The output (generally speaking, not specific to money markets) is better prices. There are large scale examples of economies in which prices were mismanaged either due to lack of information/technology or centrally planned prices, some of which resulted in failed states (e.g. Venezuela and the Soviet Union). While providing market information signals via prices is certainly an abstract concept that most people will never appreciate, it is important regardless.
For complex instruments in money markets, the main effects are bridging mis-priced treasuries on different time frames and hedging against various outcomes for pensions, banks, and dealers in physical commodities.
Most of the complex stuff either serves one of those purposes or becomes a zero sum game that doesn't affect non-participants. It's important to judge each instrument by its purpose and mechanism rather than bunch everything as a way to make bankers richer (e.g. a future vs. a CDO).
> lack of information/technology or centrally planned prices, some of which resulted in failed states (e.g. Venezuela and the Soviet Union)
Venezuela has never had Soviet-style central planning. It's a market economy with a public sector only slightly larger than the OECD average. Their current situation is largely the result of excess social spending: first at the expense of investment and diversification away from oil prices were high, then at the expense of currency stability when oil prices crashed.
While you're correct that high social spending that relied on high oil revenue was probably the primary cause of Venezuela's economic collapse, they had price controls on food starting back in 2003 and they began nationalizing major industries in addition to oil by 2008. From 2008, it was a full on centrally planned disaster.
Ownership and allocation mechanism are mostly independent axes. Consider for instance Norway (extensive state ownership but highly market-oriented; in certain respects more liberal than the US) contemporary China (state control of most major firms but mostly market-oriented), Gaullist France (nationalized infrastructure plus minority state shares in other sectors, markets supplemented with indicative planning and state-directed investment) or the US during WWII (almost entirely private, full-blown central planning).
Venezuela's level of interventionism is unremarkable by the historical standards of the developed world. The problem is their poor choice of interventions.
why would this be surprising? Don't believe for a second that the USA has a generally more liberal financial market than Scandinavia. Employment laws, trade, regulations, etc. are often wayyy less strict in Scandinavia.
It shouldn't be surprising, but American political discourse has unfortunately latched onto an extremely simplistic univariate model of economic policy. There's a common background assumption that redistribution, public ownership, fiscal policy, and all varieties of regulation rise or fall together.
For complex instruments in money markets, the main effects are bridging mis-priced treasuries on different time frames and hedging against various outcomes for pensions, banks, and dealers in physical commodities.
Most of the complex stuff either serves one of those purposes or becomes a zero sum game that doesn't affect non-participants. It's important to judge each instrument by its purpose and mechanism rather than bunch everything as a way to make bankers richer (e.g. a future vs. a CDO).