When governments invent new markets, expect trouble

US ethanol credits debacle highlights problems with fiat markets

refinery-shutterstock-299805716
US refiners have been hit with surging RIN costs

Markets are a product of human action, but not human design. This statement was made famous by Friedrich Hayek, the best-known figure in the so-called Austrian school of economics. But it actually dates back to 18th century Scottish philosopher Adam Ferguson, who wrote: "Every step and every movement of the multitude, even in what are termed enlightened ages, are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the result of human action, but not