[klabb3]

Both activities happen in the same economy. Zero-sum or negative-sum activities are plenty. Asset speculation is one such area where the first, second and third order effects are all completely useless to society as a whole, and lack meaningful externalities. Yet people invent the most far-fetched fairy tales to explain why golden handcuffing the brightest math and physics phds to work for hedgies/hfts is a critical piece of human progress.

The truth is markets work great for some things and terrible for other things. When you make a means a goal you always end up with absurdity, in any system.

[WendyTheWillow]

That's not true; speculation is the absorption of risk, an immensely useful financial tool. For example, farmers require speculators to secure guaranteed revenue from crops. Landlords create (yes, they create) housing for people who can't afford to purchase homes by ensuring capital flow into housing construction, among other things.

Investors take on risk in exchange for additional reward. The upside is the people who can't afford the risk have safe ways to protect themselves.