Pluralistic: A perfect distillation of the social uselessness of finance (18 Dec 2025)


Today's links


The Earth from space. Standing astride it is the Wall Street 'Charging Bull.' The bull has glowing red eyes. It is haloed in a starbust of red radiating light.

A perfect distillation of the social uselessness of finance (permalink)

I'm about to sign off for the year – actually, I was ready to do it yesterday, but then I happened upon a brief piece of writing that was so perfect that I decided I'd do one more edition of Pluralistic for 2025.

The piece in question is John Lanchester's "For Every Winner A Loser," in the London Review of Books, in which Lanchester reviews two books about the finance sector: Gary Stevenson's The Trading Game and Rob Copeland's The Fund:

https://www.lrb.co.uk/the-paper/v46/n17/john-lanchester/for-every-winner-a-loser

It's a long and fascinating piece and it's certainly left me wanting to read both books, but that's not what convinced me to do one more newsletter before going on break – rather, it was a brief passage in the essay's preamble, a passage that perfectly captures the total social uselessness of the finance sector as a whole.

Lanchester starts by stating that while we think of the role of the finance sector as "capital allocation" – that is, using investors' money to fund new businesses and expansions for existing business – that hasn't been important to finance for quite some time. Today, only 3% of bank activity consists of "lending to firms and individuals engaged in the production of goods and services."

The other 97% of finance is gambling. Here's how Stevenson breaks it down: say your farm grows mangoes. You need money before the mangoes are harvested, so you sell the future ownership of the harvest to a broker at $1/crate.

The broker immediately flips that interest in your harvest to a dealer who believes (on the basis of a rumor about bad weather) that mangoes will be scarce this year and is willing to pay $1.10/crate. Next, an international speculator (trading on the same rumor) buys the rights from the broker at $1.20/crate.

Now come the side bets: a "momentum trader" (who specializing in bets on market trends continuing) buys the rights to your crop for $1.30/crate. A contrarian trader (who bets against momentum traders) short-sells the momentum trader's bet at $1.20. More short sellers pile in and drive the price down to $1/crate.

Now, a new rumor circulates, about conditions being ripe for a bounteous mango harvest, so more short-sellers appear, and push the price to $0.90/crate. This tempts the original broker back in, and he buys your crop back at $1/crate.

That's when the harvest comes. You bring in the mangoes. They go to market, and fetch $1.10/crate.

This is finance – a welter of transactions, only one of which (selling your mangoes to people who eat them) involves the real economy. Everything else is "speculation on the movement of prices." The nine transactions that took place between your planting the crop and someone eating the mangoes are all zero sum – every trade has an evenly matched winner and loser, and when you sum them all up, they come out to zero. In other words, no value was created.

This is the finance sector. In a world where the real economy generates $105 trillion/year, the financial derivatives market adds up to $667 trillion/year. This is "the biggest business in the world" – and it's useless. It produces nothing. It adds no value.

If you work a job where you do something useful, you are on the losing side of this economy. All the real money is in this socially useless, no-value-creating, hypertrophied, metastasized finance sector. Every gain in finance is matched by a loss. It all amounts to – literally – nothing.

So that's what tempted me into one more blog post for the year – an absolutely perfect distillation of the uselessness of "the biggest business in the world," whose masters are the degenerate gamblers who buy and sell our politicians, set our policy, and control our lives. They're the ones enshittifying the internet, burning down the planet, and pushing Elon Musk towards trillionairedom.

It's their world, and we just live on it.

For now.

(Image: Sam Valadi, CC BY 2.0, modified)

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Upcoming appearances (permalink)

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Recent appearances (permalink)


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Latest books (permalink)


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Upcoming books (permalink)

  • "Unauthorized Bread": a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2026

  • "Enshittification, Why Everything Suddenly Got Worse and What to Do About It" (the graphic novel), Firstsecond, 2026

  • "The Memex Method," Farrar, Straus, Giroux, 2026

  • "The Reverse-Centaur's Guide to AI," a short book about being a better AI critic, Farrar, Straus and Giroux, June 2026


Colophon (permalink)

Today's top sources: John Naughton (https://memex.naughtons.org/).

Currently writing:

  • "The Reverse Centaur's Guide to AI," a short book for Farrar, Straus and Giroux about being an effective AI critic. LEGAL REVIEW AND COPYEDIT COMPLETE.

  • "The Post-American Internet," a short book about internet policy in the age of Trumpism. PLANNING.

  • A Little Brother short story about DIY insulin PLANNING

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