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In Praise of Insider Trading
(c) 1989
By Matthew O'Keeffe
Libertarian Alliance

When voluntary exchange becomes the basis of disseminating information, perhaps people will realise that the truth about capitalism and the institutions of private property is that "the rich get richer and the poor get richer."

A few months ago I had the misfortune to see the latest Oliver Stone offering, 'Wall Street' (1987). In the final scene, Martin Sheen is driving through downtown Manhattan with his son on their way to court, where the latter awaits sentencing for insider trading. The film closes with Sheen's lines:

"It's time you started to do something with your life. It's time you started to produce something, rather living off the buying and selling of others."

One wonders if this is intended as a criticism of insider dealers in particular or just stockbrokers in general. Obviously Mr Stone put as much thought into the implications of 'Wall Street' as he did into the implications of that other "much acclaimed" file, 'Platoon.' (1986)

THE PRODUCTIVITY OF STOCKBROKERS
Stockbrokers (or market-makers, as they are now called) do in fact produce something. The Stock Exchange exists because certain companies are far too big to be owned by individuals. So without the Stock Exchange there would be a far greater concentration of wealth, far more of the Machiavellian billionaires depicted in 'Wall Street.' It is, in fact, the expertise and advice offered by stockbrokers which allows ordinary laymen and non-billionaires to use the Stock Exchange. And it is these stockbrokers who provide the vital service whereby small investors and institutional investors alike can participate in the trading of shares (the fact that among these institutional investors are alternatives to the welfare state should make the Stock Exchange even more attractive for a libertarian). Some stockbrokers have always managed to provide a better service and win a bigger market share through knowledge of inside information. Recently, these stockbrokers have become known as "insider traders ."
(More: Capital.Demon.co.UK News Source)
2002 © Libertarian Alliance.

That was interesting.



Dan