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The Need for greater efficiency

|Includes: BOT, BTK, CME Group Inc. (CME)

The need for efficiency in society does not necessarily increase the most fair society, and this tradeoff represents the clash between free market policies and government control.

For example, trade barriers make it so that certain companies cannot just go bankrupt, facing additional funding and subsidies to produce a less-demanded function. The NYSE and the COMEX, both trading pits where people trade with high transactions costs i.e. floor brokers, full-service brokers and open outcry, physical stock exchanges are no longer needed. It only takes up space where something more societally valuable can be i.e another highly demanded good or service.


Electronic trading, the advent of the NYSE, and computerized-methods save expenditures used for land and other costly maintenance purposes. The only argument for such maintenance purposes might be signals. Signals work in microeconomic manners such as college grades and high paying jobs, as well as  companies business practices. A large stock exchange or trading pit signals to investors, customers, and creditors that this institution is worth investing in, and hence reinforces the continuity assumption.

The companies that usually own these entities are publicly-traded themselves, and like banks who provide elaborate facilities to show trustability in people, perhaps stock exchanges, made relic by electronic trading, still have this marketing advantage. Such companies' share price is also subject to the risk of being publicly traded. Just as a car company's reputation matters ( Not currently with Toyota though huh? ) , the reputation of stock exchanges still never ceases to be useful in your display of longevity.


Disclosure: long electronic, short everything else (paper, ink, books, human trading)