Extraordinary Popular Delusions and the Madness of Crowds
by Charles MacKay · first published 2003
52% recommend43% neutral6% critical
Why HN recommends it
Nineteenth-century history of financial manias and mass delusions, including tulip mania, the South Sea bubble and alchemy. Its recurring patterns help investors and tech watchers spot hype and bubbles.
Common criticism: Some say its history is unreliable, leaning on satirical accounts and weak evidence
Summarised by Claude from recommending comments
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…easier to write and publish than carefully researched facts and analysis, and (b) opinion is also easier and more titillating to read. But really, things are improving. Another great morale-lifter was Extraordinary Popular Delusions and the Madness of Crowds. When you read how common and insane were the myths and fads of previous times, you think how lucky you are to be alive now, when the irrationality quotient is so much lower.
on “Alan Kay: "An oral culture of assertions held around an electronic campfire?"” ↗…happening. I would strongly recommend a critical reading of Doug Noland's Credit Bubble Bulletin, Paul Krugman's blog and at least a university level text on Money and Banking. Also Charles Mackay's classic Extraordinary Popular Delusions and the Madness of Crowds also merits a look. Many people have an emotional reaction to money. This emotional reaction is part of what can make something "money-like" but if one wishes to understand what's going on, one needs…
on “EFF no longer accepts donations in Bitcoins” ↗You're relying on one person's summary of the tulip bubble 'facts'. Other sources give great detail of the tulip purchasing craze. For example, read the tulip chapter in 'Extraordinary Popular Delusions and The Madness of Crowds', by Charles Mackay. It cites many sources that detail the crazy high prices people did actually pay for tulips.
on “Hackers nab $500k as Enigma is compromised weeks before its ICO” ↗…about alchemy and other delusions which is actually still really interesting. I'd recommend it. It was originally published in 1841. It includes chapters on financial bubbles as well as alchemy. [1] Extraordinary Popular Delusions and The Madness of Crowds https://www.amazon.co.uk/Extraordinary-Popular-Delusions-Mad...
on “An alchemist who failed to make gold but still made history in porcelain” ↗Those who do not read "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay are doomed to repeat it.
on “What Happens to Stocks and Cryptocurrencies When the Fed Stops Raining Money?” ↗It's a rule of mine to avoid any financial area that looks, acts, and talks like a mania after reading Charles Mackay's "Extraordinary Popular Delusions and the Madness of Crowds (1841)," which I discovered at random in a strip mall bookstore in Rhode Island. Reading it saved me over $300,000 dollars before the dotcom crash because I sold everything and got out (my timing was…
on “Web3/Crypto: Why Bother?” ↗Information Rules (Varian and Shapiro) Economics of network industries (Shy) Extraordinary Popular Delusions and the Madness of Crowds (Mackay) The information Rules book belongs on your bookshelf if you want to understand how information goods are priced and how competition works in information driven industries. (Varian is now google's…
on “Ask YC: What are some the best business books?” ↗"Extraordinary Popular Delusions and the Madness of Crowds" (Mackay, 1841) http://www.gutenberg.org/browse/authors/m#a516 Good chapters on tulip mania, the original South Sea bubble, Mississippi company, the introduction of paper money and hyperinflation in…
on “Bitcoin HITS $400” ↗…* "Devil Take the Hindmost," by Edward Chancellor: https://www.amazon.com/dp/0452281806 * "A Short History of Financial Euphoria," by John Kenneth Galbraith: https://www.amazon.com/dp/0140238565 * "Extraordinary Popular Delusions and the Madness of Crowds," by Charles Mackay: http://www.amazon.com/exec/obidos/ASIN/1586635581
on “Ask HN: Non-tech books that have helped you grow professionally?” ↗"Extraordinary Popular Delusions and the Madness of Crowds" (1841). See all the large-scale scams in their original forms.
on “Ask HN: What are the best unknown books you have read?” ↗There's a great book on behavior like this, "Extraordinary Popular Delusions and The Madness of Crowds" by Charles MacKay. It was first published in 1841 but feels like it could have been written today. McKay was editor of The Illustrated London News in 1850's. https://www.amazon.com/gp/product/B081ZD9CL1/ref=dbs_a_def_r...
on “Trading halted as U.S. stocks plummet” ↗…First, understand that if we are playing head or tails, me having $10 and you having $1,000,000 , who will end up getting the other's money? 2.- Most independents money managers I know, love this book; Extraordinary Popular Delusions and the Madness of Crowds - by Charles Mackay http://www.gutenberg.org/ebooks/24518
on “Ask HN: Book recommendations for understanding financial systems?” ↗> I wish there was some rulebook on how to spot trends that will be short-lived. It's not exactly a rulebook, but if you read enough of Extraordinary Popular Delusions and the Madness of Crowds, there are some patterns that recur over and over. It was written 180 years ago, but it's amazing how little the psychology behind manias has changed. In particular, a good golden rule is to not follow…
on “The NFT market bubble has popped?” ↗The Art of the Long View - Peter Schwartz Any book by Tom Kyte. Pragmatic Thinking and Learning: Refactor Your Wetware - Andy Hunt The Media Lab: Inventing the Future at M.I.T. - Stewart Brand Extraordinary Popular Delusions and the Madness of Crowds - Charles Mackay Only the Paranoid Survive - Andy Grove
on “Ask HN: Name 3-5 books that had the most impact on your career and knowledge?” ↗The History of the Decline and Fall of the Roman Empire by Edward Gibbon (1776) It's many volumes but I never considered not finishing. Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay (1841) Reading that helped me understand the NFT craze and how these things get going and usually end
on “What history books would you recommend?” ↗