Chipotle insider trading: Disproving the efficient markets hypothesis

We had a distressing little incident here recently among the commentards over the meaning of the efficient markets hypothesis. So I'll explain what it is, using a current little story to prove that one version of it must be wrong as well. That little efficient markets hypothesis (EMH) incident was an insider trading case …

[frank ly]

Much complication.

I read the linked article to get more details and it is interesting. As the article points out, they were charged because of the 'misappropriation theory'.

" ...when he misappropriates confidential information for securities trading purposes, in breach of a duty owed to the source of the information ..."

The article goes on to explain that the information belongs to Capital One/Visa/Mastercard but they are looking after it for Chipotle, to whom it ultimately belongs.

But heck, wait a minute. Surely that information really belongs to the people who spent the money in the first place? It was the customers of Chipotle (and other companies that were monitored) who bought goods and had (eventually) to pay for them who created that information in the first place. I'd be in favour of a system whereby any profits of this type of activity were shared with the people who's credit card spending was analysed for that purpose. (Yeah, fat chance, I know).

My point is that the 'creators' of the information (the paying members of the public) are not regarded as the owners. It is the corporations who take ownership of it in the same way that Google etc. take ownership of creative input from their contributors and the NHS in the UK are about to take ownership (and sell) information provided by members of the public who have medical problems - all to the monetary benefit of corporations and those acting as government contractors.

[Adam 1]

Re: Much complication.

The creators of the transaction are not only the customer. Equally without the vendor, no such information would exist. The vendor will provide a receipt if you want your own record of the transaction.

More interesting, unless you opt out, Google will track your location via your android smartphone through location history. They would be in an amazing position to track the movements of customers over time through various businesses. If they play those cards right, they could well and truly beat the financial markets at their own games.

[Z80A]

Re: Much complication.

Don't give them ideas, Pike!

[Gordon 10]

Re: Much complication.

One flaw with the information going back to the customer. It already does in the form of a receipt.

There is nothing that the customer pays for that entitles them to the aggregate sum of all customers data.

Or to put in a privacy flavoured context. Why should my next door neighbour get to know what CD's I have bought just because he has also bought some CD's from Amazon?

[Anonymous Coward]

Re: Much complication.

I claim copyright on the information on the spending pattern that I create!

[Anonymous Coward]

Efficient Markets Hypothesis ...

... is just that: a hypothesis.

The first warning sign about the EMH: it originates at the Chicago School.

EMH makes some outlandish claims:

- that markets are always informationally complete - prices quoted on a market always reflect all the publicly available information

- that market prices always adjust instantaneously, as a consequence of said markets' inherent informational completeness

In the EMH, markets are devoid of uncertainty. Because markets are always informationally complete, and market prices self-correct instantaneously, there is no room for uncertainty. A price quoted on a market is always correct, and can never be wrong. At this point, someone might be tempted to ask how come stock options traders make or lose money, given that they all price their options with Black-Scholes.

Also in the EMH, market bubbles or market crashes cannot exist, because market prices self-correct instantaneously.

Whenever factual reality checks are brought to the attention to the Efficient Marketeers, they are unable to come up with a coherent explanation for the discrepancy between reality and their hypothesis.

[Gordon 10]

Re: Efficient Markets Hypothesis ...

Did you even read Tims article - he was very clear that not all versions of the EMH claim to be informationally complete.

[Anonymous Coward]

Re: Efficient Markets Hypothesis ...

> not all versions of the EMH claim to be informationally complete

Which version of the EMH disclaims informational completeness. I am unaware of any such version of the EMH. I am aware of three variants of the EMH - weak, semi-strong and strong, but none of the three disclaims informational completeness.

Link to reference please, not quotes from Worstall.

[Paul Shirley]

Re: Efficient Markets Hypothesis ...

"all the publicly available information"

If they claim that then they're based on a fiction to start with.

[Yet Another Anonymous coward]

Re: Efficient Markets Hypothesis ...

If the strong EMH were true there would be no need for insider trading laws or quite periods or restrictions on spying on competitors - since it would all be in the price.

[LucreLout]

Re: Efficient Markets Hypothesis ...

At this point, someone might be tempted to ask how come stock options traders make or lose money, given that they all price their options with Black-Scholes.

At this point someone more cynical than I might mention the book "When genius failed" regarding events at LTCM, and someone truly cynical might suggest looking at the senior staff roster of said company.

They also might mention that Black-Scholes is the least worst way of pricing an option, rather than being a flawless calculation. Sort of like VaR calculations, or many others used in the finance industry.

[Anonymous Coward]

Re: Efficient Markets Hypothesis ...

"Whenever factual reality checks are brought to the attention to the Efficient Marketeers, they are unable to come up with a coherent explanation for the discrepancy between reality and their hypothesis."

Because all supporters of open market hypotheses never account for one thing: human greed. In every debate supporting open & efficient markets, somehow all actors will behave well and according to plan - no schemers, no insiders, no swindlers, no cheats, no line-jumpers. Information is ascertained by all symmetrically and in perfect accord as all those with the information will share it equally and justly; all those who receive the information will act on it fairly and harmoniously in respect to an equal system.

Markets will react in perfect harmony as all those involved work in harmony for one goal: the common advancement of profits and by association, the human condition. Remove regulations, the "impediment to true freedom", and all those previously regulated will act justly in enlightened self interest, self preservation and with an eye towards the ultimate goal of eventual, heightened personal citizenship.

Fools selling Emperor's new clothes, people buying the Kool-Aid of believing, for decades now.

NEVER do you hear about the corruption, the greed, the avarice, the selfishness, the negative possibilities that such systems will allow - you only hear about the negatives of the OTHER systems, the systems they preach against. The systems that EMH will replace and "cure", if only it was allowed to flourish. Because nobody breaks rules, everyone loves freedom, democracy, equality and capitalism so much that they wouldn't POSSIBLY corrupt the system for the sake of PROFIT. No sir, not here.

[Tim Worstal]

Re: Oxfam

" Once the initial emergency phase of a disaster is dealt with, the way to fix famine is to give people money. Then, the entrepreneurs will find ways to get them the food."

Absolutely correct. And it doesn't come from Oxfam but from Amartya Sen who won his Nobel in large part for pointing this out. In the modern era famines aren't about lack of supply but a lack of effective demand. The answer is thus to add to that effectuive demand by giving broke people money with which to purchase food.

I wrote my first article about this over a decade ago when George Bush was trying to change the way that the US provides famine relief. Amazingly, Shrub was actually trying to change that system the right way, to providing cash on the ground, not shipping food from the US. I'm not entirely sure but 2004 might well have been before Oxfam's change of heart on this.

As to what this has to do with Piketty, well, that's anyones' guess.

[Tim Worstal]

Re: Oxfam

"Piketty argues that the present financial system is designed to produce ever greater inequality, and that this is a bad thing;"

Err, no, no he doesn't. He does say that a side ewffect of r>g is that wealth will become more concentrated but he's absolutely certain that's not because of design. Indeed, he seems to think it a natural part of capitalism, one that we've got to insert a design against.

As to hte Worstall Relevancy test, it was you who actually used my name in your question, no?

[Anonymous Coward]

Re: Oxfam

"Indeed, he seems to think it a natural part of capitalism, one that we've got to insert a design against."

Listening to some pro-Piketty friends argue their position, at least in some cases it is capitalism that we've got to insert a design against, not just part of it.

I'm sure that's not true, but it doesn't help when it comes to actual discussions ...

[Anonymous Coward]

Re: Oxfam

" Indeed, he seems to think it a natural part of capitalism, one that we've got to insert a design against."

I've always been of the view that wealth has a natural "gravity" to it in that, beyond a certain point, wealth has a tendency to beget more wealth simply by being there. Much like the chip leader at a poker table who can push the other players around with that wealth, forcing other players into give it up or go all in decisions. Economists have also noted something akin to a reality distortion field whenever high concentrations of wealth come upon a place; prices go up all across the board which can price out even the local population.

[LucreLout]

Re: Oxfam

Piketty argues that ...

I'm going to be polite and assume you're citing Piketty without having actually read his text. So many of the left have taken this book and ran with it as though it were a previously undiscovered work of Marx; never having read it, much less understood it, and repeating half baked exptrapolations from the Guardian (which regular readers of this site really ought to know isn't a good idea, given it's somewhat lax approach to journalistic integrity vs agendas and the willfully ignorant repetition of same).

Piketty is widely viewed as flawed, having in essence started with his conclusion, then sought facts with which to bolster his view. I forget the author, but there is an expression for this type of work - "Statistics are used much like a drunk uses a lamppost: for support, not illumination". That's quite aside from his numbers not adding up, which may most politely be viewed as a basic error rather than an intentional deception.

[LucreLout]

Re: Oxfam

To simplify my previous post:

Piketty argues that if r > g eventually g will be prementantly below r. The rich will always become richer and the poor unable to catch up.

He's quite obviously wrong, for several reasons, though that doesn't mean I disagree that the rich will get richer. They will. But so will the poor. I'd rather be poor now than rich 200 years ago. Poor 200 years from now will look like a lottery win by comparison to that.

So why is Piketty definitively wrong?

r > g isn't half as relevant as the fact that (r+g) > g.

Any public sector worker earning more than 25k will accrue a pension that will derive an income greater than minimum wage, thus making it impossible for those on minimum wage to catch up even if they invest all of their income and the public sector staffer spends all of theirs.

In essence, the game is over before it starts, as those at the bottom must be left behind for as long as we have investments or savings of any type. They will, however, be dragged along at a slower pace, with welfare ensuring that those falling behind today live a lifestyle that was beyond even the richest 200 years previous.

[Naughtyhorse]

Re: Shrub right thing..providing cash on the ground...

less a percentage to his puppet masters.

I mean, what the fuck would cheney do with two million bushels of wheat... now cash enough to _buy_ two million bushels... thats a different matter.

if you do the right thing for the wrong reasons, is it still right?

I guess if the market says so :-)

[Dan Paul]

Re: Oxfam

Lots of agencies gave the local residents of New Orleans, LA and Muscle Shoals Al areas lots of money, first for Katrina aid and then for the BP Oil platform that blew out and ruined the fishing.

Funny thing Tim, many there still don't have a "pot to piss in". and there was PLENTY of demand. The trouble is that unscrupulous people (including FEMA) took advantage of the food, housing and building products scarcity and charged too much and did too little while residents didn't do enough to fight back. Not to mention the Corps of Engineers that still hasn't fixed the levees and pumps permanently.

Your and Sens methodology just results in wasting even more money. (If that's even possible)

You could give all the money in the world directly to starving orphans in Darfur. That doesn't mean they will get better, it means that Boko Haram will just come in and kill everyone for the money.

If they gave food, they would just steal that too.

If you did directly give money to the chronically poor in the USA or Europe, they would likely buy drugs before food or rent.

[OffColour]

Re: Oxfam

That's always been Tim's view way before Piketty arrived on the scene.

Pretty much anything he's written over the years about alleviating poverty is letting people keep more of their own money or handing out money for people to make their own decisions with rather than taxation for schemes and grand plans.

[P. Lee]

Re: Oxfam

> Once the initial emergency phase of a disaster is dealt with, the way to fix famine is to give people money. Then, the entrepreneurs will find ways to get them the food.

Then the entrepreneurs will have the money and the people will be hungry again. I forget the exact details, but I remember when air-dropped food was being picked up not by starving locals, but by gangs with machine-guns mounted on pickups. "How much of your useless farm are you willing to sell to have some food today?" Do you gamble, take the food and run to the city in the hope of a job?

What you need is a way to make people productive (increase useful work=>income) and a way to prevent the redistribution of wealth from the low/middle to the top end. Along the way, you have to avoid the pitfalls of lagged production vs demand, political interference (warlords, taxmen), con artists and other politicians, natural and man-made disasters, ignorance, bribery, market manipulation and all these things happening not just locally, but in other places around the world.

Should be quite easy, right?

I suppose the point I'm making is that things are very complex, especially in economics. The robes of the various orders of the priests of Mammon don't indicate competence, only loyalty.

[a pressbutton]

time

the weak form of the emh may be correct if it is further weakened to allow for information becoming available at different times (includng never) to different people.

getting my coat because there is no clock icon

[Z80A]

non sequitur

This very good article is spoiled by the final two socialist sentences IMHO. Handouts work only in the short term. Welfare fosters dependency, like giving the poor some fish instead of helping the poor learn to fish.

[Tim Worstal]

Re: non sequitur

Socialism is the price fixing bit where there's no bog roll for anyone. Redistributing money to the poor might be described as charity?

[SoaG]

Re: non sequitur

When private groups redistribute money, that is charity, when government does it, that is socialism.

The former organizations can be extremely helpful and effective, the latter is always inefficient and wasteful (and not just when it comes to redistribution).

Mental exercise - what if, over a decade, all social programs were phased out, all tax rates were lowered proportional by the amount spent on them, and replaced with mandatory donations to charities of the taxpayer's choosing in the same portion of income.

[dr2chase]

Re: non sequitur

Sorry, but your claim is plain nonsense. Look in the US at those organizations whose job it is to collect and distribute money, e.g., IRS and Social Security Administration. Their overheads are extremely low, their fraud rates (as a percentage) are also extremely low. Few charities have an overhead anywhere near as low.

Polls of US citizens about such things as the amount of money spent on foreign aid also reveal levels of ignorance that make you wonder how the EMH appears to work as well in practice as it does.

[Yet Another Anonymous coward]

Re: non sequitur

> Few charities have an overhead anywhere near as low.

Few charities have armed forces they can send after people who don't "contribute"

[Anonymous Coward]

Re: non sequitur

I don't think anyone doubts that governments are extremely efficient at *collecting* money.

The issue is how incredibly inefficient they are at *spending* it (or "investing" as they usually like to call it). $300 for a hammer anyone?

Or is the argument that it doesn't actually matter who the government gives the money to, since it's all stimulating economic activity? I think a lot of people would disagree with that.

[DragonLord]

Re: non sequitur

@AC - But it's also $350 for 100 hammers and $450 for 500 hammers, $1000 for 10,000 hammers. Basically it's the fixed overhead of the procurement process in any large organisation with a fixed procurement process. You also see this in some large companies.

It's also much cheaper for the government to run things like rubbish collection, laying roads, funding police, etc. than it would be for individuals to do the same because they can drive down costs by effectively buying in bulk.

And the prices of bulk vs individual purchases are based off of guaranteed revenue vs fixed costs. If you've got $100,000 fixed costs and $10 unit costs then when you're selling single units with a 10% mark-up you need to make 100,000 units to cover your costs, however if someone comes along and says that they want to buy in 30 * 10,000 units suddenly you've made 3 times more money than your fixed costs so you can afford to only make 3.33% mark-up to make up your fixed costs. The government is in a position to do this on behalf of the population for certain things. However most things aren't known in advance about what's needed which is why central planning is generally considered a bad thing for things like bread and milk, but a good thing for things like rubbish collection and paving roads.

[Anonymous Coward]

Re: non sequitur

"The issue is how incredibly inefficient they are at *spending* it (or "investing" as they usually like to call it). $300 for a hammer anyone?"

A quartermaster addressed that subject once. Many times, the "expensive" hammer is actually an accounting shortcut because they acquired an assortment of products in a lot and simply split the total cost equally among each item to speed things along. And you never know what these lots can contain. $300 for a hammer sounds outrageous, sure...until you learn the same lot had a working engine in it...

[Graham Marsden]

@SoaG: Re: non sequitur

> what if, over a decade, all social programs were phased out, all tax rates were lowered proportional by the amount spent on them, and replaced with mandatory donations to charities of the taxpayer's choosing in the same portion of income.

Some years ago a friend was working at the Neo-Natal unit in a hospital when they were contacted by a group who wanted to do a fund raising event for the Special Care Baby Unit.

Their response? "Please don't!"

Why? Because the rules of charity giving state that the donations can only be used for the specified purpose and cannot be spent on anything else.

The SCBU had money coming out of its ears, they had all the specialist equipment they could use, meanwhile other (not-so-special) departments were desperate for funds, but were screwed because of these rules.

Or another example I've literally just seen on the news: someone set up a facebook page for a pensioner who was mugged and was too scared to go back home and it's raised over £250,000! That's great for him, but what about everyone else?

Now imagine that writ large across the whole sphere of social programmes. Some people may get lucky, some programmes may get massive support, but the ones that aren't newsworthy, that don't get big headlines, that don't tug on the heartstrings of the donors may not get funded at all.

*That* is why we have the system we do, it may not be perfect, but it's better than the alternative.

[LucreLout]

Re: non sequitur

Mental exercise - what if, over a decade, all social programs were phased out, all tax rates were lowered proportional by the amount spent on them, and replaced with mandatory donations to charities of the taxpayer's choosing in the same portion of income.

There'd be lots of starving former diversity co-ordinators roaming the streets. Other than that, I'd imagine things like ex-servicemen would receive significantly enhanced treatment, and stuff like left wing pressure groups would see funding shortfalls (lots of environmental groups, anti-car / smoking lobbies are propped up with public funds: See Brake for a citation).

[Anonymous Coward]

Re: non sequitur

Mental exercise - what if, over a decade, all social programs were phased out, all tax rates were lowered proportional by the amount spent on them, and replaced with mandatory donations to charities of the taxpayer's choosing in the same portion of income.

Lots of charity directors would become rich, and BBC Watchdog would be busier?

[Naughtyhorse]

Re: sequitur

ah so you mean like:

give a man a fire, he'll be warm for a day

set a man on fire and he'll be warm for the rest of his life?

[Anonymous Coward]

Re: non sequitur

But what do you do with an armless retarded beggar (some who basically can't learn how to fish)? Or perhaps there's no fish to be caught anywhere nearby? People who are basically at the complete mercy of others?

[Voland's right hand]

Hmm... some ideas come to mind

So, if, instead of misappropriating card data they were running a small fleet of drones in key locations in the country to gather enough data to feed into some Bayes stats

Hm... There is a rational idea somewhere in this :) It is a trivial mathematical problem - get a statistician and an optimal control specialist and they will calculate you the optimal drone routes in a month or so. From there on - profit...

The sole problem is that the "augurs" (sometimes erroneously referred to as financial analysts) which presently make a living on predicting the financial results based on [ guts | cards | stars | bolivian marching powder induced hallucinations ] will pay a hitman for your head after that.

[Identity]

May I remind you...

that Joseph Stiglitz won his Nobel for showing that perfect information in markets is unobtainable — one party almost always knows something his/her counterpart does not.

On another matter, we sometimes have conditions where Governments (and even corporations) a) know the true price of a given commodity or service because they fix it and b) the massive purchase of said commodities or services helps regulate those prices. There are social values to this. The US Government has steadfastly refused to bargain for the price of pharmaceuticals used by its services (Medicare, for the elderly and disabled), the VA (for veterans), etc. The result is we have the highest prices in the world. (No mention here of the lobbying and campaign funds provided by pHarma, headed by former powerful Congresscreature, Billy Tauzin...)

[phil dude]

Re: May I remind you...

And like most brilliantly obvious ideas, it (one party knowing more than other) , must be true.

The analogy in physical systems (I suppose) is that particles can feel each other via the fundamental forces, only when they move (first derivative of potential field). Clearly the nearer particles get the information about the price sooner...(speed of light in real world)

In economics that shiny Iphone is only *potentially* worth $800 until it is actually purchased and for that transaction, real. Retail prices are what many companies do their calculations on. It is why the media biz is in such trouble.

The ratio of "potential/actual" value is not as uniform as their yacht manufacturers would like.

P.

[Tim Worstal]

Re: May I remind you...

Don't forget: emh doesn't depend upon anyone having perfect information. It depends upon people trading upon the information they do have. The net sum of that trading will be the prices in the market. Thus market prices (might be!) informationally complete while no one individual has perfect information.

This is obviously very close to Hayek's point, that as no one can have perfect information with which to plan the economy then we've only got those markets to crunch through all the information that is available.

[Will 28]

Re: May I remind you...

I'm not very well read on all this economics theory Tim, so please do explain where I've gone wrong here, but it strikes me that you've just disproved you own article.

If no-one (or not everyone) has perfect information, then those pieces of information contributing to the ups and down of the prices must have an effect based on the proportional distribution of the various pieces of information. Thus the full fat flavour of the EMH was holding true as well, it was just that the distribution of the information that the two insiders had was so small that the effect on the prices was minimal, but still an effect (their trades surely would have moved the prices just a little).

Please do correct me. I very much enjoy reading about all this stuff.

[DragonLord]

Re: May I remind you...

I believe that the point was that the market encapsulates all public information. So if, as was the case of the employees written in the article, you trade using information that isn't public, then the market can't have already encapsulated that information, therefore you can capitalise on the knowledge by buying when your private information says that the stock price is going to go up, and selling when it's going to go down. This probably won't affect the market in the slightest if there are only a few people doing it for a relatively small number of shares. However if it wasn't illegal, then it would cause massive problems due to trust issues. This is because it would become impossible for anyone that wasn't trading on private information to compete. For example, if a CEO knows their company is going to go bust next month and they start unloading their shares, that's insider trading, and they are shunting their loss onto someone else. However if someone else analysed that companies public sales report and worked out that they were going to go bust next month and decided to unload, that would be fine. The difference being that their competition has the ability to respond by analysing the same information.

[Jason Hindle]

Welfare was used by New Labour

Specifically in-work credits for an economy addicted to low pay. I believe it did work, but since it's subject to political interference, it's not sustainable (and was an early victim of the ConDemolition). I'm fine with that kind of Welfare, but I'd prefer to see it go hand in hand with our politicians creating conditions for an economy where less Welfare is needed.

[Robinson]

Historical.

This article is kind-of historical, then. Because if they weren't priced in, they certainly are now. I can't imagine a credit card company won't be making use of this information to trade stocks in future.

[colinb]

EMH true belivers tend to get burned, eventually

This is interesting, in a physics of a vacuum kind of way, and probably be more relevant at some future point where trading is purely machine to machine (or some sociopathic version of future humans)

My mystifies me is that anyone truly believed it would behave in the real world anymore than a plane designed in a vacuum would fly correctly outside the lab.

Too many distortion factors: Goldman Sachs/JP Morgan) owning parts of the commodity chain, human panic, margin calls, the many, many opportunities for market manipulation (LIBOR, ForEx, etc.. etc.)

On the bright side when someone gets the religion about EMH and Mean Reversion and actually gets involved rather than writing papers the failures can be spectacular, if they let the 'gamble' roll long enough, Long Term Capital Management and Myron Scholes being the poster children for that.

[Karmashock]

You're blaming government mismanagement on the market.

1. you're saying the free market is bad because it doesn't account for carbon. All you have to do there is tax the extraction/importation of fossilized/sequestered hydrocarbons. That is it. Any other carbon producer is going to be getting their NET INCREASE carbon FROM those sources. If they pay a tax or the goods are taxed then everything else in the rest of the economic chain will have already paid. You don't need some incredibly complex system. Slap a tax on oil, coal, and natural gas... and you're done. Of course, you're going to have to put an import duty on anything that comes from overseas that didn't have such a tax slapped on it over seas. But again... not that hard.

2. The patent/copyright system used to work quite well. It has been allowed to deteriorate over the years.

3. You only get companies offering such low wages because the government subsidization models make it profitable. When you give people free food, free healthcare, free housing, and free education they don't need to make as much money to live. And that means companies don't need to pay people as much to get them to work. Am I saying you take all that away? I'd prefer if it made it easier for people to afford all these things on their own dime. Which is entirely practical if costs are competitive and red tape is kept to a minimum.

The free market can't do a lot of things. It is very bad at forcing people to do things. The market is about consent. Anything you'd like people to just "do" without having to put a gun against their heads to make them do it... should be done through the market.

[DragonLord]

Low wages is a symptom of the balance of power between unions and corporations swinging too far in favour of the corporations. The other end of this balance is companies going bankrupt due to not being able make necessary changes in order to stay competitive. Both are swings too far to the detriment of the worker.

[John 62]

low wages and the unions

The unions also fund Labour and Gordon Brown's great idea for being pro-business, pro-employment and pro-worker was to give tax credits to people on low incomes. The unions are mostly in favour of those tax credits because they raise incomes and are seen as redistributive, but as stated above, it is those tax credits which can act to depress wage growth.

[Daniel von Asmuth]

The market is efficient at processing the information

How come so many Reg readers still buy Intel PCs, kown to be inefficient at processing information, instead of markets?

[Carl Zetie]

The paradox of Strong EMH

There's another problem with the Strong version of EMH: anybody who sincerely believes in it would never buy shares, since there's no profit to be made if the price is completely efficient. Rationally, they should invest their money in a market that is not perfectly efficient and that provides an opportunity for excess profit (or "rent").

[John 62]

Robert Picardo

Did anyone else keep mentally picturing Roberto Picardo, the Emergency Medical Hologram in Star Trek's Voyager era?

[John 62]

Markets are socialism!

When people are allowed to act in markets (unlike being shut out because prices are set by the force majeure), then markets are by definition the will of the people.