Tag Archives: SEC

A New SEC?

While I’m more and more suspicious that Half Sigma is a National Bolshevist (that is, a Strasserite), he raises an interesting point about the SEC:

Half Sigma: Post-Marxism
The capital in Marx’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 there’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 doesn’t explain why they have to make so much money. It doesn’t explain why we need investment bankers at all—why can’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?