Subtitled A History of Financial Speculation, this book by Edward Chancellor is on the list of books recommended by William Bernstein (of Four Pillars fame). The book is a scholarly account of financial bubbles – from the tulip mania in seventeenth century Netherlands to the Japanese stock market and real estate bubble of the 1980s. As Mr. Chancellor portrays the social and political milieu in considerable detail, the book is far more interesting than simply a dry economic account of historical manias. However, this book isn’t an easy read and I had to struggle to stay awake through some of the chapters.
Still, it is well worth your time and effort because it is striking how often history repeats itself: the internet craze of the late nineties finds an uncanny parallel in the railway mania in England in the middle of the nineteenth century. Therein lies the value of a book like this because the next time another bubble breaks out, we can remind ourselves of the words of Charles Mackay (author of Extraordinary Popular Delusions and the Madness of Crowds, quoted in the book) – “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.” – and hopefully, stay out of trouble.
I was still puzzled about the phrase in the title even after I finished the book. The “hindmost” refers to the last person in a queue, which we definitely don’t want to be if we are caught up in a bubble.
Rating: 9 out of 10