Cheap History Of Financial Euphoria Galbraith
Low prices on history of financial euphoria by John Kenneth Galbraith. Free shipping on qualified orders.
A Short History of Financial Euphoria (Whittle) (Paperback)
by John Kenneth Galbraith (Author)
Textbook Details
* Paperback: 128 pages
* Publisher: Penguin (Non-Classics) (July 1, 1994)
* Language: English
* ISBN-10: 0140238565
* ISBN-13: 978-0140238563
* Dimensions: 7.6 x 5 x 0.5 inches
* Shipping Weight: 1.4 ounces
* Rating: 
Textbook Description
World-renowned economist Galbraith, the bestselling author of The Affluent Society, reviews great speculative booms of the last three centuries, including the junk-bond follies of the 1980s. With wisdom and wit, he shows how the lessons of history can help us avoid financial calamity. “Entertaining in its instructiveness.”
A Short History of Financial Euphoria Review
This book explains how bubbles develop and crash; it was written in 1990 and it foretells our current mess. It is well written, prescient and ironic. It is worth reading now as is his book on the crash of 1929. The small book is written in simple terms without complex theory –his point is that bubbles are driven by greed –they are predicitable and tied to human nature. Regrettably, they can not be regulated away. Too bad we all did not read this before this current disaster.
How appropriate this book is, given the recent real estate bubble burst. It is a short study of the historical bursting of bubbles. John Galbraith is a renowned economist, and admits he can’t predict when bubbles will burst, just that they will. The language you hear during the upward trend of bubbles is exactly the same – that “it” will never go down. People get into a frenzy or euphoric state and ignore that fact that the bubble will ultimately burst, as it always does. This book was written prior to the Stock Market crash of 1987, the dot com era, the more recent real estate bubble, which ultimately is the root of our current economic woes. This was a very quick read and I enjoyed it tremendously. A friend of mine lent me his copy to read a few years ago, and the recent crash of the real estate market led me to remember how much I enjoyed the book that I bought it for myself to reread.
A brief interesting, dare I say entertaining trip through the idiotic financial euphoria of the past…boy am I glad we aren’t that stupid anymore, he said sarcastically. Tulip Mania and the South Sea bubble provide two of the cautionary tales. Of course, these idiotic things only look idiotic after sobering reality smacks investors in the face. Indeed one of the sure signs of euphoria is the absence of public doubters. Galbraith’s short little book poses a significant challenge for purveyors of the Rational Market theory. If markets are rational, how can the bottom fall out of the market in a panic?
The last page of Galbraith’s book denotes that the mania of financial speculation always recurs and is inescapable in human history (P.110). Economists and policy-makers usually attribute the cause of a financial debacle to external influences such as ineffective regulatory mechanism to contain bubble-led investment activities and weakening in economic growth (P.85). By reviewing the major financial debacles of the last three centuries, Galbraith researches on common features of financial debacles of the last three centuries, Galbraith concludes that there are at least two key factors that trigger the debacle: the extreme brevity of the financial memory and the specious association of money and intelligence (P.13). This book is not lengthy but presents all classic cases since the 17th century including tulipomaina in Holland, Banque Royale in France, South Sea Company in England, and spectacular financial debacles in the US. To Galbraith, people have a very brief financial memory of no more than 20 years (P.87) This 20-year cycle from illusion to disillusion makes them forget lessons of the past and continue to invent highly-leveraged financial instruments without self-scrutiny and sanity. Moreover, people blindly believe that money is the measure of the intelligence that supports it (P.14). They applause acolytes of speculation and exclude any adverse opinion in order to justify the circumstances that can make them rich when a mood of optimism and excitement pervades in the financial market. The Schiller’s dictum of crowd insanity has been inherent in human history for centuries (P.5). The renowned scientist Issac Newton has remarked that he can measure human motion but he cannot measure human folly. This book was published in the 90s but Galbraith’s insights of financial insanity are still relevant to institutional and individual investors nowadays who tend not to be a scapegoat of the next financial crisis.
Frequently Bought Together
Manias, Panics, and Crashes: A History of Financial Crises (Wiley Investment Classics) (Paperback)
+
The Great Crash of 1929 (Paperback)
Add A Comment