Comment by wqaatwt
4 hours ago
Speculation or actual investment? Assuming that the allocation of capital is somehow aligned with what’s optimal for the economy/society seems naive
4 hours ago
Speculation or actual investment? Assuming that the allocation of capital is somehow aligned with what’s optimal for the economy/society seems naive
It's not naive, it's near optimal. The system rewards people who've done well at capital allocation with more capital to allocate, and takes capital away from those who've done poorly at it. And there's no better predict of future performance at allocating capital than past performance.
Well my point was that it might be optimal for the one doing the allocation and maximize their returns. That does not mean its optimal for the economy and society on the whole.
Actually it does mean it is optimal for the economy as opposed to a central planner who somehow has all the information and does planning with precision. These are mainstream views in economics.
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