Memoirs of Extraordinary Popular Delusions and the Madness of Crowds

Long before behavioral economists won Nobel Prizes for explaining why humans make irrational financial decisions, Charles Mackay wrote this savage, entertaining anatomy of collective madness. First published in 1841, it remains the definitive account of how smart people do catastrophically stupid things together. Mackay documents three legendary bubbles: John Law's Mississippi Scheme, which turned France briefly mad with paper money; the South Sea Bubble, where British aristocracy lost fortunes in a single afternoon; and Tulipomania, the Dutch obsession that made a single bulb worth more than an Amsterdam house. But the book ranges wider, into alchemy, crusades, haunted houses, and the strange popularity of famous criminals. What unites these disparate episodes is Mackay's clear-eyed insight: humans are not rational actors, never were, and believing otherwise is itself a delusion. For anyone who watched the dot-com crash, the 2008 financial crisis, or the recent crypto frenzy, Mackay offers uncomfortable truths. The wind of popular excitement carries everything before it. Caution and intelligence are no protection against the seduction of the crowd.