For someone who works on ‘understanding markets’ and is familiar with previous works of Michael Shermer, picking “The Mind of the Market” from the bookshelf was an impulsive decision. And, the blurb made it clear that I have an interesting read for my weekend.
Shermer, drawing extensively from behavioral economics, neuroscience, psychology and evolutionary biology, offers his explanation of our seemingly irrational and often unpredictable economic behavior. Shermer, en route to his explanations, builds an excellent repository of cutting edge research in several disciplines and provides his readers a plethora of interesting examples and theories which have been part of great debate among academics; this itself makes his book immensely valuable and enriching. He starts with drawing parallels between Charles Darwin’s theory of natural selection and Adam Smith’s invisible hand makes a cogent argument about interconnectedness of these two seminal works and how they affect behavior. His rebuttal of ‘Homo Economicus’ might not be very convincing to some but it does provide some good insights nonetheless.
“Morality of the market” and “morality and market” are the two themes you will come across in many chapters.
While Shermer confesses the limitation of research findings when applied to real life settings, yet he does resort often to the same for his arguments. Shermer cherry-picks cases and examples to establish the creativity and efficacy of markets and its self correcting mechanism; and this has invited a fair amount of criticism to this book. This was almost expected if you consider that Shermer is also known as skeptic and wrote a scathing criticism for Ayn Rand’s philosophy in his essay “The unlikeliest cult in history” , in this book Shermer the skeptics takes the back seat and Shermer the libertarian emerges very strongly.