Vom Wert der Blase – Die Funktion der Spekulation in der Marktwirtschaft / On the Value of Bubbles – The Function of Speculation for a Market Order

Bodo Knoll

ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 2011, vol. 62, issue 1, 115-144

Abstract: Destabilizing speculative bubbles are important for the evolution and preservation of a free market society. In the absence of speculative thinking in scientific theories of risk management and financial markets, market speculation accelerates cultural selection and adaption. It further enables market participants to learn how to deal with economic risks. Speculative profits have a bad reputation since neither the value of speculation for society nor the merit of the speculator can be seen directly. Preventing speculation by the regulation of capital markets is likely to fail. Therefore the legislator should pass general rules which allow for speculation. These rules should ensure that a country’s market order is not endangered by political pressure and civil conflicts.

Date: 2011
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DOI: 10.1515/ordo-2011-0107

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