Half Sigma: Post-Marxism
The capital in Marxâ€™s day was mostly value creation capital. But the modern economy is based on value transference capital, which is a lot less obvious than value creation capital. Investment bankers are rich because they have a lot of value transference capital, and this is something we can infer by their lack of value creation capital.
Right-wing economists will throw out a lot of smokescreens in order to deny this is happening. There are few jobs that are pure value transference, so right-wing economists will correctly identify the value creation part of a job, but then wrongly insist that thereâ€™s no value transference happening. With respect to investment bankers, the right-wing economist will argue that they are reducing the costs of a capital by providing an efficient means to match investors with entities in need of money, which is true, but it doesnâ€™t explain why they have to make so much money. It doesnâ€™t explain why we need investment bankers at allâ€”why canâ€™t the SEC set up a public system where new securities are visible on the web, and anyone who wants to can bid on them?
I don’t know the answer to his question, because I do not have the experience.
Several tdaxp readers have first-hand experience on Wall Street. Can they answer the question, of why we have investment banker, and not an SEC-run eBay-type system?
Are investment bankers essentially salesman?