Part 15 (1/2)

39 As economist Neva R. Goodwin notes: ”every year, 1.4 million undergraduates in the US take an introductory economics course that teaches that only selfishness is rational.” Monaghan, P. (2003), ”Taking On 'Rational Man' ,” Chronicle of Higher Education, 49, A12.

40 The quality and extent of social networks appears to be in decline in many rich countries. One study found that the average number of people with whom Americans can discuss important matters dropped from about three people in 1985 to about two in 2004. McPherson, Miller, Smith-Lovin, Lynn, and Brashears, Matt (2006), ”Social Isolation in America: Changes in Core Discussion Networks Over Two Decades,” American Sociological Review, 71, 353-75.

Chapter 10.

1 Henriques, Diana B. and Berenson, Alex (2009), ”The 17th Floor, Where Wealth Went to Vanish,” New York Times, 14 December 2008; Arvedlund, Erin (2009), ”How Bernard Madoff escaped detection,” Financial Times, 4 September 2009; Frean, Alexandra (2009), ”Madoff started Ponzi scheme to 'cover losses',” Times, 30 October 2009.

2 Smith, Randall (1992), ”Wall Street Mystery Features a Big Board Rival,” Wall Street Journal, 16 December 1992.

3 When these issues are mentioned, it is usually in a kind of pretend-impartial baby language that presents them as beyond the scope of the book. For example, Mankiw's Principles of Economics (p. 610) does acknowledge ”the possibility of speculative bubbles” but gives the last word to the efficient market hypothesis: ”if the market were irrational, a rational person should be able to take advantage of this fact; yet ... beating the market is nearly impossible.”

4 Arlidge, John (2009), ”I'm doing 'G.o.d's work'. Meet Mr Goldman Sachs,” Sunday Times, 8 November 2009.

5 Farmer, J. Doyne and Geanakoplos, John (2009), ”The virtues and vices of equilibrium and the future of financial economics,” Complexity, Vol. 14, No. 3, 11-38.

6 As George Cooper notes: ”The intellectual contortions required to rationalize all of these prices beggars belief, but the contortions are performed, none the less, in the name of defending the Efficient Market Hypothesis.” Cooper, George (2008), The Origin of Financial Crises: Central banks, credit bubbles and the efficient market fallacy (London: Harriman House), p. 10. See also: Pastor, L. and Veronesi, Pietro (2006), ”Was there a NASDAQ bubble in the late 1990s?” Journal of Financial Economics, 81.

7 Daly, Herman (1991), Steady-State Economics: Second Edition with New Essays (Was.h.i.+ngton, DC: Island Press), p. 9.

8 Triana, Pablo (2009), Lecturing Birds on Flying: Can Mathematical Theories Destroy the Financial Markets? (New York: Wiley), p. 44. This is ironic, since tenure is supposed to protect academic freedom. But in some fields it seems that anyone who doesn't fall in line early in their career won't get tenure.

9 Cohen, Patricia (2009), ”Ivory Tower Unswayed by Cras.h.i.+ng Economy,” New York Times, 4 March 2009.

10 Jay, M. and Marmot, M.G. (2009), ”Health and climate change,” British Medical Journal, 339, b3669.

11 Hood, Leroy (2008), ”A Personal Journey of Discovery: Developing Technology and Changing Biology,” Annual Review of a.n.a.lytical Chemistry, 1. See also: /ideas/17908 18 Ungoed-Thomas, Jon (2009), ”Banks resist government plan to publish bonuses,” Sunday Times, 25 October 2009. Another complaint was that they would infringe on privacy, but the plan was to release them anonymously.