[ExI] Status as human motivator

[Kelly Anderson]

On Tue, Apr 26, 2011 at 11:21 PM, Keith Henson <hkeithhenson at gmail.com> wrote:
> Can you make a case that trading stocks on a time frame of
> milliseconds *is* capitalism?  If you can explain how this invests
> capital in productive industry I would sure like you to do it.

Why is the time length of an investment important. The investment in
the company doesn't go away, it just changes hands. The point to the
company is that it was purchased by SOMEONE, not them, and the initial
money they get from selling the stock at the Public Offering is the
lasting value to the company. Companies focus on stock value because
that keeps them safe from unfriendly takeovers and helps with the next
public offering or dividend. If speculators subsequently use the chips
for gambling, that doesn't change the fact that the chips were
initially sold. So how does stock changing hands tens of times per
second harm the company? There is the element of electronic trading
causing faster swings up and down... which could be arguably bad. They
have been trying to fix that to some extent...

If I sell chips to a Vegas casino, I don't care that they are used for
gambling later, I only care about the money I got for selling them the
chip in the first place.

I am not any kind of financial expert, so it is entirely probable that
I've missed something vitally important in this argument.

-Kelly