Re: @AC 19:39, "Which must mean that markets cannot be efficient."
Well, I will call this BS as BS as well. In addition, I will call anything that tries to call me BS is BS as well because I am calling MYSELF BS, and you can't call something BS if it's ALREADY BS, can you? (Joke ends).
But seriously, there's a point to this. While it is true that unregulated markets inevitably lead to corruption (the sharpest image in my mind is the American Guilded Age of the late 19th century), the problem is that, like the greedy investors, regulators are people, too. And unlike the investors, they're in a position of power. Which makes them MORE prone to corruption. IOW, you shift the focus of the corruption from the investor to the regulator. Sure, regulations are all fine and dandy when they first arist, but they're eventually tainted over the years. Look at what's happening with markets today. Everywhere you look, more holes than a wheel of Emmentaler. Because regulators get corrupted and insert the loopholes one at a time in a perverted form of "regulatory creep".
What your back and forth demonstrates is that BOTH sides can be corrupted by greed and that greed is basically going to try to ruin anything society. And the worst part is, greed is inherent to all of us. It's a survival instinct (Thugg wants to get everything he needs to survive, and if it means Ooga doesn't make it, even better). Community usually only works when there's a common threat (that's why wars tend to mobilize people--they present a common threat), but when the threat's over, we turn to the threat within.
I'm perhaps oversimplifying things a lot, but I think my thought process explains why you're both correct. In essense, we can't play fair because, deep down, we DON'T WANT to play fair. It's not the greedy investor or the greedy regulator but the greedy HUMAN. And that makes the whole issue of the rules a "hard" moral problem, because solving it also involves convincing OURSELVES not to cheat.