Warrant Economics, Call-Put Policy Optionsand the Fallacies of Economic Theory

chorus of the tragedy which plays on the world stage. The main thesis of our work is that,despite the triumphant rhetoric praising the merits of perfect competition, the global fields ofthe dysfunctional market system have mushroomed in what we call Warrant Economics forthe Free-Market Aristocracy. Warrant Economics unfolds in two symbiotic tenets thatconstitute the subtle architecture of the neoliberal edifice: (i) the systemic creation andpreservation of inequality via Call-Put policy options, and (ii) the systemic exploitation ofinequality via novel and toxic forms of securitisation. In effect, the power structure of insiders’capitalism that we describe, trough the costless appropriation of an intricate cobweb of Call-Put structures, has distorted competition and accelerated economic concentration. We viewthe income distribution effect, which favours the top 1%, and the business concentrationeffect, which gravitates competition towards oligopolistic/monopolistic industries, as the twosides of the Warrant Economics coin. We argue that the Warrant Economics state ofcapitalism has been legitimised by a degenerating research programme blossomed under thefallacy that economics is the “physics of society”. In this faculty of thought, we perceive theGreat Recession as a symptom of Warrant Economics, rather than as a tsunami-like event....