Why Can't The Market Use Its Powers For Good?

Sagacious Hillbilly's post expressing anger at how the Tiger Woods debacle has impacted the market got me thinking.

Sure, it seems dumb that Tiger Woods' extramarital trysts should adversely affect his value as a commodity. He is, after all, a professional golfer not a professional husband. So it's also grossly unfair that his stock drop should take out ordinary people's money invested in the companies that sponsor/own him. Says Live Science:

"A new study - not yet published in a journal - finds the market value lost to companies that had the golfer as a sponsor is already as high as $12 billion."

A long time ago, the stock market dealt in real, solid, tangible things. The market made sense when stocks were attached to the values of actual stuff like gold, oil, coal, etc. But as the freemarketeers found creative new ways to make bank, the market lost its foundation in reality and started putting cash values on all kinds of abstract crap - like futures, hedge funds, bad debts and other figments of Wall Street's imagination. Now money begat money from nowhere, fortunes were made backed up by assets that didn't physically exist and... you know the rest.

But if we are to continue attributing financial values to abstract concepts, why not put them on abstractions that would improve, rather than damage, the real world as they increase in value?

Could not those freewheeling breadheads on Wall Street figure out a way to, say, invest in the health of Americans? Instead of backing health insurance company stock and obliging those companies to screw consumers to maximize profits, why not assign an arbitrary - but bankable - value to insured people themselves? Maybe an insured family could be worth a buck in share form. Then, as more people are insured, health stock will rise in value and rich folks could get richer without necessarily screwing everybody else. Everybody makes out. And we wouldn't have to pretend there's nothing morally wrong with corporations defrauding and killing off their own customers in order to increase their own stock value.

Again, if we see nothing weird in investing in abstractions that have no intrinsic value, what would be wrong in investing in housing? Not in real estate corporations, but in regular people having places to live. Again, one person having a home could be worth a buck to Wall Street. Then they would make more money the fewer people there were living on the streets. Homeless people would then be seen as potential profits instead of inconvenient reminders that capitalism sucks because we're too greedy to do it right.

I'm no economist (well, duh), but I know smarter minds than mine have grappled with the concept of a fair market system over the years. People have tried to figure out a way for the market system to work that's not based on predation, artificial scarcity and the built-in imperative to cut costs and jack up prices. So why not? I know the idea of helping others is anathema to the grown brats who espouse Rand's cod philosophy of self-interest. But if helping others and improving the world in which we all live could come with a big dose of self-interest attached, could they stomach it?