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Charles MacKay Issues "Memoirs of Extraordinary Popular Delusions"


In 1841 Scottish poet, journalist, and song writer Charles Mackay issued Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. The three volume work published in London on what later came to be called "investor psychology" contained, among many other things, notable descriptions of financial bubbles. It also contained early discussions of topics which were much later studied by sentiment analysis. The sub-headings of the three volumes were "National Delusions", "Peculiar Follies", and "Philosophical Delusions."

"Among the alleged bubbles or financial manias described by Mackay is the Dutch tulip mania of the early seventeenth century. According to Mackay, during this bubble, speculators from all walks of life bought and sold tulip bulbs and even futures contracts on them. Allegedly, some tulip bulb varieties briefly became the most expensive objects in the world, 1637.

"Other bubbles described by Mackay are the South Sea Company bubble of 1711–1720, and the Mississippi Company bubble of 1719–1720. . . .

"Financier Bernard Baruch credited the lessons he learned from Extraordinary Popular Delusions with his decision to sell all his stock ahead of the crash of 1929" (Wikipedia article on Extraordinary Popular Delusions, accessed 12-09-08).

Between the U.S. elections in 2018 and 2020 social scientists demonstrated that large groups sharing similar ideas on social media may operate like echo chambers amplifying and strengthening beliefs in misinformation.

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