Every once in a while, there's another round of "what good is it for quants to pile up money in hedge funds" on the Careers Forum.

One fair reply, I think, is that a diverse group of geeks piling up personal fortunes are probably more likely to find innovative and powerful ways of using that money than, say, government is. Here's a potential example from my former employer. I have no idea if this is just a pipe dream, but it's a fine use of private capital -- trying something very adventurous in an scientific area. There are plenty of others in other fields trying interesting things (like Gates and Simons, etc). Basically, I think there's value in having people able to operate stacks of cash without the ties that bind the hands of government. Individuals don't have to bow to special-interest groups, and nearly any daring excursion steps on the toes of several powerful groups. Moreover, it's less damaging when these rich folks simply fail in these ventures. Governments have many duties, and dramatic failure in one can have all sorts of spillover effects into others of those duties. The failures are more contained when an individual does it (at the very least, it's much less likely that an individual will get stuck throwing good money after bad, but this happens in government all the time).

Of course, through most of the last century, very few individuals have had resources on the scale needed to "compete" with government in the ability to fund large projects. Perhaps that's less true now, both because of the boom in finance, high-tech, and dot-coms, and because, through technology, we're able to leverage efforts of the few much more. So, big projects aren't nearly as expensive (in comparison to wealth of very rich people) as they used to be.

In some sense, on a very small scale, this is very similar to AoPS -- government really couldn't do what we are doing in the current educational climate, and maybe couldn't ever do it, and much of the early funding came from trading gains.