Defending Shylock: Productive Work in Financial Markets

Abstract:     
Like Shakespeare's Shylock, market speculators, "junk bond" dealers, and other market specialists are criticized as manipulators of money who create no real value. But is this true? Or do financiers perform a valuable function in the economy? In this essay, Stephen Hicks challenges a conventional view of financiers and financial markets – that those who work in them are zero-sum parasites upon the physical labor and that they make merely "paper profits." In contrast to the conventional view, Hicks explains the great value that financial markets add to an economy and the nature of the intellectual work that underlays them.

Number of Pages in PDF File: 22

Keywords: financial markets, junk bonds, money and ethics

JEL Classification: B10, E44, P12

working papers series