There’s a line of thinking you often hear from Republican-types about how markets are never wrong. You think a certain CEO’s lavish compensation is ridiculous? Nonsense, those types tell you. You think that a CEO’s VORP—that’s a baseball stat that translates, in this case, to the CEO’s marginal value versus the average replacement CEO—couldn’t possibly be so high? They simply counter that he’s worth the money because there’s someone willing to pay it. The results in a market triumph considerations of value.

And there’s some truth to that. Free markets are, in the long run, wonderfully efficient and wise. The problem is, they aren’t, in the short or medium run, always wise (this is why we have bubbles); they aren’t perfectly free (every market is distorted by rent seekers and other externalities); and the efficiencies they produce are not always beneficial to society writ large (see the effects of the pornography and gaming industries).