A book by Edward Chancellor< read all 2 reviews
In Chapter 7, as Chancellor concludes his examination of "The Gilded Age", he quotes the American economist H.C. Emory who wrote that "whereas gambling consists in placing money on artificially created risks of some fortuitous event, speculation consists in assuming the inevitable risks of changes in value." For Chancellor, speculation in the late-nineteenth century "brought more harm than good and transferred property from the hands of the many into the pockets of the few." This is also a useful perspective on the subsequent "Crash" of 1929 and thereafter, a volatile period which Chancellor also analyzes with eloquence as well as insight.
It is an even more useful perspective on the economy of a country such as Russia in the early-21st century. As Chancellor correctly points out in the Epilogue, "The issue of speculation in emerging markets and the unfettered trade in foreign currencies is the most immediate and vexing problem faced by policymakers." For me, Devil Take the Hindmost is an absolutely indispensable guide to more than three centuries of stock market speculation. He focuses on a broad range of speculators (eg Del Defoe, Benjamin Disraeli, Jay Gould, Ivan Boesky, Michael Milken, and Hilary Rodham Clinton); in process, he suggests that the primary motives which drive these and other speculators are far more complicated than many of us (I at least) had assumed...and, as often as not, these morives reflect "the national character" of the country in which a speculator succeeds or fails.
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Beginning with the "tulipomania" that gripped Holland in the 1630s, Chancellor chronicles the formations and irrational euphoria that can inflate markets, from shares of South Sea stock in England in the 1720s to real estate in Japan in the late 1980s. He characterizes the speculative spirit as one that
loves freedom, detests cant, and abhors restrictions. From the tulip Colleges of the seventeenth century to the Internet investment clubs of the late twentieth century, speculation has established itself as the most demotic of economic activities. Although profoundly secular, speculation is not simply about greed. The essence of speculation remains a Utopian yearning for freedom and equality which counterbalances the drab rationalistic materialism of the modern economic system with its inevitable inequalities of wealth.But it's precisely such inevitability that always seems to win out, when "sharply rising prices followed by sudden panic without cause" bring speculative excess to an abrupt end.
Chancellor makes Devil Take the Hindmost especially ...