Man does not live by GNP alone.

Still, I figure we shouldn't' discourage fans of actively managed funds. With all their buying and selling, active investors ensure the market is reasonably efficient. That makes it possible for the rest of us to do the sensible thing, which is to index. Want to join me in this parasitic behavior? To build a well-diversified portfolio, you might stash 70 percent of your stock portfolio into a Wilshire 5000-index fund and the remaining 30 percent in an international-index fund.

I couldn't reconcile what I was being taught at the university of Chicago, the lectures and the books I was being assigned, with what I knew to be true out in the streets.

Anyone with special abilities earns a differential return on that flair, which we economists call a rent. Those few with extraordinary P.Q. (Performance Quotient) will not give away such rent to the Ford Foundation or the local bank trust department. They have too high an I.Q. for that.

Perhaps there really are managers who can outperform the market consistently - logic would suggest that they exist. But they are remarkably well-hidden.

Even if this advice to portfolio decision makers to drop dead is good advice, it obviously is not counsel that will be eagerly followed. Few people will commit suicide without a push. And fewer still will pay good money to be told to do what is against human nature and self-interest to do.

I don't care very much for the People Magazine approach to applied economics.