Traders do serve a purpose in creating markets. Unfortunately, as with lawyers, we made too many of them. Thus, they had to figure out new things to trade since there were obviously enough traders for the current stock, bond, currency, and commodities markets. So, they started making CDO's, which didn't need the "bigger" market in the first place. Now they are performing the high frequency trading, which doesn't add value to the market, but does add an extra unnecessary cost. Of course, both of these have caused negative events, but for some reason we haven't corrected these yet.
While, I will be the first one to suggest that markets are not efficient, though they are one of our better tools, the bus driver example is far too simplified. Pay is not just based on skill. It is also based on the market that person is in. The Swedish market does not have an over abundance of labor and, too my knowledge, is more expensive to live in than the Indian market. I'm not suggesting these factors should account for all of that large discrepancy in pay, but there would be a discrepancy no matter how fair it was made.
I would also suggest a different example be used, as I'm 99% sure the Swedish bus driver is a government employee and, thus, not directly in the market. If the Indian bus driver is also employeed by the government this really eliminates a good portion of market influence.
I agree that randomness, chance, etc. also effect prices in markets, which is part of the inefficiency. Also, humans control the markets, so it's impossible they are 100% efficient all the time.
Jacob's Journal
> the bus driver example is far too simplified.
I am just tired of writing long descriptions. I kept it simple to set a train of thought and highlight that the idea behind 'making opportunities' and 'developing skills' and 'increasing one's salaries' are not as cut-and-dried as Jacob suggested originally -- so there
.
There is always Ha Joon's speech online, and some lecture notes, and a book chapter where this whole aspect is teased out back and forth in full (if someone wants a few complicated arguments to while away their evenings
).
P.S: "armoire"? from which the word "almairah" was derived, presumably?
I am just tired of writing long descriptions. I kept it simple to set a train of thought and highlight that the idea behind 'making opportunities' and 'developing skills' and 'increasing one's salaries' are not as cut-and-dried as Jacob suggested originally -- so there
. There is always Ha Joon's speech online, and some lecture notes, and a book chapter where this whole aspect is teased out back and forth in full (if someone wants a few complicated arguments to while away their evenings
).P.S: "armoire"? from which the word "almairah" was derived, presumably?
-
secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
I agree fully with Surio's detailed and well argued response, but I wanted to address one other point brought up by Chad:
"Traders do serve a purpose in creating markets. Unfortunately, as with lawyers, we made too many of them. "
I'm not so sure that it's an oversupply of traders but an undersupply of investments with a good yield. This problem really started in the 1970s, when high net worth individuals and institutions shifted away from investing in manufacturing and investing in real estate, largely thanks to Fannie Mae and government intervention in the home industry that allowed a secondary mortgage market to explode. A good article on this topic is here: http://www.nytimes.com/2012/02/01/opini ... built.html
I don't think an oversupply of traders resulted in unwieldy market products--rather, it's an oversupply of investors as wealth concentrated at the top and needed to be put somewhere that yielded capital gains. The investment banking industry expanded to fill this need.
I don't blame the traders or investors for filling that market, and I'd take a job in a hedge fund in a second if I were offered one. However, that doesn't mean that traders provide more utility or make society better. They fulfill a particular market need at this moment in society where there's a lot of money in the hands of a few people and few opportunities to invest in bridges, new factories, etc. This is quite clearly unsustainable and will probably change, although I have no idea what direction it's going to go in.
"Traders do serve a purpose in creating markets. Unfortunately, as with lawyers, we made too many of them. "
I'm not so sure that it's an oversupply of traders but an undersupply of investments with a good yield. This problem really started in the 1970s, when high net worth individuals and institutions shifted away from investing in manufacturing and investing in real estate, largely thanks to Fannie Mae and government intervention in the home industry that allowed a secondary mortgage market to explode. A good article on this topic is here: http://www.nytimes.com/2012/02/01/opini ... built.html
I don't think an oversupply of traders resulted in unwieldy market products--rather, it's an oversupply of investors as wealth concentrated at the top and needed to be put somewhere that yielded capital gains. The investment banking industry expanded to fill this need.
I don't blame the traders or investors for filling that market, and I'd take a job in a hedge fund in a second if I were offered one. However, that doesn't mean that traders provide more utility or make society better. They fulfill a particular market need at this moment in society where there's a lot of money in the hands of a few people and few opportunities to invest in bridges, new factories, etc. This is quite clearly unsustainable and will probably change, although I have no idea what direction it's going to go in.
-
aussierogue
- Posts: 379
- Joined: Thu Nov 10, 2011 1:02 pm
I am a trader and have worked for trading companies for years.
IMO the main purpose / use of trading companies is risk mitigation within an industry.
Trading companies provide an essential service that allows efficiencies and economies of scale that can leed to lowed prices.
It is ofetn "too risky" or too far outside the skillset of a manufacturer (who core business is manufacturing) to grow industries to an optimal level.
Traders buy and sell but they also pull together, find efficiencies.
Traders become a problem when "speculation' happens.
Speculation is when the core thing that is being traded is immaterial.
With regards to derivative trading compared to physical trading, bizarrely the derivtives markets tend to be many times the size of the actual physical market they are supposed to be mirroring....
Thats is smoke and mirrors at its best. Derivitve trading should be about hedging the physical markets........but now it has been taken over by speculators with fibonacci calculators.
IMO the main purpose / use of trading companies is risk mitigation within an industry.
Trading companies provide an essential service that allows efficiencies and economies of scale that can leed to lowed prices.
It is ofetn "too risky" or too far outside the skillset of a manufacturer (who core business is manufacturing) to grow industries to an optimal level.
Traders buy and sell but they also pull together, find efficiencies.
Traders become a problem when "speculation' happens.
Speculation is when the core thing that is being traded is immaterial.
With regards to derivative trading compared to physical trading, bizarrely the derivtives markets tend to be many times the size of the actual physical market they are supposed to be mirroring....
Thats is smoke and mirrors at its best. Derivitve trading should be about hedging the physical markets........but now it has been taken over by speculators with fibonacci calculators.
@secretwealth,
All good points. It builds on the mounting criticism of the flawed but widely misunderstood, and widely misused "comparative advantage" theory from classical economics. Heteredox economics is trying to address this.
You are right. Where it goes from here is anybody's guess.
Be prepared for more rationalisations of why "this is how it must be done" though! Sigh |-(
@aussierogue,
Thank you for the good moderation answer. "but now it has been taken over by speculators with fibonacci calculators." -- I chuckled at that statement.
All good points. It builds on the mounting criticism of the flawed but widely misunderstood, and widely misused "comparative advantage" theory from classical economics. Heteredox economics is trying to address this.
You are right. Where it goes from here is anybody's guess.
Be prepared for more rationalisations of why "this is how it must be done" though! Sigh |-(
@aussierogue,
Thank you for the good moderation answer. "but now it has been taken over by speculators with fibonacci calculators." -- I chuckled at that statement.
I took most of Jacob's argument to be that computers and quants are better at performing the same job as traders used to perform. And this is absolutely true.
I don't know if you've met many traders, but by and large, they're simply not very smart. Entire trading floors have so little human alpha that they can be replaced by a few servers with negligible impact. Computers can do the same thing as 95% of traders - except faster, more accurately, and better.
As for the broader social utility of traders/trading, I think there is none. Yes, high frequency or even general algorithmic trading increases liquidity. But there's a point of diminishing returns for liquidity. On the other hand, I don't think that high-frequency trading has any pernicious effects. I simply think it's socially neutral.
I guess it's lamentable that traders and quants are paid more than teachers or whomever, but the fact of the matter is that jobs don't pay by social utility, but rather by how much they earn in profits combined with how unwilling or unable people are to do them.
I don't know if you've met many traders, but by and large, they're simply not very smart. Entire trading floors have so little human alpha that they can be replaced by a few servers with negligible impact. Computers can do the same thing as 95% of traders - except faster, more accurately, and better.
As for the broader social utility of traders/trading, I think there is none. Yes, high frequency or even general algorithmic trading increases liquidity. But there's a point of diminishing returns for liquidity. On the other hand, I don't think that high-frequency trading has any pernicious effects. I simply think it's socially neutral.
I guess it's lamentable that traders and quants are paid more than teachers or whomever, but the fact of the matter is that jobs don't pay by social utility, but rather by how much they earn in profits combined with how unwilling or unable people are to do them.
@m741,
> I took most of Jacob's argument to be that
> computers and quants are better at performing the
> same job as traders used to perform.
I (and the others too, I suspect) took it to be the same as well. And, like I objected first, it is very reductionist. Going forward with that premise, computers/machines will always be good at doing what (most) humans can do (and therefore replace them). So, what happens to the rest of us (i.e, Humans) then? Schumpeterian "creative destruction" doesn't scale *that* well, nor will "Human creativity" find "something" to save us all. And that was the point I made. All great on paper, but in this case, the sum of the parts adds up to more than the whole. So, sorry, the argument doesn't work like the way it is being framed.
Pick your sci-fi scenario for some imaginative wanderings on the extension of computers replacing humans in every endeavour that humans are not very 'efficient' in doing. Some samples:
1. Brave New World
2. Eloi vs. Morlocks (or the retold versions Matrix/Terminator)
3. Some others I may have forgotten
> I don't know if you've met many traders, but by and
> large, they're simply not very smart.
This is dangerous ground. They're not very smart, but with respect to what? AFAIK, most expert systems and computer software (not necessarily trading software) depend on the internalised rules of thumbs of actors(or users or players) for interaction, performance, rules and algorithms.
Anyway, the corollary to your point is that we are all to some degree or the other not very smart either (when compared to someone else, that is) and therefore replaceable at the first instance of an alternative. Like the one above, not the right step for humans in general.
Also what makes it dangerous is that deciding on smarts is both relative and subjective. You know what I am saying, right? I won't stretch this point further.
Please note that I am not exactly making a case for traders here. I am simply raising a few flags about the framing of the arguments, first in the case of Jacob and now, yourself.
> I don't think that high-frequency trading has any
> pernicious effects. I simply think it's
> socially neutral.
There is a well researched and a very dense report by the UNESCO which clearly links speculative trading in all the markets (commodities in particular) to all the turmoil and churn in the markets since 2005-2006 up until now.
> I took most of Jacob's argument to be that
> computers and quants are better at performing the
> same job as traders used to perform.
I (and the others too, I suspect) took it to be the same as well. And, like I objected first, it is very reductionist. Going forward with that premise, computers/machines will always be good at doing what (most) humans can do (and therefore replace them). So, what happens to the rest of us (i.e, Humans) then? Schumpeterian "creative destruction" doesn't scale *that* well, nor will "Human creativity" find "something" to save us all. And that was the point I made. All great on paper, but in this case, the sum of the parts adds up to more than the whole. So, sorry, the argument doesn't work like the way it is being framed.
Pick your sci-fi scenario for some imaginative wanderings on the extension of computers replacing humans in every endeavour that humans are not very 'efficient' in doing. Some samples:
1. Brave New World
2. Eloi vs. Morlocks (or the retold versions Matrix/Terminator)
3. Some others I may have forgotten
> I don't know if you've met many traders, but by and
> large, they're simply not very smart.
This is dangerous ground. They're not very smart, but with respect to what? AFAIK, most expert systems and computer software (not necessarily trading software) depend on the internalised rules of thumbs of actors(or users or players) for interaction, performance, rules and algorithms.
Anyway, the corollary to your point is that we are all to some degree or the other not very smart either (when compared to someone else, that is) and therefore replaceable at the first instance of an alternative. Like the one above, not the right step for humans in general.
Also what makes it dangerous is that deciding on smarts is both relative and subjective. You know what I am saying, right? I won't stretch this point further.
Please note that I am not exactly making a case for traders here. I am simply raising a few flags about the framing of the arguments, first in the case of Jacob and now, yourself.
> I don't think that high-frequency trading has any
> pernicious effects. I simply think it's
> socially neutral.
There is a well researched and a very dense report by the UNESCO which clearly links speculative trading in all the markets (commodities in particular) to all the turmoil and churn in the markets since 2005-2006 up until now.
@Surio:
I think we are already half-way there in Brave New World. I mean, these are our ideals, consumption and distraction. I also believe that most jobs are already obsolete and it's only about distributing the wealth to fend off an uprising of the lower classes. Of course only to an extent, with the background theme still being the redistribution of wealth to a small percentage of people.
That traders don't add much to the wealth of nations is pretty obvious, I think. The market starts with x$ and ends with x$ only differently distributed, rinse and repeat. Computers are even better at being an emotionless homo oeconomicus than the psychopaths which are usually employed in these fields so I think that this development is a good thing.
Sure, other jobs like actors and sports celebrities are also questionable in terms of payment, but that inconsistency in perception doesn't put the lack of productivity of the financial sector into question.
I believe that the "He who doesn't work shall not eat." credo is obsolete in a post-industrial world, if only because it's not even applied in any meaningful sense anymore. It's just that we are running an economic system based on artificial scarcity of money. I don't think there's any meaningful change possible unless that system is replaced by something sustainable.
Most "work" these days is just giving some people access to the products created by a vast machinerie (- and slaves like Foxconn-interns, who don't get any access to the wealth they create at all).
I think we are already half-way there in Brave New World. I mean, these are our ideals, consumption and distraction. I also believe that most jobs are already obsolete and it's only about distributing the wealth to fend off an uprising of the lower classes. Of course only to an extent, with the background theme still being the redistribution of wealth to a small percentage of people.
That traders don't add much to the wealth of nations is pretty obvious, I think. The market starts with x$ and ends with x$ only differently distributed, rinse and repeat. Computers are even better at being an emotionless homo oeconomicus than the psychopaths which are usually employed in these fields so I think that this development is a good thing.
Sure, other jobs like actors and sports celebrities are also questionable in terms of payment, but that inconsistency in perception doesn't put the lack of productivity of the financial sector into question.
I believe that the "He who doesn't work shall not eat." credo is obsolete in a post-industrial world, if only because it's not even applied in any meaningful sense anymore. It's just that we are running an economic system based on artificial scarcity of money. I don't think there's any meaningful change possible unless that system is replaced by something sustainable.
Most "work" these days is just giving some people access to the products created by a vast machinerie (- and slaves like Foxconn-interns, who don't get any access to the wealth they create at all).
@Bigato
Thanks, I just could not remember what that topic was, though I remembered a nice heated discussion.
@Secretwealth
I disagree, a little on your trader point (a lot on Surio's model). Your point is valid, but I would argue my "more traders than needed" point is too. If you look at how much Wall Street has grown in the last 20-30 years I don't see how it can't be. Both are just part of a whole host of reasons for the 2008 crash and the current derivative debacle highlighted by Aussierogue. Which, is really odd and frightening.
@Felix
I couldn't agree more. Everyone talks about all the jobs that went to China, but no one seems to realize the U.S. produces more now than when it was THE manufacturing powerhouse. We don't produce more because our assembly line workers work faster now than they did in the 50's, but because of automated systems. We are well on our way to society that needs far far far less human workers for far more production. We are going to need to face how to alocate this wealth without work in our lifetimes.
Of course, a commodity shortage could derail that, but other than that I don't see how there isn't a major change to how we work/distribute wealth in the next 20-30 years.
Thanks, I just could not remember what that topic was, though I remembered a nice heated discussion.
@Secretwealth
I disagree, a little on your trader point (a lot on Surio's model). Your point is valid, but I would argue my "more traders than needed" point is too. If you look at how much Wall Street has grown in the last 20-30 years I don't see how it can't be. Both are just part of a whole host of reasons for the 2008 crash and the current derivative debacle highlighted by Aussierogue. Which, is really odd and frightening.
@Felix
I couldn't agree more. Everyone talks about all the jobs that went to China, but no one seems to realize the U.S. produces more now than when it was THE manufacturing powerhouse. We don't produce more because our assembly line workers work faster now than they did in the 50's, but because of automated systems. We are well on our way to society that needs far far far less human workers for far more production. We are going to need to face how to alocate this wealth without work in our lifetimes.
Of course, a commodity shortage could derail that, but other than that I don't see how there isn't a major change to how we work/distribute wealth in the next 20-30 years.
Jacob, it looks like your journal thread needs a comment section for every post.
> depend on the internalised rules of thumbs of actors(or users or players) for interaction, performance, rules and algorithms.
Is it possible to characterize these rules of thumb? No doubt people try to profit off of predicting other people's decisions.
Bigger question: It is possible in some cooperative systems to detect when an actor becomes uncooperative, e.g., Byzantine fault tolerance. Is it possible to base an economic system on this idea?
Smaller note: My wardrobe is approaching steady-state. I have a few alterations left on my to-do list, like taking in shirts and blazers and hemming pants, but I'm pretty happy with it, and it's only getting smaller as I prune.
> depend on the internalised rules of thumbs of actors(or users or players) for interaction, performance, rules and algorithms.
Is it possible to characterize these rules of thumb? No doubt people try to profit off of predicting other people's decisions.
Bigger question: It is possible in some cooperative systems to detect when an actor becomes uncooperative, e.g., Byzantine fault tolerance. Is it possible to base an economic system on this idea?
Smaller note: My wardrobe is approaching steady-state. I have a few alterations left on my to-do list, like taking in shirts and blazers and hemming pants, but I'm pretty happy with it, and it's only getting smaller as I prune.
It's easy to find compromises made in any large system. All large systems have inefficiencies. The current market system requires traders. We know that, because they exist and make profit.
Sure, the ideal market would be 100% liquid with no middle men. Design and implement that system in a way that scales, and you'll probably be the richest person in the world.
I do suspect the allowed frequency of trades under the current market rules is too high. When even the time it takes for a trade to travel across the network matters, it seems like something could be wrong. The resulting churn is a leak in the system.
How do you patch the leak though? How big is it in relation to the entire system? IMO if it was big enough and there was a better solution, someone would come along with a patch, simply so they could replace the high frequency traders as the middleman.
Actually, I would say that is what happened when manual traders were replaced with computers. It will probably happen again down the road. Maybe Jacob will be the one to figure it out!
Sure, the ideal market would be 100% liquid with no middle men. Design and implement that system in a way that scales, and you'll probably be the richest person in the world.
I do suspect the allowed frequency of trades under the current market rules is too high. When even the time it takes for a trade to travel across the network matters, it seems like something could be wrong. The resulting churn is a leak in the system.
How do you patch the leak though? How big is it in relation to the entire system? IMO if it was big enough and there was a better solution, someone would come along with a patch, simply so they could replace the high frequency traders as the middleman.
Actually, I would say that is what happened when manual traders were replaced with computers. It will probably happen again down the road. Maybe Jacob will be the one to figure it out!
@Chad:
You may like this article by Douglas Rushkoff:
http://www.rushkoff.com/blog/2011/9/7/c ... olete.html
as well as his book Life Inc.
@Scott 2: The Pet Rock sold quite well...
http://en.wikipedia.org/wiki/Pet_Rock
You may like this article by Douglas Rushkoff:
http://www.rushkoff.com/blog/2011/9/7/c ... olete.html
as well as his book Life Inc.
@Scott 2: The Pet Rock sold quite well...
http://en.wikipedia.org/wiki/Pet_Rock
@Felix,
1. Of course I do realise we live in a quasi-brave-new-world. Therefore, in the context of constructing a mental model (or even proposing an alternative to status quo), it is important to keep in mind the people/Society's role in the loop as well! The push-pull from societal forces matter a lot.
2. "Computers are even better at being an emotionless homo oeconomicus than the psychopaths which are usually employed in these fields" -- I look at this whole debate we are now having with a broader context and lens than just the field of trading (Re-read my replies). I am not making a case for a floor trader, nor for a computerised trader in all this.... Taking the line of argument that efficiency is some sort of THE "holy grail" to strive for by all, is my main objection (for it has greater ramifications than just the immediate solution)
Other than these two points from me, I wholeheartedly agree with your points.
@teewonk,
> Is it possible to characterize these rules of thumb?
Well, in that case, then traders *ARE definitely* smart at one level. Either because of their internalising of the roles which only they can apply, or by deliberately withholding this info from being coded into a rule.
@Chad,
> I disagree, a little on your trader
> point (a lot on Surio's model)
Watch it, you are close to making a career out of disagreeing with whatever I write, whenever I write, all the time, on this forums.
Also, I am past caring to take the effort to explain it enough to make you understand it (and other people seem to have grasped the story arc and the overall clarity and trajectory of the idea). Like I said, the idea and the case is available in greater detail on the Net if you are interested in forming an informed opinion. Re-reading your original reply, it appears to me at least that you simply jumped the gun with a big list of "caveats" (*) despite my original reminder "And so on it goes. But you get the overall message".
(*) some of those caveats of yours I couldn't understand actually. :-/
@Felix,
> I don't know ... the pet rock exists, but is it necessary?
What did you mean here?
1. Of course I do realise we live in a quasi-brave-new-world. Therefore, in the context of constructing a mental model (or even proposing an alternative to status quo), it is important to keep in mind the people/Society's role in the loop as well! The push-pull from societal forces matter a lot.
2. "Computers are even better at being an emotionless homo oeconomicus than the psychopaths which are usually employed in these fields" -- I look at this whole debate we are now having with a broader context and lens than just the field of trading (Re-read my replies). I am not making a case for a floor trader, nor for a computerised trader in all this.... Taking the line of argument that efficiency is some sort of THE "holy grail" to strive for by all, is my main objection (for it has greater ramifications than just the immediate solution)
Other than these two points from me, I wholeheartedly agree with your points.
@teewonk,
> Is it possible to characterize these rules of thumb?
Well, in that case, then traders *ARE definitely* smart at one level. Either because of their internalising of the roles which only they can apply, or by deliberately withholding this info from being coded into a rule.
@Chad,
> I disagree, a little on your trader
> point (a lot on Surio's model)
Watch it, you are close to making a career out of disagreeing with whatever I write, whenever I write, all the time, on this forums.
Also, I am past caring to take the effort to explain it enough to make you understand it (and other people seem to have grasped the story arc and the overall clarity and trajectory of the idea). Like I said, the idea and the case is available in greater detail on the Net if you are interested in forming an informed opinion. Re-reading your original reply, it appears to me at least that you simply jumped the gun with a big list of "caveats" (*) despite my original reminder "And so on it goes. But you get the overall message".
(*) some of those caveats of yours I couldn't understand actually. :-/
@Felix,
> I don't know ... the pet rock exists, but is it necessary?
What did you mean here?
"I am not making a case for a floor trader, nor for a computerised trader in all this.... Taking the line of argument that efficiency is some sort of THE "holy grail" to strive for by all, is my main objection (for it has greater ramifications than just the immediate solution)"
I tend to agree that this is "the bigger picture". Much of the discussion above assumes that classical economics, with its stable and static equilibria, is a useful lens, which logically and mathematically leads to the "efficiency is always good" argument. The counter is that that type of model is just wrong-headed, because the world is actually full of dynamic systems where unstable equilibria are the norm.
Visualize the static standard economic model as a bowl where a marble dropped in comes to rest in the center after rolling around for a little bit. "Efficiency" seeks to get it to the center resting spot sooner rather than later. But the real world more resembles changing or warping bowls and surfaces where the marble never comes to rest for any significant length of time. In such cases, "efficiencies" may send the marble off the surface entirely, because it starts moving too fast. In this manner "efficient systems" are more brittle and more prone to crashes and other unforeseen "Black Swans". Add a little "leverage" to "efficiency" and you get 1929 or 2008.
This is the central theme of most of N. Taleb's writings, but is actually rooted in the mathematics of Benoit Mandelbrot. The economist line moves from Irving Fisher to Hyman Minsky and Charles Kindleberger to Steve Keen. Another perspective is brought through a biological or evolutionary models of markets -- see "Origins of Wealth" by Beinhocker.
Keen makes one of the most salient points in "Debunking Economics" -- most people who discuss economic issues don't really know what they are assuming, and much (more than you think) of neo-classical economics simply "goes away" without its predicates.
I tend to agree that this is "the bigger picture". Much of the discussion above assumes that classical economics, with its stable and static equilibria, is a useful lens, which logically and mathematically leads to the "efficiency is always good" argument. The counter is that that type of model is just wrong-headed, because the world is actually full of dynamic systems where unstable equilibria are the norm.
Visualize the static standard economic model as a bowl where a marble dropped in comes to rest in the center after rolling around for a little bit. "Efficiency" seeks to get it to the center resting spot sooner rather than later. But the real world more resembles changing or warping bowls and surfaces where the marble never comes to rest for any significant length of time. In such cases, "efficiencies" may send the marble off the surface entirely, because it starts moving too fast. In this manner "efficient systems" are more brittle and more prone to crashes and other unforeseen "Black Swans". Add a little "leverage" to "efficiency" and you get 1929 or 2008.
This is the central theme of most of N. Taleb's writings, but is actually rooted in the mathematics of Benoit Mandelbrot. The economist line moves from Irving Fisher to Hyman Minsky and Charles Kindleberger to Steve Keen. Another perspective is brought through a biological or evolutionary models of markets -- see "Origins of Wealth" by Beinhocker.
Keen makes one of the most salient points in "Debunking Economics" -- most people who discuss economic issues don't really know what they are assuming, and much (more than you think) of neo-classical economics simply "goes away" without its predicates.
@Surio: In general, I like efficiency because it reduces workload and increases free time. I think I agree with you on the "we focus too much on efficiency" point. I have a different focus here, though. I think our current society has turned productivity and goal-achievement into its new god. It's become a goal all by itself without being used to achieve anything in particular, the goal itself is not really important. Try to tell people that you like to spend your Sundays doing nothing. Someone may jump in and say that he, too has started taking meditation classes. Then you reply that no, in fact you do not meditate, you just lie there without any goal in mind and instead just waste hours looking at the ceiling and you will receive blank stares. 
<rant>
Everything you do needs to serve some form of goal-directed purpose and it needs to be optimized. I have yet to have someone explain to me why that is so. Usually you get something along the line of "Well, you need to make the most out of life." I tend to wonder why this means to maximize time spent doing productive things and "improve" all areas of my life all the time. I need to have more and more beautiful women and have more and more extravagant sex with them, I need to make more and more money, get a bigger car, a bigger house, I need to learn more, get more degrees, learn more languages, become more fit, run longer distances in a shorter time, add more facebook friends, eat more protein, no wait, carbs, no wait, saturated fat, no, wait I need to fast more, and of course I need to work longer hours, start a business on the side, get a better phone and have better haircuts and wear better clothes and go to better clubs and take better vacations all the while being more relaxed and in balance, probably by - after adding 24 hours of additional activities per day - just adding 10 additional hours of meditation to get measurable changes in my brain to indicate my relaxation on my facebook profile in a nice graph. After all, I need to express my individuality and be my "awesome" self in the right way, that is, in the way dictated by social customs and advertising.
</rant>
Why not just count the grass in your lawn? You can count all day and if you make a mistake, you just start over again or just turn around and lie in the sun. And then you go home, eat some oatmeal and go to sleep. This seems much more fulfilling at times, but all that wasted potential ... There seems to be a general fear of unproductiveness or idleness. It's somehow not allowed. I think that this is simply a taboo on being content.
http://wulffmorgenthaler.com/img/strip/ ... -04-15.gif
<rant>
Everything you do needs to serve some form of goal-directed purpose and it needs to be optimized. I have yet to have someone explain to me why that is so. Usually you get something along the line of "Well, you need to make the most out of life." I tend to wonder why this means to maximize time spent doing productive things and "improve" all areas of my life all the time. I need to have more and more beautiful women and have more and more extravagant sex with them, I need to make more and more money, get a bigger car, a bigger house, I need to learn more, get more degrees, learn more languages, become more fit, run longer distances in a shorter time, add more facebook friends, eat more protein, no wait, carbs, no wait, saturated fat, no, wait I need to fast more, and of course I need to work longer hours, start a business on the side, get a better phone and have better haircuts and wear better clothes and go to better clubs and take better vacations all the while being more relaxed and in balance, probably by - after adding 24 hours of additional activities per day - just adding 10 additional hours of meditation to get measurable changes in my brain to indicate my relaxation on my facebook profile in a nice graph. After all, I need to express my individuality and be my "awesome" self in the right way, that is, in the way dictated by social customs and advertising.
</rant>
Why not just count the grass in your lawn? You can count all day and if you make a mistake, you just start over again or just turn around and lie in the sun. And then you go home, eat some oatmeal and go to sleep. This seems much more fulfilling at times, but all that wasted potential ... There seems to be a general fear of unproductiveness or idleness. It's somehow not allowed. I think that this is simply a taboo on being content.
http://wulffmorgenthaler.com/img/strip/ ... -04-15.gif
