Extraordinary Popular Delusions and the Madness of Crowds
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Extraordinary Popular Delusions and the Madness of Crowds is a popular history of popular folly by Charles Mackay, first published in 1841. The book chronicles its targets in three parts: "National Delusions", "Peculiar Follies", and "Philosophical Delusions".
The subjects of Mackay's debunking include alchemy, beards (influence of politics and religion on), witch-hunts, crusades and duels. Present day writers on economics, such as Andrew Tobias, laud the three chapters on economic bubbles.
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[edit] Bubbles
Among the alleged bubbles or financial manias described by Mackay are the South Sea Company bubble of 1711–1720, the Mississippi Company bubble of 1719–1720, and the Dutch tulip mania of the early seventeenth century. According to Mackay, during this bubble, speculators from all walks of life bought and sold tulip bulbs and even futures contracts on them. Allegedly some tulip bulb varieties briefly became the most expensive objects in the world during 1637.
Two modern researchers, Peter Garber and Anne Goldgar, independently conclude that MacKay greatly exaggerated the scale and effects of the Tulip bubble, and Mike Dash, in a footnote to his modern popular history of the alleged bubble states that he believes the importance and extent of the tulip mania was overstated.
Mackay's accounts are enlivened by colorful, comedic anecdotes, such as the Parisian hunchback who supposedly profited by renting out his hump as a writing desk during the height of the mania surrounding the Mississippi Company.
Financier Bernard Baruch credited the lessons he learned from Extraordinary Popular Delusions and the Madness of Crowds with his decision to sell all his stock ahead of the financial crash of 1929.[1]
Financial writer Michael Lewis includes the financial mania chapters in his book The Price of Everything as one of the six great works of economics, along with writings by Adam Smith, Thomas Malthus, David Ricardo, Thorstein Veblen, and John Maynard Keynes.
James Surowiecki in The Wisdom of Crowds takes the opposing view to McKay, saying that crowds or groups may have better information and make better decisions than even the best informed individual.
[edit] Alchemists
The section on 'alchemysts' focuses primarily on efforts to turn base metals into gold. Mackay notes that many of these practitioners were themselves deluded, convinced that these feats could be performed if they discovered the correct old recipe or stumbled upon the right combination of ingredients.
Although alchemists gained money from their sponsors, mainly noblemen, he notes that the belief in alchemy by sponsors could be hazardous to its practioners, as it wasn't rare for an unscrupulous noble to imprison a supposed alchemist until he could produce gold.
[edit] Crusades
The history of the crusades is described as a kind of mania of the middle ages, precipitated by the pilgrimages of Europeans to the Holy lands, and the taxes and supposed ill treatment the pilgrims faced at the hands of the Seljuk Turks. Kurt Vonnegut's Slaughterhouse Five quotes part of the introduction to this section: "History in its solemn page informs us that the crusaders were but ignorant and savage men, that their motives were those of bigotry unmitigated, and that their pathway was one of blood and tears."
[edit] Witch Mania
Witch trials in 16th and 17th century Western Europe are the primary focus of the Witch Mania part of the book, which asserts that this was a time when ill fortune was likely to be attributed to supernatural causes. Mackay notes that many of these cases were initiated as a way of settling scores among neighbors or associates, and that extremely low standards of evidence were applied to most of these trials. Mackay claims that "thousands upon thousands" of people were executed as witches over two and a half centuries, with the largest numbers being killed in Germany and Spain.
[edit] Quotes
- "Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one!"
- "Of all the offspring of Time, Error is the most ancient, and is so old and familiar an acquaintance, that Truth, when discovered, comes upon most of us like an intruder, and meets the intruder's welcome."
[edit] Allusions
- Neil Gaiman borrows from the title in an issue of his popular comic series The Sandman, in a story featuring a writer whose novel is titled "...And the Madness of Crowds".
[edit] References
- ^ Bernard Baruch, My Own Story, New York: Henry Holt, 1957, p.242-245.
[edit] Bibliography
- Charles MacKay, Extraordinary Popular Delusions and the Madness of Crowds, with a foreword by Andrew Tobias (1841; New York: Harmony Books, 1980). ISBN 0-517-53919-5
- Mike Dash, Tulipomania: The Story of the World's Most Coveted Flower and the Extraordinary Passions It Aroused (1999) ISBN 0-575-06723-3
- Peter M. Garber, Famous First Bubbles: The Fundamentals of Early Manias (Cambridge, MA: MIT Press, 2000).
- Anne Goldgar, Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age (University of Chicago Press, 2007).
[edit] See also
[edit] External links
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