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A Short History of Financial Euphoria

4.05  ·  Rating Details  ·  459 Ratings  ·  51 Reviews
The world-renowned economist offers "dourly irreverent analyses of financial debacle from the tulip craze of the seventeenth century to the recent plague of junk bonds."—The Atlantic.
Paperback, 113 pages
Published July 1st 1994 by Penguin Books (first published January 1st 1990)
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Lainie
Feb 16, 2009 Lainie rated it really liked it
This is not my usual style of book. My accountant husband urged me to read it (after I failed to read another book of Galbraith's--The Great Crash, I believe it was). This book was short and a fast-paced read, essential if I'm going to read some non-fiction book about financial matters.

I flew through this book and it was a big eye-opener. I knew some of the history included but Galbraith lays out the similarities of various economic crises to show how (clichéd though it may sound) history repeat
...more
Chuck
Aug 25, 2010 Chuck rated it liked it
Déjà vu all over again. That seems to be the pattern of financial boom and bust. In this slender volume, John Kenneth Galbraith selectively traces episodes of speculative excess from the Tulipomania of the mid-17th century through the Crash of '87. Why don't we ever learn? Galbraith identifies several reasons. First, collective memories of financial debacles tend to be very short; therefore, each new generation of financial "wizards" can effectively start over with a blank slate. Second, each wa ...more
Laura (Kyahgirl)
This book was referenced several times in "Juggling Dynamite" so I thought I'd check it out. Galbraith's style reminds me of the intellectuals I was always tripping over at the University but he's quite readable. In fact, the book is pretty funny in a sarcastic, cutting kind of way.

Galbraith reviews the aspects of human nature and the economy that allow us to constantly go into boom and bust cycles. He starts around the time of "Tulipomania" in the 1600s and goes right up through the 20th centu
...more
Roger
Aug 11, 2009 Roger rated it really liked it
Most recently updated 1993. Scary. Could have been written in July 2009. Brilliantly executed descriptions of euphorias(ae?) of the past.

Only short-coming is that it's very short on the prescriptive. Ends with a bit shrug of the shoulders.
Juan Hidalgo
Oct 19, 2015 Juan Hidalgo rated it really liked it  ·  review of another edition
Un interesantísimo libro que ayuda a comprender los entresijos y funcionamiento de los mercados, que invita a pensar y a ser precavido con tus inversiones.
Francisco
Feb 05, 2016 Francisco rated it really liked it
Shelves: investing
Short and sweet, witty, humorous, and yet informative. Galbraith shares his characterization of episodes of speculation, then gives the account of a dozen such episodes, from Holland's tulip mania to the crash of October 1987.

Some key ideas:

a) The average person believes that people of great wealth (or who manage great wealth) are rich because of their superior intellect. When the average person becomes richer during an euphoria, he also tends to believe that the new riches are the product of h
...more
John
Aug 13, 2015 John rated it liked it
Shelves: economics
Galbraith's reputation as an economist isn't what it once was. There are few takers these days for tomes such as American Capitalism, The New Industrial State, or Economics and the Public Purpose, although The Affluent Society retains a readership. But as a writer of popular, accesible economics, he is, in my view, up there with Bastiat. His The Great Crash of 1929 is an excellent bit of descriptive writing and this short book is another riff on its themes.

Are the causes of economic events such
...more
Terry
Jun 08, 2015 Terry rated it really liked it
Shelves: investing
100 page essay.

Key idea:

All the financial bubbles exhibit three common traits:

1. There is always something "new" can be claimed, usually some financial innovations or new economic state, technology change. The new change will be used to justify that "this time is different". However, every time it is eventually proved the "new" thing is not really new.

2. Leverage is used one way or another. There has to be leverage in every bubble. People borrow money using different kind of vehicles. It could
...more
Ravi Abhyankar
Sep 09, 2014 Ravi Abhyankar rated it really liked it
Galbraith, John. A short history of financial euphoria, Whittle books (Viking), Viking Penguin, New York, 1993. Hardcover, 113 pages.
Rating: 7/10

Following a series of extraordinarily bad fiction books, it was a delight to turn to Galbraith, whom I had not read since my college days. A short history of financial euphoria can be read in two hours, it offers amusement as well as utility.

All of us regularly come across people who believe in earning 20-100% on stock markets, who genuinely believe the
...more
Scott
May 21, 2009 Scott rated it liked it
Shelves: 1990s, money
"Recurrent descent into insanity is not a wholly attractive feature of capitalism." -- John Kenneth Galbraith

There is madness in the markets, according to Galbraith. Speculators, he believes, are ignorant, irrational creatures driven by short-sighted greed and pride. Most lack the ability to honestly scrutinize their motives and actions -- or read a balance sheet. Relying on the supposed wisdom of the wealthy (and those who handle great wealth), short-term investors are caught up in whirlwinds o
...more
Mark
Apr 11, 2008 Mark rated it it was amazing
This review has been hidden because it contains spoilers. To view it, click here.
E
Oct 05, 2009 E rated it it was amazing
Literary mini-history of financial collapses

John Kenneth Galbraith’s short, literary book on financial speculation and the inevitability of subsequent economic catastrophe contends that devastating financial collapse is built into the free-enterprise system – an idea as intriguing today as it was when this book debuted in the mid-1990s. The late famous economist ended this treatise with a chilling question: “When will come the next great speculative episode and in what venue will it recur?” Ever
...more
Zach Vaughn
Sep 29, 2015 Zach Vaughn rated it liked it
For Galbraith, self-delusion draws people into a speculative frenzy. This delusion - this madness - cannot be legislated against; there is no policy to defend against it. While Galbraith accepts the growth and bursting of bubbles as part of the market, he does not, believe that bubbles are a benign part of the business cycle. And because it cannot be defended against, the only thing that can be done is to mitigate the effects of the crash. Of course, there will continue to be debate over whether ...more
Al Maki
Mar 19, 2014 Al Maki rated it really liked it
This book demonstrates a couple or three interesting things. Economics can be readable and easily comprehensible. Economics need not be mathematical. The operation of markets is relatively simply and predictable. I most recently re-read this book in 2008 while many were being shocked by what was happening in the economy. The stages we were going through are laid out clearly in this book. The same stages were experienced during the dot com bubble and during the S&L collapse before that. and s ...more
Jacque
Sep 26, 2014 Jacque rated it it was ok
This book was interesting and definitely stayed on the topic of financial euphoria, but I didn't enjoy reading it as much as I anticipated. I felt that a person would need a somewhat advanced knowledge about economics and the economics history to really understand the content of the book. I was looking for more of a "basic" analysis about why people get caught up in financial speculation, and I may have assumed this would be more basic since it was such a short book.
Jennifer
Dec 11, 2010 Jennifer rated it it was amazing
Reading this in the wake of the credit crisis, sub-prime mortgage debacle, and all the other calamities of the past few years, it is remarkable how accurately Galbraith describes exactly what happened - in a book that was last revised in 1992. He seems utterly prescient, and his calm conviction that the next euphoric crash is inevitable has been borne out multiple times since this book was published.

It's short, insightful and definitely worth reading.
Bimus
Apr 27, 2010 Bimus rated it really liked it
Definitely a brief read but you will get the gist of how free markets get weird when people lose their senses of proportion. Would you pay 50K for a tulip bulb? Hilarious but devastating. Remember...values go up and values go down. If values go up unusually steeply you may want to pause and think about it. Anyway...a very quick non-technical and reasonably informative read. Not a huge fan of the writing style though.
Jeff Rooney
Jan 05, 2013 Jeff Rooney rated it really liked it
This short little book is a must read to understand the recurring phenomena of economic bubble mania. He shows how these episodes throughout time always have appearance of being different but every episode has all the same essential ingredients. So if you want to be ahead of the herd next time around (I fear it won't be that long) I recommend this read!
Tirath
Jan 04, 2015 Tirath rated it really liked it
A simple, concise book on the euphoria of crowds.
And everytime it's the same thing - euphoria based on a mutated new event/ reality.
And the crowd catches the fever.

Wonder what this book would have said about the IT bubble
And about the Great Recession

This is a book to go to everytime prices or emotions become a little heady.
Ferhan Siddiqui
Apr 25, 2016 Ferhan Siddiqui rated it really liked it  ·  review of another edition
Shelves: read-nonfiction
A quick and informative (if not oversimplified) essay highlighting key moments of speculation in financial history and their inevitable reoccurance brought on by short term memory and extreme optimism. Definitely worth picking up.

"Those who forget the past are destined to repeat it"
Tyler
Jun 19, 2012 Tyler rated it liked it
This is kind of a fun read. Too short to make any complex points, the book is simply intended to point out that market booms and collapses are intrinsic to capitalism. And that we're not as smart as we think we are when we speculate in market run-ups. Good stories, and the author's sarcastic wit works perfectly with this subject.
Linda
Jun 08, 2009 Linda rated it really liked it
This short book should be a must read for all those involved in our financial institutions. Galbraith shows how we have repeatedly allowed ourselves to ride the boom/bust roller coaster and how the pattern repeats itself. If only we could see it while it was happening and be willing to put on the brakes!
Joyce Zhang
Jul 07, 2015 Joyce Zhang rated it liked it
Read this for my history extension essay and the blatant doneness gradually ceases to be subtle toward the end and that was my favourite part. I could almost hear the *sigh* emanating from its pages.

On a separate but related note. All economists I've read so far have sounded so, so annoyed?

Timothy Chklovski
Jun 29, 2012 Timothy Chklovski rated it really liked it
A fun, quick read.
Great command of English, cutting wit

Cons: not heavy on explanations or analysis. just a quick summary of some manias.

Read it for the psychological effect -- to avoid participating in manias, rather than for
gaining a deeper understanding of why they happen.
Laura
May 16, 2011 Laura rated it liked it
This one was a bit tough to slog through, despite how short it was. However, it was interesting to see how history tends to repeat itself in the financial sphere - I particularly liked the story of tulip speculation in Holland and how it mirrored the crash of 2008.
Hariharan Ragunathan
Aug 12, 2015 Hariharan Ragunathan rated it really liked it
From Tulipomania to the 1987 crash Galbraith shares the common themes of the various financial boom and bust cycles. A very short 100 page read but definitely some great negative history we must be aware and changes your view of financial markets.
David Shi
Jun 09, 2015 David Shi rated it it was amazing
a financial history written with the prose of a master. no redundancy and no unnecessary points. a rational and well researched piece that is essential for the understanding of the irrationalities that still persist in the minds of investors.
Javier
Good book about history of financial meltdowns starting with the speculation of tulips in the Netherlands in the 17th century.

I liked the following quotes:
- "The financial memory is extremely short"
- "Financial genius is before the fall"
Francisco
Exceptional

The author provides an easy to understand explanation of some of history's most memorable bubble bursts. Something that must always be on the mind of the enterprising investor if he wishes to succeed.
Jaryl Altomare
May 08, 2014 Jaryl Altomare rated it it was amazing
A brilliant economist and wordsmith; I would recommend this to anyone who would be interested in seeing the 2008 Financial Crisis in a historical context, yet may not want to read heavy-handed theory and statistics.
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John Kenneth Galbraith (10/15/1908–4/29/2006) was a Canadian-American economist. He was a Keynesian & an institutionalist, a leading proponent of 20th-century American liberalism & democratic socialism. His books on economic topics were bestsellers in the '50s & '60s. A prolific author, he produced four dozen books & over a 1000 articles on many subjects. Among his most famous work ...more
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“All crisis have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.” 1 likes
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