

Russ Nelson on Speculation WRT PG's "Mind the Gap" Essay - h3h
http://blog.russnelson.com/2008/09/17#in-defense-of-speculators

======
pg
I wasn't claiming speculation has no good effects, just that speculators don't
create wealth. You don't have to create wealth to have good effects on the
world. Good laws, for example, have good effects without creating wealth.

~~~
awt
Can a law create wealth?

~~~
pg
I doubt it, but the edge cases of what counts as wealth creation and what
doesn't are so hard that I'd want to think more about it before saying for
sure.

~~~
byrneseyeview
I think a good law will create wealth if it enables a mutually beneficial
transaction that would not otherwise be possible.

For example, a law against breach of contract makes you more likely to hire
someone you don't know well. That person gets a job, you get an employee, so
you're both better off. As long as this benefit is greater than the cost of
enforcing the law, that law has created wealth.

I recommend _Law's Order_ by David Friedman for a whole lot more on this
subject. It's a fascinating introduction to the application of economics to
law.

~~~
h3h
For pedantry's sake, this sounds like enabling wealth rather than creating it.
The wealth doesn't originate with the law, so isn't created by it.

