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by SiVal
5835 days ago
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I'm not interested in your bonus points, but in the correct answer. I believe this is it: Large, liquid markets reduce economic friction. They make an economy larger, more diverse, and more adaptable. The low friction allows small changes in supply and demand to quickly propagate long distances, producing responses where otherwise the information would have been lost to the friction. You don't have to look far in space or time to find places where this "zero-sum game" isn't or wasn't available. Just look for poverty and lack of social mobility. There is an economic progression from the switch from barter to money, to lending of money, to spread of risk by enabling minority ownership of multiple ventures (early corporations), to easier transferal of ownership in smaller pieces (allowing more of society to participate), to large-scale, low-friction, highly-liquid markets used by everyone, directly or indirectly. Each step further reduces economic friction, which lowers the threshold for economic activity to take place, causing more of it to occur, increasing the prosperity of the whole society. Even if you lose money personally in the "zero-sum game" with unfortunate investments, you're still probably losing only a portion of the money you made working at a company that wouldn't exist if not for large, liquid, low-friction markets. |
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