Starting a
discussion about which economic activities are or are not 'socially' useful opens a can of worms. Is Opera - or Music in general - socially useful? or hairdressing beyond simply chopping off surplus hair? Opinions will differ widely and the last thing we want is to leave the answer to this question to authorities, be they religious (we had enough of that for 2000+ years), political or - academics. The discussion about the merits (or lack thereof) of High Frequency Trading (HFT) illustrates this very well. While I have often argued that the rules of the stock exchange should be adjusted so that the rules of 'priority and precedence' are brought up-to-date for the internet age it is means overkill when economists or regulators attack the activity per-se claiming that it is socially useless. That may well be the case. Participants may see it as just another form of gambling (Casinos are also a negative sum game for the punters) and should be free to enjoy their game...as long as they are collectively willing to accept the net negative costs associated with this activity. And I am gentleman enough not to question Mr. Stiglitz' social usefulness.
