The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street

Starred Review. At the core of the current financial crisis has been the
widely held assumption that markets behave rationally. Fox, Time magazine
editor-at-large, isn't the first to bring scrutiny—or censure—to the conceit,
but his analysis is singularly compelling, and the rare business history that
reads like a thriller. Fox leads us on a chronological journey of modern
economic theory, featuring the cast of scholars who constructed the 20th- and
21st-century financial landscape, from Irving Fisher to such post-WWII figures
as Milton Friedman, Harry Markowitz, Franco Modigliani and Merton Miller, Jack
Treynor and William Sharpe. Fox offers a behind-the-scenes glimpse at
academia's finest, complete with amusing anecdotes about the players and their
theories, and illustrates how our economic behaviors and markets have been
shaped by a gradually refined theory holding that the stock market prices are
both random and perfectly rational. A must-read for anyone interested in the
markets, our economy or government, this dense but spellbinding work brings
modern finance and economics to life. (July)

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“This wise and witty book is must reading for anyone who wonders what makes
financial markets tick. Even those who have wrestled with this question for
years will be glad to have read Fox’s compelling history.” (Peter Bernstein,
author of Against the Gods: The Remarkable Story of Risk )

“A thoughtful, often fascinating, always illuminating history of the idea of
market rationality.” (Cory Doctorow, boingboing.net )

“Fox makes business history thrilling.” (St. Louis Post-Dispatch )

“An intellectual tour-de-force...” (The Economist )

“...a rich history of the world’s most seductive investing idea...the book
chronicles the rise of rational market theory over the decades and captures
the sizzle and pop of the intellectual debate ...” (Bloomberg )

“A fascinating historical narrative.” (Roger Lowenstein, The Washington Post )

“His analysis is singularly compelling, and the rare business history that
reads like a thriller... A must-read for anyone interested in the markets, our
economy or government, this dense but spellbinding work brings modern finance
and economics to life.” (Publishers Weekly (starred review) )

“Impressively broad and richly researched.” (Financial Times )

“Do we really need yet another book about the financial crisis? Yes, we do —
because this one is different. Fox’s book is not an idle exercise in
intellectual history, which makes it a must-read for anyone who wants to
understand the mess we’re in.” (Paul Krugman, New York Times Book Review )

“Justin Fox is a truly insightful fellow who can see things with his own
eyes—a rare, very rare attribute.” (Nassim Nicholas Taleb, author of The Black
Swan )

“Superbly accurate and readable... Clearly the result of many years of
research and reading,... it is a model of what the popularization of social
science can be, but too rarely is, and it will continue to be read when the
current crisis is many years behind us.” (American Scientist )

“A tough, tasty steak of a book.” (Dan Neil, Los Angeles Times )

“A lucid, lively and learned account.” (Barron's )

“Good wonky fun.” (Barry Ritholz, The Big Picture blog )