[ir123]

Here is my non zero sum understanding.

Let's say there's a new company that develops technology to grow apples efficiently.

This company will be eventually able to sell its technology. But why would apple growing companies buy it? They can grow cheaper apples and thereby make more profits. So it follows that our apple tech company will be able to make profits.

Central to this example is that apples are valued by people. People WANT apples. And if they can eventually buy it for cheaper they are better off.

Now from the shares point of view, why will I buy shares of apple tech? Because I believe that this company will actually develop the technology, go on to make actual tangible profits by selling to companies. And I believe this because I believe apples are actually valued by people.

Now what will happen to the society if this company goes down under? The society on the whole lost the opportunity for cheaper apples (again valuable). And obviously the few investors who had put the money lost part of their wealth. (Similar to burning one's money)

So to answer the question, where did the wealth go? I think it's equivalent to a situation where if all my wealth were in eggs but they all rotted away.

Now to ascertain whether wealth vanishing is a good or a bad thing, i think that is directly dependent on your subjective opinion of the value the wealth was attached to. In the case of apples, it would clearly be a net loss to society.

But if we take shares of a porn company going down, there was no net loss to society because my subjective opinion on the value of porn is 0 or negative.