lambdapie
You are implying that I don't realize that insider trading reveals extra information. But I have clearly stated in almost every post that insider trading would reveal additional information. There's no point continuing this discussion if I am responding to what you say but you're ignoring what I say. I'd ask you to keep an open mind and not assume that other people just need to be enlightened via terse replies.
When it comes to intentionally making people feel bad about themselves, I don't see much of this, since negative advertising is not very popular. Most advertising I see is motivational/aspirational, i.e. showing people an image that people believe they can attain.
There is only one thing which is more unreasonable than the unreasonable effectiveness of mathematics in physics, and this is the unreasonable ineffectiveness of mathematics in biology.
— Israel Gelfand
That said, my employer has standards for security and privacy that go well beyond industry norms, so if I was working elsewhere maybe I would feel the need for better standards across the industry.
In my experience, software engineers tend to be conscientious. Caring about the big picture is a big part of open source, hacker and nerd culture. But knowledge is hard to come by. I learnt from the experts, but I doubt most engineers would be able to build a simple CRUD app form scratch without major security holes.
It would be nice to see some best practices around security and privacy emerge without forcing everyone to write Ada or Coq or completely change their approach to writing software.
Your argument that other professions do it is invalid. In fact the government should be more proactive in ensuring that professions only impose valid conditions on employment, and don't add spurious requirements in order to exclude people from the profession, in order to, as you say "protect [their] careers and incomes".
I do implicitly address these issues in my comment, when I compare public information with insider information. Noise traders are the goose that lays the golden eggs[0]. They irrationally trade randomly in a stock, masking the trades of informed traders. They make a trading loss on average, and these losses provide the profits of informed traders, which gives those traders the incentive for price discovery.
Although the simplest noise trader models can't capture this (as all information takes the same form) [1], public information is much less costly to the noise traders. So for example, noise traders lose a lot more if a company's earnings are leaked to a few individuals, than if these earnings are made public, because in the latter case the market maker can distinguish information from the the noise trader's trades.
So (and again, a model is really needed to confirm this) public information is cheaper in terms of its impact on liquidity, than insider information. One thing I'm not certain of is whether many insiders competing to trade on the same information would be as good as public information.
[0] See the seminal work of Kyle (1985), http://www.jstor.org/stable/1913210 and also the review article http://scholar.harvard.edu/shleifer/files/noise_trader_appro...
[1] Giving the market maker access to a meaningful information set would resolve this issue.
Am I missing anything else? Did the author make a specific argument for why insider trading would prove to be efficient (i.e. why the effect on liquidity outweighed the increased information revelation?) I doubt it since the author's language suggest someone familiar with law and philosophy but not so much finance and econ.
Once we see that this isn't the case, it becomes necessary to do a cost benefit analysis to determine the true effect of allowing insider trading. But as you say, this should be done on a utilitarian basis, not on some imagined "rights" of the counterparty to insider trading. (EDIT: I don't mean to imply that economic analysis from a utilitarian POV can't clarify what we should think of as people's rights, but rather that as you said, causing someone else to have a negative outcome does not prove that someone's rights are being violated)
The fundamental error in all cases is to conceptualize insider trading as buying from someone who would have bought/sold anyway. This is precisely failing to think at the margin. It is as erroneous as saying "eating meat is ok because those cows would have been killed anyway". Put more technically, when you buy a share, you do so by shifting up the demand curve a tiny bit, with your demand, which in turn shifts the price slightly up and causes a seller to sell, who would not otherwise have. Market microstructure, together with the fact that supply/demand curves really form a single curve, can obscure this fundamental economic fact.
Given this, insider trading does cause harm to some people. And how could it not? If a person can make money from insider trading, then, to first order, someone else must lose money. There are some externalities from information revelation, but only a tiny fraction of these benefits go to the marginal buyer/seller who lost out because of insider trading.
How does this compare to public releases of information? Well unlike insider trading, public information can shift prices without any transactions occurring (or in practice, very few). This is because while insider trading only moves the price by the mechanism of moving the supply/demand curve, while public information is revealed to all traders at once.
So while insider trading does reveal information (which is a good thing) it does so in a way that reduces liquidity, because people don't want to be on the wrong side of insider trading.
I'll admit that the above narrative isn't watertight. I think it's the best analysis that can be done verbally. The only models that allow a meaningful discussion of welfare in the context of financial markets are so called noise-trader models, which explicitly model the (irrational) reasons why most people trade. The whole field is vastly complicated by the fact that theory predicts almost no trade in stocks if people were completely rational.
[0] http://www.marketwatch.com/story/why-insider-trading-should-...
Redistributing money from people who are not going to spend it to people who will (or vice versa) is not zero sum.
This is the essence of (neo-)Keynsianism but it only applies during recessions. In the long run, redistributing money to people who are going to spend it has zero effect.
Of course redistribution has a positive effect on welfare as defined by the sum of total utility, but it doesn't increase, for example, GDP.
For reference, when I speak of "marginal effective tax rate" I mean the marginal effective tax rate after including (1) welfare payments to you, (2) the tax you pay and (3) any basic income you receive, although (3) does not directly contribute to the marginal effective tax rate, since it is zero.
Every kind of redistribution must sum to zero across all people. Basic income is no different in this regard. So to say that basic income is different because the right and poor both receive it is pure sophistry.
Most of the arguments for basic income apply just as well to a welfare system like Australia's. The ones that to not are the worst ones. E.g. it's said that basic income avoids disincentivizing work. And yet as an accounting identity, all redistribution schemes must disincentive work for some people. Welfare systems place a greater disincentive to work on the poorest, which to me makes sense as many of these people have a lower intrinsic incentive to work in the first place. In any case, the lower marginal effective tax rate for the poor under basic income, is only possible because of a higher marginal effective tax rate for the middle class.
A very brief summary of my position is that there is a set of "right" laws, and that is the free market with redistribution through taxation. This is not an arbitrary choice, but one justified by classical economics. Anything good for the poor that you would want to accomplish would be better done by redistribution than by unions. Except, of course, pleasing the members of a particular union, who might stand to benefit at the expense of other workers if they could increase their power.
Outsourcing a great example of this. It is actually good for people in the countries where work is outsourced to. They get more for their labor than they would otherwise, even if they get less than what a Western worker makes. If they showed "solidarity" and demanded Western wages, they would get nothing.
In either case I don't think it has much bearing on Amazon. In both cases evolution is just a metaphor/scienciness.
The mathiness comes through the fact that the simulation is nothing like real life (e.g.people care about far more than their immediate neighbors) and yet the claim is that tweaking the parameters of this model gives some intuition about the quantitative real life effect.
Can you give any similar examples of violence against unions, say within the last 20 years and in the US?
In fact, before I saw the rest of the thread I was going to ask for clarification about the original oil-field worker point.
I agree that manual work can have a high market rate even without unions, e.g. if it physically requires a very fit man to do the job, in addition to the right personality, dexterity, intelligence and reliability.