The Malign Hand of the Markets

by John Staddon

When a professor of neurobiology writes a book like this, it seems easy to pass it off as a cross-discipline, “make easy money from an obvious situation” kind of stunt, almost. But this book is extremely insightful, carefully written, highly detailed, and probably accurate. It points out that there is more to economics than meets the eye and that when human behavior is involved, financial markets are at risk from other forces besides supply, demand, interest rates and the like.

Your money is at risk because ignorance creates gaps in knowledge, gaps in knowledge cause specious thinking, and specious thinking causes illogical behavior. This leads to laws and regulations that actually work to make the situation worse, not better. Can all this be prevented? The author thinks so, but I think not nearly enough people are reading this book (or writing others like it) to change the economic policies of the world much. And that’s scary.

This is an interesting and original book. Not everyone will agree with what it posits, but there are enough graphs, illustrations, and logical arguments to convince most free-thinking readers. I don’t hold out much hope for positive change, but I’m glad I read this book. At least I can steer myself clear of the malign hand, even if the government won’t do it for me.