Hacker News new | past | comments | ask | show | jobs | submit login
Ask HN: Do you consider finance/trading to be an evil industry?
1 point by gas9S9zw3P9c on July 13, 2020 | hide | past | favorite | 3 comments
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've come across it a few times during my career in Silicon Valley.

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?

I'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 "make the world a better place." I think that keeping up this fake persona can be quite damaging psychologically, especially for young startup founders.

What do you think?




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.


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.”


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.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: