Ajay Shah in his article, "Who is afraid of algorithmic trading" (August 22) has rightly emphasised empirical evidence as the basis for decision-making. It, therefore, behooves him and his ilk to produce empirical evidence that algorithmic trading has furthered the prime purpose of capital market, namely, channelling savings into financial assets.
Not unlike the prognosis of Irving Fisher just before the great crash of US markets in 1929 that "stock prices have reached what looks like a permanently high plateau", Shah, in his article, "A crisis? Or a mere recession" (March 19, 2008) judged the 2008 crisis as: "This may well be a recession, but it is not an emerging markets-style crisis." What happened subsequently hardly needs mention.
The murky, if not sinister, role played by "neutral academics" in engineering the crisis of 2008 was exposed in the Academy Award-winning documentary, Inside Job. Sophistication for its own sake serves no purpose; on the contrary it is the handmaiden of deception. In formulating public policy, wisdom lies in discarding the shibboleth of "experts" and sticking to common sense.
S M Roy Kolkata
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