The Market Knows All, Redux
April 8, 2005
Thanks to Substitute for finding this story before I did. It reduced both of us to baffled, boggling silence.
For centuries, the argument in favor of laissez-faire capitalism has been simple. If you step back and let businesses pursue profit without restraint, legitimate needs and desires will be taken care of in an efficient manner. Moral concerns, the argument went, were better handled by consumers voting with dollars than governments coercing with legislation.
While I have my issues with that presupposition (see earlier posts about The Miracle Of The Market and the language of economics), it has given rise to some innovative approaches to social activism. The Social Investment Forum, SocialFunds.com, and other similar projects play by the rules of the free market, investing money in corporations that don’t abuse the environment or exploit their workers. In that way, they’re putting a dollar value – their own money – on those positive business practices.
Sounds cool, right? Putting moral value into The Market as something with economic weight? Bzzzzzt. According to Steven Milloy, a FoxNews and New York Sun columnist, they’re bad people trying to weaken businesses. In order to combat those nasty, nasty investors who let moral responsibility get in the way of stock returns, he’s founding a new mutual fund to counter Socially Responsible Investing.
Conrad posted a choice quote from the Wall Street Journal’s article:
Founded by Steven Milloy, a columnist for FoxNews.com and The New York Sun, the fund aims to get good returns for investors while - in his words - evening the score with leftist forces that are chipping away at business. Culprits include corporate management, mutual funds and other groups that promote so-called corporate social responsibility.
"Businesses are being pressured by radical politicized left-wing activists to do things not in the best interest of the whole free-enterprise system," said Milloy, also an adjunct scholar at the Cato Institute and publisher of junkscience.com, a commentary site that bears the motto: "All the junk that's fit to debunk." "We want to be a counterforce to the activists," Milloy added.
So, let’s revisit. When people decide what to invest in based on moral principle, they’re bad. Because if a corporation is doing something legal to make a profit, that’s good. But if people try to change laws to keep corporations from doing things they think are wrong, that’s bad. Because if people really thought the things were bad, they would vote with their dollars. But if they vote with their dollars, that’s bad. So, to stop them, Milloy and his friends will invest in companies that do bad things. And that’s good.