN is not the place to plan a revolution :)
What's my incentive to take the considerable effort, burn what political capital I may have, and use my little spare energy to overcome the enertia of the terrible situation? I save the company 400k by eleminating unnecessary services. Great a challenge coin. I'll remember this next time you ask for savings opportunities or volunteers.
It may be worth considering overlap with burnout, and how staying (without really considering other options or addressing the underlying things going on personally) ends up damaging the person who stays.
an anecdote I've shared before, was talking to an acquaintance from my child's kindergarten who was an investment guy and I said I thought that finance services were increasingly capturing too much value and he countered that was because finance was where "all the innovation is."
He later got indicted for fraud and couldn't explain how a lot of money disappeared.
financial innovation is dirt cheap. get enough aligned interests around a table and you can create new contracts, new financial markets etc out of thin air. its all fundamentally just a game around information control, an intermediary forcefully interjected in the economy and extracting rents.
now, the quiz: in which other sector is most "innovation" dirt cheap and essentially just a game around information control, an intermediary forcefully interjected in the economy and extracting rents?
the only thing that could be worse than what we have today is when those two "innovative" sectors merge. yet this outcome is inevitable and it will happen fairly soon.
Time value of money, optionality, non-arbitrage.
There's a million ways to cook up a financial product from those and I'm not going to pretend I know them all, but it's like how a chef can look at a dish from another culture and still more or less describe what it is: sugar, fat, acidity, heat, etc.
When exciting things have happened in finance it's often been purely because the exciting thing became legal. Things like buybacks or the repeal of Glass-Steagal. The other thing that can happen is that some sales team finds a way to sell the thing that creates an ecosystem around it, like Credit Default Swaps. Rarely is it the financial contract itself that is so inventive as to create a market.
Also Wilmott. Can't remember the name but it will be obvious.
It's pretty much high school math, you establish what the cash flows are and the value of the thing flows from there. When it comes to optionality you probably haven't done stochastic calculus in high school, but you can follow along anyway. Both books will explain interesting things like how to price an option on an option, that kind of thing. Non-arbitrage is what holds the the whole thing together: if the price didn't follow {rules} then you could do {steps} to make free money.
Another big one is "opacity". A financial product that is convoluted and needlessly complicated allows the most sophisticated financial players to consistently take advantage of the rest.
Much in finance is zero sum. Your outperformance is somebody else's underperformance. Financial products that are understood by everybody will not make you a lot of money, because they will trade approximately at their fair value. This is why so much in finance is complex instead of simple.
By analogy: PDF is terribly complicated because Adobe didn't want their PDF software to become commoditized. A bad and illogical file spec benefits Adobe at the expense of everybody else.
A mildly cynical person might start giggling uncontrollably at the idea that the financial sector is propagating good risk management technology, yet the picture is quite nuanced: Our world would be a more brutal place without insurance contracts and pension schemes. So there is a grain of truth. There are genuine if unfinished financial innovations and they are important. The trouble is that, by-and-large, recent decades have seen nothing of lasting utility coming from the financial sector. In fact the whole thing seems to be unwinding.
Take for example the suddenly hot topic of interest rate risk which is blowing up regional US banks left and right. This was supposed to be a solved risk management problem. Interest rate derivatives have been developed after the Savings and Loan crisis and investment banks have made gazillions of revenue peddling "interest risk management" tools.
Much has been said about the role of regional bank managers, the role of social media the role of watering down regulation etc. What I have not seen much discussed is the role of those risk management intermediaries. MIA?
I at some point a smart cookie will follow the money and publish a lurid account of how the "solved problem" went all pear shape.
This is known as the "Cantillon Effect"[0], and it also explains the concept of biflation[1]: if you're close to the money tap and there's a surge of money, you can profit from arbitrage before that money hits the larger economy and spreads out. The further away from the money tap you are, the less you're able to profit from changes in money supply. This creates perverse incentives for large well-connected business entities, typically centered around schemes involving juggling debt and skimming margins off that.
Eventually every business model starts turning into some variation of a pump and dump scheme. We see this most prominently in crypto, but also in the traditional economy (stock buybacks, real estate speculation, etc).
When enough of the economy turns away from production to speculation, the entire thing falls over and implodes. We don't know the exact point when this happens, and it's probably impossible to model, but history tells us it eventually does happen.
However I feel like your average voter shaking my fist angrily a bankers sometimes when trying to put it into words (I don't honestly have a lot of insight on how it all works).
Have you got any good book/essay recommendations on over-financialisation?
This is the opposite of the reality. Financial statements following GAAP (USA) or IFRS (EU + many other major countries) explicitly list assets on the balance sheet with associated footnotes that explain more complex areas in greater depth. Often, footnotes will include more detailed information for those assets such as depreciation schedules (particularly for PP&E: Plants, Property, and Equipment).
A company can raise capital either via debt or equity financing[0]. Relevant footnotes usually include the terms of how capital was raised, which is normally to fund the core business operations for most companies I have come across.
> The virtual reality of Wall Street and the obese financial system only serves to inflate the volatility. That is by design because volatility is precisely what it is milking.
I agree there are indeed Wall Street firms that conduct unhealthy business, but I believe this is more common within Wall Street banks and investment firms rather than most American businesses as your comment seems to be implying.
I encourage you to read a set of financial statements to better understand how a business truly operates from an accounting perspective. Apple’s financial statements[1] are a good place to start since they have many PP&E assets, conduct financial services, and regularly deal with more complex accounting topics such as foreign currency conversion and derivatives for hedging. It’s truly valuable insight into how a company that’s incredibly expansive operates in (my opinion) a rather healthy manner all things considered.
[0] https://www.investopedia.com/ask/answers/032515/what-are-dif...
[1] https://s2.q4cdn.com/470004039/files/doc_financials/2022/q4/...
What a lot of people probably dont realise when they read the term "business" is how big a fraction of management attention, incentives and remuneration is pure financial engineering: a parasitic game between financiers, accountants, tax code, central banks and company treasuries that has nothing to do with the mission of the company.
A modern corporation is a gigantic financial spreadsheet with its real assets a mere footnote.
In its most benign form debt is an accelerator for a healthy business that is growing. It is possible to get a debt hangover when misestimating actual business prospects and that is a serious enough challenge of its own.
The virtual reality of Wall Street and the obese financial system only serves to inflate the volatility. That is by design because volatility is precisely what it is milking.