[logicchains]

>No, there's no evidence that these activities produce economic value of a magnitude that justifies their compensation.

The evidence of economic value is the fact that these activities are so lucrative. If they weren't producing a lot of value somehow, be it directly or indirectly, they wouldn't receive such high compensation in the market. Economic value is essentially a measure of what people are willing to pay for things (revealed preference), under the assumption that people paying for something, absent any cooercion or market distortion, means they value it.

[hackuser]

How much did Albert Einstein make compared to Babe Ruth? Why is the highest paid employee at most large public universities not the Nobel Prize winning scientist, but the football coach?

Even in theory, many conditions are required for free markets to function efficiently. Regardless, we don't live in a free market, and many other factors determine income.

[logicchains]

There were far fewer people willing to pay to see Einstein do what he did than to see Babe Ruth did what he did. Millions of people got regular satisfaction from watching Babe Ruth, which suggests more people valued what he did than they valued what Einstein did. Economically speaking the value an average person places on something is no less valid than the value an intellectual places on something, and there are a lot more average people than intellectuals.

[collyw]

Thats like saying a Landlord is producing more economic value than the low wage worker who's wages go to pay the rent. One is working, one is rent seeking.

[logicchains]

The landlord (or whomever he inherited the property from) created enough value to buy the house. This individual would have refrained from consuming some of the value they produced in order to save money for the house, meaning this produced-yet-not-consumed value could be invested, increasing the overall productive capacity of society. The landlord could even have been a low-wage worker themselves, who saved money for years so that they could buy a house and have a more comfortable life, with the rent they're able to charge being an economic reward for the consumption they forwent.

[collyw]

Or more likely they inherited it.

[pbhjpbhj]

People who start pyramid schemes create huge "compensation" for themselves, ergo they are doing something valuable for society?

This argument doesn't work.

[logicchains]

> People who start pyramid schemes create huge "compensation" for themselves, ergo they are doing something valuable for society?

Economic value isn't necessarily "valuable for society", it's "valued by people as measured by some particular metric based on the preferences expressed in their spending behaviour". Gambling for instance is something that could be said to have little value to society, but has economic value in the sense that gamblers obviously get some satisfaction out of it or else they wouldn't put so much money into it.

Pyramid schemes generally involve fraud, and when someone is defrauded into buying something economics doesn't consider that purchase an expression of their preferences. If it didn't involve fraud and people knew it was a pyramid scheme yet still invested in it, then they'd have to perceive some value in investing else why would they do it?