Margaret Thatcher famously outraged the left by asserting there was no such thing as society. Perhaps today would be a good moment for David Cameron to flummox rightwing orthodoxy by declaring there is no such thing as "the market". This mythical creature has been credited with playing a key role in events of the last few days. The market was unhappy with uncertainty. The market doesn't like coalition government. The market didn't want to hang around and wait.

Television news crews were even dispatched down to the City of London to try to doorstep this grumpy beast, standing outside empty office blocks hoping to catch a glimpse.

The reality, as ever, is more complicated. There are markets, but many of them, all with buyers and sellers expressing necessarily contradictory opinions on where things are going.

Some of these markets have indeed shown clear reactions to the political turmoil. The foreign exchange market, for example, has seen the value of sterling rise and fall in inverse relation to Labour's fortunes: the pound fell against the dollar when it looked possible that Gordon Brown's departure might allow a deal with the Lib Dems, only to rise again when this receded in favour of a Tory-led coalition.

The market in government debt, or gilts, experienced a similarly bumpy ride. But those speculating this might be the start of a long-feared "strike" by disenchanted investors were somewhat let down: a regular government debt auction at the height of the political confusion was twice oversubscribed.

More importantly, all this drama was captured in a surprisingly narrow trading range. As of this evening, sterling is back where it was yesterday lunchtime, which is roughly where it was on Friday. All the intervening ups and downs have moved cable – the forex term for dollar/sterling rates, not the recanonised Vince – by a total of four cents, taking this vitally important yardstick all the way back to where it stood, er, a year ago.

The most volatile and widely quoted market index, the stock market's FTSE 100, was perhaps the least useful in assessing what was going on. This list of big British shares is actually stuffed full of foreign companies and multinationals and is consequently much more sensitive to global economic conditions than what happens in Westminster. Just as yesterday's huge rally was driven by the eurozone rescue, it would be wrong to read much into today's sell-off other than a few people getting overexcited the day before.

But this is also a good day to puncture the equally specious argument that circulates at times like this suggesting we shouldn't pay too much attention to what goes on in these confusing corners of finance.

Surely these are just the same chaps in stripey shirts who got it so wrong last year, goes the common refrain. It's just gambling, goes another. A more sophisticated version, currently in vogue in Europe, questions the role of credit rating agencies, asking why we should care what they say about the credit-worthiness of nations when they overestimated the creditworthiness of so many companies before the credit crunch.

There is plenty to dislike about rating agencies, hedge funds and all other players who make up this murky picture, but we ignore them at our peril. European proposals to set up rival credit rating agencies, for example, smack of shooting the messenger and calling for a new one – the political equivalent to putting our hands over our ears and singing to make it all go away.

Governments do not issue debt – they have to persuade a disparate bunch of people to lend them money. As Greece found, once they stop, it's very hard to persuade them to start again. Fortunately Britain remains a long way from this point, but over the next couple of years the new government is going to have to pull off a tricky three-ball juggling act: it will have to raise around £167bn a year in debt without killing off the recovery, while at the same time continue Labour's tentative start in tackling the broken financial system that did so much to get us into this mess.

This is why it matters to be so pedantic with definitions. Keeping up investor confidence in Britain's public finances and keeping investment flowing to UK businesses will be vitally important, but these are not the same things as keeping investors happy. This is also why the details of any concessions wrung from the Tories over the last couple of days on financial reform will matter so much. More than Labour or the Conservatives, the Lib Dems and Vince Cable seemed to recognise the need for radical change and should push hard to hold on to their bold plans for breaking up banks and stifle George Osborne's rash plan to prove his virility by cutting the deficit too fast. Reform of party funding to sever the Tories' dangerous reliance on City donations is equally vital.

Perhaps one silver lining in the coalition that threatens to please no one will be a more mature relationship with the world of finance: somewhere between the unquestioning acquiescence of the last three decades in Britain and the bewildered anger seen now in Europe. The market is not a force of nature or a tyrannical beast, but a human construct we all need to take back under control.