Chichilnisky observes that financial markets are now facing down issues of the fundamentally unknowable. You can do two things. One is worry about it. The other one is bet on it. If one person thinks there will be three hurricanes this season and another thinks six, they can make a bet with each other.
Market prices are the result of continuous changes in the balance of such wagers.
In the 1960s and 1970s, the so-called efficient market hypothesis, under which financial markets were thought to be frictionlessly accurate mechanisms for pricing risk and reward, dominated academic economics and financial theory. In the 1980s, new theories arose, offering significant if not definitive evidence that markets can go badly wrong, systematically mispricing assets. Rather than pricing the future, as they're supposed to do, financial markets grossly overweight the last piece of news. No, she says, because this sort of trouble isn't relevant to the kinds of markets she's proposing. Unlike conventional markets, which involve the private trading of privately owned, privately produced goods, markets in nature will trade privately what economists call public goods.