My review of "Extraordinary Popular Delusions and the Madness of Crowds"

A classic, well worth reading! Review originally written on November 22, 2008.....

For a long time, I have wanted to read this 1852 classic, "Extraordinary Popular Delusions and the Madness of Crowds", by Charles MacKay, but why I decided to do so recently, was because I was hoping to get some insights into understanding our recent Housing bubble and 2007-8 financial meltdown. I am glad I read it, because I did indeed come away with some 'extraordinary' insights.

Sure, this book goes into some historic financial bubbles, like Tulipmania, the South Sea Bubble, and the Mississippi land scheme. But, when it got into other manias involving witches, the Crusades, alchemy, popularity of certain phrases/expressions, fortune tellers, slow poisoners, duels, admiration of thieves, haunted houses, etc., it awakened me that our financial meltdown wasn't simply a repeat of other financial bubbles. We had the Internet bubble only a few years prior to what was happening with Housing, so most of us should have not been so blinded as Housing got out of hand. But, it is clear that we were also suffering from an overload of all kinds of manias, which I think, because of the depth of this book, appeared to condition so many in our society to find an even greater safety in 'crowds'. In particular, words like liberal and socialist were not just argued against, but actually successfully demonized, along with targeted uses of words like 'traitor' for anyone not supporting a US war, even trying to affix the term, 'terrorist' to Barrack Obama. Witness the success of Ann Coulter books, Fox News, etc. It is like if you just wanted to be a renter, there must have been something wrong with you, even anti-American, not wanting to participate in 'the ownership society', another term feeding into a financial mania. Plus, was anyone warning that this 'ownership society' was based almost entirely on debt, hardly real ownership? Heck, we were told after 9-11, the patriotic thing to do was shop, never mind sacrificing for the war. Also, our almost maniacal adoration of celebrities, outrageous salaries for athletes and CEOs, long lines for new introductions of new Apple products, Harry Potter books, etc, etc.

We were a society primed with all kinds of 'extraordinary popular delusions', especially susceptible to a meltdown of generational proportions. Will we change? It does look like many are looking for some deeper societal transformation. But, as this book seems to show, transformation will be difficult, and we probably need to worry about transforming to just another mania, just as bad. We have a big task ahead.

Too bad Mr. Mackay isn't around to write about our current manias. Though the book is about 700 pages long, unless you are particularly interested in every detail of each mania, you can skim over lots of the details and complete the book in just a few days and still come away with a thorough understanding.