Extraordinary Popular Delusions was recommended to me as a way of doing some homework on a novel I’m working on set in the financial world. And, indeed, McKay explores some of the more interesting historical examples of boom and bust, such as the South Sea Bubble. However, he also takes a look at other instances of public mania–the adoration of criminals, the Crusades, alchemy, and the like.
From the financial point of view, we are reminded of how much the old French saying about same and change applies. This book was written in 1841. Some of the phenomenae he describes happened two centuries earlier. He quotes DeFoe, whose verse might have been written for Bernard Maddoff:
Some in clandestine companies combine;
Erect new stocks to trade beyond the line;
With air and empty names beguile the town;
And raise new credits first, then cry ‘em down;
Divide the empty nothing into shares,
And set the crowd together by the ears.
I believe it’s helped me with my book, and it’s certainly helped me with my attitude toward this crisis, which is none the less hurtful because it’s happened before. However, it’s a reminder of how little we seem able to budge and what an illusion progress seems to be.