Yeah, we know, Wall Street is a den of sin and iniquity. But what constitutes sin and, even better, iniquity? What's over the line, beyond the pale? You scoff. Well, this isn't just a summer, time-wasting column (like last year's). It's meant to be useful. Recently, we discovered that rumors and shorting have hit the Proscribed Behavior Index. Over the years, we have seen many activities jump on and off The Index. In the '40s and '50s, stocks were viewed as dangerous products peddled by shady brokers. On. By the '60s: Off. In the '70s, hostile M&A deals embodied moral decline. On. As late as the early '90s, Goldman, Sachs & Co. still limited itself to defense, rejecting hostile assignments; when it changed its mind, society quietly shuddered. Off. The '80s, of course, hatched multiple outré developments that violated norms of civilized behavior, from junk bonds to greenmail to corporate raiders to leveraged buyouts. On. Twenty-five years later, we accept those practices, albeit with an eye-lowering, cheek-blushing change of nomenclature. Buyouts -- natch, private equity -- are an appropriate M&A strategy. High-yield, née junk, is a large and mature market. Corporate raiders are activists. Greenmail is what activists do to help shareholders. Off, off, off. Then there are derivatives, CDOs, CLOs, SIVs...

What's going on here? Ponder moral theory No. 1. Some "moral adjustments" involve the acceptance of larger doses of risk over time. Stocks were damned as gambling chips after 1929 and institutions continued to eschew them in favor of "safe" bonds into the '60s. Institutions then shed their inhibitions, mastered portfolio theory and embraced risk in zippy vehicles such as real estate, buyouts, hedge funds (societally, we've also learned to love gambing but that's another story). Stocks are now deemed not only fit for everyone, but essential. Likewise, LBOs and junk bonds stirred moral opprobrium because they were new, complex, with sketchy track records, an air of too-good-to-be-true and, thus risky, risqué, or both. That too has changed.

Moral theory No. 2. Some of these developments were branded evil, destructive or the purest greed because they threatened estabished power relations. Conglomerates got that treatment in the '60s; and the '80s saw one development after another undermining one "certainty" or another. (The '70s play little role here because nothing good happened.) Junk, LBOs, hostiles, greenmail all threatened a once-placid and imperial corporate suburban park, like coyotes stalking decorative deer. There was a struggle: Wall Street versus corporates, outsiders versus insiders. Self-regarding greed emerged. This was accompanied by social condescension: How can parvenus like Icahn, Pickens, Steinberg, plus that Svengali Milken, threaten us? It's often forgotten, but that divide also split Wall Street, much of which was not unhappy to see arriviste Drexel Burnham collapse. How much teeth gnashing was self-interest, how much moral rectitude?

Moral theory No. 3. Some stuff just smells. After all, there are rules, laws, commandments, though the Securities and Exchange Commission's various declarations about rumors and shorting suggest they are, well, flexible. In some circumstances flexibility can seem sensible; in others, lax, even corrupt. Lying, stealing, cheating are no-nos; but the market -- if not the real world -- has a remarkable tolerance for borderline behavior, and it often takes time for outrage to assert itself. Moral zealotry is itself shaped by the market. It's a hoary truth that behavior tolerated in bull markets -- pay-for-play, conflicted research, creative accounting -- screams skeevy, shady, illegal, disgusting in bear markets. Naked shorting? Don't worry about it. But with financial firms quaking, naked shorting suddenly becomes urgent. Fancy financial instruments? Uh-oh.

Has Wall Street grown more debased? We tolerate greater risk, conflict, speculation. Markets have grown so large, deep, complex, that opportunities to pillage and places to hide have proliferated. But the literature of market immorality is also wide and deep, from Trollope to today's straight-to-DVD movies, and suggests we have neither progressed nor regressed very far. Markets are states of nature, where expedience, illusion and self-interest war and caveat emptor is whittled over the gate. Alas, that's not how society and the punditry view the situation. Outsiders want markets to adhere to their favorite moral, social, ideological truism. Markets are level playing fields. Markets are right, rational, efficient. Markets are democratic. Markets are addictive, life affirming, creative, sexy. In fact, markets have their own unique nature. They tell us, again and again and again, how uncertain and changeable quotidian life is and how difficult it is to pin the wings on absolute virtue -- offering instead their own icy Darwinian index of success and failure. It's called price and it's got nothing to do with morality.