Devil Take the Hindmost

Dates Covered: 200 BC - 1980
ISBN: 0374138583
HH Rating:

Our Take

Betting your shirt before you've got it is nothing new. Looking for a quick buck in the financial markets, speculators have conspired to artificially inflate stock or futures prices only to see them crashing down again several times in recorded history. As Edward Chancellor notes in Devil take the Hindmost: A History of Financial Speculation, the cycle has resurfaced as long as the abstract distribution of profits (i.e., stocks, bonds, etc.) has existed. This existence reaches way back, he argues, to the second century BC with Rome, and he gently walks us through the more famous speculative bubbles: Holland's tulip mania, the South Sea bubble, the U.S. stock market crash of 1929, and Japan's crash in the 1980s, and even the curious stockjobbers of 1690s Britain.

Chancellor, a contributor to The Economist, is thoroughly well read and possesses an excellent eye for historical detail. He commands the particulars of the narrative with an even keel, noting opposing viewpoints to the salient economic theory wherever applicable, even in relatively obscure hypothetical texts. He also weeds out some of the more spectacular legends and presents some of the more human elements. Robert Campeau, an eccentric corporate raider in the 1980s, Chancellor reports,

flew regularly to Germany for injections of sheep brains and traveled everywhere with large supplies of mineral water and fresh oranges. His unusual appearance was enhanced by a penchant for wearing porkpie hats with feathers sticking out. In New York, Campeau would call his bankers in the middle of the night and hold meetings with them in his hotel room dressed only in a pair of underpants.

Such details are what make history fun. However, Chancellor nails his thesis so solidly -- that the cycle of financial speculation is a common one throughout history, despite loud protestations by stockholders and analysts to the contrary -- that the differences between the episodes reported in the book are so minimal as to be redundant. Widows and workingmen buy into these stocks put forth by insiders, the market crashes, there is a mild national panic, and everyone forgets and does it again two generations later. Save for the injections of personality, in many ways the chapters are nigh interchangeable. There are sufficient differences in social elements, and not simply economic ones, to warrant a more complete picture of the public's perception of speculation as it evolved and continues to evolve. Chancellor is right in thinking that crowd dynamics don't change that much, but the public climate between the tulip brokers and the corporate raiders is a fascinating story in itself. The similarity between these cycles is undeniable -- but we'd like to see enough differences to convince us we're not reading about one of them twice. The sparse gems about the individuals involved in the dealings just aren't enough to carry a book this repetitive. Shame, because today's money grubbing capitalists could do with a briny drink from the well of historical perspective.

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