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Originally Posted by aelle  If that guy makes money, spending power - money re-injected in his local economy. |
Okay, this is the only thing that I've seen that comes close to what a trader might offer in the way of a benefit to society.
However, traders make money on others' losses. Hence, while spending power might increase for that guy making money, it decreases for the one losing it. That trade off would then negate the benefit.
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If someone bought from that trader, it must be that the buyer thought it was worth paying for it - therefore, of value.
The pricing of services is often counter-intuitive because their value can be so different from one person to another. When I moved to Korea I hired an immigration lawyer to deal with my work visa requirements. Objectively they did not perform a very difficult task, just printed out my paperwork, held my hand while I filled it in because red tape makes me anxious, and delivered it at the immigration office. Someone else might consider this mooching off the system. I considered it was a service worth paying $5,000 for.
You grow apples. But you're in the States. Are you willing to come and deliver your apples to me halfway across the world? Probably not. But a trader is, and I am willing to pay for it - in oranges, if he wants. The value I am receiving is apples I wouldn't have been able to access had there been no trader.
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Maybe I need to be more specific. I'm talking specifically about
securities trading.
However, to respond to your response, as an apple farmer, I already provide a benefit to society by producing food that it eats. Now, when you say that a trader is going to deliver my apples to China, he's not functioning as a trader, then, but as a delivery service.
That service is the benefit, not the trade itself.
Ultimately, what I'm trying to understand why the world even needs securities trading, so as to gather what the problem would really be if a tax were instituted on every trade. It would obviously lower trade volume, but so what? It might put day traders out of business, but if they are of no benefit to society as a whole, then so what?