More than half a century ago, in his classic paper on the economics of speculation, Paul Samuelson noted the perverse rewards to knowing stuff just slightly before everyone else. He asked readers to imagine someone who, somehow, consistently received crucial information one second before everyone else. As he pointed out, the social value of that extra second would be minimal; but the private rewards could be huge.

Today, Kevin Drum points us to a real-world example quite close to Samuelson’s thought experiment. It turns out that Thomson-Reuters pays the University of Michigan a million dollars a year to provide selected clients with the results of the latest survey of consumer confidence 5 minutes before the rest of the world sees them –and to provide super-special clients with this information 2 seconds before the rest.

This is a trivial example; still, what we see here, as Drum notes, are real resources being devoted to the socially useless task of getting an economic number slightly before the hoi polloi. And you have to wonder how much of what the financial sector does is like that. Certainly these days many vast fortunes come, not from building something, but from consistently guessing what other investors are going to do a few days, or sometimes a second or two, ahead of the pack.

It sure doesn’t look like a productive activity.