By Justin Fox

Amazon calls 'Myth of the Rational Market' the best business book of 2009, plus Fama, Bartlett, Samuelson

As part of its big end-of-year (even though it's only early November) best-of rankings, the book editors at Amazon.com have determined that Myth of the Rational Market is the best business book of 2009. I think the ranking is a little dubious because ... aw, I'd better shut up about that now. Thanks, Amazonians!

Also, the great Gene Fama has chosen to promote the book, with a blog post criticizing it. Thanks, Gene! Here's my response.

Finally, I'll be "debating" economic policy with Bruce Bartlett and Robert Samuelson at the Lincoln Triangle Barnes & Noble on Monday night (Nov. 9). Our views run the gamut from, uh, center to center-right. So I'm sure fireworks will ensue.

The 76th-best book of the year

That's the verdict of the editors at Amazon.com, who put The Myth of the Rational Market just ahead of Audrey Niffeneger's Her Fearful Symmetry and just behind Seth's George Sprott: 1894-1975 on their 100 Best Books of 2009 list. Hey, I beat Thomas Pynchon (Inherent Vice is #94) and William Vollmann (Imperial is #97)! Which says something about the absurdity of such rankings. Although you can't think a best-of list is absurd if your book is on it, right?

In other book-related news, the nice people at the Canadian Broadcasting Corp. gave me yet another chance to flog Myth on the radio, in an 80th-anniversary-of-the-1929 crash segment on The Current Thursday with economist Ken Rogoff. Also, my first review for the New York Times Book Review appeared on Sunday.

Fall speaking schedule

I just updated my upcoming events page for the first time in a while, and realized that I have enough stuff coming up in the next couple of months to merit a post. First, I'll be on the Consuelo Mack WealthTrack show on PBS this coming weekend. (Check your local listings!) Then there's this New-York-centric line-up of speaking events:

Columbia Business School, 6:30-8:30, William & June Warren Hall, 1125 Amsterdam Avenue, Feldberg Space. Register online.

Museum of American Finance, Oct. 29, 2009, 5:30-7, 48 Wall Street, New York ($15 for non-members).

New York Salon, Nov. 9, 2009, 7-8:30, Barnes & Noble Lincoln Triangle, Broadway and 66th, New York. Tickets required (but they're free); e-mail jean@nysalon.org.

Drucker Business Forum, Dec. 3, 2009, Los Angeles. Details to come.

New York Society of Security Analysts, Dec. 9, 2009, 5:30-7:45, 1177 Avenue of the Americas, 2nd Floor, New York ($25 for non-members).

Ryan Lizza puts Myth of the Rational Market in the New Yorker, and other news

In that other blog I write, I have whined a teensy little bit about Paul Krugman and The Economist failing to throw in a mention of my book in their recent pieces on what went wrong with economics. So it was great to see, in Ryan Lizza's epic account of economic decisionmaking in the Obama White House in this week's New Yorker, a largely unnecessary reference to The Myth of the Rational Market:

Summers told me that, as a graduate student, he first studied claims, made famous by economists at the University of Chicago, that financial markets are always rational and self-correcting. He said, “I encountered a sentence that was much quoted: ‘The efficient-market hypothesis is the best established fact in social sciences.’ Any sentence like that is a red flag to an ambitious academic.” Summers produced a body of work that undermined the efficient-market hypothesis, or E.M.H. A memorable paper on the subject, which he wrote in the early eighties but never published, began, “THERE ARE IDIOTS. Look around.” According to Justin Fox’s recent book, “The Myth of the Rational Market,” that paper persuaded Fischer Black, one of the leading theorists of E.M.H., to essentially abandon his belief in the hypothesis.

'Myth of the Rational Market' on Big Think and C-SPAN BookTV

This was a segment of an interview I did a while back with Big Think, an very cool online endeavor created by former Charlie Rose producer Victoria Brown.

Talking Myth of the Rational Market @ Authors@Google

The Krugman effect

As I left Diane Rehm's radio studio in Washington after doing her show in July, her parting words were, "Watch your Amazon ranking." I did, and the Rehm effect was impressive, driving Myth of the Rational Market from somewhere in the 200s to as high as 112. The Daily Show effect was similar (on the Amazon rankings, at least—the Rehm show appearance also landed the book on the NYT extended bestseller list, which going on Jon Stewart did not do). I've already written here about the Nocera effect and the new Laffer curve.

Turns out the Krugman effect may be the most powerful of all (for my book, at least; we're not talking Oprah material here). When Paul Krugman's review of Myth went online the afternoon of Friday, Aug. 7, the book was in the 500s. Here's how high it got the following Monday:

Finally on the front table at the Jet Blue Borders

A few weeks ago, my wife stopped by the Borders at the Jet Blue terminal at JFK, and could not find Myth of the Rational Market (Borders ordered hardly any copies when the book first came out). Well, I'm in the Jet Blue terminal right now waiting for a flight to Oakland, and I can report that times have changed:

After I took this photo, a guy who saw me doing it (not one of the guys in the photo) immediately began checking the jackets of the books on the table. When he got to Myth and saw my picture he stopped, walked over to me and said, "Congratulations." His wife, he said, had done the same thing when her book came out.

Paul Krugman calls 'Myth of the Rational Market' a 'Must-Read' in NYT Book Review

It's been a long wait, but the New York Times Book Review has come through in a big way, with a review by Paul Krugman. The crucial bits:

... Justin Fox’s “Myth of the Rational Market” brilliantly tells the story of how that edifice was built — and why so few were willing to acknowledge that it was a house built on sand.

Do we really need yet another book about the financial crisis? Yes, we do — because this one is different. Instead of focusing on the errors and abuses of the bankers, Fox ... tells the story of the professors who enabled those abuses under the banner of the financial theory known as the efficient-market hypothesis. Fox’s book is not an idle exercise in intellectual history, which makes it a must-read for anyone who wants to understand the mess we’re in. ...

One of the great things about Fox’s writing is that he brings to it a real understanding of the sociology of the academic world. Above all, he gets the way in which one’s career, reputation, even sense of self-worth can end up being defined by a particular intellectual approach, so that supporters of the approach start to resemble fervent political activists — or members of a cult. ...

Myth of the Rational Market is a New York Times bestseller. Sort of

In what has come as something of a surprise to everyone involved, Myth of the Rational Market has landed on what the New York Times calls its "extended" bestseller list. That is, not in the top 15, but in the top 35. See:

This list hasn't been published yet. In fact, it will never be published in the actual book review. It will show up online the weekend of Aug. 2. But everybody who's anybody in the book business got the pdf yesterday (July 22). It's magic!

The book's inclusion on the list was a surprise because it fell off the Wall Street Journal business bestseller list a couple of weeks ago, and hasn't exactly been tearing up the charts on Amazon.com lately either (it's been doing fine, mostly bouncing around the 200s, but it didn't make the NYT list the week it hit #30 on Amazon, so ...). The only explanation we could come up with was that my appearance on Diane Rehm's radio show last week did the trick. That, and the fact that one can now actually find the book in most bookstores.

Anyway, it's all very exciting, and I plan to spend the rest of my life insisting that people refer to me as a "New York Times extended bestselling author."