> A better version of the efficient market hypothesis would be that markets are inexploitable.
No, that's absolutely not true and relies on what I think is the most perniciously false assumption behind market economics: that all market participants only make moves within the market itself.
If you're trying to win at chess then learning to master the rules and strategy of chess is where you focus your attention. But if you're trying to defeat your opponent (or not get defeated by them), you'll probably do better to bring a gun and/or body armor. If you focus 100% of your attention on the chessboard, you are completely opening yourself up for exploitation by an opponent who is willing to play the metagame.
And, indeed, in market economics, actors invariably do play the metagame. This is why we get cabals, trusts, rent seeking, regulatory capture, monopolies, price fixing, price dumping, lobbying, etc.
The ultimate goal of market actors is not to be maximally efficient. It's not even to win the market game. It's to make the most money. And often the best way to make the most money is to rig the game, cheat, or get the rules changed in your favor.
Then couldn't you reframe things to include the entirety of human civilization as a kind of market, and still show that there are unexploitable inefficiencies?
Sure, but then your definition of "market" has no meaning.
A book on "chess strategy" would be very different if it's definition of "chess" included the whole of human conflict and warfare. It probably wouldn't spend much time talking about rooks and pawns at all.
That's not what I meant. I mean there's no rule that you have to include only what we call "the market". I mean the "real" global market includes politics, crime, etc. Basically anything humans do to get their hands on money.
No, that's absolutely not true and relies on what I think is the most perniciously false assumption behind market economics: that all market participants only make moves within the market itself.
If you're trying to win at chess then learning to master the rules and strategy of chess is where you focus your attention. But if you're trying to defeat your opponent (or not get defeated by them), you'll probably do better to bring a gun and/or body armor. If you focus 100% of your attention on the chessboard, you are completely opening yourself up for exploitation by an opponent who is willing to play the metagame.
And, indeed, in market economics, actors invariably do play the metagame. This is why we get cabals, trusts, rent seeking, regulatory capture, monopolies, price fixing, price dumping, lobbying, etc.
The ultimate goal of market actors is not to be maximally efficient. It's not even to win the market game. It's to make the most money. And often the best way to make the most money is to rig the game, cheat, or get the rules changed in your favor.