Thursday, March 11, 2004
Martha Stewart
The Martha Stewart case brings to center stage the whole issue of insider trading. As Stephen Moore points out, libertarians for years have called for the end to laws which prevent people from taking advantage of information they may have but others do not. If you were to study the issue you would find that the line between what counts as insider information and is what is excluded is almost impossible for a rational person to gage.
The major problem these laws present is that success in a capitalist system depends on information. Companies profit by knowing how best to efficiently produce a product, by meeting consumer demand, and by reacting quickly to what competitors have to offer. In fact, Frederick Hayek thought that the entire field of economics was characterized by the disbursement of information, the exchange of which he called the discovery process. To have a system in which profit depends on the use of knowledge and then to penalize efforts to benefit from its use is contradictory.
PermaLink | 5:43 AM |
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The major problem these laws present is that success in a capitalist system depends on information. Companies profit by knowing how best to efficiently produce a product, by meeting consumer demand, and by reacting quickly to what competitors have to offer. In fact, Frederick Hayek thought that the entire field of economics was characterized by the disbursement of information, the exchange of which he called the discovery process. To have a system in which profit depends on the use of knowledge and then to penalize efforts to benefit from its use is contradictory.
PermaLink | 5:43 AM |
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