On Mar 4, 2011, at 5:02 PM, brad wrote:
> ...the idea that profits fell and
> then people began investing to make money makes no sense.
Indeed it makes no sense. When people are economically desperate they may, out of desperation, buy lottery tickets. The people with enough money to speculate are in no way economically desperate so they, collectively, have absolutely no reason to throw their money into a negative-sum game (negative because of the banker/ brokers vigorish). Speculation is a function of uncertainty/volatility, which energizers the human propensity (as noted by Adam Smith) to overestimate one's likelihood of doing much better than everyone else in an activity that offers huge rewards to some and losses to everyone else.
Shane Mage
"All things are an equal exchange for fire and fire for all things, as goods are for gold and gold for goods."
Herakleitos of Ephesos, fr, 90