As a free-market proponent who isn't 100% sold on all of the democratic socialism stuff, I don't understand how anyone can deny that having your literal physical well-being tied to your employment is not an enormous problem for anyone who values the efficient allocation of labor/capital (which should hopefully be everyone?)
It's literally just a cash-equivalent (in that nearly every employer is going to provide a plan, and you'll need to pay for health coverage somehow, whether it be in taxes or in premiums) part of your compensation that is also coincidentally an enormous arbitrary sticking point that makes moving jobs that much more of a pain and danger. But only for the employee, of course.
What is your definition of a free market? I see this so often but few people seem to understand the inherent contradiction. If a market is truly free it will naturally tend toward monopoly thereby extinguishing itself. If it is regulated to prevent it's own destruction, it ceases to be truly free. In either case it is a transient condition. A brief glorious moment in time that cannot, by its own definition, be anything more than ephemeral.
It’s possible to have laws that increase freedom overall. For example: a law against murder restricts some people (the murderer) but frees many more people from (their victims).
Markets can be regulated to make them more free as well - if we pass a law to enforce mutually agreed upon contracts, some people (those that would go against the contract) have their freedom restricted but the market as a whole now has a trust mechanism allowing them to actually hold others accountable and thus overall it improves society.
“Free market” still implies certain restrictions, like “no stealing the other person’s stuff”.
Could you rephrase that first paragraph without the triple negative?
It sounds like you are saying that having your physical well-being tied to employment is good for efficient allocation of labor/capital, but I have some problems with this claim and I’d like to check that this is what you’re actually saying.
The economic problem is that having well-being tied to employment pushes people towards employment short-term rather than value long-term.
Then there’s the moral problems, which can’t be ignored.
Also, having your health care, retirement and general well-being tied to a particular job reduces employee "freedom", which in his point of view is not efficient.
Because it benefits employers to have desperate employees. If your short-term survival is tied to your job, you'll be willing to take a lot more abuse (and less pay) in order to maintain your core needs.
You literally cannot have comfortable life for the majority of society under a free-market system because it relies on the threat of being outcast from safety. The most socialist era of this country (1930-1980) is widely regarded as the American "Golden Era". I don't think that's a coincidence.
There is a non-trivial amount of the English language that has religious baggage that I suspect you'll have a difficult time first identifying and then avoiding.
Reading the article, it seems like the primary complaint is that, since the business has to pay things like social security, payroll taxes, worker's comp, etc. that they then have to withhold this money before they pay the workers, rather than have the workers withhold this themselves?
It sounds a lot more like the complaints are "I was making $X before because I was underreporting my income, but now that the business is on the hook for all this, I'm being forced to comply and am finding that the work isn't profitable enough anymore". Which translates to me as everyone else, who was paying into all these public tax pools, was essentially subsidizing the dancers.
I guess you could argue that some of the stuff, like workman's comp, some people might want to just pocket the money that otherwise would've gone to insuring the risk of being injured on the job. Which I think is maybe irresponsible, since otherwise the burden just ends up getting shifted, again, to the general public (worker injured without worker's comp then ends up on food stamps, or ends up getting their medical debt written off, etc). So we should probably require people to directly pay into these things, like we require people to maintain liability auto insurance.
And I suppose you could also say that maybe the businesses are taking the opportunity to pocket some extra profit, but hopefully the invisible hand of the free market would compete that back down as employees and customers move around based on new pricing/comp.
Flash Boys is written to entertain, though, not inform. It is littered with inaccuracies and dramatization to the point of lying.
Front-running, for the record, is illegal and nobody does it. Michael Lewis perverts the phrase to mean "using publicly available information and extremely expensive- though publicly available- radio technology to move stock information faster than competitors". Which you might still think is "unfair", though I would argue it's only unfair in the same sense that WalMart and Target make it hard for small shops to compete because they can't afford ultra-efficient trillion dollar supply chains. It's not illegal, it's objectively more efficient, and the only thing that prevents anyone from "just doing it too" is capital.
"Dark Pools" by Scott Patterson is a much more educated and in-the-know look at electronic trading.
>> Front-running, for the record, is illegal
I didn't get the sense that it is illegal from the book. Could you please elaborate what you understand by front running and why/how is it illegal.
>> Michael Lewis perverts the phrase to mean "using publicly available information
Per my understanding Michael Lewis is referring to the fact that HFT firms were able to race faster than the original trade executions and execute part of the trade, due to it being spread over multiple exchanges with different latencies.
While this may not be illegal, it surely sounds unethical.
> I didn't get the sense that it is illegal from the book. Could you please elaborate what you understand by front running and why/how is it illegal.
Front running involves placing a trade based on nonpublic information. It's a type of insider trading that has been going on for at least hundreds of years and it has nothing to do with HFT. The classic example is a broker placing orders ahead of their own clients in order to profit off the market's reaction to the client orders.
An HFT system placing orders based on public data feeds is not front running.
I'm not sure Michael Lewis said it was so much "unfair" as it was "nonproductive". The HFT firms weren't creating any value for the markets. They weren't making markets. They weren't helping liquidity except on paper by making every trade show up as multiple trades. At the end of the day they held zero position.
The problem is that they were basically taxing everybody who couldn't build quite as close to the physical ___location of the servers as they could. They were just parasites.
Every non-fraudulent profitable trade makes prices more efficient (in either time or value), and in this case it's time. Their competitors aren't you and me, and someone is going to make money from the arbitrage, so what's the big deal? The capital they spent to set up their edge just comes out of the profits that their competitors would be enjoying without them.
But HFT made the trades take longer, making them less efficient. By buying up the stocks while the trade was still in route, it cause the trade to fail and to make the brokers try it again at a higher price, wasting their time and money.
Trades get canceled/rejected because the price moves away from their limit/immediate-or-cancel order all the time, even without any HFT involvement. And the reason those orders don't get filled is because they don't reflect a competitive bid or offer for the security. I don't think you're suggesting that we should accept less-competitive orders just because the market participant took the time to submit it.
The only difference with HFT's, and market makers, and all other high-speed/high-frequency participants in the mix is that these changes in price happen more often, which indicates that price discovery is more efficient (has better granularity, recency and accuracy). (Unless the market activity doesn't have 'economic merit', which the SEC devotes a significant amount of time to investigating).
One might argue: "do we need microsecond-level granularity on the price of Amazon?"
I'll take the Matt Levine route and ask: "Do you think quotes should update once per minute? (I suspect most people will say yes). How about once a second? (Yes?) Ten times per second? (?) Every millisecond? Microsecond?"
Now ask the flip side: "Should it be illegal to perform market activity every minute? Every second? Every...?"
It's hard to draw a line with any kind of solid reasoning. As an economy, we certainly reward people who can make these sub-second adjustments with a lot of money, and in general with the stock market, where every trade is, by definition, two consenting parties agreeing on a price, usually making money means you're improving market efficiency.
Also, I want to point out that it's not like HFT's are invincible magic money-stealing boogiemen. HFT profits are declining year-over-year (look at Virtu's recent earnings numbers and their current corporate strategy/direction) specifically because other market participants are responding to their existence and getting smarter about their own order execution.
> Trades get canceled/rejected because the price moves away from their limit/immediate-or-cancel order all the time
When your trade is occasionally beaten by someone at a different brokerage (or the same brokerage) that's normal. When there is a bot on the wire doing it every time that's a problem.
The changes in the price happen more often because they are marking up the price while the trade is still in progress. This doesn't help anybody except the HFT firm. Discovery isn't more efficient because the discovery has already happened, they set the price based on what they had discovered.
HFT profits are falling because people got wise to their system and built countermeasures.
I used a system76 gazelle professional during part of college. Ran Arch on it. Probably 2 years or so. 15". It was really solid. I think I bought it in 2013? The only drawback was the battery life. 45 mins tops, and the battery itself only lasted 2-3 years. I replaced it twice, once right before I gave it to my sister, and once for her after she'd had it for a similar period of time. I used it as a desktop replacement, so it was plugged in a good deal of the time. The specs were great, screen was great, etc. I still have it plugged in on a shelf in my homelab to use for random testing stuff (got it back from my sister eventually).
I only replaced it because I decided I wanted to go the "ultrabook" route and have an i5-xxxxU processor but get 12+ hours of battery life. I got a T440s, and ran linux on it, ofc.
Nah, definitely not illegal in the US, like 30%-40%+ of my high school dropped out at the day they turned 16 (or maybe 15... forgot exactly which one they let you drop out at).
Also... I graduated before I was 18.
EDIT: I was in high school two decades ago, so it might have changed since then.
Its never been federal officially although theres substantial funding bribery over the years (like drinking age enforcement), age has changed wildly over the years, vast increase over the last two or three generations, and wide variance in religious vs non-religious reasons, parental consent vs no parental consent required, etc.
It's literally just a cash-equivalent (in that nearly every employer is going to provide a plan, and you'll need to pay for health coverage somehow, whether it be in taxes or in premiums) part of your compensation that is also coincidentally an enormous arbitrary sticking point that makes moving jobs that much more of a pain and danger. But only for the employee, of course.