Modern investment theory says that public securities markets- computerized, blazingly fast, effusively liquid- are as close as mankind has ever come to realizing the perfectly efficient market of classical economic theory. In such a perfect market, entrepreneurship is impossible. The entrepreneur’s profit comes from superior judgment, but in a perfect market no one’s judgment can be better than the market’s. In the ideology of modern finance, attempting to exercise ordinary judgment when building a portfolio of  publicly traded securities is considered not only futile but actually dangerous. Judgement is everywhere to be replaced by structure and process.

To say, as so many did in the wake of the crash, that the bankers were reckless, heedless of risk, is exactly the opposite of the truth. They were so obsessed with risk that they became terrified to live by their own judgment. If the ideology of modern finance had a motto, it might be “thinking doesn’t work.”

From Panic- The Betrayal of Capitalism by Wall Street and Washington by Andrew Redleaf and Richard Vigilante