We may be confusing market efficiency and economic efficiency. Economic efficiency is about limited assets (money, etc.) being used most productively. The economic value of something isn't arbitrary or whatever the market says; it depends on how productive it is. For example, the market may price Dutch tulip bulbs at thousands of dollars each, but that's not their value nor is it economically efficient to tie up thousands of dollars in a tulip bulb.

Market efficiency can contribute to economic efficiency. I've long been aware of theories that markets are inherently perfect and accurate, but I believe economists abandoned those ideas many years ago. Efficiency depends on the spread of information; if a large part of the market lacks accurate information or has false information, efficiency is reduced.

> The addition of new participants helps spread, judge and value the information, more than fewer participants

Imagine a market for rockets, and the market participants are the heads of Boeing, Blue Origin, SpaceX, NASA, ESA. Now imagine that we added 1,000 random people to that market; would the information be better? Would the rockets be priced better? Probably not. The market would be flooded with bad information.