Market Reasoning Renders Moral Considerations Irrelevant---Episode 1

                           THE ERA OF MARKET TRIUMPHALISM

   The years leading up to the financial crisis of 2008 were a heady time of market faith and deregulation --- an era of market triumphalism. The era began in the early 1980s, when Ronald Reagan and Margaret Thatcher proclaimed their convictions that markets, not government, held the key to prosperity and freedom. And it continued into the 1990s, with the market--friendly liberalism of Bill Clinton and Tony Blair, who moderated but consolidated the faith that markets are the primary means for achieving the public good. 
   Today, that faith is in doubt. The era of market triumphalism has come to an end. The financial crisis did more than cast doubt on the ability of markets to allocate risk efficiently. It also prompted a widespread sense that markets have  become detached from  morals and that we need somehow to reconnect them. But it's not obvious what this would mean, or how we should go about it. 
   Some say that the moral failing at the heart of market triumphalism was greed, which led to irresponsible risk taking. The solution, according to this view, is to rein in greed, insist on greater integrity and responsibility among bankers and Wall Street executives, and enact sensible regulations to prevent a similar crisis from happening again. 
   This is, at best, a partial diagnosis. While it is certainly true that greed played a role in the financial crisis, something bigger is at stake. The most fateful change that unfolded during the past three decades was not an increase in greed. It was the expansion of markets, and of market values, into spheres of life where they don't belong. To contend with this condition, we need to do more than inveigh against greed ; we need to rethink the role that markets should play in our society. We need a public debate about what it means to keep markets in their place.  To have this debate, we need to think through the moral limits of markets. We need to ask if there are some things money should not buy. 
   The reach of markets, and market-oriented thinking, into aspects of life traditionally governed by nonmarket norms is one of the most significant developments of our time. 
   Consider the proliferation of for-profit schools, hospitals, and prisons, and the outsourcing of war to private military contractors. { In Iraq and Afghanistan, private contractors actually outnumber U.S. military troops.-----(T. Christian Miller, "Contractors Outnumber Troops in Iraq," Los Angeles Times, July 4, 2007; James Glanz, "Contractors Outnumber U.S. Troops in Afghanistan," New York Times, September 2, 2009). } 
   Consider the eclipse of public police forces by private security firms --- especially in the United States and Britain, where the number of private guards is more than twice the number of public police officers. { "Policing for Profit : Welcome to the New World of Private Security," Economist, April 19, 1997. } 
   Or consider the pharmaceutical companies' aggressive marketing of prescription drugs to consumers in rich countries. If you've ever seen television commercials on the evening news in the United States, you could be forgiven for thinking that the greatest health crisis in the world is NOT malaria or river blindness or sleeping sickness, but a RAMPANT EPIDEMIC OF ERECTILE DYSFUNCTION. 
   Consider too the reach of commercial advertising into public schools ; the sale of "naming rights" to parks and civic spaces ; the marketing of "designer eggs and sperm" for assisted reproduction ; the outsourcing of pregnancy to surrogate mothers in the developing world; the buying and selling, by companies and countries, of the right to pollute ; a system of campaign finance that comes damn close to the buying and selling of elections. 
   These uses of markets to allocate health, education, public safety, national security, environmental protection, recreation, procreation, and other social goods were for the most part unheard of thirty years ago. Today, we take them largely for granted.