# One Last Attempt At Understanding \[investment\] Risk
**URL:** https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711
**Category:** Great Debates
**Created:** [April 8, 2011, 8:12pm UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711 "2011-04-08T20:12:36Z")
**Posts on this page:** 20
**Page:** 3
### Author:  [@Magiver](https://boards.straightdope.com/u/Magiver)
#### Post date: [April 9, 2011, 10:40pm UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/41 "2011-04-09T22:40:28Z")
> [@emacknight](#):
>
> The same arguments could have played out here. Evil land owner should have lowered the rent as the home value increased, should have allowed profit sharing to encourage signing a longer lease.
The home owner should have raised the rent as the home value increased because the value of the space increased. Whether the home creates a profit is independent of the renters agreement. the renter is not investing in real estate and carries no risk.
> [@emacknight](#):
>
> What am I missing?
Everything.
---
### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 9, 2011, 11:09pm UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/42 "2011-04-09T23:09:54Z")
> [@Ruminator](#):
>
> Several people said it – including you, **Frylock** :
>
> [http://boards.straightdope.com/sdmb/showpost.php?p=13639506&postcount=258](http://boards.straightdope.com/sdmb/showpost.php?p=13639506&postcount=258)
>
> You said, _“I’m someone who sometimes finds himself thinking workers should get a share of the profits.”_
Wow that’s the worst misunderstood out of context quotation I’ve ever found myself the victim of.
I sometimes think (and I do not commit myself to this–I merely state “I sometimes find myself thinking”) that the wage system should be replaced with a profit-sharing system. I do _not_ know whether this would result in an increase in income for the worker. And I do _not_ think there’s any sense in which a dishwasher legally employed in the USA is “entitled” to a share of the profits legally _or_ morally. He’s entitled to what he agreed to, no more no less. Now, it may be that we should be working on building a system where agreeing to that wouldn’t seem like a good move to him. But as it stands, it’s what he agreed to and the agreement defines his (moral AND legal) entitlements.
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### Author:  [@Ruminator](https://boards.straightdope.com/u/Ruminator)
#### Post date: [April 9, 2011, 11:31pm UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/43 "2011-04-09T23:31:01Z")
> [@Frylock](#):
>
> Wow that’s the worst misunderstood out of context quotation I’ve ever found myself the victim of.
>
> …
>
> Now, it may be that we should be working on building a system where agreeing to that wouldn’t seem like a good move to him.
I didn’t misunderstand you. Yes, you couched [post #26](http://boards.straightdope.com/sdmb/showpost.php?p=13624576&postcount=26) with a ton [weasel words](http://en.wikipedia.org/wiki/Weasel_words) but regardless, that last sentence I set apart above is the type of “feeling” I was talking about. (Even though you also added the weasel words “_may_” and “_seem to_” to that last sentence as well.)
As a side point, I don’t really understand why you had to surround your arguments with such words to (attempt to) distance yourself from the opinion stated. You already have a long posting history sympathetic to the position. Your identity is anonymous here on SDMB. Just say your opinion in a straightforward manner and argue your position from that point. Why use weasel words and then turn around and accuse someone of quoting you out of context?
---
### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 9, 2011, 11:51pm UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/44 "2011-04-09T23:51:41Z")
> [@Ruminator](#):
>
> I didn’t misunderstand you. Yes, you couched [post #26](http://boards.straightdope.com/sdmb/showpost.php?p=13624576&postcount=26) with a ton [weasel words](http://en.wikipedia.org/wiki/Weasel_words) but regardless, that last sentence I set apart above is the type of “feeling” I was talking about. (Even though you also added the weasel words “_may_” and “_seem to_” to that last sentence as well.)
>
> As a side point, I don’t really understand why you had to surround your arguments with such words to (attempt to) distance yourself from the opinion stated.
Huh. Screw you too, then.
Those aren’t weasel words: They express my position _precisely_.
Why do you and others in these conversations have to approach the issue so distrustingly? You appear hostile thereby, and others become defensive as a result. ☹
> [@](#):
>
> You already have a long posting history sympathetic to the position. Your identity is anonymous here on SDMB. Just say your opinion in a straightforward manner and argue your position from that point. Why use weasel words and then turn around and accuse someone of quoting you out of context?
I don’t have much of an opinion here. Actually, **emacknight** ’s got me halfway convinced. But for the most part what I have are questions. **Emacknight** and others seem to take themselves to have made good arguments, and I’m not seeing good arguments. I’m seeing a lot of unstated presuppositions and half-conscious ideological commitments. I’m trying to bring those forward.
I honestly have no idea what the truth is about the topics being discussed. I’m just trying to find someone with a good _argument_ concerning the topic.
---
### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 9, 2011, 11:58pm UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/45 "2011-04-09T23:58:51Z")
> [@Frylock](#):
>
> I’m seeing a lot of unstated presuppositions and half-conscious ideological commitments.
And the most important one I forgot to mention–conceptual confusions. People on boths sides of this argument really seem to me to be confusing, for example, prescriptive and descriptive concepts, and concepts of entitlement, desert and justice (three separate things!).
---
### Author:  [@Ruminator](https://boards.straightdope.com/u/Ruminator)
#### Post date: [April 10, 2011, 12:01am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/46 "2011-04-10T00:01:36Z")
> [@Frylock](#):
>
> Why do you and others in these conversations have to approach the issue so distrustingly?
Because adding a few qualifiers such as “may” and “seem to” to this one post in this one thread so you can step out of character and be “neutral” does not jive with your posting history. I wasn’t intentionally being hostile about it. That’s just the way it looks to me.
> [@](#):
>
> I honestly have no idea what the truth is about the topics being discussed. I’m just trying to find someone with a good _argument_ concerning the topic.
Right… I’m with you there. You haven’t found _anybody_ making a _good argument_ for the business owners. I agree that you think that … which is why I responded to you the way I did – which is to take your comments at face value (ignoring the qualifiers such as “may” and “seem to”).
---
### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 10, 2011, 12:11am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/47 "2011-04-10T00:11:09Z")
> [@Ruminator](#):
>
> Because adding a few qualifiers such as “may” and “seem to” to this one post in this one thread so you can step out of character and be “neutral” does not jive with your posting history. I wasn’t intentionally being hostile about it. That’s just the way it looks to me.
>
> Right… I’m with you there. You haven’t found _anybody_ making a _good argument_ for the business owners. I agree that you think that … which is why I responded to you the way I did – which is to take your comments at face value (ignoring the qualifiers such as “may” and “seem to”).
If you ignore the “may” and “seem to” in the statement you’re discussing, then you’re ignoring my stated position. My stated position accurately reflects my _actual_ position (and despite what you said, it’s completely in keeping with everything else I’ve said in these conversations).
So then, you’re refusing to engage with my actual position.
I can’t see what productive continuation there can be from that.
Once again: when you read my posts, you’re reading the words of someone who does not have any well-formed beliefs about the topic, but who is very interested in the topic, and would very much _like_ to have a well-formed belief about it, and who hopes to find the basis for such an opinion in the writings of others–but who seems to find considerable conceptual confusion in those who participate in the conversation who _do_ have opinions and make arguments for them, and so continues to be quite lost.
I don’t believe there are aliens, but I believe there may be.
And I don’t believe that we should be working on building a system where agreeing to wages wouldn’t seem like a good move to dishwashers, but I believe it _may_ be that we should be doing so.
---
### Author:  [@Ruminator](https://boards.straightdope.com/u/Ruminator)
#### Post date: [April 10, 2011, 12:29am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/48 "2011-04-10T00:29:26Z")
> [@Frylock](#):
>
> If you ignore the “may” and “seem to” in the statement you’re discussing, then you’re ignoring my stated position. My stated position accurately reflects my _actual_ position (and despite what you said, it’s completely in keeping with everything else I’ve said in these conversations).
If this is accurate and true, you should be able to cite abundant posts that you authored giving _equal time_ to positive arguments favoring business owners over the workers.
Regardless, I’m just going to let this issue go and let you be “impartial” about this.
As for the following complaints about “confusion”…
> [@](#):
>
> who hopes to find the basis for such an opinion in the writings of others–but who seems to find considerable conceptual confusion in those who participate in the conversation who _do_ have opinions and make arguments for them, and so continues to be quite lost.
> [@](#):
>
> And the most important one I forgot to mention–conceptual confusions. People on boths sides of this argument really seem to me to be confusing, for example, prescriptive and descriptive concepts, and concepts of entitlement, desert and justice (three separate things!).
… I think you’re actually ADDING to the confusion by saying there _is_ confusion in this thread. I don’t think there’s much confusion.
_Descriptive_ concepts: there’s an existing legal framework for who gets profits. Nobody in any thread I know of is confused about this status quo at all. This total non-argument has been beat to death for some crazy reason.
_Prescriptive and entitlements_ concepts: this can all be boiled down to what people feel/believe/judge is the proper disposition of profits for workers. It’s really that simple. There are 2 sides being discussed.
Now, yes, there has been some confusion over terminology such as “risk”, “entitlement”, etc. But all of that is a sideshow to the fundamental disagreement about who should get what % of profits. That’s the main debate pivot of all these threads. No confusion I see.
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### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 10, 2011, 12:31am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/49 "2011-04-10T00:31:39Z")
> [@emacknight](#):
>
> Interesting you should ask:
>
> To suggests workers should get a share of the profits is no different than suggesting the tenant should get a share of the proceeds in this sale.
Hm… I guess to my mind “entitlement” and “desert” are very different things.
I think that every one of those posters would agree that once an agreement has been entered into, it governs who is entitled to what, both legally and morally. I think.
But they also think that in some sense, that agreement is a bad one. It shouldn’t have been entered into. Why? Because the worker (they think) _deserves_ more than what his agreements _entitle_ him to.
Again, I’m not trading on a confusion between legal and moral entitlements–I’m saying the agreement entitles the participant to what he agreed to in a _moral sense_, and yet, the person may have _deserved_ (again, in a moral sense) to enter into a different agreement.
If any of the four quoted posters are reading this, I’d love to hear whether they think I’m right about what they think concerning agreements, entitlement, desert, etc.
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### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 10, 2011, 12:35am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/50 "2011-04-10T00:35:18Z")
> [@Ruminator](#):
>
> If this accurate and true, then you should be able to cite abundant posts that you authored giving _equal time_ to positive arguments favoring business owners over the workers.
I’m floored. I’ve given _all_ my time in these threads to positive arguments for the view that Y’s risking X for investment W entitles Y proportionately to X-like rewards resulting from W. (I don’t think anyone in this thread "favors business owners over the workers). I haven’t addressed–neither put forward nor criticized–_any_ other arguments.
> [@](#):
>
> Now, yes, there has been some confusion over terminology such as “risk”, “entitlement”, etc. But all of that is a sideshow to the fundamental disagreement about who should get what % of profits. That’s the main debate pivot of all these threads. No confusion I see.
People are confused about what ‘should’ means, basically.
---
### Author:  [@Ruminator](https://boards.straightdope.com/u/Ruminator)
#### Post date: [April 10, 2011, 12:41am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/51 "2011-04-10T00:41:08Z")
I split your following sentence in 2 parts to emphasize what we’re wasting time on:
> [@Frylock](#):
>
> Again, I’m not trading on a confusion between legal and moral entitlements–I’m saying the agreement entitles the participant to what he agreed to in a _moral sense_,
Yes, yes, and yes one thousand times. We’ve beat this non-argument to death – a thousand deaths actually. Nobody is confused about this. Nobody. And yet we continue to add words to this aspect that everyone on both sides 100% agrees on.
> [@](#):
>
> and yet, the person may have _deserved_ (again, in a moral sense) to enter into a different agreement.
_This_ is the essence and spirit of the debates. It always has been.
> [@](#):
>
> If any of the four quoted posters are reading this, I’d love to hear whether they think I’m right about what they think concerning agreements, entitlement, desert, etc.
To be fair, **Voyager** said he was misquoted. You’re actually down to 2 posters since you’ve explained that you’re impartial.
---
### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 10, 2011, 12:45am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/52 "2011-04-10T00:45:07Z")
> [@Frylock](#):
>
> I’m floored. I’ve given _all_ my time in these threads to positive arguments for the view that Y’s risking X for investment W entitles Y proportionately to X-like rewards resulting from W. (I don’t think anyone in this thread "favors business owners over the workers). I haven’t addressed–neither put forward nor criticized–_any_ other arguments.
Never mind, I misunderstood you.
You’re saying I’ve only argued against these arguments, and I also should have been giving arguments _for_ them, or at least, arguing against arguments for the opposite conclusion.
But my main intention here has been to be in dialogue with **emacknight** ’s view (not him specifically, but his view) so that’s what I’ve been doing.
If someone on a different side of the fence starts up some OP’s titled “understanding labor” or something, check and see what my posts look like in that thread.
---
### Author:  [@emacknight](https://boards.straightdope.com/u/emacknight)
#### Post date: [April 10, 2011, 12:45am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/53 "2011-04-10T00:45:20Z")
> [@Frylock](#):
>
> Hm… I guess to my mind “entitlement” and “desert” are very different things.
I still don’t know why you keep using the word desert. Am I the only one who finds it strange? Are you referring to losses, or did you forget an ‘s’ ?
---
### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 10, 2011, 12:47am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/54 "2011-04-10T00:47:10Z")
> [@Ruminator](#):
>
> I split your following sentence in 2 parts to emphasize what we’re wasting time on:
>
> Yes, yes, and yes one thousand times. We’ve beat this non-argument to death – a thousand deaths actually. Nobody is confused about this. Nobody. And yet we continue to add words to this aspect that everyone on both sides 100% agrees on.
Then how was I wasting time? I can’t see the relevance of the four quotes unless they are misinterpreted as being confused on that very point.
Gah! I have no clue what you people are even talking about anymore. ☹
> [@](#):
>
> To be fair, **Voyager** said he was misquoted. You’re actually down to 2 posters since you’ve explained that you’re impartial.
Myself being one of the 2 eliminated?
---
### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 10, 2011, 12:51am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/55 "2011-04-10T00:51:56Z")
> [@emacknight](#):
>
> I still don’t know why you keep using the word desert. Am I the only one who finds it strange? Are you referring to losses, or did you forget an ‘s’ ?
Dude, I showed you the dictionary entry! 😃
> [@](#):
>
> de·sert 2 (d-zûrt)
> n.
>
> 1. Something that is deserved or merited, especially a punishment. Often used in the plural: They got their just deserts when the scheme was finally uncovered.
---
### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 10, 2011, 12:58am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/56 "2011-04-10T00:58:22Z")
So the question is, which agreements should we enter into.
**Emacknight** ’s answer is, we should enter into the agreements where reward is directly proportional to risk. (Right?)
I then ask, what’s the argument that those are the best agreements?
The only reply I think I’ve gotten to that is an argument from psychology–we’re psychologically structured to try to make reward proportional to risk.
I pointed out that’s not a good argument–just because we’re structured to try to make one thing proportional to another, that doesn’t mean it’s _good_ to try to make that one thing proportional to that other thing.
As far as I can tell, that’s where the discussion (mine anyway) stands.
Since **Ruminator** ’s posts, I’ve queried myself to see if I have a position. Maybe I’m getting one, but I don’t feel a lot of conviction about it. It’s this: entitlement is determined by agreements (we all agree on this of course) _and_ desert is determined by agreements (that’s the bone of contention) but agreements are only _agreements_ when entered into freely (that’s agreed to by everyone) and many dishwashers did not enter into these agreements freely (very controversial, and not really something htat’s under discussion in this thread). Happy **Ruminator**?
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### Author:  [@Ruminator](https://boards.straightdope.com/u/Ruminator)
#### Post date: [April 10, 2011, 1:02am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/57 "2011-04-10T01:02:31Z")
> [@Frylock](#):
>
> Then how was I wasting time? I can’t see the relevance of the four quotes unless they are misinterpreted as being confused on that very point.
No. For example, **Whack-a-Mole** was specifically _not_ talking about that legalistic point. He was talking about the _higher concept_ (non legal) of what he judge was right and fair. He even made it a point to [mock the OP using a strawman of fake ignorant dishwashers that supposedly didn’t know the letter of the law](http://boards.straightdope.com/sdmb/showpost.php?p=13639322&postcount=255). Seriously, we have beat this sub-topic to death… and all over a total non-disagreement.
Wow, this must be a new talent of SDMB participation. Find a subtopic that everyone agrees 100% and write a million words back and forth about how we disagree and are confused about it!
> [@](#):
>
> Myself being one of the 2 eliminated?
Correct.
But there were probably others that expressed similar “feelings.” I just didn’t go over every post looking for them.
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### Author:  [@Frylock](https://boards.straightdope.com/u/Frylock)
#### Post date: [April 10, 2011, 1:06am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/58 "2011-04-10T01:06:57Z")
> [@Ruminator](#):
>
> No. For example, **Whack-a-Mole** was specifically _not_ talking about that legalistic point. He was talking about the _higher concept_ (non legal) of what he judge was right and fair. He even made it a point to [mock the OP using a strawman of fake ignorant dishwashers that supposedly didn’t know the letter of the law](http://boards.straightdope.com/sdmb/showpost.php?p=13639322&postcount=255). Seriously, we have beat this sub-topic to death… and all over a total non-disagreement.
>
> Wow, this must be a new talent of SDMB participation. Find a subtopic that everyone agrees 100% and write a million words back and forth about how we disagree and are confused about it!
Alright, I’m prepared to drop that topic. I cannot follow what you’re saying. I _said_ they were probably using “deserves” or “entitled” a moral rather than a legal sense. But they were quoted in a context which I could only make sense of if I thought the quoter was _confused_ and thought they meant it in a legal sense.
Okay just never mind.
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### Author:  [@Ruminator](https://boards.straightdope.com/u/Ruminator)
#### Post date: [April 10, 2011, 1:22am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/59 "2011-04-10T01:22:03Z")
> [@Frylock](#):
>
> … but agreements are only _agreements_ when entered into freely (that’s agreed to by everyone) and many dishwashers did not enter into these agreements freely (very controversial, …
I guess you’re redefining the debate from _“investment risk –\> profit”_ to _“agreements –\> profit”_
Although the words “capital investment” are drastically different from “agreement”, I don’t think the debate is all that different because _the end concept of “fair & justice of profits” is still what we’re ultimately debating._
But let’s play along with your characterization of the “unfree coerced dishwasher.” In what scenario would he be “free” to enter into the agreement that “capital investment risk” determines profits? I guess if the dishwasher was a millionaire himself, he would be “free” to enter such an agreement. But I’m not trying to mock you with that non-existent dishwasher. Obviously, that scenario is too far fetched… so what would this species of a “free” dishwasher that’s not independently wealthy look like?
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### Author:  [@Triskadecamus](https://boards.straightdope.com/u/Triskadecamus)
#### Post date: [April 10, 2011, 1:27am UTC](https://boards.straightdope.com/t/one-last-attempt-at-understanding-investment-risk/577711/60 "2011-04-10T01:27:27Z")
Every year I sign a lease. I agree to pay rent, and the owner agrees that I get to live in the home. He also agrees to keep the building in livable condition for the entire year, continuously. I agree to notify the property manager sixty days before the end of my lease if I wish to renew the lease, and he agrees to notify me prior to that of the rent for the following year.
If the building gets hit by a meteor, he loses his building, I lose all my belongings, unless I have my own insurance, and he has to find a place for me to live for the balance of my lease, since my current home is not livable. If rent goes down to a third of what I am paying now, I lose out on the cheap rent for the rest of the year, since I have already signed a contract to pay him my rent.
If I think I can get a better deal, I can look around before I sign the lease. If I don’t like the place he has for me to move after the meteor strike, I can refuse, and ask that the balance of the lease be voided. We might have to go to landlord tenant court over that one.
I am not an owner. If the RNC decides to have a convention in my town, and the place I live in could be rented for ten times the rent I am paying, He cannot raise my rent because he is missing out on the bonus in sudden demand. He risks a possible improvement in rental income to gain a contracted income. Neither of us gets to whine if we end up on the short end of a change in the economy. We have agreed to a contract, and are legally bound to fulfill it.
Tris
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