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Comment by hn_throwaway_99 | Hacker News Reader

Yeah, a lot of these jobs he talks about are what I call "zero-sum jobs" - it sucks that they have to exist, but if any individual firm stopped having them, that firm would be behind.

Money managers are a good example of this. At the end of the day stock picking truly is a zero-sum game, and all money managers can produce in total is the negative effect of their fees on their clients money, yet people pay them because they take the chance that their money manager will produce a better than average return.

Similarly, the vast majority of marketing jobs are zero-sum jobs. True, a teeny minority do inform the public about a new product or service they wouldn't otherwise know about, but the vast majority are just trying to convince the public to use your widget over competitor's (actually very similar) widget. But any individual firm needs marketers, otherwise the competitors would take all of their business.

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That reminds me of an aphorism I once heard: If a town has a one lawyer, the lawyer drives a Honda. If a town has two lawyers, they both drive BMWs.

> all money managers can produce in total is the negative effect of their fees on their clients money

This assumes that the same stocks are issued and purchased regardless of the efforts/nonexistence of money managers. Do you think it's possible that scams might be more numerous or more successful if there were nobody at all trying to determine the worth of individual stocks?

If you do think that's possible, then money managers can collectively produce positive value.

> At the end of the day stock picking truly is a zero-sum game

If stocks give dividends, then stock picking isn't a zero-sum game.

To expand on this , growth is real , and it's not random. Value for society is created by having money directed towards more beneficial projects.

> If stocks give dividends, then stock picking isn't a zero-sum game.

I don't understand this. "Stock picking" traditionally refers to buying or selling stocks through the stock market. It doesn't create or destroy any stock, and the dividends are invariant with respect to who owns the stock.

That makes dividends perfectly zero-sum. If I buy a stock from you, my gain from getting the dividend is exactly equal to your loss from losing the dividend.

What am I missing here?

The selling party doesn't lose dividend, they just don't gain it. Losing it would mean the dividend amount is subtracted from their account.

The more common argument for stock trading being zero sum is that if I experience a gain after buying a stock from you, you experience an equal loss (by selling the stock when it would have gone up).

Dividends do not alter that argument in any way. The trade is described as zero-sum because the total amount of value it produces is zero -- in the trade scenario, I gain X, and in the no-trade scenario, you gain X. X minus X is zero. My gain is your loss.

In the old days companies sold stock to raise capital to do things that were productive and would hopefully return the capital and more back to the shareholders. Companies with a lot of growth potential would sell stock over and over again as they needed more money to grow. Imagine the time (not that very long ago) when private investors would not invest billions in companies before an IPO. Giving money to a great company that is cash strapped is a win-win, not zero sum. Tesla is the only company right now that I can think of that does this. Amazon is close with its zero profit philosophy.

The tax code in America messed with this dynamic with taxing stock buy backs(capital gains) less than dividends (income). Giving large chunks of stock options to the company execs also didn't help.

“[A] lot of these jobs he talks about are what I call "zero-sum jobs" - it sucks that they have to exist, but if any individual firm stopped having them, that firm would be behind.”

This part of it all, in particular, reminds so much of “Meditations on Moloch”[1] . If anyone hasn’t read through this, I highly recommend it. It’s an inspiring look into how human society gets trapped into these games where no one wins, but to stop playing is much worse.

1: http://slatestarcodex.com/2014/07/30/meditations-on-moloch/

"zero-sum jobs" - it sucks that they have to exist, but if any individual firm stopped having them, that firm would be behind.

Perhaps a solution would be to ban them by law. So if corporate lawyers were banned then the executives would settle their disputes personally at a fraction of the cost.

Except that that can end up costing even more.

A common "cost saving" measure in companies is to get rid of various admin staff, people like PAs and the ones who book travel etc.

Now everyone has to spend a bunch of time doing work that a £20KPA first-jobber could be doing.

In some cases (e.g. scheduling meetings), the amount of time doing that gets bigger the higher up you get. This means that a £200KPA executive probably now spends a fifth of their time on grunt work.

In other cases (e.g. international travel booking), someone who has it as their day-to-day job will get it done correctly in a fraction of the time of anyone else.

> "zero-sum jobs" - it sucks that they have to exist, but if any individual firm stopped having them, that firm would be behind

Like feathers on a peacock.

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