Conventional wisdom holds that insider trading laws are good.  These laws are meant to protect the little guy and are supposed to make trading fair.  But according to an article in the Wall Street Journal (Donald Boudreaux) insider trading is impossible to police and helpful to markets and investors.  Does this argument have any merit?  I don’t know.  I do know that this is not the first time this argument has been made.  Economists such as Henry Manne, Milton Friedman, Thomas Sowell, Daniel Fishel, and Frank Easterbrook have all argued against insider trading laws (Wikipedia).

There’s no need to rehash the arguments against insider trading.  The main point I want to make is how to approach arguments that question conventional wisdom.  I found this article from tweet from a respectable ethics expert.  My question is “why is it moronic?”  Before dismissing the argument, tell me how the current law accomplishes its goal of making the market more fair.  Does the law really protect the little guy?  Or does it allow corporations to manipulate bad information.  Tell me why government regulation does a better job than corporate self-governance on the matter.  Are insider trading laws outdated in this day of immediate information on the Internet?

My point is that arguments surrounding ethical issues need to have a good dialogue rather than ad hominen attacks against someone as “moronic.”  I don’t think people like Milton Friedman are moronic.  Let’s discuss the issue and see if there are better ways of handling difficult matters.  Dialogue on ethical issues need to stay on a higher plane.