[coffeecat]

> I think the reason most people are suspicious of those who don't work for a living is fairness: we all benefit from the many goods and services that our society produces, so we all should contribute our fair share to producing them.

This implies that an employee of a firm like Renaissance Technologies should have the same social status as an unemployed welfare recipient; I do not believe this is the case in our society.

[chordalkeyboard]

> This implies that an employee of a firm like Renaissance Technologies should have the same social status as an unemployed welfare recipient; I do not believe this is the case in our society.

No, rather it implies the opposite because the employee is working whereas the unemployed person is not.

[ytwySXpMbS]

The grandparent of your comment suggested that unemployed people are shamed because they don’t contribute meaningfully to society, in that they don’t produce anything or provide any services. Similarly, a hedge fund employee contributes nothing of tangible value to society. Sure, they use pension money to make money for themselves, but pensions don’t depend on that.

[chordalkeyboard]

> Similarly, a hedge fund employee contributes nothing of tangible value to society.

Thats your opinion, but it's not something that can be assumed to be true. Its equally likely that you just don't have the education and experience to perceive their contributions as valuable. Lots of people say the same thing about professions they don't respect such as artists, educators, police officers, mental health professionals, dog walkers etcetera. It says more about the person holding the opinion than the profession itself.

[pdonis]

> Its equally likely that you just don't have the education and experience to perceive their contributions as valuable.

This is a common dodge used by professions that don't want to admit how much of what they do is not making any net contribution to society.

It is true that hedge funds contribute to making stock and bond trading markets more efficient, and that is a genuine net contribution.

It is also true, however, that in the course of doing this, hedge funds siphon lots of money from other people's pockets into theirs in zero-sum trades. Not to mention that many very smart people who could be making much greater genuine net contributions in other fields are attracted to hedge funds because of the money-making potential.

The question for society as a whole, as with any profession whose genuine contributions have not so nice side effects (which is just about any profession), is whether the genuine contributions are worth the not so nice side effects. One way society as a whole expresses its judgments about such questions is social approval or disapproval of particular professions based on people's estimate of the tradeoffs.

[chordalkeyboard]

> The question for society as a whole, as with any profession whose genuine contributions have not so nice side effects (which is just about any profession), is whether the genuine contributions are worth the not so nice side effects. One way society as a whole expresses its judgments about such questions is social approval or disapproval of particular professions based on people's estimate of the tradeoffs.

People's estimate of the value of a particular profession is dependent on their understanding of the profession and how it provides services to other people/professions. However familiarity/understanding is not a prerequisite to expression of social sanction.

> It is also true, however, that in the course of doing this, hedge funds siphon lots of money from other people's pockets into theirs in zero-sum trades.

There's an agent-principal problem here where a trader managing other people's money necessarily understands more about the field than the person whose money they are responsible for.

> Not to mention that many very smart people who could be making much greater genuine net contributions in other fields are attracted to hedge funds because of the money-making potential.

This is probably a sign that entry into this field is artificially limited. When the market rewards people for activity, it is supposed to indicate that activity is in demand. It may be the case that there are structural limitations that prevent the entry of new firms who would then drive profits to the marginal level.