Editing Speculation (section)

===Sustainable consumption level===
[[Image:Philippine-stock-market-board.jpg|thumb|right|Speculation usually involves more risks than investment.]]
[[Nicholas Kaldor]]<ref>Nicholas Kaldor, 1960. Essays on Economic Stability and Growth. Illinois: The Free Press of Glencoe.</ref> has long argued for the price-stabilizing role of speculators, who tend to even out "price-fluctuations due to changes in the conditions of demand or supply", by possessing "better than average foresight". This view was later echoed by the speculator [[Victor Niederhoffer]], in "The Speculator as Hero",<ref>Victor Niederhoffer, The Wall Street Journal, 10 February 1989 [http://www.dailyspeculations.com/vic/spec_as_hero.html Daily Speculations]</ref> who describes the benefits of speculation:
<blockquote>Let's consider some of the principles that explain the causes of shortages and surpluses and the role of speculators. When a harvest is too small to satisfy consumption at its normal rate, speculators come in, hoping to profit from the scarcity by buying. Their purchases raise the price, thereby checking consumption so that the smaller supply will last longer. Producers encouraged by the high price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant, they sell. This reduces prices, encouraging consumption and exports and helping to reduce the surplus.
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Another service provided by speculators to a market is that by risking their own [[capital (economics)|capital]] in the hope of profit, they add [[Market liquidity|liquidity]] to the market and make it easier or even possible for others to offset [[risk]], including those who may be classified as [[hedge (finance)|hedgers]] and arbitrageurs.