I'm not a libertarian exactly, but it always boggles my mind how the philosophy that at least tries to remain consistent with the ideal of not aggressing on the life, liberty, or property of others receives some of the most derisive comments.
> Would you buy stock from an insider?
Yes, because I understand that corporate employees qualify as people too and need to pay bills now.
But it's important to recognize patterns. If 3 out 5,000 employees are selling their stock in the week before earnings, it's probably just normal bill shuffling. If 3,000 out of 5,000 employees are selling their stock in the week before earnings, that probably means something far more significant. Let the market figure out what the patterns mean.
> Now here is another hypothetical.
IMO, any hypothetical you can come up with can be answered by pointing out that financial speculators perform a useful social service. By trying to buy low and sell high as soon as possible, speculators speed up price adjustments to their optimal point and make stock prices less volatile than they otherwise would be. This ultimately means that price discovery should happen faster and resources should flow quicker to wherever they'd be more useful.
> Should we make bicycle theft legal because it is so hard to catch bike thieves? How about date rape?
A bike thief or a rapist unambiguously violates the right to life, liberty, or property of another human being.
Insider trading is different in that it's labeled as a crime where there's arguably no victim.