> the whole discussion of markets is a terrible starting place for deriving results in ethics/psychology.

Historically, we did essentially the opposite. We figured out many aspects of human ethics and psychology first, and deduced from them how and why markets work as they do.

> ... If people weren't broadly aligned on basic stuff, then autocrats, theocrats, kleptocrats and so on would simply not be interested in dismantling democracies. They make that effort because they must.

This implies that people are only weakly aligned in the first place, otherwise no such attempt at dismantling could ever succeed. That's not a very interesting claim; it does not refute the usefulness of some external mechanism to more directly foster aligned action. Markets do this with a maximum of decentralized power and a minimum of institutional mechanism.