Why didn’t people in finance pay attention to Benoit Mandelbrot?

Yes, yes, yes! The exact correct point.

Mandlebrot's finance papers, in published in the 1960's, refute Black and Schole's Nobel Prize winning theories of the 1990's. Who wants to hear that?

Does Mandlebrot rate a Nobel himself? Why of course not...

Mandlebrot pointed the way to "another country", one which marketing can not describe...

The Black-Scholes model provides a recipe for creating synthetic options that will (under the assumption of known volatility) act just like real ones. Which is convenient because you can create synthetic versions of options that people want to have but which are not traded. Leading up to the '87 market crash, lots and lots of these synthetic options were created. Then came the crash.

People can debate endlessly about why the crash started. But once it did, there is no question that trading algorithms attempted to close out trades that were necessary to maintain synthetic options. These large trades attempted to execute in markets that had seized up, and made the market much, much worse. The result contributed greatly to the crash, and caused the synthetic options to fail to work as promised. (Besides, the Black-Scholes algorithm guarantees that it acts like an option through a certain amount of variation in the stock price, and not for a particular time period. The volatility of the crash demonstrated the importance of this discrepancy.)

Now do you see how the Black-Scholes model contributed to that crash?

Citation needed, please. By the way, my good sir, RenTech and others have shown over the past two decades or so that it's possible to predict the market... at least in the very, very short term. We have very solid empirical evidence of that, but some intellectual nihilists prefer to ignore that.

"Pointing out that the market is describable by a self-similar fractal froth is an interesting thought, but it basically means that if true, you can't predict anything with any effectiveness."

Please define "predict" and "effectiveness". If you have access to order book data, I guarantee you that you will find pockets of predictability.

A deep question would be: why is that the collective behavior of millions of agents acting in their own self-interest generate fractal patterns? Can that be derived from first principles? Moreover, what exactly would exhibit fractal behavior? The price time series? But they are only a very low-dimensional picture of a very high-dimensional beast, which is order flow. The mathematics that make sense in financial markets are not stochastic processes not fractals, but game theory.

"Who wants to listen to a party pooper like that?"

More like: who wants to listen to a pompous, bitter old academic who once did some interesting work in Mathematics and who is now trying to force his aesthetics on other people's fields of knowledge?

"Shall we say, the evidence somewhat suggests that pervasive underestimation of risk can potentially have slightly negative effects on the global economy."

And airplanes sometimes crash, and ships sometimes sink. From the very definition of risk, your statement is a truism.

It's a separate thing to blame a bad idea, versus blaming the people who thought the bad idea was true. Language is ambiguous; trying to weasel one's way out of "this idea is bad" by saying "the people who think this idea, they're bad; it's not the idea itself", is IMO trying to rely on the imprecision of casual language to refute an argument only for a single formulation, but not in spirit. Ideas have no life of their own outside people's heads. The same argument can be applied to say that there is no such thing as a bad idea.