All I think when I see this is "this intelligence wasted on finance and ads."
Can you imagine human potential if it was somehow applied to crop harvesting efficiency, new medicines, etc?
Not everything has to be perfectly efficient but it just saddens me to see all these great minds doing what, adversarially harvesting margin from the works of others?
As someone who has worked in the industry, I've yet to see any compelling argument that high frequency quants are making any meaningful contribution to society. Maybe on the low frequency end, but slightly higher market liquidity doesn't serve that large a social good imo.
High frequency quants almost certainly don't directly provide a massive social good, but they're one of the many facilitators enabling the smooth functioning of markets that do.
But FWIW, the comment I was replying didn't seem to be specifically critical of high frequency quants. Dismissing the entire field as something that doesn't contribute to society is beyond absurd.
I didn’t read the OP as being entirely dismissive, but rather making a point about relative impact.
You could make the case that a neurosurgeon is contributing to the field by being a full-time reviewer of a research journal; like a quant, they are providing utility by assisting in the flow of information. But I suspect there are many people like me who think they would have a bigger impact by putting on scrubs and working in an operating room.
The context of the comment being a Jane Street blog post is why I singled out HFT.
I think we're probably roughly in alignment w.r.t. other forms of finance, but the market liquidity gained by a marginal HFT employee almost certainly isn't worth the marginal cost imo. Even in finance, you could do a lot better by expending that human capital into optimising the structure of the markets themselves (there's lots of research on how hideously inefficient the TSE is because of its coarse tick sizes, for example; but vested interests get in the way of fixing that).
There's that, but the market in the West was already over-saturated with HFT arbitrage. What's hot is growing markets that get a little less attention. The big Jane Street maneuver in India made a lot of noise recently. They've been "banned" for "market manipulation", but that was one of their biggest play to date.
We don't have any reliable and scalable way of doing this allocation, though, so it's a bit like saying that all the resources are wasted being locked up in asteroids.
Don't we already harvest more food than humans could ever eat, and have a huge pharmaceutical industry? I get what you're saying but these two examples seem counterproductive imho.
Which begs the question: what would actually be a good field to apply human potential towards? I agree that finance, sales and ads are very low on that list.
I would imagine that increasing crop yields would do social good primarily via decreasing the amount of cultivated farm land, especially since we're well past Jevons paradox territory with calorie intake I imagine.
While the pharmaceutical industry is large, the marginal researcher does still seem to have a pretty positive impact from an outside view.
The most positive use of human time probably looks something like antiwar advocacy, but I don't really think that most quants have the social skills for that tbh.
It's not wasted. Society can pay for the talent it wants, and they don't want to pay for this. Instead this talent helps to grow the overall wealth on in the world, letting us pay for the stuff we want.
TFA details a solution, it's pretty interesting. Basically the problem was to reverse engineer an absurdly obfuscated and slightly defect MD5 algorithm.
Can you imagine human potential if it was somehow applied to crop harvesting efficiency, new medicines, etc?
Not everything has to be perfectly efficient but it just saddens me to see all these great minds doing what, adversarially harvesting margin from the works of others?
What they could achieve in spending their attention on real problem would be massive.
How is finance not exactly that?
But FWIW, the comment I was replying didn't seem to be specifically critical of high frequency quants. Dismissing the entire field as something that doesn't contribute to society is beyond absurd.
Do you think without HFT markets stop functioning properly?
What if they are one of the contributors of highly inflated valuations?
You could make the case that a neurosurgeon is contributing to the field by being a full-time reviewer of a research journal; like a quant, they are providing utility by assisting in the flow of information. But I suspect there are many people like me who think they would have a bigger impact by putting on scrubs and working in an operating room.
I think we're probably roughly in alignment w.r.t. other forms of finance, but the market liquidity gained by a marginal HFT employee almost certainly isn't worth the marginal cost imo. Even in finance, you could do a lot better by expending that human capital into optimising the structure of the markets themselves (there's lots of research on how hideously inefficient the TSE is because of its coarse tick sizes, for example; but vested interests get in the way of fixing that).
The markets have shown themselves to be an excellent way of applying human potential to things like crop harvesting efficiency, new medicines.
Which begs the question: what would actually be a good field to apply human potential towards? I agree that finance, sales and ads are very low on that list.
While the pharmaceutical industry is large, the marginal researcher does still seem to have a pretty positive impact from an outside view.
The most positive use of human time probably looks something like antiwar advocacy, but I don't really think that most quants have the social skills for that tbh.
At this point tech is probably worse than finance, at least in finance they dont pretend to be saving the world no matter what the giant squid says.
Feels to me like it’s similar to dumping a binary with an image, the format being entirely custom.
And/or trying to decode a language or cipher, trying to recognize patterns.
https://x.com/1914ad/status/2026757796390449382
Haven't read it yet but seems spicey