The Corporation is in Serious Trouble

[Hugo]

Your position represents an extreme perspective on economic liberty, and a reductionist understanding of property. Okay, fine. Economic market theory, however strongly suggests that your ideas are not optimally efficient.

No, it does not. The greater the economic freedom, the greater the prosperity. Take a look at the economic freedom index and comparative real incomes, etc., if you don't believe that.

I know what anti-trust rules are about. They are intended to prevent market distortion through collusion or dominance. Do you object to that INTENT?

Absolutely and completely, because any attempt to prevent "market distortion" is market distortion. It is self-contradictory. There is only market distortion where state interference makes it so.

You see, the anti-trust laws are based upon a false premise, i.e. that the free market system, if left alone, will generate monopolies. This has never, ever been borne out. The theory exists in denial of the empirical facts, therefore, the theory is wrong. Monopolies have only ever existed where government interference made it so. Think of the East India Company, who only held a monopoly because British laws and British troops ordained it. The best safeguard against monopoly and dominance is the removal of state regulation from the economy. Because of that, anti-trust laws actually harm what they are trying to protect.

From your earlier comment, it appeared you were complaining about anti-trust rules as a general principal... Well, now you're back to principles again

I'm not sure where you are going with this. I'm arguing against both the specific anti-trust laws that we have, their vagueries and their unjust nature, and against the principles they are based upon. I'm sorry if that was not clear.

Accordingly, you must have some other criteria than efficiency which you are concerned with. What, I wonder?

I am concerned with efficiency, but more than efficiency I am concerned with freedom and liberty. Those are far more important than anything else, and so I am opposed to state interference in the economy not primarily because of the disruption and inefficiency it causes but because it violates individual freedom and human rights.

[maplesyrup]

new purge of executives

[Hugo]

After all, these labourers are not forced to work there now are they? I mean, starvation is an option.

Yes, and before the corporations got there starvation was the only option. What you propose is punishing companies who gave third-world workers an alternative to starvation.

If you propose raising wages in these "sweatshops" be aware that this will make the situation worse. It was tried before. In the 19th Century, British popular opinion decried the wages being paid to workers in the African colonies. They raised them, under public pressure, but because of the increased overheads a lot of the African workers had to be fired. This created higher wages for a few, unemployment for many. Then, to compound the problem, rural farmers heard of the great wages being offered in the cities, closed their farms and headed to the towns. They couldn't get work either. The cities were filled with angry, unemployed mobs and the farms went idle. Food shortages and famine followed.

So, what you are proposing is to punish those who bettered the lives of third-world workers, and push those workers back into starvation, and you do this all in their name. Is "hypocrisy" a term you are familiar with?

[maplesyrup]

Hugo....I'm intrigued - Human Rights?

How does interference in the economy violate human rights?

[August1991]

After all, these labourers are not forced to work there now are they? I mean, starvation is an option.

Do starved workers arrive at Nike sweatshops pleading for a job? Have you ever been to a 'Third World' country? By voluntarily accepting a job, the workers are presumably better off than the alternative.

Cartman, I have no doubt that there is great poverty in this world. I don't see how forcing Nike to pay higher wages will reduce that poverty.

Starting broad and getting narrow, begin with the rule of law itself which you alluded to but haven't given full acknowledgement.

What do you mean by "rule of law"? I would define it as "property rights" and "contract law". The former is typically enforced by the State (with varying degree of success) and the latter is largely non-State.

Then add the principle of equality before the law -- the ability of regular citizens to enforce contracts with the aristocracy and the government greatly enhanced the willingness of merchants to undertake works for them.

What do you mean by equality before the law? Got me there. Most contract arbitration is conducted in private courts according to mutually acceptable rules.

Consider also highway traffic regulations which enable the road system to function at all, and thus the market for automobiles to reach its current level.

The 407 is evidence of a modern private road of which there were many in the past. Your example of traffic regulations is more convention: think of left/right hand drives. It is in the interest of everyone to follow the rules.

Let me give another, very practical example. Who decided the rules of English grammar? The State? Who enforces these rules? The State? It is in the interest of everyone to follow these rules. Contract law is the same.

Life (in the sense of trade) is not a sports game where people want to cheat or get around the rules. Life (in the sense of trade) is like two people talking through an interpreter. They both want to help their intermediary.

government regulation of insurance has contributed substantially to the extent of coverage purchases we see in our society at the level of the retail consumer.

On the contrary, government regulation has given people a false sense of confidence. This has encouraged reckless behaviour because many feel Big Brother will step in and bail us out with other people's money. In Canada, we had Confederation Life. In the US, the Savings and Loan.

MS suggested thinking outside the box. IMV, the State has become identified with the nation. This is a con job. I see a big difference between Canada the country and, for example, the Canadian federal government. They are not the same thing at all.

Canada the country has a long history, involving millions of people and their various efforts to live their lives. The Canadian government is an entity which confers on certain people certain powers that no one else has. We too often mistake the Canadian government for Canada. It's not.

I'm not anti-government. I just wonder what role the State should have.

[Cartman]

OK...now I got it Hugo.

#1. Before capitalism, there was only death and starvation in the world. Capitalism is the only way humans can exist (encoded in our genes?).

#2. Raising wages can only hurt people. (Thank goodness we live in communist Canada where fellow revolutionaries earn the exact same wage).

#3. The reason why North American corporations pay low wages is to ensure peace in third world countries. It has little to do with greed.

Thanx for the tips. All these years I thought that my sponsorship of two kids in third world charities were helping them to obtain medical services and food, when in reality I am only inducing jealousy and added suffering.

[Hugo]

How does interference in the economy violate human rights?

Human rights should include property rights, basically, that what I own and what I have earnt belongs to me, that I have the sole right to decide what to do with it, and nobody can take it away without my express consent. Interference in the economy violates that right. The products of a company belong to that company and they may dispose of them however they wish, at least that should be their right. However, state economic interference holds that a company (and, by inference, a person) does not have the right to do as he pleases with his own possessions, and that the state is the only correct agency for deciding what happens with other people's possessions.

Before capitalism, there was only death and starvation in the world.

A gross over-simplification, but essentially correct. You are doubtless aware that between 3000BC and 1700AD, the life of the average human being did not change. No matter if he lived in a civilization of 3000BC or one over four-and-a-half-thousand years later, the average citizen could expect to spend his life toiling on the land, often going hungry, seeing a good portion of his children die, enjoying a bare minimum of creature comforts, suffering disease, squalor and often endemic war, having no civil rights, no police to protect him, and dying at around 40-45 years of age.

Since capitalism reared its head, the rate of change in the welfare of the average citizen has been absolutely incredible. Consider that your lifestyle is better than the most wealthy of citizens 100 years ago, and probably better than the wealthy had it 50 years ago. You'll live to 78 years of age, you'll have to work no more than 40 hours a week, there's a mere 2% chance you'll work on the land, you'll get a new car every few years, you have a nice TV with cable, a computer and internet access, and enough technological appliances (microwave oven, dishwasher, laundry machines) to take the work of a whole household of servants.

Raising wages can only hurt people.

Correct. Wages will rise and fall of their own accord, because labour is a market like any other. A labour glut lowers wages, a labour shortage raises them. Engineers get paid a lot more than telemarketers because the market demands more engineers than are available.

Attempting to interfere in that market will damage the system to the detriment of all. As I cited earlier in this thread, the Employment Policies Institute in the USA has found that, when minimum wage was raised $1.00 in 1996-1997, the first $0.50 of that raise alone cost 645,000 jobs, the majority of which were held by blacks, working mothers and teenagers.

The reason why North American corporations pay low wages is to ensure peace in third world countries.

Perhaps you'll quote me where I said that.

All these years I thought that my sponsorship of two kids in third world charities were helping them to obtain medical services and food, when in reality I am only inducing jealousy and added suffering.

Give a man a fish and you feed him for a day. Teach a man how to fish and you feed him for a lifetime.

[Cartman]

Hugo, you are fond of the fishing analogy and I entirely agree. But, it has been state intervention that has, by and large, been responsible for educating people. Without the Cdn state subsidizing people, how many could realistically afford to pay the entire costs of their education? (BTW...a portion of my charitable donations do go towards education).

I used the example of Nike, because I suspect that without state protection and worker activism, they would behave in a similar manner in North America.

We have all benefitted from these interventions. While capitalism has clearly benefitted society, capitalism within a welfare state has been even more beneficial.

[Cartman]

Do starved workers arrive at Nike sweatshops pleading for a job? Have you ever been to a 'Third World' country? By voluntarily accepting a job, the workers are presumably better off than the alternative.

You have an odd notion of "choice" if the option is b/w starving or working in a sweatshop.

[Hugo]

But, it has been state intervention that has, by and large, been responsible for educating people. Without the Cdn state subsidizing people, how many could realistically afford to pay the entire costs of their education?

Maybe if around 50% of their income was not taxed, the far better performing private school system would be more attainable for Canadians. As it is, because of heavy taxation and government interference in the economy which stagnates the wealth-creation process, most are forced to use the underachieving public school system. Those that can afford private school are still paying for the public education system. This would be akin to shopping at Zellers, and being forced to pay whatever you paid them to Wal-Mart without receiving anything in return. Just? I think not.

While capitalism has clearly benefitted society, capitalism within a welfare state has been even more beneficial.

The clear fact is that, in every arena where state-run industry and private industry have competed (education, healthcare, power generation), private industry has been able to deliver a better product at a cheaper price. If the state is able to provide something like healthcare or education, based on historical precedent we can say it is an absolute certainty that the free market would provide it cheaper and better.

[Cartman]

Maybe if around 50% of their income was not taxed, the far better performing private school system would be more attainable for Canadians.

That was not the rate of taxation last time I looked. Where did you get that from?

If the state is able to provide something like healthcare or education, based on historical precedent we can say it is an absolute certainty that the free market would provide it cheaper and better.

It is been well established that Canada spends less per capita on health care than in the US even though we cover our entire population. Our system is more efficient because profit has largely been eliminated.

If you believe that about education, then fill out your ICS matchbook cover and get that non-accredited "certificate" in VCR repair.

[August1991]

I used the example of Nike, because I suspect that without state protection and worker activism, they would behave in a similar manner in North America.

You show a frightening ignorance of markets and how they work. Have you ever thought what determines the price of gasoline? House prices? Wages?

Do you really believe that wages are higher in Canada because of "state protection and worker activism"?

[House prices are much higher in Canada than in, say, Sri Lanka. Is this because of "state protection"?]

It is been well established that Canada spends less per capita on health care than in the US even though we cover our entire population. Our system is more efficient because profit has largely been eliminated.

By that logic, the profitable US health sector would be a growth industry and everyone would want its shares.

I agree the US spends a larger share of its income on health care than we do. But the US also spends a larger share of its income on travel and tourism too. Americans have higher incomes and rich people spend proportionately more on health services than poor people do. The US also "exports" its health services by providing them to foreigners. This makes the US sector larger than ours.

I am willing to concede however that a State health insurance scheme might function at lower cost than several private health insurance schemes.

Lastly, Canada no longer offers universal medical coverage. There have been several news articles in Montreal about newcomers being unable to find a family physician. Existing doctors refuse to accept new patients. Since this primarily affects immigrants, it has yet to register on the public radar where queues still seem to be the priority.

Read this article as an example.

If you believe that about education, then fill out your ICS matchbook cover and get that non-accredited "certificate" in VCR repair.

I find that comment sheer snobism - and of the worst kind. If an education helps someone to work or live better, then who are you to question how the education was obtained? Many wise people have no "formal" education. In any case, almost all Canadian university students would gladly accept the opportunity to study at Harvard, Princeton or Yale: all non-State institutions. Greek and Italian students desert their State institutions as quickly as possible.

[Hugo]

That was not the rate of taxation last time I looked. Where did you get that from?

That's tax freedom day, for the average person, roughly 6 months into the year. Income taxes are a very small part of the deal. Let's say you pay 20% income tax. Then, if you live in Ontario, you pay 15% sales tax on whatever you spend the remainder on. With those two taxes alone, the government is taking 32 cents from every dollar you make. That does not even take into account user fees for government services, higher taxes on certain products (gasoline, cigarettes, etc), capital gains taxes, taxes on savings, etc.

Consider, too, that while the rich pay more income taxes, taxation like sales tax, car license plate fees, gasoline taxes and so forth all take a much larger percentage of the income of the poor than of the rich. For instance, a vehicle license plate costs $78 to renew, where I live, no matter how rich the owner of the vehicle. To the minimum wage worker, that's a big chunk of cash. To a doctor making $115,000 per year, that's pocket change.

Our system is more efficient because profit has largely been eliminated.

That would only be true if the healthcare provision of the US and Canada were comparable. Since the US system is far superior, one can only conclude that Canada is not spending enough and this is the only reason for the difference in spending levels.

Let me make an analogy to your argument. You buy a 21" TV for $200. I buy a 50" TV for $2000. According to you, this proves that your TV is better than mine.

If you believe that about education, then fill out your ICS matchbook cover and get that non-accredited "certificate" in VCR repair.

I've nothing to say in response to this beyond what August has said. To believe the only measure of the value of an education is how it is accredited by the government is absurd.

[Cartman]

You show a frightening ignorance of markets and how they work.

Quite frankly, I have yet to find any glorious insights from you on this matter August.

Do you really believe that wages are higher in Canada because of "state protection and worker activism"?

Yup...that is a good part of it. If unions have such a trivial effect upon wages, then why are so many people, including yourself, so worried about them destroying companies?

[House prices are much higher in Canada than in, say, Sri Lanka. Is this because of "state protection"?]

Never been there. Are you suggesting that more people there own a home 'cuz they are so cheap relative to earnings?

I am willing to concede however that a State health insurance scheme might function at lower cost than several private health insurance schemes.

I believe it is fair to say that economists have reached a consensus on this matter.

Lastly, Canada no longer offers universal medical coverage.

Agreed.

[Cartman]

Consider, too, that while the rich pay more income taxes, taxation like sales tax, car license plate fees, gasoline taxes and so forth all take a much larger percentage of the income of the poor than of the rich.

I agree wholeheartedly on this matter (mark that on the calendar 'cuz it happens rarely). My belief is that taxes should always "slide" where possible. That is why I am in favour of income tax, but believe sales taxes are regressive. We in Alberta likely all agree that a PST is not helpful. I would suggest Hugo, that if we are going to include all information when we make claims about the levels of taxation, we should do the same when it comes to the benefits of taxation (services). Include clean air, drinking water, regulation of food services, roads, etc. etc.

Since the US system is far superior, one can only conclude that Canada is not spending enough

What can I say? I believe about 36 million Americans are not insured and a serious illness could destroy a family economically. I disagree and every study I have looked at suggests that I am correct. Economists are able to include the factors you mention.

I've nothing to say in response to this beyond what August has said. To believe the only measure of the value of an education is how it is accredited by the government is absurd.

Accreditation is important to ensure that people with bogus "degrees" are not perceived to be at par with others in the marketplace. This is protection against fraud. For personal enjoyment, go ahead. I do again agree that there is more to learning than just economic benefits.

[Hugo]

I would suggest Hugo, that if we are going to include all information when we make claims about the levels of taxation, we should do the same when it comes to the benefits of taxation (services).

Let's make certain that the free market couldn't provide those benefits at less cost. I'm not certain of that at all.

What can I say? I believe about 36 million Americans are not insured

A lot of 20-35-year-old Americans who are in good health just don't want to spend the money on health insurance. They figure if the worst happens they'll pick up the tab, but in the meantime they'd rather have a nicer car. The poor in America get healthcare coverage. While they may moan about it, the quality of care is still better than anything you can get in Canada.

It's their choice. In America, the healthcare consumer has choice. In Canada, the healthcare consumer has absolutely no choice. You pay, whether you need it or use it or not.

Accreditation is important to ensure that people with bogus "degrees" are not perceived to be at par with others in the marketplace.

I would say that the free market can accredit itself better than the government can. I believe that publications such as Consumer Guide offer much better information on, say, car safety, than government standards and regulations. According to the the government, every car on the market is safe. According to Consumer Guide, some cars are safer than others, and they can tell you which ones.

[The Terrible Sweal]

Your position represents an extreme perspective on economic liberty, and a reductionist understanding of property. Okay, fine. Economic market theory, however strongly suggests that your ideas are not optimally efficient.

No, it does not. The greater the economic freedom, the greater the prosperity. Take a look at the economic freedom index and comparative real incomes, etc., if you don't believe that.

This would really be a more productive discussion if you would move beyond the sophistry of received ideology. Even presuming that the figures you reference are fully acceptable, your comment is contigent upon the actual content and meaning of 'economic freedom'. And you still ignored the point that extreme 'freedom' is not optimally efficient.

I know what anti-trust rules are about. They are intended to prevent market distortion through collusion or dominance. Do you object to that INTENT?

Absolutely and completely, because any attempt to prevent "market distortion" is market distortion. It is self-contradictory. There is only market distortion where state interference makes it so.

Now we can play games around the definition of 'distortion', eh?

But instead let's again question your presumption: Why do you contend that state action (no matter how beneficial) is 'interference', but untrammelled participant behaviour (no matter how abusive) is acceptable? I ask again what criteria are you using, since neither efficiency nor fairness seem to be underlying your position.

... the anti-trust laws are based upon a false premise, i.e. that the free market system, if left alone, will generate monopolies.

You are mistaken. There is no necessary premise of deterministic monopoly outcomes needed to support Anti-trust laws. They are based on the premise that market participants may have opportunities for unfair advantage in the market through collusion or a dominant position, and that taking such opportunities is abusive to the market and overall welfare. Accordingly, your digression on monopolies is moot.

... I'm arguing against both the specific anti-trust laws that we have, their vagueries and their unjust nature, and against the principles they are based upon. I'm sorry if that was not clear.

Got it. For me, however, I'm not very interested in the discussion of the specific rules -- I'm happy to concede they can use improvement.

I am concerned with efficiency, but more than efficiency I am concerned with freedom and liberty. Those are far more important than anything else, and so I am opposed to state interference in the economy not primarily because of the disruption and inefficiency it causes but because it violates individual freedom and human rights.

So, where a practice improves market efficiency, and thereby increases overall welfare, you may find yourself opposing it solely on ideological grounds, right?

[The Terrible Sweal]

Starting broad and getting narrow, begin with the rule of law itself which you alluded to but haven't given full acknowledgement.

What do you mean by "rule of law"? I would define it as "property rights" and "contract law". The former is typically enforced by the State (with varying degree of success) and the latter is largely non-State.

Then add the principle of equality before the law -- the ability of regular citizens to enforce contracts with the aristocracy and the government greatly enhanced the willingness of merchants to undertake works for them.

What do you mean by equality before the law? Got me there. Most contract arbitration is conducted in private courts according to mutually acceptable rules.

In our modern society all law is premised on the state's promulgation and enforcement. Property exists because the state enforces it. Contracts take their forms because the courts will enforce them that way. 'Private' arbitrations apply the laws as they exist and are enforceable thru the courts because statutes provide for it.

Consider also highway traffic regulations which enable the road system to function at all, and thus the market for automobiles to reach its current level.

The 407 is evidence of a modern private road of which there were many in the past. Your example of traffic regulations is more convention: think of left/right hand drives. It is in the interest of everyone to follow the rules.

The 407 is a very poor example of non-state action, and I don't think I need to delve into why.

Regarding traffic rules, your position overlooks a couple of important things: determining a convention may be a long and costly process which government action can abbreviate (e.g. traffic laws); and the significance of enforcement the state provides to maintain the coherence of the convention.

Let me give another, very practical example.  Who decided the rules of English grammar?  The State?  Who enforces these rules?  The State?  It is in the interest of everyone to follow these rules.  Contract law is the same.

No, it's different.

government regulation of insurance has contributed substantially to the extent of coverage purchases we see in our society at the level of the retail consumer.

On the contrary, government regulation has given people a false sense of confidence. This has encouraged reckless behaviour because many feel Big Brother will step in and bail us out with other people's money. In Canada, we had Confederation Life. In the US, the Savings and Loan.

Why do you say it's a 'false' sense of security? I would say it has given real security which has increased market participation, despite the occasional Confed. Life, confidence overall remains.

[Cartman]

QUOTE 

Accreditation is important to ensure that people with bogus "degrees" are not perceived to be at par with others in the marketplace.

I would say that the free market can accredit itself better than the government can

I am not sure whether you are being serious here or not, but hey, I encourage you to bring forth such a resolution in any political party in this country (or the US). Do you think that all those economists and lawyers will be exicted about your proposal?

[Hugo]

Even presuming that the figures you reference are fully acceptable, your comment is contigent upon the actual content and meaning of 'economic freedom'. And you still ignored the point that extreme 'freedom' is not optimally efficient.

Then you will have to tell me what you mean by "extreme freedom." I believe that extreme freedom is both optimally efficient and optimally fair. What I mean by extreme freedom is that each individual be free to do exactly as he wants, with his thought and speech, his person and his property, and that necessarily infers that this freedom includes the obligation not to interfere with the freedom of others.

But instead let's again question your presumption: Why do you contend that state action (no matter how beneficial) is 'interference', but untrammelled participant behaviour (no matter how abusive) is acceptable?

First of all, I contest the assumption that you have attempted to smuggle into that excerpt - that state action in the economy can be beneficial. I don't believe it can, at least, not as beneficial as noninterference would be.

Secondly, you have answered you own question. "Participant behaviour" is not interference. The participation from those outside the economy - the state - is interference.

Here's an analogy. We have two runners in a race. Those runners may behave as they will to try and affect the outcome, so far as it does not interfere with the ability of the other runner to attempt to affect the outcome. That's the nature of their competition. However, it would not be fair or just for a non-participant to attempt to affect the outcome of the race, say, by moving one runner's starting blocks ahead of the other's. The outcome of such a race would be unfair and would not reflect the true abilities of the runners.

I ask again what criteria are you using, since neither efficiency nor fairness seem to be underlying your position.

Both efficiency and fairness underly my position. Efficiency, since the free market provides the best and the most for the least cost, and fairness, because I believe that a man has the right to retain and enjoy what he does and what he produces. Your definition of "fairness" would appear to include depriving individuals of their rightful possessions in order to give them to individuals who do not own them, did not earn them and have no right to them. In private practice, that is called "theft."

You are mistaken. There is no necessary premise of deterministic monopoly outcomes needed to support Anti-trust laws. They are based on the premise that market participants may have opportunities for unfair advantage in the market through collusion or a dominant position

Ah. So what you are saying is that anti-trust law is based not upon incorrect empirical evidence but upon a flawed theory.

Anti-trust laws are basically designed to protect us from a situation that cannot exist.

So, where a practice improves market efficiency, and thereby increases overall welfare, you may find yourself opposing it solely on ideological grounds, right?

You proceed with a false premise: that such a practice (you imply that it would arise from state interference) does or could exist. Once you prove your premise has merit I shall debate that point.

Otherwise you might as well ask me, what if the sun exploded tomorrow? Prove it can realistically happen and we'll discuss it. Until then it's a waste of time.

[Hugo]

Do you think that all those economists and lawyers will be exicted about your proposal?

It depends upon whether or not it would legislate them out of a job, doesn't it?

[Cartman]

QUOTE 

Do you think that all those economists and lawyers will be exicted about your proposal?

It depends upon whether or not it would legislate them out of a job, doesn't it?

Well, the good news Hugo is that there are already plenty of people in this country with non-accredited diplomas and degrees etc. (self-accredited by the corps that offer them). I am certain that at a very attractive price, they will offer you lots of medical advice, dental services, and legal advice when you purchase a home or defend you in court. But, I assume by your disposition, that you already know of such "educated" folks.

I wonder which party would entertain your idea? Don't expect too much support from Harper because he holds a respectable U of C MA in economics and used to teach at the U of C.

[The Terrible Sweal]

...Here's an analogy. We have two runners in a race. Those runners may behave as they will to try and affect the outcome, so far as it does not interfere with the ability of the other runner to attempt to affect the outcome. That's the nature of their competition. However, it would not be fair or just for a non-participant to attempt to affect the outcome of the race, say, by moving one runner's starting blocks ahead of the other's.

But look, here is the very nub ... The contingency I emphasized in quoting you is not taken into account in your conclusion.

[The Terrible Sweal]

You are mistaken. There is no necessary premise of deterministic monopoly outcomes needed to support Anti-trust laws. They are based on the premise that market participants may have opportunities for unfair advantage in the market through collusion or a dominant position

Ah. So what you are saying is that anti-trust law is based not upon incorrect empirical evidence but upon a flawed theory.

No, what I am saying is that the theory is correct: government/state intervention may sometimes be useful in improving market efficiency. That is what explains its existence.

[Hugo]

But, I assume by your disposition, that you already know of such "educated" folks.

Your elitism is showing.

But look, here is the very nub ... The contingency I emphasized in quoting you is not taken into account in your conclusion.

I don't see how. You will have to explain how you see that in more detail.

No, what I am saying is that the theory is correct: government/state intervention may sometimes be useful in improving market efficiency. That is what explains its existence.

That's affirming the consequent. It was once thought that absolute monarchy was the best form of government, and it existed, but it's existence does not prove that it was the best form of government.

The theory of which you speak, like the theory of a non-heliocentric solar system, does not fit the empirical facts and has never been proven true. In fact, it has been repeatedly proven wrong. Therefore, the theory is wrong.