Library:Devil Take the Hindmost
| Devil Take the Hindmost: A History of Financial Speculation | |
|---|---|
| Author | Edward Chancellor |
| First published | 1999 |
| ISBN | 978-0-374-13858-5 unverified |
| Role | Analysis |
| Domains | Business, Finance & Scams History |
| Tactics | Fraud or Scam Propaganda Technique |
Devil Take the Hindmost: A History of Financial Speculation is a 1999 book by Edward Chancellor.
Summary
Edward Chancellor, a British financial historian and journalist, traces the history of speculative manias from ancient Rome to the late twentieth century. Published in 1999, at the height of the dot-com boom, the book argues that speculation is a recurring feature of capitalism, driven by human psychology, financial innovation and the stories people tell about new eras. It is widely regarded as one of the best histories of financial bubbles.
Early speculation
Chancellor begins with speculation in ancient Rome and medieval Europe, then examines Dutch tulip trading in the 1630s and the South Sea Bubble and Mississippi Bubble of 1720 in Britain and France, where governments and promoters encouraged investors to pour money into companies whose prospects were wildly exaggerated.
The railway mania and beyond
He devotes considerable attention to the railway mania in Britain in the 1840s, when investors poured money into hundreds of proposed railway lines, many of which were never built. Promoters such as George Hudson, the "Railway King," used misleading accounts and paid dividends out of capital. Chancellor then examines speculation in the United States during the Gilded Age and the 1920s, leading to the crash of 1929, and Japan's asset bubble of the 1980s.
Recurring patterns
Throughout, Chancellor identifies recurring features: a new technology or opportunity that seems to justify unprecedented valuations; easy credit; financial innovations that make speculation easier; promoters who exploit enthusiasm; and political leaders who encourage or tolerate the boom. He also notes the frequent appearance of fraud during manias, as rising prices make deception easier to hide. The final chapters discuss the derivatives markets and the emerging internet boom, which collapsed shortly after the book appeared.
Relevance to Bullshitopedia
Devil Take the Hindmost provides a long historical perspective on the stories that sustain financial bubbles, such as "this time is different" and "a new era." It complements Charles Mackay's classic account with more careful scholarship and helps readers recognize familiar patterns in new speculative waves, from dot-com stocks to cryptocurrencies.
Related entries
- Tulip mania ruined the Dutch economy
- The South Sea Company would make investors rich
- Extraordinary Popular Delusions and the Madness of Crowds (Mackay)
- The Great Crash, 1929 (Galbraith)