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

[BillK]

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.


BillK