This One Paragraph Is The Greatest Summary Of The Market's Role In American Society

For the first several years of BI’s existence, our markets vertical was called “Money Game.”

We took the name in part from one of the greatest books about finance every written: “The Money Game,” by George Goodman, who jokingly wrote under the name “Adam Smith.”

Goodman died last week age 83.

His other lifetime achievements included founding Institutional Investor magazine in the ’60s, and serving as executive editor of Esquire in the 1970s.

But “The Money Game,” published in 1968, remains his most famous work. In his obituary, The New York Times’ Douglas Martin writes that the work posits that “the machinations of money were high drama, understandable to the lay reader and, perhaps most important to the book’s success, humorous. The Wall Street Journal and The Washington Post both lauded it as a masterly exposition of mass psychology.”

And indeed, “Game” contains one of the best passages about markets’ role in American society ever written. Goodman breaks down the country into two segments: those who care about markets, and those who don’t — and the price paid by each.

…the investment game is intolerably boring save to those with a gambling instinct, while those with the instinct must pay to it ‘the appropriate toll.’ This really does say it all. We have more than 26 million direct investors in this country, i.e., people who have actually bought stocks. (I say direct investors because indirectly, through insurance companies and pension plans, we have more than a hundred million investors, which is just about everybody except children and the rural poor.) Not all of the 24 million are fiercely active, but the number grows all the time, making the stock market a great national pastime…Sometimes illusions are more comfortable than reality, but there is no reason to be discomfited by facing the gambling instinct that saves the stock market from being a bore. Once it is acknowledged, rather than buried, we can ‘pay to this propensity the appropriate toll’ and proceed with reality.”

Some books never lose their relevancy, no matter how old.

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