[ExI] Greed + Incompetence + A Belief in Market Efficiency = Disaster

[samantha]

BillK wrote:
> On Thu, Jan 29, 2009 at 5:06 PM, Stefano Vaj wrote:
>> The prob is that within classic economic theory the market player
>> cannot really be "incompetent" as a whole, since they are the ultimate
>> judges of where their preference lie at any given moment, and since
>> their "efficience" is supposedly assured by the market mechanisms
>> themselves.
>>
>> So, I suppose that such article is not going to change much in the
>> views of those adhering to such theory.
>>
> 
> 
> He is pointing out (loudly!) that humans acting as market players are
> just as irrational as humans in daily life.  Bubbles - irrational
> exuberance, crashes - irrational fears, panic buying, crooked deals,
> greed, beggar take the hindmost, etc. etc.  All human life is there in
> the market.
> 
> Markets need civilizing and laws, just like property and human behaviour.
> 


Ah, but the rub is that the ones doing the civilizing are just as 
brutish as irrational as the rest of the human herd.  Worse, since they 
are in the seat of maximal power to civilize the rest they attract 
maximal greed and corruption.

Hmm.  Back to the whiteboard again.

- s