Product Description

Of Galbraith's classic examination of the 1929 financial collapse, the Atlantic Monthly said:"Economic writings are seldom notable for their entertainment value, but this book is. Galbraith's prose has grace and wit, and he distills a good deal of sardonic fun from the whopping errors of the nation's oracles and the wondrous antics of the financial community." Now, with the stock market riding historic highs, the celebrated economist returns with new insights on the legacy of our past and the consequences of blind optimism and power plays within the financial community.

Product Details

• Amazon Sales Rank: #38072 in Books
• Published on: 1997-04-30
• Number of items: 1
• Binding: Paperback
• 224 pages

Amazon.com
Rampant speculation. Record trading volumes. Assets bought not because of their value but because the buyer believes he can sell them for more in a day or two, or an hour or two. Welcome to the late 1920s. There are obvious and absolute parallels to the great bull market of the late 1990s, writes Galbraith in a new introduction dated 1997. Of course, Galbraith notes, every financial bubble since 1929 has been compared to the Great Crash, which is why this book has never been out of print since it became a bestseller in 1955.

Galbraith writes with great wit and erudition about the perilous actions of investors, and the curious inaction of the government. He notes that the problem wasn't a scarcity of securities to buy and sell; "the ingenuity and zeal with which companies were devised in which securities might be sold was as remarkable as anything." Those words become strikingly relevant in light of revenue-negative start-up companies coming into the market each week in the 1990s, along with fragmented pieces of established companies, like real estate and bottling plants. Of course, the 1920s were different from the 1990s. There was no safety net below citizens, no unemployment insurance or Social Security. And today we don't have the creepy investment trusts--in which shares of companies that held some stocks and bonds were sold for several times the assets' market value. But, boy, are the similarities spooky, particularly the prevailing trend at the time toward corporate mergers and industry consolidations--not to mention all the partially informed people who imagined themselves to be financial geniuses because the shares of stock they bought kept going up. --Lou Schuler

Card catalog description
Reviewing Galbraith's classic examination of the 1929 financial collapse, The Atlantic Monthly said, "Economic writings are seldom notable for their entertainment value, but this book is. Galbraith's prose has grace and wit, and he distills a good deal of sardonic fun from the whopping errors of the nation's oracles and the wondrous antics of the financial community." For this edition, the celebrated economist has written a new introduction with fresh insights on the legacy of our past and the consequences of blind optimism and power plays within the financial community.

About the Author
John Kenneth Galbraith who was born in 1908, is the Paul M. Warburg Professor of Economics Emeritus at Harvard University and a past president of the American Academy of Arts and Letters. He is the distinguished author of thirty-one books spanning three decades, including The Affluent Society, The Good Society, and The Great Crash. He has been awarded honorary degrees from Harvard, Oxford, the University of Paris, and Moscow University, and in 1997 he was inducted into the Order of Canada and received the Robert F. Kennedy Book Award for Lifetime Achievement. In 2000, at a White House ceremony, he was given the Presidential Medal of Freedom. He lives in Cambridge, Massachusetts.

Customer Reviews

Economics at its best
When I was an undergraduate, the church around which the campus was centered hosted informal luncheons twice a month. These affairs were held in the church's large and comfortable basement, and usually had nothing to do with religion. The enticement for students to attend the luncheons (aside from a free box lunch) was the reputation or position of a fellow diner the church had managed to ensnare, and to be included at a gathering, a student had only to sign up while space was still available. Sometimes this personage would be as humble as the Dean of Student Affairs. On one occasion, it was John Kenneth Galbraith.
Galbraith, I remember, was arrogant, intelligent, and witty, and all three of these attributes permeate his contribution to the literature on the crash. Galbraith himself remarks in the introduction that he "never enjoyed writing a book more," and I can well imagine that he laughed out loud as he penned the hilarious passages that make this book so enjoyable. His explanation of the increase in embezzlement during the late twenties, which he euphemistically calls "informal financial arrangements," and the fall of various illustrious personages associated with the Wall Street crash make for some of the funniest reading I have ever encountered.
There is a serious side to the book, however, wherein Galbraith succinctly analyzes the causes of the crash (in his humble opinion). For those looking for parallels in today's market, there is one striking similarity between 1929 and today: the impact that the collapse in securities prices had on the well-to-do. Because the well-to-do, then as now, "disposed of a large proportion of consumer income," and "were a source of a lion's share of personal saving and investment," the losses suffered by this group of investor's "had broad effects on expenditure and income in the economy at large." This, perhaps, is Galbraith's indictment of the capitalist system, and the fact that he offers no remedy for this situation is tacit acceptance of the inherent flaw of capitalism. Galbraith, though, is no socialist or economic radical. As he casually claimed during the luncheon I attended, he ran the US economy during World War II, and I've never heard of any extreme economic policies that were instituted during the war. On the other hand, I'm not now, nor have I ever been, an economist.
Galbraith does a brilliant job of tracing the fluctuations in the market from 1927 to 1932, demonstrating in the process that the crash was not confined to a single day, nor even to a single month. He explodes a few myths about the crash (it was caused by a lack of available securities; suicides after the crash skyrocketed) and explains the impact of the growth of investment trusts and the lack of involvement by regulatory bodies (such as they were). It is unlikely a better short course on the crash of 1929 exists, and it is a certainty that no more entertaining book on the subject exists. Galbraith's little tome is convincing evidence that the dismal science need not be.

Black Tuesday ..
Is interesting to know more about one of the most dramatic events in the history of financial markets. If you really want to know what really speculation is, you have to read this book, because great part of the problem that happened that bloody October of 1929 was due to an overvalued market thanks to the speculators. It is also interesting to note that in those days, despite the stocks prices were dropping, there was always somebody buying for the rise. This crash of the stock market took on a bad foot the economy, igniting the great depression. In my opinion the problem with the book is that is not very engaging, but despite of that this book was a good reading --- 3,5 stars!

A good overview
I wasn't sure whether to give this 3 or 4 stars (I would have preferred 3.5), so I rounded down. Sorry.

As for the book, itself, this is a light, quick and even entertaining take on the market mania that caused the 1929 crash. While the book doesn't go into great detail, it does provide some good insights into both the crowd psychology that always produces crashes as well as the objects of their desire.

The investment trusts which were bid up so ridiculously in the late 20's bear just a bit more than an eerie resemblance to the tech stocks of the late 90's, the subprime paper of present day, the M&A mania that recently burst, the housing market, ethanol, sovereign wealth funds and... well just about everything on CNBC these days. More seriously, the similarities between than and now are quite extensive, and one can learn a valuable lesson from the largest calamity in U.S. financial history.

I do wish that the book would have gone more into all of the reasons behind not only the crash but also the Great Depression. While the 2 are intertwined, this book only offers insight into the stock market and, sadly, leaves the entire story untold.