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= Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds =
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Introduction
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'Extraordinary Popular Delusions and the Madness of Crowds' is an
early study of crowd psychology by Scottish journalist Charles Mackay,
first published in 1841 under the title 'Memoirs of Extraordinary
Popular Delusions'. The book was published in three volumes: "National
Delusions", "Peculiar Follies", and "Philosophical Delusions". A
second edition appeared in 1852, reorganizing the three volumes into
two and adding numerous engravings.
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Mackay was an accomplished teller of stories, though he wrote in a
journalistic and somewhat sensational style.
The subjects of Mackay's debunking include alchemy, crusades, duels,
economic bubbles, fortune-telling, haunted houses, the Drummer of
Tedworth, the influence of politics and religion on the shapes of
beards and hair, magnetisers (influence of imagination in curing
disease), murder through poisoning, prophecies, popular admiration of
great thieves, popular follies of great cities, and relics.
Present-day writers on economics, such as Michael Lewis and Andrew
Tobias, laud the three chapters on economic bubbles.
In later editions, Mackay added a footnote referencing the Railway
Mania of the 1840s as another "popular delusion" which was at least as
important as the South Sea Bubble. In the 21st century, the
mathematician Andrew Odlyzko pointed out, in a published lecture, that
Mackay himself played a role in this economic bubble; as a leader
writer in 'The Glasgow Argus', Mackay wrote on 2 October 1845: "There
is no reason whatever to fear a crash".
Economic bubbles
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The first volume begins with a discussion of three economic bubbles,
or financial manias: the South Sea Company bubble of 1711-1720, the
Mississippi Company bubble of 1719-1720, and the Dutch tulip mania of
the early seventeenth century. According to Mackay, during this
bubble, speculators from all walks of life bought and sold tulip bulbs
and had even declared futures contracts on them. Allegedly, some tulip
bulb varieties briefly became the most expensive objects in the world
during 1637. Mackay's accounts are enlivened by colorful, comedic
anecdotes, such as the Parisian hunchback who supposedly profited by
renting out his hump as a writing desk during the height of the mania
surrounding the Mississippi Company.
Two modern researchers, Peter Garber and Anne Goldgar, independently
conclude that Mackay greatly exaggerated the scale and effects of the
Tulip bubble, and Mike Dash, in his modern popular history of the
alleged bubble, notes that he believes the importance and extent of
the tulip mania were overstated.
Chapters
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* The Mississippi Scheme
* The South Sea Bubble
* The Tulip Mania
* Relics
* Modern Prophecies
* Popular Admiration for Great Thieves ('cf' hybristophilia)
* Influence of Politics and Religion on the Hair and Beard
* Duels and Ordeals
* The Love of the Marvellous and the Disbelief of the True
* Popular Follies in Great Cities
* Old Price Riots
* The Thugs, or Phansigars
Crusades
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Mackay describes the history of the Crusades as a kind of mania of the
Middle Ages, precipitated by the pilgrimages of Europeans to the Holy
Land. Mackay is generally unsympathetic to the Crusaders, whom he
compares unfavourably to the superior civilisation of Asia: "Europe
expended millions of her treasures, and the blood of two millions of
her children; and a handful of quarrelsome knights retained possession
of the Kingdom of Jerusalem for about one hundred years!"
Witch mania
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Witch trials in 16th- and 17th-century Western Europe are the primary
focus of the "Witch Mania" section of the book, which asserts that
this was a time when ill fortune was likely to be attributed to
supernatural causes. Mackay notes that many of these cases were
initiated as a way of settling scores among neighbors or associates,
and that extremely low standards of evidence were applied to most of
these trials. Mackay claims that "thousands upon thousands" of people
were executed as witches over two and a half centuries, with the
largest numbers killed in Germany.
Sections
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* The Crusades
* The Witch Mania
* The Slow Poisoners
* Haunted Houses
Alchemists
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The section on 'alchemysts' focuses primarily on efforts to turn base
metals into gold. Mackay notes that many of these practitioners were
themselves deluded, convinced that these feats could be performed if
they discovered the correct old recipe or stumbled upon the right
combination of ingredients. Although alchemists gained money from
their sponsors, mainly noblemen, he notes that the belief in alchemy
by sponsors could be hazardous to its practitioners, as it wasn't rare
for an unscrupulous noble to imprison a supposed alchemist until he
could produce gold.
Books
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* Book I: The Alchemysts
* Book II: Fortune Telling
* Book III: The Magnetisers
Influence and modern responses
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The book remains in print, and writers continue to discuss its
influence, particularly the section on financial bubbles. (See
Goldsmith and Lewis, below.)
* Financier Bernard Baruch credited the lessons he learned from
'Extraordinary Popular Delusions and the Madness of Crowds' with his
decision to sell all of his stock ahead of the Wall Street crash of
1929.
* Kurt Vonnegut's seminal novel, 'Slaughterhouse-Five', references the
book.
* The book was the initial inspiration for Richard Condie's National
Film Board of Canada animated short film 'John Law and the Mississippi
Bubble' (1978).
* 'Forbes' magazine compared Mackay's descriptions of financial
bubbles to the Chinese stock bubble of 2007, claiming that the
"emotional feedback loop" that drove the Chinese market was very
similar to what Mackay described.
* Neil Gaiman borrows from the title in an issue of his popular comic
series, 'The Sandman', in a story featuring a writer whose novel is
titled "... And the Madness of Crowds".
* Author and executive coach Marshall Goldsmith discussed the book in
depth in 'BusinessWeek', drawing extensive parallels between the
financial bubbles Mackay wrote about and financial bubbles today.
Other writers also frequently point to the book to explain recent
financial bubbles.
* Financial writer Michael Lewis includes the financial mania chapters
in his book 'The Real Price of Everything: Rediscovering the Six
Classics of Economics' as one of the six great works of economics,
along with writings by Adam Smith, Thomas Robert Malthus, David
Ricardo, Thorstein Veblen, and John Maynard Keynes.
* Author and journalist Will Self writes a column for 'New Statesman',
"Madness of Crowds", which takes its title from Mackay's book.
* James Surowiecki, in 'The Wisdom of Crowds' (2004), takes a
different view of crowd behavior, saying that under certain
circumstances, crowds or groups may have better information and make
better decisions than even the best-informed individual.
* Canadian author Louise Penny used MacKay as an inspiration for her
2021 novel 'The Madness of Crowds'.
* American synthpop band Information Society released a song titled
after the book in 2021. Its vocals are mostly samples of cult leader
Jim Jones.
See also
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* Joseph Bulgatz 'More Extraordinary Popular Delusions and the Madness
of Crowds' (2000)
* Crowd psychology
* Groupthink
* Irrational exuberance
* Moral panic
* 'Pseudodoxia Epidemica'
External links
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The book is in the public domain and is available online from a number
of sources:
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License
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Original Article:
http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds
