While technically true, this could still be a great trade for all involved.
If you invest in shares in a company, you are a link in the chain to that company existing at all, employing people, serving customers, and paying a dividend to shareholders. Employees have a job and income without the need to come up with the initial capital to start the venture and the associated risk of no income for a while.
If you invest in real estate, you are providing the capital that allows someone to have shelter (and maybe allowing a property management firm to also employ people). Tenants have shelter without the need to buy an entire lifetime of a house that they only want to live in for a few years and without the hassles of being tied down to a specific address (in the event their relationship status or family size evolves or a job improvement arrives 50 or 200 miles away) or buying and selling houses frequently as these changes tend to happen frequently early in adult life.
Neither is something that you had to wipe sweat off your brow this particular month, but it is a deployment of foregone consumption in the past that allowed you to make those investments. Now that previously foregone consumption is being returned to you.
Another tangible example is renting a tractor to a farmer that couldn’t otherwise afford one. Their income from crop production goes up (even after tractor rental expenses) and society also gets more food.
But wouldn't it be even better if the farmer bought the tractor on a loan? Now the farmer keeps the entirety of his production and the guy that would have rented the tractor also has to work, further improving society.
The farmer is either renting the tractor or renting the money to buy the tractor. Which is better depends on details like the rate of the loan/rental and the expected utilization of the tractor.
How is that different. In either case the farmer is paying someone (interest/rent) more for the use of the tractor than just outright buying it (which he does not have the capital to do).
That's the decision to be made by the farmer either selling equity or taking a loan.
From the perspective of the banker/lender, they're still living off someone else's labor (which is fine for me since it's the result of a voluntary exchange for something else of value, but it seems like it's not for some upthread posters).
- Investing provides benefits for society at large
- Investors are exploiting the labour of others for their own gain
(but also your examples only work in a very weird worldview where everything is privatised, but I don't want to bother discussing that on this website)
If you invest in shares in a company, you are a link in the chain to that company existing at all, employing people, serving customers, and paying a dividend to shareholders. Employees have a job and income without the need to come up with the initial capital to start the venture and the associated risk of no income for a while.
If you invest in real estate, you are providing the capital that allows someone to have shelter (and maybe allowing a property management firm to also employ people). Tenants have shelter without the need to buy an entire lifetime of a house that they only want to live in for a few years and without the hassles of being tied down to a specific address (in the event their relationship status or family size evolves or a job improvement arrives 50 or 200 miles away) or buying and selling houses frequently as these changes tend to happen frequently early in adult life.
Neither is something that you had to wipe sweat off your brow this particular month, but it is a deployment of foregone consumption in the past that allowed you to make those investments. Now that previously foregone consumption is being returned to you.