Library:Extraordinary Popular Delusions and the Madness of Crowds
| Extraordinary Popular Delusions and the Madness of Crowds | |
|---|---|
| Author | Charles Mackay |
| First published | 1841 |
| ISBN | 978-0-517-88433-6 |
| Role | Analysis |
| Domains | History Business, Finance & Scams |
| Tactics | Fraud or Scam |
| Specimen: Later historians have shown several of Mackay's accounts, tulip mania in particular, to be heavily exaggerated. | |
Extraordinary Popular Delusions and the Madness of Crowds is a 1841 book by Charles Mackay.
Summary
Charles Mackay, a Scottish journalist, published this compendium in 1841 under the title Memoirs of Extraordinary Popular Delusions. It is a sweeping, entertaining history of collective folly, and it has remained in print ever since, often recommended to investors as a warning about speculative bubbles. It also turns out to be a lesson in how dramatic stories about delusion can themselves become delusions.
The financial manias
The best-known chapters cover three early financial bubbles. The Mississippi Scheme describes John Law's paper-money and colonial-trading venture in France, which drew in much of the nation before collapsing in 1720. The South Sea Bubble covers the parallel speculative frenzy in Britain the same year. Tulipomania describes the Dutch craze for tulip bulbs in the 1630s, in which Mackay reports that single bulbs sold for the price of houses and that the collapse ruined much of the country.
Beyond money
Most of the book is not about finance. Mackay surveys alchemists, fortune-tellers, the magnetisers who followed Franz Mesmer, the witch persecutions, the Crusades, beliefs about haunted houses, the trade in holy relics, fashions in hair and beards and popular catchphrases. His thread is that crowds adopt beliefs together and abandon them together, and that people recover their senses "one by one" — a line that became the book's best-known idea.
Why it is a specimen
Later historians found that Mackay's most famous story was badly exaggerated. Research into Dutch archives, notably by the historian Anne Goldgar, found little evidence of the widespread ruin he describes; the tulip trade was a limited affair among merchants and enthusiasts, and Mackay relied heavily on moralizing pamphlets published after the event. Economists have also pointed out that during Britain's railway mania of the 1840s, Mackay's own newspaper was enthusiastic about the boom rather than warning against it.
Relevance to Bullshitopedia
The book is valuable for the History and Business, Finance & Scams domains, and its account of collective belief is still insightful. But it is also a cautionary example of how a vivid moral tale can outrun its evidence and harden into received wisdom. Editors should treat its specific claims as leads to verify, not facts to cite.