Many deals clinched are revoked, many
businesses started end, many detrimental policy decisions adopted and
many potentially beneficial situations avoided because of these
personal upheavals.
5. Speculators and middlemen are yet another species of parasites. In a
theoretically totally efficient marketplace - there would have been no
niche for them. They both thrive on information failures.
The first kind engages in arbitrage (differences in pricing in two
markets of an identical good - the result of inefficient dissemination
of information) and in gambling. These are important and blessed
functions in an imperfect world because they make it more perfect. The
speculative activity equates prices and, therefore, sends the right
signals to market operators as to how and where to most efficiently
allocate their resources. But this is the passive speculator. The
"active" speculator is really a market rigger. He corners the market by
the dubious virtue of his reputation and size. He influences the market
(even creates it) rather than merely exploit its imperfections. Soros
and Buffet have such an influence though their effect is likely to be
considered beneficial by unbiased observers.
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