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Book Review: Devil Take the Hindmost: A History of Financial Speculation by John Chancellor

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In the re-imagining of Battlestar Galactica, the first Cylon Hybrid utters these chilling words: “All this has happened before, and it will happen again.” It may seem odd to quote a science fiction series in review of a book about the stock market, but it's disturbingly apropos of the subject matter. John Chancellor’s magisterial book, Devil Take the Hindmost: A History of Financial Speculation, charts the course of human folly in high finance from tulipomania to kamikaze capitalism. Trade and exchange are as old as time, while the need for money and the desire for wealth are not necessarily bad. Unfortunately, desire and greed can lead to hubris, hysteria, and hyperinflated stocks.

Chancellor covers the major bubbles that burst — some familiar, some not — creating ruin in their wake: the aforementioned tulipomania, the South Sea Scheme, railroads, junk bonds, and land. The book is a valuable resource for those interested in our current sub-optimal economic situation. Chancellor excels at distilling the complexities of the stock market into terms lay people can understand. While financial histories can be rather dry and unexciting, Chancellor generously peppers the accounts with various historical personalities. Learn about the unwise investments of Alexander Pope, Benjamin Disraeli, and others. Popular culture gets its due in these pages as Chancellor cites poets, pamphleteers, and storytellers, either working as cheerleaders or contrarians.

The greatest challenge to creating a functioning economy is finding the sweet spot between government regulation and free enterprise. With too much regulation, the economy grinds to a halt, speculation and investment quashed in an atmosphere that will not allow risk. With too little regulation, hysteria and anarchy create a system with all the sense of a coked-out wolverine. Chancellor comes out in favor of more regulation in financial speculation. After reading about the historical shortsightedness of investors, busts following booms with predictable regularity, one might understand his trepidations. No one believed Cassandra either.

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About Karl Wolff

  • Nice review. You get at the heart of the book very succinctly.