Memoirs of Extraordinary Popular Delusions and the Madness of... by Charles Mackay

There are lessons to be learned from them in the present day. His book highlights several stories from history of various manias that took place. The reactions are very similar and predictable and this “madness” leads to a downward spiral with undesirable effects. Mackay’s central theme in the book is that the tendency of humans to develop a herd mentality leads to individuals in the herd to act and react to various stimuli. People have been doing crazy things for centuries. There have been many fads in recent years but they are by no means a recent phenomenon. We were warned against blindly following the masses by Charles Mackay a long time ago. Peter Thiel once said “The most contrarian thing of all is not to oppose the crowd but to think for yourself”. It explores how easily we can be misled and how illogically we can think when popular opinion influences us. elections in 20 social scientists demonstrated that large groups sharing similar ideas on social media may operate like echo chambers amplifying and strengthening beliefs in misinformation.Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay is a study on crowd psychology and is extremely relevant to the present day, despite being written back in 1841. 'Financier Bernard Baruch credited the lessons he learned from Extraordinary Popular Delusions with his decision to sell all his stock ahead of the crash of 1929' (Wikipedia article on Extraordinary Popular Delusions, accessed 12-09-08).īetween the U.S. 'Other bubbles described by Mackay are the South Sea Company bubble of 1711–1720, and the Mississippi Company bubble of 1719–1720. Allegedly, some tulip bulb varieties briefly became the most expensive objects in the world, 1637. According to Mackay, during this bubble, speculators from all walks of life bought and sold tulip bulbs and even futures contracts on them. 'Among the alleged bubbles or financial manias described by Mackay is the Dutch tulip mania of the early seventeenth century. The sub-headings of the three volumes were 'National Delusions', 'Peculiar Follies', and 'Philosophical Delusions.' It also contained early discussions of topics which were much later studied by sentiment analysis. The three volume work published in London on what later came to be called 'investor psychology' contained, among many other things, notable descriptions of financial bubbles. In 1841 Scottish poet, journalist, and song writer Charles Mackay issued Memoirs of Extraordinary Popular Delusions and the Madness of Crowds.

Memoirs of Extraordinary Popular Delusions and the Madness of... by Charles Mackay