Devil Take the Hindmost by Edward Chancellor: How the Book Shaped the Western World

As Chapter 10 questions, if further evidence continues to surface that capital markets do not always behave in accordance with the efficient market hypothesis, then should we reject the research that has embraced the EMH as a fundamental assumption? In this regard we can return to earlier chapters of this book in which we emphasised that theories are abstractions of reality. Capital markets are made of individuals and as such it would not (or perhaps, should not) be surprising to find that the

During the building of the Transcontinental Railroad, the railroads themselves created a large market for the steel and iron industries.4 The steel and oil industries were booming and corruption was rampant. Andrew Carnegie had cornered the market in the steel industry and John D. Rockefeller had cornered the oil market. Rockefeller bought up his competition after essentially putting them out of business by flooding the market with refined oil bringing down prices and profits. He was determined to pay no one a profit because he wanted it all for himself. He created a plan called vertical integration which consolidated his businesses into one by creating The Standard Oil Trust.5 These two men became known as barons and got rich beyond belief. In 1890, the Government enacted the Sherman Anti-Trust Act to prevent large firms from controlling one single industry and finally put a stop to these monopolies and trusts, 6 but it was not rigorously enforced until the 1900’s. This act was designed to restore competition and

A Faustian legend is a story in which a character trades something of great personal value to the devil in order to receive personal gain. Since this type of literature originated in the Fourth Century it has spread throughout the world. Two relatively recent versions of this legend are “The Devil and Tom Walker” by Washington Irving and “The Devil and Daniel Webster” by Vincent Benét. These stories show many similarities as well as a few differences. While both Benét and Irving present similar themes in setting of the tales and motivation in the Faustian character, they do differ in the nature of that character and their visual presentation of the Devil.

In Document 5, by Harry J. Carman and Harold C Syrett, A History of the American People, 1952, stated that, “As more investors put their money into securities (stocks) in the hope of making a quick profit on a speculative rise in stocks,... the exchange became a betting ring where people gambled on stocks in much the same fashion that gamblers wagered on roulette or horse races.” Investors would buy shares not knowing if the company would make a profit, making it dangerous. Stocks would go up because buyers believed that they will be able to sell it for more next time. When things are going well, consumer confidence is high and people buy.

2008 Economics Noble Prize winner and Princeton University professor, Paul Krugman, translates the roots of modern and prior financial crisis economics. In his book, The Return of Depression Economics and The Crisis of 2008, Krugman first educates the reader of historical and foreign financial crises which allows for a deeper understanding of the modern financial system. The context provided from the historical analysis proves to be a crucial prospective in such a way that the rest of Krugman’s narrative about modern finance continually relates back to the historical analysis. From there, Krugman analyzes and updates his prior studies done on the Asian financial crisis. He then applies his knowledge from historical events to the modern day financial struggles and argues his opinion about how and why our financial world operates the way it does. Krugman explains his perspective that the world believed that depression economics was no longer a problem, however the Asian crisis, Japan 's liquidity trap and the Latin American crisis having acted as warning signals to modern market struggles. Thus he says that this subject needs further examination and more resources should be poured into it. For Krugman, Depression Economics is still a relevant problem and should be further studied.

A Colossal Failure of Common Sense was one of many books to be published in the aftermath of the Financial Crisis of 2007. After seeing the global economy stall in the face of massive losses in word financial markets, many Americans sought to better understand the crisis and its causes. This book, written from the perspective of a financial market insider, provides a glimpse into the world of global finance and also seeks to explain how the players in this world were involved in the crisis. In the words of the author Lawrence McDonald, “My objective in writing A Colossal Failure of Common Sense was twofold. First, to provide … a close-up, inside view of how markets really work…..And, second, to give… as crystal clear an explanation as possible about the real reasons why the legendary Lehman Brothers met with such a swift end”1. By writing about his personal experience at Lehman Brothers and recounting stories from within the famous investment banking firm, Mr. McDonald largely succeeds at his first goal. However, the elements of personal biography and the chronological order of the book make it difficult for the reader to fully appreciate all of the varied causes of the financial crash. I believe that the main value of reading this book is in understanding these causes, with Lehman Brothers acting as a microcosm of the greater financial universe. As such, in this review I have isolated elements from Mr. McDonald’s book which highlight how the crisis

“You may perhaps ask who these rangers are?...in short they are created Indians, & the only proper troops to oppose them. They are good men, but badly disciplined…. He (Rogers) He is a very resolute clever fellow & has several times, as he terms it, banged the Indians and French heartily”

<br>Stock prices had been rising steadily since 1921, but in 1928 and 1929 they surged forward, with the average price of stocks rising over 40 percent. The stock market was totally unregulated. Margin buying in particular proceeded at a feverish pace as customers borrowed up to 75 percent of the purchase price of stocks. That easy credit lured more speculators and less creditworthy investors

In Norman Cohn’s book, Europe’s Inner Demons, his ultimate goal is to explain the development of anti-human conspiracies. He discusses how these “fantasies” were gradually tied to Christians and eventually how they influenced the European witch-hunts. It can be difficult to decipher his exact thesis as his preface itself seems to function as one large thesis. However, his thesis overall seems to be that “the great witch-hunt became possible when these practices and experiences were interpreted in terms of the traditional stereotype of the clandestine, systematically anti-human society.” He proves his thesis by discussing how the tradition began and was tied to early Christians and then discussing its transition and use by later Christians to demonize people and practices they feared or did not understand. He shows how this tradition’s precedence in history was what allowed for it to be used to such great effect during Europe’s witch hunts.

The irrational behavior in the stock market also precipitated the depression. There were cases in the late 1920s of ordinary citizens becoming very wealthy by purchasing stock. Some of these people were engaged in speculation, meaning

It is often said that perception outweighs reality and that is often the view of the stock market. News that a certain stock may be on the rise can set off a buying spree, while a tip that one may be on decline might entice people to sell. The fact that no one really knows what is going to happen one way or the other is inconsequential. John Kenneth Galbraith uses the concept of speculation as a major theme in his book The Great Crash 1929. Galbraith’s portrayal of the market before the crash focuses largely on massive speculation of overvalued stocks which were inevitably going to topple and take the wealth of the shareholders down with it. After all, the prices could not continue to go up forever. Widespread speculation was no doubt a

It was previously assumed that economic investors and regulators (agents) utilised all available information and thus market prices were a reflection of this information with assets representing their fundamental value, encouraging the position that agents’ actions were rational. The 2007-2008 Global Financial Crisis (GFC) is posited to have originated from the notion that all available information was utilised, causing agents to fail to thoroughly investigate and confirm “the true values of publicly traded securities,” leading to a failure to register the presence of an asset price bubble preceding the GFC (Ball 2009).

This quote reports that there was a small economic crash surrounding the date of October, 25, 1890. This crash, affecting London and many areas around the world, served as a precursor for the larger Panic of 1983 which can be traced back to this very event. This occurrence is one of many that all can be classified under the theme of economics and the people’s economy.

Speculation was one of the main factors for the Wall Street Crash. There were other reasons for the Wall Street Crash but everything is connected. The Wall Street simply over-heated; between 1924-29 the value of shares rose 5 times. The Wall Street Crash was a horrible consequence for the Americans. People that lived in America thought they were doing so well because of the roaring twenties. People could afford almost everything they wanted, they could go out and spend money and buy many consumer goods. As the Wall Street Crash came people’s lives changed a lot and they couldn’t afford to do anything.

During the economic boom of the 1920’s, it is a universal climax as almost everyone looks to the pursuit of wealth instead of relying on God’s roles. Globally, they see soaring stock markets, providing euphoric investors with incredible financial