> But, I've never seen anyone discuss second order effects from hedge funds, or rich developers.
I think we do. We discuss startup culture, unicorns, huge companies with no revenue, the effects of quarterly reporting on long term thinking and many similar topics. These are all in my opinion second order effects of how business is financed nowadays. If you can think of other second order effects which are not widely discussed please do write about it. They are usually all super interesting and more insightful analysis is always welcome.
> Can someone explain why second order effects are only relevant and as powerful when it is a government entity
I don't think that they are only relevant when it is about government. See my previous point, but it is easier to talk about governments in this sense. Our governments in the "free and democratic" world are very transparent. We have freedom of information laws, the laws and policies of our countries are published, and politicians leak info like a sieve. Of course there are secrets, and backroom deals, and honest to goodness conspiracies too. But when you compare how transparent our governments are to how transparent hedge funds are it is day and night. It is much easier to talk about what you can observe, therefore there is more discourse around the second-order effects of transparent government action than the intentionally more opaque hedge funds.
Likewise people discuss more what they can influence. At least in theory we all can influence our governments. I'm not voting on hedge fund managers. They don't really care what I think. They care enough to not anger so many people that they grab pitchforks, but the opaqueness and lack of information helps them there. Curiously the easiest way the average Joe and Jill can affect a hedge fund is by convincing the government to enact and enforce some law. This is another reason why people might be talking about the second-order effects of government action more.
I think we do. We discuss startup culture, unicorns, huge companies with no revenue, the effects of quarterly reporting on long term thinking and many similar topics. These are all in my opinion second order effects of how business is financed nowadays. If you can think of other second order effects which are not widely discussed please do write about it. They are usually all super interesting and more insightful analysis is always welcome.
> Can someone explain why second order effects are only relevant and as powerful when it is a government entity
I don't think that they are only relevant when it is about government. See my previous point, but it is easier to talk about governments in this sense. Our governments in the "free and democratic" world are very transparent. We have freedom of information laws, the laws and policies of our countries are published, and politicians leak info like a sieve. Of course there are secrets, and backroom deals, and honest to goodness conspiracies too. But when you compare how transparent our governments are to how transparent hedge funds are it is day and night. It is much easier to talk about what you can observe, therefore there is more discourse around the second-order effects of transparent government action than the intentionally more opaque hedge funds.
Likewise people discuss more what they can influence. At least in theory we all can influence our governments. I'm not voting on hedge fund managers. They don't really care what I think. They care enough to not anger so many people that they grab pitchforks, but the opaqueness and lack of information helps them there. Curiously the easiest way the average Joe and Jill can affect a hedge fund is by convincing the government to enact and enforce some law. This is another reason why people might be talking about the second-order effects of government action more.