What I mean is, that airplane example consists entirely of gamblers.
Are you saying "humanity is better because people can continue to fly with the airline"? Then why not use a different airline?
So I'm struggling to see why the world wouldn't be better off letting the airline fail, as opposed to risking a bunch of other people's money.
Their clients think they provide an economically useful function - otherwise they wouldn't use them. Do businesses really need more justification to exist than that?
Also:
- The bank wasn't directly interacting with the airline, they were buying bonds from other organisations who were holding them
- Lots of people risk other peoples money - fund managers, pension companies, VCs, hedge funds etc. - with varying degrees of risk and exposure by the people actually doing the investing.
1) Money exists to serve humans. It doesn't exist for money's sake. The end goal is to help people. The airline helped people get from A to B. Dropbox helps people send files.
2) The people holding the bonds are still gamblers. Your example consists entirely of gamblers!
Do you think the VCs who invested in Dropbox would do so if they knew that Dropbox would never allow itself to go public or be acquired?
By your definition, if I purchased Apple stock I would be "gambling" - Apple wouldn't see any of my money. In a certain respect I sort of agree with this, but it's also clear that when Apple went public the money raised was built on the expectation of future free trading in the stock so, as far as I can see, it is very difficult to divorce "investment" from "gambling".
So what do you think should be done about the present situation, if anything? I have no idea.
http://www.scribd.com/doc/26993356/Worlds-Biggest-Companies-...
[NB As I write this I am maybe 100m from their old headquarters!].
No, it doesn't. Either that, or everyone is a gambler.
Everything involves risk. The amount of risk tolerance is very context dependent and varies. For example, I'm much more willing to make an (inflation-adjusted) $10k "bet" now than I was 20 years ago. In another 20 years, I'll be less likely than I am now.