Boxer Day EPh readings should include this interview with Professor Mark Taylor. Taylor claims that

According to market fundamentalist dogma, investors are rational and markets operate efficiently in a world where every risk can be hedged. This is a religious vision — but a misguided one.

Given my own oft-stated suspicion of invocations of “market forces,” I am not sure that I qualify as a “market fundamentalist” in Taylor’s world. But the market fundentalists that I read (e.g., here, here, here, here), are not huge fans of rational expectations or market efficiency. They do believe in the Hayekian argument that freedom and the rule of law leads to wealth, at least faster than any of the other alternatives. I would be more likely to buy Taylor’s book if I thought that he took more seriously the arguments of his opponents.

Any large-scale solutions to the world’s current crises will have to involve recognizing that the simplistic ideologies and instruments we’ve invented to minimize political, cultural, and economic volatility always end up increasing it.

I am not smart enough to know whether Taylor is being extremely subtle or obviously stupid here. I am aware of no measure of “economic volatility” — the variance in, say, stock prices, unemployment, inflation, industrial production, et al — that is higher today than it was 30 years ago, at least in the US. Reasonable people might disagree about the cause of this phenomenon (perhaps financial derivatives haven’t had anything to do with the decline) but no one sensible should deny the facts.

Again, I really ought to read the book, ideally along with some smarter people who could explain the tricky parts to me.

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