>no, the point of a financial market is to be a place where people who need money for lucrative projects can get it, and a place where people who have money can invest it
But all things being equal, investors would like their money allocated into projects with the best returns. Borrowers of course would prefer that they get the money so that doesn't really tell us anything, but society as a whole would rather that worthy projects are funded rather than a linear city in the desert or whatever.
>and people will partake even if the market is inefficient. Consider illegal/black markets, they are often cited as truly free markets where you can invest large sums of cash or buy anything for a price, and even though the prices are high, there are customers.
A good that can't be acquired on regular markets has a price of infinity. A black market might be more expensive than some place where it's legal, but it's still cheaper than the alternative.
>But all things being equal, investors would like their money allocated into projects with the best returns. Borrowers of course would prefer that they get the money so that doesn't really tell us anything, but society as a whole would rather that worthy projects are funded rather than a linear city in the desert or whatever.
you are describing the process by which competitive "jostling for the best returns / cheapest capital sources" produces market efficiency, which makes it pointless to try to find better returns or cheaper capital. Not having to think about that is a reward itself. The price of oil is established by auctioning off more oil every day; if you buy some at an auction, you're doing the best you can do, there is no better place to invest in oil, you can focus on driving your fleet of delivery trucks.
But all things being equal, investors would like their money allocated into projects with the best returns. Borrowers of course would prefer that they get the money so that doesn't really tell us anything, but society as a whole would rather that worthy projects are funded rather than a linear city in the desert or whatever.
>and people will partake even if the market is inefficient. Consider illegal/black markets, they are often cited as truly free markets where you can invest large sums of cash or buy anything for a price, and even though the prices are high, there are customers.
A good that can't be acquired on regular markets has a price of infinity. A black market might be more expensive than some place where it's legal, but it's still cheaper than the alternative.