In either case, the markets are not aiming to make moral statements. They are simply serving as indicators of what works and what does not. You criticism relies heavily on a moral argument. Punishment implies wrong doing which can only be determined by morality. Markets make no statements about wrong doing they only inform agents about what works and what doesn’t.

This is what makes the markets libertarian. Libertarians don’t make moral statements. I should be clear here given Dan’s criticism. Libertarians don’t wish to force their moral evaluations on people via the state. That is to say libertarians don’t wish to use the state to punish those that go against their own moral evaluations. Libertarians and markets are neutral when it comes to moral valuations of what people do.

The more charitable variation of your argument is to say that by punishment you mean to say that the CEO was not given the proper signal regarding his incompetence at the company. However, the markets sent a strong and immediate signal by forcing him to retire once the full extent of his incompetence was understood by the board. This is precisely how you want the market to operate.

It really feels like you think this guys should be punished or at least capitalism has a problem because it does not punish CEO in these instances. However, its not entirely clear how you would go about punishing this CEO. I’m sure when he was brought in his contract had a golden parachute built into it. To punish him by taking that golden parachute away would be breach of contract. Failure to honor contracts seems to be more problematic for capitalism than failure to punish certain agents for so-called wrong doing.

I don’t think it’s a problem to make value judgments, but I do think it is hyperbole for you to suggest that libertarians do not.