Actually, here. Lets have this conversation - how would you define Capitalism? A particular kind of market economy, any market economy, a culture, an ideology...? :/
@Angle As an angle, how do you define it?
@Azure Myself? Well, it's a complicated question, but to give you my five minute answer, I would say an ideology, centered around a particular kind of market economy that emphasizes the role and power of Capital.
I've always defined it as "an economic system in which ownership of the means of production rests primarily or entirely in private hands", but I'm thinking it could be useful to identify other useful definitions (such as Angle's) and catalog them.
(...on, say, Issuepedia.)
@woozle @dredmorbius @Angle @Azure
wealth is aggregated, but liability 'limited' in such ways to flow "downhill", externalised away from the more wealthy & powerful to those less wealthy & powerful.
Though banking etc as developed in, eg, what is now Northern Italy were important antecedents, what grew up on either side of the North Sea was the real cradle of capitalism, VOC et al.
Allows for, but does not require, & may co-opt, democracy.
@deejoe @woozle @dredmorbius @Angle It's also interesting that in recent times, many of the 'democratic' features of the Limited Liability Corporation are under attack. Perverted (yes. PERVERTED.) share structures are used by the likes of Google to keep /Control/ separate from Ownership and in the hands of the founders, sort of destroying the inherent social contract of selling shares for equity. (Thankfully there's some push-back against this. FTSE and S&P are refusing companies that try this.)
@Angle @dredmorbius @woozle @deejoe Well, NEW companies. Ones already in it are grandfathered. However, a stance taken by a big index like that can really penalize companies who try this crap, which is good, since large institutional holders won't buy their shares.
The shift from dividends to buybacks is similar. Because founders/executives/'insiders' get paid in options buybacks benefit them much more than they benefit ordinary shareholders.
@deejoe @woozle @dredmorbius @Angle That and dividends gave a definite relationship between ownership and profit. You own stock, you get a portion of the profits. It's predictable. It also democratizes stock, since the average guy can buy it, see how much money he's getting, and just hang on to it if he likes it.
Buybacks change that so it's purely a buy/sell thing, and individual investors have a much harder problem thinking about value and benefit.
@Azure @deejoe @dredmorbius @Angle
Side note: this suggests (only just occurred to me) that the stock exchanges may be control-points worth looking at.
(We need to find control-points we can influence to Do The Right Thing.)
@woozle @Azure @deejoe @Angle Any thoughts on how you're thinking of applying that control?
And I'll note, there are examples of this.
Stocks have been delisted or frozen. The founder of the Piggly-Wiggly stores lost control through a similar mechanism.
It's possible to attempt to bid up or down shares (though dangerous). Short sales may be used for companies in trouble. Probably other bits.
Lawsuits and regulatory changes can be attempted (see Tesla for cases of both, used by other co.s)
@dredmorbius @Azure @deejoe @Angle
At first I thought by "applying" you meant "convincing the exchange to actually do what we think they should do", which to my mind is the harder part.
What should be done, if we can convince them to do it, seems like an easier problem; you've suggested a couple of ideas.
Having read "Flash Boys" a couple of years ago, another idea comes to mind: delay trades of problematic companies on an incremental scale starting around 1 millisecond.
@woozle @dredmorbius @deejoe @Angle There's some support for that. Well, not that /in particular/ but I've read of proposals to kill high frequency trading outright by running exchanges on a discrete clock for everybody, which is a pretty appealing idea to me.
@Azure @dredmorbius @deejoe @Angle
That's pretty much the exact solution that came into my head as I was reading the book.
(The idea that the best solution was to insert a super-long network cable into the system seemed highly suspect to me. Someone is both (a) not really thinking the problem through, and (b) lacks access either to the source code or to a half-decent coder to modify it.)
@dredmorbius @Azure @deejoe @Angle
The question of cheating wasn't an issue in this case, as it was the company which owned and ran the computer and software which decided to make the cable longer.
As a regulatory enforcement measure... maybe.
@dredmorbius ( @Azure @deejoe @Angle )
Are you suggesting the literal version of that, or the more general "Robin Hood tax" version?
@woozle @Azure @deejoe @Angle Transaction taxes, generally.
HFT only works if you can do *lots* of trades, *cheaply*.
Increase trade costs, and you can't do HFT, it costs too much.
Incidentally, this becomes a "bad hygiene" approach to decentralisation. You're raising costs so that centralised approaches don't work.
@dredmorbius @Azure @deejoe @Angle
Sure, a transaction tax is a viable idea for reducing high-speed trading.
So would forcing all trades to be on a clock-tick. (If you're worried about enforcement, how the bleep would you enforce a transaction tax?) The tick wouldn't even have to be synchronized across exchanges.
I'd want to find some trustable financial computing experts to see what they think of the various options.
@Angle @Azure A pretty good answer. And ... shorter than mine ;-)