Unmissable by way of Money Science, how the financial crisis emerged from an industry of business and finance that actively recruits social psychopaths due to their superior skills in morally unconstrained decision making. The original article is an essay by my fellow Bloomberg columnist William Cohan: It took a relatively obscure former British academic to propagate a theory of the financial crisis that would confirm what many people suspected all along: The “corporate psychopaths” at the helm...

I've written quite a bit about the shortcomings of traditional economic models of markets. Most notably, such models -- typically characterized by rational agents the actions of whom lead (by assumption) to a market equilibrium of some sort -- generally fail to explain basic dynamical features of real markets. These include, most prominently, 1) a pronounced tendency in all markets to large price fluctuations reflected in "fat tailed" distributions of returns, and 2) vigorous and persistent...

I've been doing some background reading on rationality in economics, and came across this fairly unique perspective offered by economist Duncan Foley. It's from 2003. What sets it apart from most other reviews of the role of the rationality assumption in economics, is that Foley tries to trace the history of this approach as it emerged out of the tradition of Hobbes and Locke in political philosophy. As Foley notes, the idea of rationality is in many ways beyond question for most economists,...