they get paid well, but they're also doing work of dubious value. i left trading because i wanted to do something that i knew would make a positive impact on the world.
Back in the 90s I worked for two different commodity traders as it seemed like a good way to make a lot of money fast, which was very appealing to my 20-some-year-old self. I rapidly grew disenchanted by the entire thing. While I respected the men I worked for, everyone who's successful ends up driven by the two ghosts of the trade: greed and fear. That's not how I wanted my life to be.
The "dubious value" argument is a bit crap. I work in porn for one of my clients. That's of pretty dubious value as well. Is it of less dubious value to work in a hospital? What about a car manufacterer? Or the tobacco industry?
The only relevant values are 1) what the industry is willing to pay you and 2) whether you enjoy it. Anything else is just bullshit. If you won't enjoy a job in HFT because you think it's of dubious value, then don't get one.
There are plenty of things wrong with this HFT madness, but the programmers are not the problem, so there's really no point in questioning their value [or as the slashdot crowd is doing, blaming them for all sorts of crap].
Wouldn't it have been better, as far as making a positive impact on the world goes, to just keep your job and redirect a large portion of your paycheque to a worthier cause? This is a sincere question. You must have considered that, right?
Suppose you work for me. I pay you because your work has value to me. Congratulations: you aren't doing something no one cares about. But your work for me could be (1) finding a cure for cancer (hugely valuable to everyone if it works out), or (2) making my brand of smartphone 0.1% better than its rivals (hugely valuable to me, positive value to others but maybe not much), or (3) writing effective advertisements that persuade people to by my product rather than a rival's which is actually slightly better for their needs (hugely valuable to me, negative net value to the world), or (4) assassinating people whose politics I don't like (valuable to me, presumably, but probably not so good overall).
If doing something that someone values is enough for you, then indeed getting paid is (more or less) a guarantee of that, and getting paid a lot indicates that you're doing something someone values a lot. But they might value it merely because you're sending money to them that would otherwise have gone to someone else. They might value it merely because you're creating value for them by destroying 10x as much value for others. If you care about doing something that's valuable overall then being well paid is no guarantee whatsoever of that.
(You might hope that if your employer is making money then someone values what they do, and so on recursively, with the process necessarily bottoming out at people doing things that are actually useful overall. Alas, that isn't guaranteed either; or, more precisely, there is no guarantee of any connection between what anyone is doing and its overall value.)
In the case of the labor of an employee or a contractor, the person you're working for. Value is what someone is willing to pay, or trade, or work, for something.
For example, diamonds aren't valuable because they are rare or hard to make (anymore), they're valuable because people are willing to pay large amounts of money to signal to loved ones how loved they are, to signal how rich someone is because they can spend a large amount of money on a rock, etc.
This doesn't mean that price is equal to value. How about the value of the diary of your hypothetical dead grandmother? It may be "priceless" to you while it's in your possession, but there is some absurd amount of money that someone could offer that would make you part with it ($10,000, $100,000, $1,000,000,000, etc.). This isn't its market value, however, because the price some person (a historian perhaps) would be willing to pay for it is likely quite a bit less. And there is certainly a price you'd be willing to recover it.
Take for example family photographs, I recently had a coworker bring in a computer with a dead hard drive. This hard drive had thousands of family photographs that weren't backed up. I made sure that the hard drive was really dead and not just mostly dead and let them know that taking it to a lab was their last option. The cost would likely be between $1000-$4000 and they wouldn't get a guarantee that they'd get anything. They thanked me for my time and decided not to attempt to recover the images.
To make the problem even more interesting let's look at a commons. How valuable is Wikipedia to you? Assuming that you haven't donated to it, nothing. This doesn't mean that it isn't useful to you, or that it doesn't benefit humanity as a whole, or that it is necessarily a waste of everyone's time. It's valuable to the people that run it, it's valuable to the people that donate to it, but everyone else lacks skin in the game.
You might try to calculate its value by summing the labor of all the contributors of the site (http://en.wikipedia.org/wiki/Labor_theory_of_value), but this would make it more valuable if people made it less efficient to add content to the site (perhaps requiring that people mail their edits in triplicate in approved forms obtained from the local post office on a tuesday morning).
The reason why the tragedy of the commons is a problem is because commons are frequently more valuable to everyone than they are to someone. You can't hope to solve these problems without understanding what value is.
>(3) writing effective advertisements that persuade people to by my product rather than a rival's which is actually slightly better for their needs (hugely valuable to me, negative net value to the world)
To defend people in marketing, somebody has to let people know about products and services.
> If you care about doing something that's valuable overall then being well paid is no guarantee whatsoever of that.
Right. Many people value work that benefits society as a whole, or work that satisfies their own curiosity, or work that helps their religion or political beliefs, or work that has high status in the society they live in. Due to this millions of people forego higher wages.
None of this makes people getting paid lots of money better people than people getting paid less money.
> How valuable is Wikipedia to you? [...] You might try to calculate its value by summing the labor [...] but this would make it more valuable if people made it less efficient
No, it would make it more valuable if people made it less efficient and the same amount of content got added. In fact, if you couldn't edit Wikipedia without filling out hard-to-obtain forms in triplicate, scarcely anyone would bother. I'm not sure I'd actually want to endorse the LToV, but for something like Wikipedia it's at least a useful heuristic.
> You can't hope to solve these problems without understanding what value is.
This comment, plus the Economics 101 material that preceded it, suggests that you think I don't understand what value is. If you have evidence for that, I would be interested to see it. (Note: asking a rhetorical question is not the same as admitting ignorance about the subject of that question.)
> To defend people in marketing
I wasn't attacking them. Some advertising (and other marketing) has considerable value to the world at large as well as to the people who are paying for it. Some, not so much.
> Right.
In which case, we are agreed on the original point here: there is no incoherence or foolishness about saying "They get paid well, but they're also doing work of dubious value": the work can have clear (and large) value to the people writing the paychecks, but be of dubious (or indeed clearly negative) value to the world at large.
Ya know, most people would agree for you until you ask them to pay for the stuff they call a "social good."
I went with my fiance last Christmas to donate food and money to a local food bank. She got teary when she saw were so many people waiting to get a basket of food.
I saw a bunch of people playing games on smartphones.
Actual value is what people are knowingly and voluntarily paying for your work. Front-running trades that were about to happen in milliseconds only produces "value" by exploiting flaws in the way the market clears. Muggers don't get to claim their income represents a contribution to society either.
Front-running is a loaded term (I'm sure you know that), and isn't what is going on in HFT - since front-running is illegal, and these programmers are paid to be on exactly the right side of the law.
