[eru]

Oh, if you by a burger and sum the benefit over, say, Burger King and McDonald's it's probably constant.

If you sum the benefits of arbitrage over the high frequency traders, it's possible (close to) constant, too.

But the rest of the world can still benefit (or perhaps suffer in the case of a burger).

[jbooth]

Hm, I think we're talking past each other although I'd like to hear more exposition on your comment because it doesn't really make sense to me.

I was talking more from the perspective of someone who's generating cash. Burger King pays suppliers for meat and whatever (or raises cows in their own operation) and you pay them for a burger. You get a burger, they get cash, pay people, value creation all around.

In Wall St, on the other hand, theoretically we should see value creation through efficient routing of capital to the right places and the people who make that happen are rewarded for their effort. In practice, I feel, it's often a video game where they manage to nibble a billion little pieces away from the value-based investors who are actually performing an economic function. So in some scenarios, they're a net drain, rather than part of a robust economy. That's where my zero-sum analogy came in. YMMV.

[eru]

Yes, the difference between theory and practice can be startling in finance. But I am more wary about fleecing the customer than about counter parties in a high frequency trade. [1] And of course there's also always making money by rent-seeking behaviour. E.g. the implicit subsidy banks get in lower borrowing costs on the market once they are to big to fail.

[1] Mutual fund managers or hedge funds who take a lot of fees are probably quite a drain on your their clients returns.