.......... from the conclusion of "A Short History of Financial Euphoria" by John Kenneth Galbraith, an 81 page essay published in 1990 ...
"There are few references in life so common as that to the lessons of history. Those who know it not are doomed to repeat it. The lessons of history can, however, be disturbingly ambiguous, and perhaps especially so in economics. That is because economic life is in a process of continuous transformation, and in consequence ... is an uncertain guide to the present or the future.
... let the lessons be summarized. The circumstances that induce the recurrent lapses into financial dementia have not changed in any truly operative fashion since the Tulipomania of 1636-1637. Individuals and institutions are captured by the wondrous satisfaction from accruing wealth. The associated illusion of insight is protected, in turn, by the oft-noted public impression that intelligence, one's own and that of others, marches in close step with the possession of money. Out of that belief, thus instilled, then comes action -- the bidding up of values, whether in land, securities [or other assets]. The upward movement confirms the commitment to personal and group wisdom. And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by a desperate and largely unsuccessful effort to get out."
... one of the most powerful and enlightening books I have ever read ...
Ken Wilson |
