It does kinda annoy me when people say the stock market is just gambling, just astrology-for-men, just a con - it ignores a lot of the interesting, real-world importances of the system.
That’s not to say that there’s not a lot of gambling and conning going on in stocks! - but that’s almost all in the sort-of ‘meta level’ of stocks, in the externalities and intricacies of the stock market itself, rather than what the stocks represent and correspond to. There’s a reason most regulatory agencies ban insider trading, market manipulation, and other cons and gambles that only care about the stocks as arbitrary objects of trade.
As an example of stocks-as-intended, stocks as actually related to material reality and production, we can take the case of the humble Chicken McNugget. Before the McNugget’s introduction in 1983, McDonalds didn’t sell chicken products. They had no connection to the chicken market. Given the vagaries of production, where a bad season, a freak storm, or any number of things could affect agricultural output, and thus the price of agricultural goods, expanding into the chicken market was a risky move. If they can only sell McNuggets to people for five dollars, and the price of chicken suddenly shoots up to four, they might not make as much of a profit (which, for a business like McDonalds, which requires constant expansion and growth, isn’t good) or even make a loss. How did they get around this?
Well, they bought futures stocks. Dumb move, right? Gambling isn’t going to help - it’s random chance. It’d be like spending your country’s treasury on Bitcoin (looking at you, Bukele). Well, not so much. The futures stocks they bought were in soybeans, maize, grains - chickenfeed, in short. A futures stock is, at its most basic, just a contract to buy a certain commodity in the future, but at its current cost, today. The way futures stocks work, if the price of the commodity rises, so does the value of the futures stock. If it falls, so does the futures. It’s equivalent to (but a lot more efficient and less hassle than) literally just buying a bunch of corn and soy at its current price to sell later, at the new price. If the price of chickenfeed went up, and thus the price of chicken went up, then the worse profits (or even loss) from McNuggets would be cancelled out exactly by the gain in value of the futures stocks. If the price of chickenfeed went down, the loss from the futures would be cancelled out by the increased McNugget profits.
In short, it was the specific relationship that these stocks had to material reality, the way they acted as an analogy for a more complicated movement of commodities and materials, that allowed McDonalds to sell chicken at a fixed cost. It was precisely the fact that these stocks were not random gambling, but related to actual production, that made them useful, and allowed for new developments.
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