The Great Divergence

[Jester]

Trading in financial instruments is often done by arbitrage pricing mechanisms. This allows for making profits without dealing in actual goods, without risk, and even without initial investments on the deal.

Almost definitionally, arbitrage is not the problem - someone must have already owned something, and someone else must want to buy it, for the arbitrageur to make money buying and reselling it.

Now, maybe there are things (certain kinds of financial instruments) that people shouldn't be allowed to buy or sell at all, for structural safety reasons. But that's a different issue from arbitrage.

-Jester