How glorious efficient markets are!

That this runs in The Guardian makes us think that they might not have realised the import here:

The 59-year-old Wilfred Poggenpoel is a fisher from Lambert’s Bay, a picturesque town 170 miles north of Cape Town that’s popular with surfers and home to 17,000 breeding pairs of Cape gannets. Five years ago, he made the decision to join a virtual marketplace called Abalobi, which enables fishers such as him to sell their catch directly to restaurants, retailers and consumers using a custom-built app.

“I get a better price and I can sell more species now,” he says. “I’ve bought a 60-horsepower motor that I’d never have been able to afford before. I’ve bought a second boat.” He joined, he says, because he didn’t want to spend all day walking around town in the sun trying to sell fish. “My quality of life has improved. I’ve even been able to help some old people in the community.”

Abalobi (which means fisher in isiXhosa, one of the official languages of South Africa) is a tech nonprofit that works to help the small-scale fishers who make up the bulk of the South African fishing industry but are traditionally excluded from it financially.

Those previously in a Polanyiesque marketplace of direct contact and mutual obligations have now moved over to a technologically intermediated impersonal and larger scale market. They are - humoungously - better off as a result.

Which is glorious, poorer people are now better off. Precisely, exactly and wholly because of a deeper and wider market - a more efficient market.

Or, as we might put it, market efficiency matters. It’s what makes people better off. Therefore we must - as we are not - be very careful in evaluating anything that makes markets less efficient for whatever synapse-spasm seems a good idea at the time to those proposing it.

But then we’ve known about this for a long time. That study of sardine fishermen and their mobile phones off Kerala was in one of the very top economic journals back in 2007. The creation of those more efficient markets increased fishermen welfare - profits went up and labour requirements declined. Increased consumer welfare - the price of fish went down. Everyone benefitted - even CO2 emissions declined - none lost, from that mere market efficiency.

Of course, early papers often get revised - the conclusion of doing that seems to be that the original paper under-estimated the benefits, the general increase in human welfare from that more efficient market.

Market efficiency, it’s a good thing and don’t you, ever, forget it.