Practitioners experienced efficient-market theory as a professional identity threat

Evidence

If finance academics were believed to be saying that “the value of investment advice is zero,” it is no wonder that, as the economist Burton Malkiel of Princeton University put it, proponents of efficient-market theory were “greeted in some Wall Street quarters with as much enthusiasm as Saddam Hussein addressing a meeting of the B’nai B’rith” (Malkiel 1996, p. 159). The investment adviser Peter Bernstein “found the new theories emerging from the universities during the 1950s and the 1960s alien and unappealing, as did most other practitioners. What the scholars were saying seemed … to demean my profession as I was practicing it.” — Donald MacKenzie, An Engine, Not a Camera, 354

Categorization

• CANDY: Malkiel’s B’nai B’rith/Saddam gag is a vivid, quotable rhetorical jab that lands on its own.
• XREF: connects to: Efficient-market theory undercut the professional credibility it seemingly supported. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 350; Efficient-market theory threatened brokers’ income by discouraging trading — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 360

Broader Connections

• Efficient-market theory threatened brokers’ income by discouraging trading #expands (0.95) — Donald MacKenzie, An Engine, Not a Camera, 360