Extraordinary Popular Delusions and the Madness of Crowds

Published in 1841, Extraordinary Popular Delusions and the Madness of Crowds is one of the earliest books to explore financial booms and busts, and human hysteria and irrationality more generally. It is especially interesting to note the similarities in Charles Mackay’s examples to our own recent financial crises; derivatives and options for example were prevalent during the 1720 South Sea Bubble, when traders could buy options on the sailcloth used for expeditions. Mackay (1814-1889) was a journalist and writes in an entertaining tabloid style. However, modern books from authors like Charles Kindleberger, Robert Shiller or Hyman Minsky are more relevant and informative.