RECORDED BEFORE AN AUDIENCE AT THE BRISTOL FESTIVAL OF ECONOMICS (17 November 2022)
The Dutch went so potty over tulip bulbs within the 1600s that many had been ruined when the inflated costs they had been paying for the crops collapsed – that’s the oft-repeated story later promoted by best-selling Scottish author Charles Mackay. It’s really a gross exaggeration.
Mackay’s writings about financial bubbles bursting entertained and knowledgeable his Victorian readers – and proceed to affect us immediately – however how did Mackay fare when confronted with a inventory market mania proper earlier than his eyes? The railway-building increase of the 1840s confirmed he wasn’t so insightful in any case.
The important supply on this story is the work of Andrew Odlyzko, notably “Charles Mackay’s personal extraordinary common delusions and the railway mania“.
On the tulip mania, see Anne Goldgar Tulipmania: Cash, Honor and Data within the Dutch Golden Age and Mike Sprint Tulipomania.
On the railway mania, see Odlyzko “Collective Hallucinations and inefficient markets” and William Quinn and John Turner’s Growth and Bust, supplemented by Christian Wolmar’s Fireplace and Steam and John Francis Historical past of the English Railway.
Charlotte Bronte’s letter to Ellen Nussey is quoted in M. Hope Dodds “George Hudson and the Brontës” Brontë Research Vol 38 No 4 Nov 2013