SYSTEMIC RATIONALITY AND THE EFFECTS OF FINANCIAL REGULATION - REPLY

In his Reply, Kindleberger falsely ascribes to me the views that polit ical actors are utterly incompetent, while market actors are completel y rational; and that political processes ave pure chaos, while market processes are perfectly efficient. My point was that the relatively be tter performance of the market is a result of systemic factors, not th e rationality of individuals. Kindleberger fails to address the histor ical evidence indicating the comparatively poor performance of governm ent intervention in the monetary order ''Market manias'' ave, in fact, largely the product of ill-conceived government regulations.