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A Short History of Financial Euphoria

4.08  ·  Rating details ·  1,236 ratings  ·  112 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. ...more
Paperback, 113 pages
Published July 1st 1994 by Penguin Books (first published January 1st 1990)
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Daniel Clausen
Aug 02, 2018 rated it it was amazing
This is the second book I've read in a short time about financial manias, and it's an important one. The book was written in the early 90s at a time when the junk bond bubble had collapsed.

The book is short, simple, and intelligent. It also comes from a sensible left-of-center perspective that I feel is both wise and sadly lacking into today's landscape. I don't know everything about Mr. Galbraith's financial view, but he seems Neo-Keynesian.

The central arguments of the book are these:
1) The
...more
T
Dec 15, 2020 rated it really liked it
"The financial memory should be assumed to last no more than 20 years" John Kenneth Galbraith, 1994.
"Financial genius is before the fall"

Damn this book aged like a fine wine...
...more
Lainie
Feb 16, 2009 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
Haaris Mateen
Apr 29, 2020 rated it really liked it
Reading massive tomes at the moment so this book came as a welcome change. It's a fast recap of major economic crises over the past 500 years. Galbraith argues there are three commonalities behind all these events -- leverage, mass delusion, and scapegoating. The first two represent the exuberant upsurge; the latter, the panicked unraveling.

Wouldn't be the book to go if you're looking to understand the anatomy of each crisis. There are longer and meatier books out there for that.
...more
Wej
Jan 08, 2020 rated it really liked it
The title says it all. Galbraith introduces the reader to the history of financial bubbles. Highly readable introduction to the topic, just enough to increase the appetite for more (e.g. books by Charles Mackay or Reinhart and Rogoff).

In this brief essay he describes the major financial crises: Tulipmania, John Law's scheme, South Sea Company, US railroad boom, 1929 crisis, and several 20th century moments of euphoria. The US takes the centre stage in the book as a place where many recent bubble
...more
R.
Jun 18, 2018 rated it really liked it  ·  review of another edition
Bit unfair to rational choice theory, but it was a different time perhaps. It is interesting to note that Galbraith places the blame for speculative mania quite purely within crowd psychology rather than more institutional effects like easy credit, etc. Hope is an unbacked asset, and people get silly. Oh, and thought his discussion of the first two American central banks, regional politics, and the wildcat banks were quite interesting, but everything discussed is generally in passing; it is a sh ...more
John
Jul 25, 2015 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
Francisco
Jan 04, 2016 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
Ravi Abhyankar
Sep 09, 2014 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
Chuck
Aug 25, 2010 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
Tirath
Jan 04, 2015 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.
...more
Roger
Aug 11, 2009 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.
...more
Joyce Zhang
Oct 29, 2014 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?

...more
Hariharan Ragunathan
Jun 08, 2015 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.
Francisco
Feb 15, 2016 rated it it was amazing  ·  review of another edition
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.
...more
Ferhan Siddiqui
Mar 31, 2016 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"
...more
Dina
Feb 03, 2015 rated it it was amazing
"Only two things are infinite, the universe and human stupidity, and I'm not sure about the former." - A.Einstein ...more
Uros
May 06, 2015 rated it really liked it
Brilliant. A welcome reminder of brevity of financial memory and mass folly in finance.

Anyone taking part in financial markets should read this once a year.
Robert Rigoni
Short book, quick read but packed with a lot of wisdom.
Robert Karl
Dec 02, 2015 rated it it was amazing
Short, witty, to-the-point. A whirlwind tour of some booms and crashes and one economist's take on the cause: irrational exuberance on the part of investors that happens over and over. ...more
Marilyn Pocius
Dec 29, 2015 rated it it was amazing
Must read for anybody who invests, gambles or cares about history. Truth is stranger than any fiction.
Peter Bösenberg
Mar 30, 2016 rated it really liked it
i read the german translation - very poor translated, difficult to read in german
InvestingByTheBooks.com
Aug 21, 2018 rated it it was amazing
In 1954 the Canadian-born, Keynesian celebrity economist, serial author, academic enfant terrible and producer of timeless quotations - Ken Galbraith published his now classic The Great Crash of 1929. It’s never been out of print since. A Short History of Financial Euphoria is a compendious later day sequel, with a broader scope as it tries to establish a framework for how to analyze financial bubbles. It is a short, witty book with superb, sometimes cynical language. It’s a pleasure to read.The ...more
Ashain Perera
Jul 11, 2020 rated it really liked it
A quick read on financial lessons of the past. Human nature never changes and remains constant. Collectively, We have what is known as financial dementia: A financial memory of 20 years. According to the author, it usually takes 20 years for the memory of one disaster to be erased and for some other variant of previous dementia to come forward. It is also generally the time required for a new breed of investors to enter the scene and contribute to more financial innovation. He further elaborates ...more
Mark
Jan 03, 2019 rated it it was amazing
Shelves: favorites, economics
Brilliant little book, or long essay, by perhaps the greatest economic mind of the late 20th century.

In summary: There is no true financial innovation, only variations on the theme of leverage, and the specious association, or perceived but nonexistent correlation, between money and intelligence contributes to speculative euphoria and programmed collapse. In fact, “having money may mean, as often in the past and frequently in the present, that the person is foolishly indifferent to legal constr
...more
Will Bell
Oct 29, 2018 rated it liked it
Its not so much a bool, its an essay in bool form, but the blurb does confirm this. I do love JK Galbraiths melodious writing style, his eloquence and timbre make you not want to stop reading.

The book is as with most of his stuff, just too darn short, and its strange to say that as this is not a criticism often aimed at economics writers. His style is so engaging it leaves you wanting more, but the book fairly skirts over most of the interesting episodes it chronicles, never really getting into
...more
Paul
Jan 08, 2021 rated it really liked it
This essay explains financial mania and the following crashes by historic examples beginning with the dutch tulip crisis through history till 1987. It identifies key elements and how they've been very similar for centuries. Since this book was released several more of these happend and the book applies to them, too. It never goes deep into the financial detail but concentrates on the effect of leverage and the patterns of behaviour which are replicated every time.
It's a quick and interesting rea
...more
Philip Vasquez
Jan 02, 2021 rated it really liked it
A great introduction to the fickleness of financial euphoria up to the time of its publishing as it does not cater for more recent phenomenon. Would be great to understand what the late Galbraith's views would be on bitcoin and decentralised finance and whether they are truly paradigm shifting or, in his vernacular, would be dressing up an old financial mechanism in new technology.

A good and easy read. Would recommend to anyone looking to learn more on financial markets, key events and black swa
...more
Shashank
Mar 24, 2021 rated it really liked it
Shelves: non-fiction
A very brief read on the manias of South sea, Tulips, the 1929 and 1980s crash.

To summarise:
1) Manias are part and parcel of financial markets. One can navigate them but they can't be avoided
2) Those who seem to have credibility and petition new financial innovations are those that are the ultimate fall guys( think now ARK, CHAMATH, MUSK)
3) The underlying emotion of " things only go up" is the first sign of the mania
4) Never is mania attributed to the public and their fervour, it is only attribu
...more
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John Kenneth Galbraith was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism and democratic socialism. His books on economic topics were bestsellers in the 1950s and 1960s. A prolific author, he produced four dozen books & over a 1000 articles on many subjects. Among his most famous works was his economics trilogy: Am ...more

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