One or Two Cheers for the "Invisible Hand"
Tobin, James
Adam Smith's "Invisible Hand"' is surely one of the genuine Great Ideas of history, both for its intrinsic intellectual content and for its durable influence on ideologies, politics, and public...
...Exaggerations of Exuberant Ideology Yet there are large divergences of intellectual substance between Adam Smith's Invisible Hand thesis and modern scientific proofs of the optimality of competitive market solutions...
...We should be especially suspicious of interventions that seem both inefficient and inequitable, for example, rent controls in New York or Moscow or Mexico City, or price supports and irrigation subsidies benefiting affluent farmers, or low-interest loans to well-heeled students...
...At present, it enjoys one of its strongest and most widespread prosperities...
...The proposition that the alchemy of market competition transmutes the dross of personal selfishness into the gold of social welfare is still a powerful message in economics classrooms and in political debates...
...When I read that Wall Streeters are visiting Beijing to help the People's Republic establish a stock market, I shudder...
...Consider the fabulous booms in real estate values in Japan, beyond what could be justified by rents, and in related stock market prices as well...
...The epidemic insolvencies of savings and loan associations in the United States are a case in point...
...Justice Oliver Wendell Holmes, the price of civilization...
...Sometimes they are the payoffs of Schumpeterian innovations...
...As my acid rain example illustrates, these hazards do not respect international boundaries...
...The same dialectic of revolution, counterrevolution, and synthesis has been repeating itself in economic science and in economic politics...
...A disquieting implication of the large premiums in takeover values is to confirm failure of ordinary market prices to reflect long-run fundamental values...
...So far there is no convincing evidence of such congruence, certainly nothing that entitles anyone to accept and assert literally the formal propositions of the model...
...It is not easy to discern how laissez-faire unaided, unguided, and uncontrolled can handle the big new challenges of the twenty-first century...
...Likewise in the "Third World," the success of the economies of Taiwan, Korea, and of other Newly Industrialized Countries (NICs) is attributed largely to free markets and free enterprises, while in contrast stagnation is observed in countries where governments intervene with heavy hands...
...The looser ideology makes a big logical jump in extending the Invisible Hand proposition to all market structures and to competition in products and other nonprice dimensions...
...In the last ten years, the excess volatility of stock market prices relative to dividends and earnings has been ingeniously documented econometrically by Robert Shiller...
...The longstanding suspicion of this failure was expressed eloquently by Keynes when he likened the stock market to a beauty contest in which the contestants' prizes depend on voting the same as other contestants...
...Thus the institutions, whether sound or unsound, cautious or reckless, honest or corrupt, solvent or insolvent, could always attract deposits by offering high interest rates...
...David Halberstam's The Reckoning tells how the famous financial Whiz Kids of the Ford Motor Co., many years ago, lost the ball game for Ford...
...A system with zero distortionary fiscal or regulatory interventions is a chimera...
...Their supervisory agency, following the spirit of the times, became less strict and less diligent...
...Whether justifiably or not, the disappointments of the 1970s were blamed on the economic doctrines and policies adopted and often praised during the preceding decades...
...With international agreement a transfer tax could also, in my opinion, diminish speculation in foreign-exchange markets and allow larger differences among currencies in short-term interest rates, permitting somewhat greater autonomy in national monetary policies...
...This new old macroeconomics, fortified by Rational Expectations theory, extends the pretensions of laissez-faire to macro theory and policy and undermines the case for monetary and fiscal stabilization policies that most economists, even those opposed to microeconomic interventions, had previously come to accept...
...In the last ten years, after great political and economic pressure, the regulations of these institutions were substantially relaxed...
...But if everyone behaves like that in all aspects of life, the social order breaks down...
...The Great Idea has led parallel lives in the two arenas, public and professional...
...That transgression of civic virtue may be innocuous...
...I doubt it...
...Many ordinary good people do not put quarters in parking meters if they calculate that the probabilities of being ticketed and fined $5.00 are less than one in twenty...
...For the poorest countries today the catch is that their rates of natural increase prevent the very progress in living standards that might diminish fertility...
...Nevertheless the thrust of energy policy in the United States these past eight years has been to rely wholly on private markets...
...Competition is supposed to make selfinterest work for the best...
...2 J. M. Keynes, The General Theory of Employment, Interest and Money, (New York: Harcourt Brace, 1936...
...A disproportionate number of the brightest and most enterprising talent of our youth are devoted to the churning and shuffling of paper, in search of quick wealth rather than production of goods and services...
...5 Ronald Coase, "The problem of social cost," Journal of Law and Economics 3 (October 1960): 1-44...
...The quest for short-run profits, "day trading," stresses the ability to gauge the immediate impact of news events on other speculators rather than their long-range effects on earnings...
...Managers of corporations may be shortsighted in their outlooks and investment decisions, believing they get points and bonuses for the performance of their companies' stocks in a quarter, a year, or four years...
...President George Bush himself is calling for a kinder, gentler America...
...The burdens on police and courts are intolerable...
...Fifty or sixty years ago the depression in the fortunes of the Invisible Hand was related to the Great Depression of the world economy and then to the pragmatic compromises of market capitalism with social democracy, welfare state institutions, trade unionism, and state planning that flourished before and after World War II...
...Generators of electricity in Ohio acidify lakes in the northeastern United States and in Canada...
...Once the government guarantees the value, in the country's unit of account, of any private IOUs, then it cannot allow the private issuers completely free choice as to the assets that stand behind them...
...On the micro side too the Invisible Hand was gaining professional as well as public adherence...
...Modern theory requires much more: simultaneous clearing of a complete set of markets, including those for future and contingent commodities and globally complete information available to all agents...
...Much of the best talent of the country is engaged in transactions of this kind, and their imminence or possibility preoccupies the managers of companies that should be trying to make better mousetraps and compete with Taiwan, Korea, and Japan...
...In almost all the advanced democratic capitalist nations, conservative governments committed to laissez-faire rule the roosts: notably in the United States and Canada, in the United Kingdom and the Federal Republic of Germany, in the other major countries of the European Community (even in France, where the Socialists were forced to fall in step), and in Japan...
...If anything, they seem to be becoming shorter in their orientations...
...Commodity and capital markets together do not seem to have long enough horizons to give dependable signals...
...It is a rationale for unabashed and unmitigated individualistic selfishness...
...The question is always the one Arthur Okun posed so effectively: 3 The bucket carrying goodies from rich to poor is always leaky...
...As the point is sometimes expressed, people are rentseekers...
...This is a very precise and refined distillate of the sweeping conjectures of Smith himself and of hordes of his successors, especially those in the public arena of ideologies...
...Whether the newly structured high-debt firm, in which managers have considerable stakes in highly leveraged shares and stand both to lose much more and to gain much more than under the old structures, will be more efficient remains to be seen...
...As a principle for the organization of society This article is taken from an address to the First Pacific Basin Finance Conference, Taipei, March 13, 1989, to be published in Pacific Basin Capital Markets Research Vol...
...I am not referring to the slim possibility that a country has some market power in international trade that can be exploited by an "optimum tariff " or by strategic gaming in commercial policy...
...Should government take an "anything goes" attitude toward the financial structure of nonfinancial corporations...
...Energy prices reflect transient demand/supply conditions in disproportion to inevitable future scarcities...
...4. In the background of all our ecological problems is the excessive growth of the world population relative to the sustainable expansion of the planet's capacity to support human life, let alone to support it at standards of living to which all peoples aspire...
...One message they get is that their obligations to others are just those specified in the literal language of previous contracts and written laws...
...4 Despite their best efforts, the finance intelligentsia who espouse efficient-markets theory have not been able to refute Shiller...
...Even governments that by traditional doctrine had eschewed responsibility for fluctuations in economic activity—international, national, regional, sectoral, personal—began to assume more and more responsibilities for them and to be held to account by democratic electorates...
...The idea that "private money" could supersede government money is a ridiculous one...
...The recent complacency in the United States about mergers and conglomerations, the atrophy of antitrust policy to apply only to overt conspiracy, reflect the broader and looser laissez-faire zeitgeist...
...Yet their deposits were still federally insured, in principle only up to $100,000 per deposit but in practice 100 percent...
...No market miracle brings population and resources into balance and keeps them there...
...The affected industries chafe under the regulations and costs imposed upon them...
...To be sure, since 1776 the doctrine has experienced ups and downs in popularity...
...Indeed, nowadays there are numerous right-wing preachers, "televangelists," telling them they are doing God's work...
...If the stock market gave them reliable signals of fundamental values, short-horizon managers would be making good decisions...
...4 Robert Shiller, "Do stock prices move too much to be justified by subsequent changes in dividends...
...Where the Invisible Hand Needs a Hand Intensified confidence in the Invisible Hand— among economists, politicians, and the general public—comes at a time when more and more reasons for doubt are arising...
...One thrust of microeconomic deregulation is justified in almost all countries, the dismantling of institutions that protect privileged individuals from competition...
...The moral is that you can't apply free-market principles to an industry that deals in contingent obligations of the central government...
...And likewise of professors who want to raise their own salaries on the grounds that higher pay will attract better talent in the future...
...Everybody would like to own a toll booth and grow rich collecting tolls from the multitudes who pass by...
...The main target has been Keynesian macroeconomics, as it developed in the first twenty-five years after the publication of the General Theory...
...Errors in market valuations have further negative repercussions...
...It is not surprising, therefore, that the popularity of the Invisible Hand in our profession has revived strongly in the past fifteen years...
...There were two main reasons...
...Remember that much of the rapid growth of European countries and Japan after World War II occurred before the full dismantling of exchange and capital controls...
...As a minimum, of course, the government should make the tax liability of companies neutral with respect to their debt/ equity structures...
...The Wealth of Nations itself was both a tract of political economy and a scientific—or, as the author would have put it, a philosophical— treatise...
...But even if it were true it is an unpleasant caricature of a "good society...
...Financial markets are untrustworthy guides for managers because they are dominated by speculators...
...When agents receive no price signals to deter them from activities damaging to other agents or to encourage them to engage in activities useful to others, the market by itself fails to allocate resources optimally among 234 • DISSENT "Free Markets" activities...
...Perhaps because capital markets are shortsighted, investments to develop energy resources and to conserve energy use are abandoned or ignored when current prices are low, even though they would be justified by probable future prices...
...The foreignexchangetransactions tax is one way to do that...
...Third World countries seeking developmental investments from overseas companies should avoid competitive scrambles with each other...
...In the professional arena, the Invisible Hand eventually came to be formalized in the basic theorems of welfare economics—that a competitive market equilibrium is Pareto-optimal and that every Pareto-optimal allocation can be supported by a competitive equilibrium with a suitable arbitrary allocation of endowments among agents...
...Originally these were mutual associations attracting savings in the form of "shares" for the purpose of financing mortgages in their communities, but later they were allowed to convert to stock companies managed for profit...
...Losses were borne in part by other insured institutions, whose insurance premiums would have to be increased to help pay off the depositors, and by federal taxpayers, the ultimate guarantors...
...On the other hand, the wholesale replacement of equity by debt makes companies individually more vulnerable to adverse business developments and the economy collectively more vulnerable to deflationary or recessionary shocks...
...Nevertheless, the spirit of the invigorated Invisible Hand certainly makes a difference...
...Externalities are nonmarket effects of economic activities on other economic activities...
...2. Smith says, and his latter-day adherents repeat, that selfish motivations and local information suffice to guide individual economic decisions in ways that aggregate into social optima...
...Government and Financial Markets Undiscriminating and thoughtless deregulation can misfire...
...One way to encourage fundamental investing and to discourage short-horizon speculation is to tax financial transactions...
...Nor should these countries be in a great hurry to free capital movements into and out of their currencies of all controls and central-bank supervision...
...Pragmatism in Regulation and Deregulation These considerations counsel against uncritical acceptance of "free market" and "supply-side" arguments in every application, and suggest that economists adopt more cautious, pragmatic, and discriminating approaches than their ideological and political counterparts...
...One was the disappointing performance of the world economy in general and of most national economies in the 1970s, in contrast to the SPRING • 1990 • 229 "Free Markets" quarter century of unparalleled growth, prosperity, and stability before 1973...
...The rich countries of the world have obligations to help the poorer nations develop, yes even to help the workers of those lands to compete with their own high-paid workers...
...Modern medicine can keep people alive longer but it does not add space for them to live or resources to feed them...
...6. Finally, there are limits to the extremes of inequality that a democracy can tolerate, especially when television incessantly parades the luxurious life styles of the rich before poor youth who can never expect to taste them...
...It is important even for small countries to maintain some degree of autonomy in monetary policy, so that local interest rates are not wholly determined by foreign markets...
...Speculative frenzy is not confined to the United States...
...In the 1980s they were allowed to broaden their asset menus to compete with commercial banks They were allowed to convert savings shares into checkable deposits and to pay market interest rates to attract them...
...1 (London: Macmillan, 1987), pp...
...I think developing and ex-communist countries should go slow in copying the financial institutions and markets of the United States and the United Kingdom, or of Japan for that matter...
...Belatedly, awkwardly, erratically, and often inefficiently, governments have been trying to deal with environmental damage, the health and safety of workers, customers, and neighbors, and other external effects...
...In the United States, states and cities are engaged in unsavory bidding for locations of new business installations, and the result is mutually destructive of their tax bases and other reasonable regulations...
...Business schools are beginning to SPRING • 1990 233 "Free Markets" wonder if they shouldn't be teaching students how to make products and manage workers rather than how to shuffle paper...
...Theoretical misgivings about this compromise burst into full-scale counterrevolution in the 1970s, called by its protagonists the New Classical Macroeconomics...
...I myself think that Invisible Hand theory is mostly irrelevant to macroeconomic stabilization policies...
...Our federal administration is quite complacent about these activities, and it is indeed hard to see why shareowners of companies with lethargic or inefficient managements should be deprived of the capital gains takeovers might bring them...
...Professional—shall we say scientific...
...How leaky does it have to be before the transfer is not worth while...
...Whether active countercyclical demand management brings better macro performance than stable policies blind to economic conditions is an intellectual empirical SPRING • 1990 • 231 "Free Markets" question that cannot be settled by pure economic theory...
...Business managers, especially in the United States, are criticized, even by themselves, for their preoccupation with quick payoffs...
...Adam Smith's "Invisible Hand"' is surely one of the genuine Great Ideas of history, both for its intrinsic intellectual content and for its durable influence on ideologies, politics, and public policies...
...And in macroeconomics it has become quite decisive, especially in Western Europe, where established doctrine among policy makers and business and financial leaders is that governments should never actively stimulate aggregate demand, whatever the circumstances of their economies...
...In some respect, the corporation as restructured is simply renaming 232 • DISSENT "Free Markets" as "interest" income what formerly was called "profits...
...Many technologies that are efficient contributors to the welfare of individual consumers today spin off sideeffects that will be costly or disastrous in the future: ozone depletion, greenhouse effects, toxic and radioactive wastes, receding water tables, and many other environmental and ecological dangers...
...Sometimes they arise without government help and are maintained by restraints of trade...
...Given the overhang of regulations and other micro interventions and the vested interests they serve, it is difficult even for conservative free-market governments to dismantle them...
...The fad of deregulation has led serious economists, as well as exuberant ideologues, to propose free competitive enterprise in the creation of money...
...Such competition can easily transfer the lion's share of the gains from the investments to the multinational companies, at the expense of the countries themselves...
...Of course, a discriminating and pragmatic approach is double-edged...
...Ronald Coase did both Adam Smith and Dr...
...One should be suspicious of advocates of, let us say, lower taxes on capital incomes on grounds of incentives and efficiency when the advocates stand to gain without making any new risky investments...
...They were allowed to seek deposits and lending opportunities nationwide...
...Firms whose assets were covered 60 to 100 percent by equity are moving to 10 percent equity, 90 percent debt...
...The major purpose of financial markets and institutions is to channel the excess savings of some agents in the economy to the excess real investments other agents are prepared to undertake...
...236 • DISSENT...
...3. The Invisible Hand, especially in the general equilibrium version of formal theory, requires that agents lack market power and take parametrically the prices determined for a predetermined list of commodities...
...All too frequently another one is that SPRING • 1990 • 235 "Free Markets" disobedience of those rules is worthwhile and even legitimate if the personal benefits exceed the costs...
...These booms generate prices that do not guide allocations of land to economically rational uses...
...Monetary policy may be crippled as a result...
...At the moment, U.S...
...Some of this refinancing arises from a reduced assessment of the disadvantages and risks of debt obligations, in part because the tax-deductibility of interest was enhanced in value by the 1986 increase in the effective corporate-profits tax rate...
...There are many ways to organize such flows, and they do not all require speculative markets...
...Paradoxically, free market doctrines are more uncritically accepted just when externalities appear to be more serious than ever before...
...These are influential ideas...
...In any event, the appeal of the Invisible Hand within the profession shares the cyclical fluctuations of its popularity in the wider arena...
...It is far from clear that the proliferation of financial instruments, markets, arbitrage opportunities, and paper transactions in advanced countries has created social product to justify the high-quality human capital resources it devours...
...Assuming that free trade is efficient and maximizes the consumption opportunities of a society as a whole, it still can change—relative to any alternative status quo—the internal distribution of these opportunities, not only among persons, sectors, and regions but also as between broadly defined factors of production, labor, capital, and land...
...5 In the case of positive externalities, similarly, the generators and beneficiaries would bargain to bring them to an optimal level...
...Thus would externalities be internalized...
...1. At a time when long-range decisions are essential and myopia is especially dangerous, private markets evidently have great difficulty focusing on long horizons...
...Here are several examples...
...In the communist countries—China, Eastern Europe, now even the Soviet Union— the new vogue is the promotion of private enterprise and market pricing...
...and economy, it is a failure...
...In the United States flagrant examples have been on the hit lists of economists in all administrations, liberal and conservative, Democratic and Republican...
...Pangloss one better by suggesting that the parties to negative externalities on the delivering and receiving sides could and would get together and contract with each other to eliminate or limit them if the social gains were worth the trouble...
...457-460...
...The main ideological adversary of the tradition of Adam Smith for the past 140 years, MarxismLeninism, stands discredited before the world...
...The unrelenting pressure of debt service may force managers to be more efficient, but it might also force resort to short-term expedients to maintain cash flow at the expense of longer run values...
...These developments follow and reverse a long period of skepticism and doubt about the Smithian message, even among those who always firmly rejected Marxism and other extreme alternatives...
...Much activity of financiers and managers is devoted to the thriving markets in whole businesses: takeovers, leveraged buyouts, mergers, break-ups of previous mergers...
...The only Invisible Hands are the cruel Malthusian checks...
...Unfortunately the conservative fashion of deregulation has sometimes been blindly extended to these measures, along with the anticompetitive "toll-booth" interventions that deserve to be dismantled...
...The business fluctuations that give rise to those interventions play no role in the writings of Adam Smith, Leon Walras, and Arrow-Debreu...
...Economic theorists may take methodological refuge in the assertion that every model, including general equilibrium theory itself, is a simplifying metaphor of reality, to be judged by congruence between its implications and predictions and real-world observations...
...law and litigation absorb the best minds of the society...
...5. The Invisible Hand, as exaggerated and glorified in free-market ideology, has several unfortunate social externalities of its own...
...Even so good a cause as free trade is, in my opinion, exaggerated when it is argued, as it generally is in public debate even by economists, that free trade is obviously welfareimproving...
...It is precisely to handle situations where markets have difficulties reaching agreements and contracts of this kind that societies utilize governments...
...The hope of avoiding overpopulation is that fertility will spontaneously decline as standards of living rise...
...Taxes are, according to Mr...
...3. Economic theory has always recognized externalities as exceptions to Invisible Hand propositions...
...2. In the 1970s the world was jolted to a sudden realization that its economies were dependent on exhaustible sources of energy...
...The federal budgetary cost is likely to exceed $100 billion...
...Sometimes the bottlenecks and scarcities that yield tolls or rents are natural...
...They are much less likely to offer assistance, markets for products, and privileges of immigration if it appears that the consequences are not to raise living standards but to foster still higher rates of population growth...
...And if governments, elected officials, and civil servants are constantly denounced as wasteful and worthless, as foreign bodies in a utopian organism of private markets, the central institutions and essential infrastructures of economy and society decay and wither away...
...Theory may not be able to prove that a particular intervention is injurious to welfare, but that failure of proof does not justify the intervention...
...Sometimes both the scarcities and the rents are artificial results of government interventions, made to order for political deals and too often irresistible invitations for corruption...
...The other reason was the growing disillusionment and cynicism about politics and governments—legislatures, executives, and bureaucracies—fueled by obvious and perceived failures of policies and their execution and, worse, by endless revelations of venality, hypocrisy, deception, and mendacity...
...Keynes tentatively suggested this tax, and I favor it today...
...I The famous paragraph containing these words and summarizing the basic thesis of the book occurs in Book IV, Chapter II, on page 423 of the Modem Library Edition of Smith's The Wealth of Nations (1776), edited by Edwin Cannan and published in 1937...
...Consider several of them: 1. First, careful economists know that Pareto-optimality, which is all the fundamental theorem of welfare economics can claim for competitive equilibrium, is not necessarily maximization of social welfare...
...American Economic Review 71 (October 1981): 421-36...
...Materialism, hardheartedness, and incivility are, according to many observers, byproducts of the Reagan revolution in the United States...
...The Coase theorem seems to be a rationale for government rather than against it...
...Supply-side, economics, fortified by this new label, greatly magnified previous estimates of the deadweight losses attributable to taxes, transfer payments, subsidies, quotas, price controls, tariffs, and regulations of all kinds...
...Over the past two centuries this mechanism worked successfully for the now advanced countries...
...The official policies of international agencies, the International Monetary Fund (IMF) and the World Bank, make adoption of market-oriented reforms conditions for their aids and credits...
...Disenchantment with government interventions spread contagiously in the last twenty years...
...1, Amsterdam: Elsevier 1990, edited by Rosita Chang and S. Ghon Rhee...
...When oil became plentiful again in the 1980s we seemed to forget the lesson...
...If the government is going to take responsibility for assuring the survival of nonfinancial companies—individually, like Chrysler and Lockheed, or collectively—then perhaps it should limit their permissible debt/equity ratios, just as it does for financial institutions...
...3 Arhur M. Okun, Equality and Efficiency: The Big Tradeoff (Washington, D.C.: Brookings Institution, 1975...
...Neither the midwest utilities nor their customers consider the acid-rain costs their electricity is imposing on their northeastern neighbors when they decide how much to produce and consume or whether and how much to invest in antipollution technology...
...The surprising thing is that such restructurings are the immediate sources of such large increases in the value of the assets over the previous market value of the equities, even after the very considerable deadweight losses of the transactions, the fabulous fees of investment bankers and lawyers...
...See also, R. D. Cooter, "The Coase Theorem," in J. Eatwell, M. Milgate and P. Newman, eds., The New Palgrave, A Dictionary of Economics, Vol...
...Likewise, the driver considering going on to a busy highway or city street thinks of his or her own convenience but not of the extra delays and inconveniences the additional congestion will cause others...
...If the deposits were invested in risky loans that went bad, no losses fell on the depositors...
...But competition itself cannot function without a clement political and legal framework, and competitive markets will not survive the efforts of competitors themselves to eliminate them without the unceasing vigilance of governments...
...Economists, especially theorists, became much readier to take the theoretical optimality of a free-market solution as a reference point, placing the burden of proof on anyone who would defend or propose a government intervention...
...2 During that time the mainstream consensus of the profession came to support a synthesis of Keynesian macroeconomics and neoclassical microeconomics...
...corporations are being rapidly, drastically, and spectacularly restructured...
...Now it is an admitted failure...
...Current problems are all the more complex because the adverse effects are cumulative but delayed, and because they are intrinsically difficult to evaluate...
...Maybe real Gross Domestic Product (GDP) could be maximized by allowing free rein and untaxed gain to the enterprising, the talented, the ruthless, and the lucky and by leaving the weak, the ignorant, the shiftless, and the unlucky to their own devices and to private charity...
...economics and the economic ideologies of public and political debate are always intertwined...
...Someone's IOUs have to be those in which clearings take place among banks and other transactors...
...With their permission it is published here, with minor revisions...
...Someone's IOUs have to be those the government itself will accept in payment of taxes and other obligations and those the government regards as legal tender in the satisfaction of private debts...
...We know there are tradeoffs between "efficiency" and "equality," to mention just one important kind of 230 • DISSENT "Free Markets" distributive issue...
...It assures those who seek, above all else, to accumulate material wealth that they are patriots doing Adam Smith's noble work, promotion of the wealth of nations...
...The symptoms can be seen throughout the world...
...Even when it can be argued that some deserving low-income persons are beneficiaries of rights to buy or sell at subsidized prices, economists often can show how equal gains could be provided to them in a more efficient manner...
...It's hard to maintain the pose of old welfare economics textbooks, that externalities are the exceptions that prove the Invisible Hand rule...
...But if the stock market signals are speculative noise, the managers are making bad decisions...
...As examples I refer to financial markets and institutions...
Vol. 37 • April 1990 • No. 2
