Quote:
Originally Posted by lawdude
Actually, that's what my point 1 is answering.
You see, when you give your $100 to Microsoft for a license for Windows, you receive something of value which you can then use to do other things of value that produce for society. And Microsoft, on the other end, can also spend it and produce a multiplier effect on its end too.
On the other hand, if you just give $100 to your brother, there's only the multiplier effect on his end as he spends the money. Nothing is produced for that money.
Poker winnings are simply, in economic terms, transfer payments. One person has more to spend, another has less, and nothing gets produced.
You have effectively stated the reason why futures markets used to be outlawed. Going down the tangent rabbit hole, but futures markets used to lumped in with illegal gambling/betting. The truth is that for the most part, the regulators were correct that futures markets were betting. I wrote a paper in college that poker should be legal because futures markets are because 100 years ago, futures markets were illegal because poker was.
But back on our already tangential topic, the transfer of poker funds in a public game also generates rake. That rake is your purchasing a service from the house. So $100 to Microsoft buys you a good, $100 in rake to Borgata buys you a service. Let's say you only have $100 to spend. If you go to Borgata, you lose $90 to Joe and pay $10 in rake, so you generated less economic value than if you'd paid Microsoft $100. I won't argue with you on that. But I'm countering the claim that poker has so economic value, not that poker has maximum economic value.
P.S. Interesting that you chose Microsoft for your example as there is a decent amount of controversy regarding the economic value of their business model. Since the variable cost of selling a software license is effectively 0, "suppliers can supply an arbitrary quantity at a given price," to quote this article:
https://blogs.oracle.com/bmc/the-economics-of-software. The effect is software vendors act as natural monopolists, which may be anti-competitive, and, you guessed it, a "drain on society"! I'm not saying I necessarily do or do not agree with this viewpoint, but just an interesting aside.