The ever-more-invisible (and uncontrollably emergent) hand of the not-actually-free market

Paul Raven @ 10-05-2010

Via Chairman Bruce, the US government is getting (more) worried about automated trading in the wake of last week’s largely-unexplained and possibly emergent “stock tornado”; insert aphorism about horses and barn doors here, possibly modified to suggest that the farmer has been letting the horse run the stud for years.

Investment bankers are naturally keen to point out all the benefits of automated trading and “dark pools”:

Goldman Sachs Group Inc., the most profitable firm in Wall Street history, has shared memos with lawmakers and SEC officials that say computer-driven trading and an increase in stock transactions that occur off public exchanges has reduced consumer costs and brought more liquidity to markets.

Well, if we can’t trust Goldman Sachs, who can we trust? #scathingsarcasm

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One Response to “The ever-more-invisible (and uncontrollably emergent) hand of the not-actually-free market”

  1. khannea says:

    We have toleated free markets, and even venerated them, as ‘self-regulating magical systems’ that adjust supply, demand, wages, prices and everything down to things at the chromosomal level. This level of destiny control of markets has been attributed near magical powers.

    Yet when I say – ‘let’s have unions’, thats for some reason ‘external interference’ in markets. Protectionism is a violation of the sacred rite of checks and balances. Unions are a blasphemy. Minimum wages are a sin. Basic incomes a travesty.

    Why exactly? Why is the capricious, predatory and rapacious quality of market dynamics in any way not a systematic atrocity? Why would labor laws be a mechanism of ‘a different order’? Why would the democratic vote of free votiong citizens who vote leftist be somehow detrimental to this process of ‘self-organization’? Why aren’t votes or strikes or protests a natural, harmonious, orgaic part of this ecology of self-regulation and checks and balances?

    If we learned one thing it is we have been structurally lied to – free markets may be a functional system, but they are not sacred or universal or inviolate. They are subject to the will of people who want them ‘manageable’ or ‘limited’ or ‘in a broader context’.