
Ask HN: Do you consider finance/trading to be an evil industry? - gas9S9zw3P9c
The sentiment that finance and hedge funds are somehow evil seems to be quite common in the startup and technology world. I sometimes see it here on HN and I&#x27;ve come across it a few times during my career in Silicon Valley.<p>People going into finance are treated as if they are selling out. I wonder where this sentiments comes from, and whether you believe this to be true or false?<p>I&#x27;ve worked for both a hedge fund and tech companies, and personally found the former quite refreshing. People in finance are honest about just wanting to make money, while I found that many in tech secretly just want to make money but publicly pretend that they want to &quot;make the world a better place.&quot; I think that keeping up this fake persona can be quite damaging psychologically, especially for young startup founders.<p>What do you think?
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keybordRambo
I dont think finance is more evil than other industries,

There are examples of big companies in every industry i can think of that
figure out ways to squeeze more money out of the little guy without providing
more value (teacher unions resisting policies that would benifit students and
increase costs to tax payers, shitty universities costing students lots of
money, big hospital chains that raise prices because they can rather than due
to costs, insurance companies that screw out customers, software companies
that trick customers into paying for things they dont need, etc.).

I think finance people can look so evil because lots of educated people simply
don't believe the financial industry creates wealth, but view them more as
scavengers who prey on blue collar workers and tax payers with "management
consulting" tactics. Carl Icahn comes to mind here, people think of him as a
big pump and dump activist investor, pretty frequently he gets accused of
being this, and he takes out a sheet of paper with his historical investments
to counter these claims.

I agree that tech companies who preach their corporate gospel can be confusing
to employees not drinking the coolaid because objectivly its like, i know we
say we are saving the world but we just sell a marketing tool right? I think
companies like that are trying to motivate their employees to work harder with
those cultures. The employees who dont like that stuff are free to look
elsewhere for work but some people love it i think.

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rawgabbit
Leverage buyouts are evil. KKR bought out TXU and saddled it with $45 billion
in debt. The financiers walked away with huge paydays. In less than ten years
the company declared bankruptcy. Moody's called the company “a financially
distressed company with an untenable capital structure.”

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salawat
You've kind of tainted the answers you might get by leaving in the assertion
that those that say they are out to make the world a better place are secretly
wanting to make more money, but I'll bite.

I did my stint in a couple fintech and yes, I consider the industry evil. Not
Machiavelli evil, or Saturday morning cartoon evil; but evil in the absolute
banality sense.

They're out to make more money. Alright, how?

The answers vary, but invariably boil down to:

A) Make previously impractical value extractive transaction practical through
automation augmented with ubiquitous connectivity. This is a winning business
plan, but doesn't really make the world a better place for everyone. It just
makes yet another financial extraction mechanism.

B) Make or exploit arbitrage possibilities through exploitation of information
asymmetry to extract value. May be good for liquidity, but these micro-
extractions of value don't tend toward creating a macroscale change, but
nevertheless, more "value" is created. This suggests to me an artifact
generated by fundamental constraints of the model rather than actual problems
being solved.

C) Make something marginally "cheaper", but extract a small slice, multiply by
economy of scale. This model maintains status quo, and never really pays off
for the end user until someone really puts competitive pressure on another
actor, yet with consolidation happy markets that competitor never tends to
stick around long enough.

D) Loss lead, but monetize data. Should be self evident.

Making money just to make money is not in and of itself a virtuous goal for
the world in general given money's fundamental purpose of being a promissory
note on the improvement or capacity to follow through on a promise. If all
you're spending time doing is making more I.O.U.s, your problem solving is
never actually meeting the road and propelling society down the road of not
having to worry about things they previously had to. This manifests in pattern
where making more money in the face of climate change for instance, blooms
like a good idea because you're making more money right now, but you're ending
your fiscal yardsticking there. Feel free to replace "climate change" with any
long cycle problem that can be exacerbated by putting it off til later in
order to optimize on some more achievable and tangible metric now.

That's my two cents. It's the most boring kind of evil. The kind you can't
really build up the motivation to fix, and even worse, bewitching in that even
when you're pretty sure you've discovered that "neat trick", once you see it
out to the end you realize you just did the same thing everyone else did, and
didn't realize it.

