Hi Ken Taylor,
Thanks as always for your program.
Thank you also for reassuring us that you are 'not some kind of socialist'. It's important to always express that perfunctory loyalty to 'capitalism' - (which in america is defined to be absolute corporate control of markets, information, government policy and regulation) - you never know if someone might report you to the repub party leaders and then they would target npr and kalw for further punitive action. And I hope you aren't some kind of liberal either, or - god in heaven forbid - some kind of progressive. Interestingly, i've never heard anyone feel the need to say, 'not that I'm some kind of capitalist or something' - not once.
Anyway, yes markets are wonderful things - like motherhood and apple pie, as we all know. the market was one of the first systems to arise in the very first primitive cooperative societies (right after socialism ;).
But I find your discussion of 'externalities', as you put it, to be too narrow and also not really even consistent. Your point seems to be that there are certain goods and services (presumably including tolerably clean air, water, schools, and (dare I say it on ultra-conservative npr?) minimum health care - that everyone has a right to even if they can't pay for it. But that means you are in fact a socialist - because insuring these minimum rights requires redistribution of wealth (that is, taking some of joe-the-plumber's hard earned money from fox news and sharing it with someone less fortunate). So I guess we're all socialists, and that really isn't anything to be ashamed of, despite what mitch mcconnell says. It's sort of one of the minimum requirements of qualifying as a civilized human being instead of a mindless animal. We're just arguing over the number and extent of inalienable human rights and therefore the degree of our 'socialism'.
I also find it somewhat amusing that (apparently in defense of the perhaps regrettable but necessary consequences of our wonderful free markets) you charcaterize the 'poor' as having 'less luxurious houses', 'less expensive cars', 'less fancy schools', 'less access to the political process', while 'eating less well' and wearing less 'finely-tailored clothing', as the rich. Very diplomatic. But, you may be surprised to know that there are truly poor who have no homes at all, no car at all, fancy or otherwise, eat so poorly that their and their children's health are at constant risk, and have no effective access to the political process at all (when is the last time you heard a politician express concern for the 'poor' - the term, like 'socialist' - is toxic. Politicians only refer to the plight of the 'middle class' - apparently, anyone making less than around half a million per year).
But, your discussion of externalities ignores the well known 'tragedy of the commons' - that is, that any commodity that is not 'scarce' - like air, water, and generally, the common environment we live in, will inevitably be squandered or ruthlessly and recklessly destroyed in a purely capitalist system, until these commodities become truely scarce. Then markets will spontaneously arise for these once shared and ubiquitous, and now truly scarce, resources. And these markets will inevitably mean that the poor will be forced to breath 'less clean' air (read, 'toxic'), drink 'less clean' ('toxic') water, eat 'less healthy' ('carcinogenic') food, and lead correspondingly less enjoyable ('miserable') lives, and their children will have futures 'less bright' ('condemned to grinding poverty') than the rich, without the intervention of evil 'socialism'.
So, in the end, the argument is all about, on the one hand, what is that minimum floor of living standard that we we will support for the poorest members of society by redistribution, and to what degree do we, as socialists, defend the commons from that rapaciousness of capitalism, for our common benefit, the benefit of the helpless poor, and the benefit (or even the very survival) or generations yet unborn and therefore without voice.

by Market, i take it you mean the gathered relation of product, and it's availability to be exchanged with capital -- i'm not sure if you've even explicitly described how a Market could be Moral or not, but above all, if a Market should not be transparent through its products, or the process of the Market as the activity of product and capital exchange - in this way, the Market may not be available as itself, and in this way not appropriate for relation to consciousness. whether that's Moral or Immoral - i don't know.

Hey Ken,
I am glad you hear you guys on your new free podcast feed because ideas want to be free... :)
I am not certain that "Air" is the best example. Markets and prices are tools for allocating scare resources (and as of now there is enough air for everyone) and only makes sense when the item is excludable (if I am using it you cant be). When people think about "air" they have this mental idea that its a plentiful resource that just "out there" for the taking hence do not think clearly about the situation in which there would be a market.
Further, its important to keep in mind that prices have two functions: first as a way of allocating resources and second as a signal to determine which items are produced.
To discuss "air" we need a hypothetical.
Imagine we all lived on Mars. The earth has been destroyed. We each live in a small sealed apartment. Air canisters are connected to our individual units.
Situation 1: We produce air, but there is not enough to go around. The question is what is the "fair" way of allocating resources. Does everyone get an equal share? Do the people with breathing disorters get more? Do you just cut off the folks who will die soon anyway, so the other people all get enough? Does the person who complains the most get the first claim on the air?
Situation 1 is rarely a description of a real situation. In real situations there are more than 1 scarce resource, and there are tradeoffs.
Situation 2: Suppose now that life is very boring on Mars but there are a limited number of ipods remaining from earth loaded with music. Now we need to allocate air and ipods. Since there is not enough air to go around, is it fair for someone to choose to take a little less air (and maybe not live as long) in exchange for an ipod? Should everyone be forced to make the same choice? Alternatively, who should decide who gets less air and who gets the ipods?
And again, perhaps if we all worked harder, or worked on different things there would be enough air.
Situation 3: If everyone is forced to work 20 hours a day, we can produce enough air for everyone. Is that fair? How do we determine how to balance how much people work vs how much air we have? maybe some people want lots of air, but some people are willing to get bye with less air (and live a shorter life) in order to have some leasure time.
Markets are a way of figuring out BOTH how much air should be produced, how much should each person work, and what the "proper" trade off between leasure time, ipods and air is, and how these should be distributed....
So why exactly is the allocation of air different from anything else?
p.s. A wise professor once said to me, "Josh", said Ken, "the art of writing a great philosophy paper is that in the first half you make bold assertions, and in the second half you subtlely take them back."

Markets are crass. To borrow Oscar Wilde's definition of a cynic, it knows the cost of everything the value of nothing. Yet, we are allowing its tentacles to enter all aspects of human endeavor, grossly diminishing the fullness of life. Education along with health care have become service industries for example. As individuals, we've become 'Consumers'. How ugly is that? How reductive of what it means to be human. At least, 'Citizen' requires greater analysis and offers imponderables. We participate in this by using the language of the market place. "What's the bottom line?"