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The social function of markets in a capitalist system isn't to make prices go up indefinitely, it's to establish "true" prices for capital and various types of

The social function of markets in a capitalist system isn't to make prices go up indefinitely, it's to establish "true" prices for capital and various types of goods. This is "true" in the sense that the price reflects the consensus of all the opinions available (good and bad) where people are prepared to put their money where their mouth is. In both of the cases you mentioned, futures and short selling, if they are prohibited, what would happen is the resulting price would only reflect the opinion of people who were positive and the market would not reflect all the available opinion, and therefore would be less value in determining the clearing price of capital.

AznHisoka 7y ago
In a real estate market, there is no futures (or even any price ticker), nor short selling. Yet it goes up based on higher demand, and it goes down based on lower demand. If you want to put your money where your mouth is, there are options for that. But if the stock market really wants to be true market, it should act like all the other marketplaces we have in the world.
- seanhunter 7y ago
  There are most certainly real estate futures traded on CME. https://www.cmegroup.com/trading/real-estate.html https://www.cmegroup.com/trading/real-estate.html Short selling is possible via inverse REITs and other vehicles. I'm not really sure what you mean by "all other marketplaces". Lots of marketplaces allow shorting. For example (almost) all commodity markets trade via futures and that means shorting is possible by definition. Grain futures have been traded since ancient Babylon to allow farmers and consumers of grain (eg brewers and bakers) to hedge against adverse price movement between planting and the harvest. When I say "almost" all commods trade via futures, for weird historical reasons[1] futures trading in onions is not allowed and so people research onion trading as an example of the effects on a market of disallowing futures trading. The current research suggests that disallowing futures and options trading increases volatility, leading to more pronounced boom and bust as the market struggles to digest information. [1] https://www.good.is/articles/the-great-chicago-onion-ring-why-selling-onion-futures-is-against-federal-law https://www.good.is/articles/the-great-chicago-onion-ring-wh...

AznHisoka 7y ago

In a real estate market, there is no futures (or even any price ticker), nor short selling. Yet it goes up based on higher demand, and it goes down based on lower demand. If you want to put your money where your mouth is, there are options for that. But if the stock market really wants to be true market, it should act like all the other marketplaces we have in the world.

seanhunter 7y ago
There are most certainly real estate futures traded on CME. https://www.cmegroup.com/trading/real-estate.html https://www.cmegroup.com/trading/real-estate.html Short selling is possible via inverse REITs and other vehicles. I'm not really sure what you mean by "all other marketplaces". Lots of marketplaces allow shorting. For example (almost) all commodity markets trade via futures and that means shorting is possible by definition. Grain futures have been traded since ancient Babylon to allow farmers and consumers of grain (eg brewers and bakers) to hedge against adverse price movement between planting and the harvest. When I say "almost" all commods trade via futures, for weird historical reasons[1] futures trading in onions is not allowed and so people research onion trading as an example of the effects on a market of disallowing futures trading. The current research suggests that disallowing futures and options trading increases volatility, leading to more pronounced boom and bust as the market struggles to digest information. [1] https://www.good.is/articles/the-great-chicago-onion-ring-why-selling-onion-futures-is-against-federal-law https://www.good.is/articles/the-great-chicago-onion-ring-wh...