When the financial
tailspin of 2008 forced Alan Greenspan to confess that he was mistaken about
the unshakable rationality and self-correcting nature of the economy, it was as
if a Roman Catholic cardinal publicly doubted the divinity of Christ. As TheNew
Yorker’s John Cassidy argues so well in How
Markets Fail, Greenspan was the gnomic pontiff of a pseudo-religion whose
laissez-faire, free-market doctrine was rigged up with mathematical equations
and bunk history to masquerade as a science of human behavior. Alas, the
dogmatic faith of recent generations of economists in the inevitable
rationality of human actors left “no place for stupidity, ignorance, or herd
behavior”—just the sort of human frailties (along with greed) that led the
world economy to the brink.
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