By Justin Fox

Duncan Niederauer, Barry Silbert, J. Doyne Farmer, and me at Techonomy

My former Fortune colleagues David Kirkpatrick, Peter Petre, and Brent Schlender put on a pretty brilliant conference at Northstar-at-Tahoe in August. And they got me to moderate this panel on financial markets.

Here's part 1:

part 2:

and part 3:

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.

'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.

Milton Friedman on the efficient market hypothesis

In the orgy of eulogization and evaluation that has followed the death of Milton Friedman, a couple of odd myths have been promulgated.

One is that his monetary theories have been discredited. What has been discredited is Friedman's belief that monetary policy could be run on a purely automatic basis, by simply allowing the money supply to grow at a certain pace. It turns out the money supply is far too slippery a thing to measure accurately enough for such a policy. But Friedman's main messages--that inflation is always and everywhere a monetary phenomenon, and that central banks should focus all their energies on keeping prices stable--have been accepted at the Federal Reserve and pretty much every other respectable central bank on the planet.

Another myth, central to a Michael Kinsley essay in Slate this week that I dissected in the Curious Capitalist today, is that Milton Friedman believed that financial markets were efficient. Shawn Tully at Fortune does a great imitation of Friedman saying something along the lines of, "Yes, over the long run, markets might be efficient, but in the short-term ..."

I didn't get anything quite like that out of Friedman when I interviewed him on the subject in 2004, but he did, as always, deliver an interesting quote. I had mentioned that Friedman's friend and long-time intellectual ally George Stigler had told then-Chicago-grad-student Baruch Lev at a cocktail party in the 1960s that he didn't believe in the efficient market hypothesis.  Friedman responded:

You don’t have to believe it. I don’t believe it. We all know the market is not efficient in a descriptive sense. But that doesn’t mean that the efficient market is not the best approximation if you don’t have anything else to use. …Warren Buffett proves that there’s not an efficient market, and yet Warren Buffett is what makes the market efficient, and both statements are right. If the market were 100% efficient, nobody could make any money making it efficient, and then it wouldn’t be efficient again. So in a way it’s self-contradictory to suppose that there really is an efficient market.

Friedman didn't believe markets were perfect. He just thought that they were better, and more accommodating of human liberty, than government. He may have oversold that argument on occasion. But don't go calling the man an efficient marketeer.

Curious capitalist 2

My blog on fortune.com is now live, with a post on the thrilling subject of where corporate boards come from.

Anyway, I thought this might be a good time to share some of the blog names not chosen (I had a team of four experts working on the project):

Mas Kapital (a favorite, but already taken)
We're All Dead
Der Kapitalismusbeschreibungsblog
Capitalists Do the Darnedest Things
Captain Capitalism
Permanently High Plateau
Permanently High
Der Kapitalist
Der Kommisar
Capital Offense
:-D ismal
Blingdaddy
Blingdiddy
Fox and Friends
Office Pirates

UPDATE: Forgot one (see comment):
Truth universally acknowledged

Curious capitalist

My long-awaited (by me at least) conversion of my occasional fortune.com contributions into a regular blog is set to begin on Wednesday. It's going to be called "The Curious Capitalist," a name coined by Brian O'Keefe. It had been threatened that if I didn't come up with something better, it would be called "The Justin Fox Files." So thanks, Brian.

I'm not entirely sure where that leaves this blog. Posts about the book belong here, of course, but I have to figure out what else. More news soon on this same channel.

Hold me, public

I recently wrote a fortune.com piece keyed to the Santa Barbara newspaper mess. It was headlined "Why being publicly held is best," and was mainly a dig at the more or less constant complaints one hears that U.S.-style publicly traded corporations are inevitably short-term-focused, environment-destroying, employee-exploiting beasts. It was certainly not my best work, but because it was at least tangentially about the media, Jim Romenesko linked to it yesterday on his much-read site. And because of that, I got an e-mail today from the people at the NPR show On the Media. Their interview with just-resigned Santa Barbara News-Press editor Jerry Roberts had fallen through, and they were wondering if I'd talk to them. I find radio interviews to be almost always a pleasure (you get to talk for so long, compared with TV), so I said yes, of course.

This leads to a couple of observations. First is that, in this Age of Romenesko, it's incredibly tempting to write about journalism, because you know that if you do, Romenesko will link to your work and many of your fellow journalists will see it and put you on their radio programs (or offer you jobs or whatever). The other is that, the more and more I thought about it, the less comfortable I was in recommending public ownership for newspaper companies. My fortune.com essay was mainly an attempt to extend the lessons of the News-Press to the business world in general. And I do still believe that Wall Street is pretty good at sensing impending trouble, which is exactly what investors in newspaper companies have been doing lately. But so many of the world's greatest newspapers are not at the mercy of public markets that there's got to be something to the idea that insulating them from financial-market pressures can be a good thing.

Anyway, my very muddled observations on the subject will be aired nationwide this weekend. Check here for local listings. (You can also eventually listen at the On the Media site.)

Hubbard speaks

It was really not my intention to turn this into an all-Glenn-Hubbard, all-the-time blog. But I'm too busy writing on the book (or at least like to pretend that I am) to post much else, and I did go to see the G man speak last night at Columbia, where he gave a University Lecture on "Business, Knowledge, and Global Growth."

A University Lecture seems to be a big deal. Hubbard was introduced by Provost Alan Brinkley who in turn had been introduced by President Lee Bollinger. The rotunda at Low Library was more or less packed. And the speech lasted a whole hour.

It was a defense of business schools, which have been under attack lately in some unlikely places like Harvard Business Review and Business Week. Not to mention the new Atlantic that arrived in the mail a couple days ago. Hubbard's argument (you can read a summary by Hubbard's PR people here): Entrepreneurial capitalism is essential to raising living standards, and business schools like Columbia's foster not entrepreneurial capitalism but social entrepreneurship as well.

He made one mention of the famous "Every Breath You Take" video. He was talking about how the U.S. lags other countries in broadband connections, then added (it wasn't in the prepared text): "I would point out that Columbia Business School's recent video about me managed to make it around the world pretty quickly."

The topic came up again at the post-lecture dinner. In his remarks at the end of the meal, Bollinger told Hubbard that "we'll be watching you." I was invited to the dinner, I think, because Hubbard has zeroed in on me as a potential vessel for his message that business schools are great. It was a pretty good dinner, and I got seated at the head table with Hubbard, Bollinger, and Brinkley, among others. So here goes: Business schools are grrrrrrreat!

Glenn Hubbard, video star

This is a Columbia Business School student, playing Columbia Biz Dean Glenn Hubbard as Sting (or is it Sting as Glenn Hubbard?), complaining about Ben Bernanke getting the Fed chairman job (instead of him) to the tune of the Police's "Every Breath You Take."

It's brilliantly done, with some nice Fed jargon slipped in and even some pretty good singing. And it's one more indication that the new era of user-generated content (or, as I've seen one blogger more eloquently if tendentiously put it, "authentic media") holds untold riches in store. In the past, something like this would have been done at a talent show seen by a couple hundred people. By putting it up on YouTube, the creators have immediate access to a global audience. They posted it last Thursday. As of mid-morning Monday, it had been viewed more than 108,000 times. And I'm betting that on this one the viral contagion is just getting going (I first heard about it this morning). [I had to switch to Google video because the YouTube link stopped working.]

Of course, it's only a parody. It's interesting that so much of the "authentic media" being created these days consists of commentary on or parody of the creations of those of us in what I guess has to be called the inauthentic media. But maybe this is just the transitional phase. The popular music industry seems to be starting to come out the other side of the great Internet destroying-and-reinventing machine, and I'm mostly of the impression that the new iTunes/MySpace/podcast infrastructure is a lot better at getting interesting music to people than what went before. It's just that, not having any clear idea of what the rest of the media is going to look like--and being employed by a big media company--I can't help but worry about my paycheck.

Blogging Mr. Kirkpatrick

My Fortune colleague David Kirkpatrick is currently sitting in his office a couple doors down from mine e-mailing bloggers, trying to get them to link to his great article about Ray Ozzie's attempt to transform Microsoft. As a blogger, albeit one with a daily readership of about five, I feel duty bound to do so. In fact, why not link twice? Or thrice?

A better illustration of the shift in media power over the past decade is hard to imagine. A star writer for the country's best business magazine, not to mention an employee of the world's biggest media company, is begging a bunch of self-published bloggers for publicity. Not that I think this is a bad thing. Thanks to the bloggers, David's article will reach readers who wouldn't have known about it otherwise. If he made any boneheaded errors, the bloggers will let him know. If his article was especially insightful (I say yes, but I'm no expert), he'll get online plaudits for that.

Of course, no blogger has the time or resources to produce an article like David just did. Which makes this all a nicely symbiotic relationship, for now. My only concern is whether the economics of the media business will continue to allow time and money to be set aside for people like David and me to write long articles that the bloggers can pick apart.