Oh my Dear Gawd Almighty Ritchie.

Tim

But unlike you I relate my comments to the real world – not one of fantasy created on blackboards who long ago you studied and I by and large ignored, having perceived how harmful their ideas were.

as you well know I was not discussing grain futures. And it so happens I see little merit in them. They are a mechanism for extracting value from the market. I know the farmer who grows wheat in the field behind my house. Who takes it to the local mill. Where as often as not he makes a loss.

Who pays for the ‘market’? We do through tax subsidies where wealth of ordinary people is transferred to traders. Do the farmers get it? No.

Is that a good thing? No.

Is it an argument to cut subsidies? maybe. Is it an argument to cut the volatility of the trade? Definitely. That’s the one element who has not interest in the grain at all, merely taking a rent off society. If a tax does that its good news.

Debate over Tim. Go waste your time elsewhere.

Don\’t forget, this is the man who would tell us how the financial world should operate. He\’s writing papers about how the tax system should work, about the way that corporations should report their activities, he\’s insisting that the laws of every land on the planet be changed to accord with his prejudices.

And yet he doesn\’t know how or why futures markets work. Doesn\’t grasp the simplest point about them. Thinks, in fact, that they\’re a waste of time and effort.*

He even thinks that the futures market extracts value from the farmer: when as every fule kno, futures markets are zero sum games for everyone except the primary producers and the consumers.

We simply cannot let someone this ignorant help to design our world.

Do also note his logic in there: the farmer who doesn\’t use futures markets, the farmer who makes a loss without using futures markets, is proof perfect that futures markets are not needed.

* When, in fact, futures markets move prices intertemporarily, move and disperse risk and reduce price volatility. All four of them being good things.