Who has proven the “Efficient Market Theory”?
True, but so what? Let’s look at the record. Nation-states without free markets, or with politically-warped ones, include:
The Soviet Union
The People’s Democratic Republic of Korea
Almost the entire Arab world
Most of West Africa
A partial list, at best, but a sure indication that non-market economies simply don’t work, or don’t last, and usually both.
Nation-states with mostly-free markets include:
The United States
The United Kingdom
The Czech Republic
All of these nations are either rich, or are at least improving rapidly. And I’ve placed them in a particular order — from the freest markets to those free markets most tainted by politics. Reading the list that way, you’ll notice yet another trend: even in free-market economies, the degree of freedom usually equals the degree of wealth. Not to mentiton which “free”-market nations are stagnating or seeing non-cyclical downturns in growth.
Now, all this is certainly no rock-solid mathematical proof, but the circumstantial evidence is overwhelming. Free markets produce better results than non-free ones.
Santoro goes on:
In fact, the financial markets over the last five years would lead us to believe that great externalities and inefficiencies can occur.
Sorry for getting a bit technical, but the blind acceptance of this unproven theory is a key issue.
Well, of course there are externalities and inefficiencies. We’re talking human beings and human institutions here, not Utopia. The question isn’t “Are markets perfect?” the question is “Are markets better than most any alternative?”
The answer shouldn’t be in doubt.
Santoro concludes by saying, “Terrorism will be defeated without this absurd proposal.”
On that, we’re in full agreement. But as I understood it, the Pentagon’s idea wasn’t designed as a war-winning knockout blow, but rather as a tool for gaining new sources of potentially useful intelligence, in a manner already proven to work.
It’s a damn shame that the Pentagon gave in to the likes of Santoro and threw away their new tool, before ever giving it a chance to work.