| Re: Why We Don't Celebrate A "Capital Day" |
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Group: alt.philosophy · Group Profile
Author: Fred WeissFred Weiss Date: Sep 4, 2008 07:44
On Sep 3, 10:15Â pm, Les Cargill cfl.rr.com> wrote:> The Trucker wrote:
>>> 2) Without speculation, transactions become all but
>>> impossible. Speculation is the means by which price
>>> signalling occurs. Longs and shorts both take
>>> positions, the buyers steer towards one or the other.
If you are referring to the importance of creating increased
liquidity, you are of course correct.
>> This part may also be correct. Â But the problem is that it has little to
>> do with real research and development.
>
> That is for sure.
It depends what you are talking about.
Speculation in terms of extreme risk-taking is a key and essential
part of a free market economy. In fact it is *only* in a free market
economy where such speculation (and risk-taking) will be present to a
large degree and which will make possible important breakthroughs in
new products.
That's in part the role of the venture capital market where typically
huge fortunes are commonly lost in the hopes of making bit hits on
highly speculative undertakings. That's how, for example, Google got
its start.
Fred Weiss
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