Hacker News Reader

Comment by harryh | Hacker News Reader

Thinking of the stock market as merely "a way to provide retirement plans" is wrong. It costs money to serve meals, put people in housing and invent technologies. Where does a lot of that money come from? Our financial system (of which the stock market is a key component). A better functioning financial system enables progress in lots of other industries.

View on HN

You can have a financial system without a stock market. It would be constituted with public banks or various kinds of credit unions. The reason I cited retirement plans is that is the most sympathetic argument I could think of for caring about the stock market going up. Only ~20% of Americans own stocks, so it going up basically just enriches 1/5th of the population at the expense of the rest.

You can have a financial system without a stock market. It would be constituted with public banks or various kinds of credit unions.

Not really. A financial system that only consisted of debt and not equity would not be able to support anything like our current economy. We would all be much poorer for it. Loans are simply not suitable for a huge variety of financial risks.

You can imagine a successful financial system without a stock market if you don't know much about financial systems, in the same way that you can imagine a jet flying without wings if you don't know much about aerodynamics.

I believe that the rise of importance of finance has been a net good for humanity, but I know that's an unpopular opinion and I've seen good arguments that it's a net harm. But I don't think you can make a reasonable argument that we could have a modern world anything like the current one without stock markets. Banks and credit unions don't, can't and shouldn't provide the kind of funding that equity markets do.

This says 55% https://news.gallup.com/poll/266807/percentage-americans-own...

Soviet Union existed, and literally failed to put some bread on the table

https://www.chron.com/neighborhood/bayarea/news/amp/When-Bor...

It failed due to both internal and external problems. The proximal cause of death was running out of foreign currency.

Did you notice the breadlines in the US earlier this year?

Reply on news.ycombinator.com