system
Given the following post, respond as if you're commenting on Reddit:
human
How do investment bankers and other financial careers produce wealth/value?

A popular opinion seems to be that people in finance produce little value and/or are just parasites. This seems to rely on the assumption that wealth is a zero sum game. 

Are there good examples of how these people increase production?
gpt
Starting from the obvious:

Businesses require capital - startup money to buy property, plant, equipment, or whatever else. Good businesses are a better allocation of capital than bad businesses. Therefore, we want smart venture capitalists and angel investors to go over new business plans, and to try to distinguish the good entrepreneurs from the bad ones.

The benefits these guys provide are obvious. Entrepreneurs come up with ideas and venture capitalists help vet them. So what about the rest of the financial markets?

Well, the venture capitalists need to be able to exit the market, so they can invest their money in new startups. So you need some people to turn a new company's ownership into publicly traded stock. Then the venture capitalists can exit (sell).

Here's where the rest of the finance people come in. Stock prices, from beginning to end, *must* reflect the fundamentals of the underlying company. 

Suppose that the stock traders weren't doing their job right, and they were overvaluing, say, all of the tech stocks. Well, then you'd see the venture capitalists giving too much money to dubious tech startups. Who cares if the thing is profitable in ten years? If we can sell the stock immediately at a high price, that's all we care about!

This isn't a hypothetical; this is *exactly* what happened in the late 1990s. Capital was poured into dubious tech companies when it should have been going into other, more useful projects. If we had smarter finance professionals who didn't overvalue the tech stocks, then we'd all have been better off.