- Paperback: 224 pages
- Publisher: Penguin; New Ed edition (29 Oct 1992)
- Language English
- ISBN-10: 0140136096
- ISBN-13: 978-0140136098
- Product Dimensions: 19.6 x 12.2 x 1.4 cm
- Average Customer Review: 4.5 out of 5 stars See all reviews (39 customer reviews)
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Amazon Bestsellers Rank:
75,333 in Books (See Top 100 in Books)
- #4 in Books > History > North America > Inter-war Period 1919-1938
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Product Description
Amazon.co.uk Review
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 in the US. 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, Amazon.com
Product Description
Examines the "gold-rush fantasy" in American psychology and describes its dire consequences. The Florida land boom, the operations of Insull, Kreuger and Hatry, and the Shandoah Corporation all come together in Galbraith's study of concerted human greed and folly.
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Customer Reviews
Most Helpful Customer Reviews
27 of 28 people found the following review helpful
Format:Paperback
One of the most surprising and delightful things that I found about the book, particularly in view of the potentially heavy subject matter, was how wonderfully readable Professor Galbraith is. There are not that many world renowned experts in any field who can write as well as they can understand their subject. It's a bit like finding that a world class footballer can also play first violin. This book reads like the work of a top drawer professional writer who has immersed him/herself in the subject for a period and, with ongoing expert guidance and hands-on editing, has brought the subject home in fine style. It reads to me a bit like Tom Wolfe (of the Right Stuff etc), wonderfully literate, sardonic prose. It really is quite unexpected. Marvellous. You will have more than one chuckle out loud which may raise one of the live-in's eyebrows. Chuckling at economics now? Hmmm.
Anyway, the stock market fell, measured by the Times Industrial Average, from 542 down to 224, from October through Nov 1929, and then more gradually to only 58, basically a tenth of its peak 1929 value, by July 1932. Drastic times indeed. This residual value that the market held, 58, in 1932, was roughly the same amount by which the market fell, in only one day, 28/10/1929, Black Thursday. The Professor's contention seems to be that the Depression and the Crash, while not totally unrelated, were less connected than popular opinion held then, or holds now. The contention is that prior to the crash, that the economy was not fundamentally sound. Although there were no glaring warning signs in the economic indicators reported in the first half of 1929, there were some red lights flickering. The Professor goes on to detail and explain those. Of course I am still no expert on what happened in 1929 and why. But due to this book I have a better idea. And it has encouraged me to read more about it. Which I intend to do shortly. And further works by the extremely readable Professor Galbraith will most certainly be on my list.
Anyway, the stock market fell, measured by the Times Industrial Average, from 542 down to 224, from October through Nov 1929, and then more gradually to only 58, basically a tenth of its peak 1929 value, by July 1932. Drastic times indeed. This residual value that the market held, 58, in 1932, was roughly the same amount by which the market fell, in only one day, 28/10/1929, Black Thursday. The Professor's contention seems to be that the Depression and the Crash, while not totally unrelated, were less connected than popular opinion held then, or holds now. The contention is that prior to the crash, that the economy was not fundamentally sound. Although there were no glaring warning signs in the economic indicators reported in the first half of 1929, there were some red lights flickering. The Professor goes on to detail and explain those. Of course I am still no expert on what happened in 1929 and why. But due to this book I have a better idea. And it has encouraged me to read more about it. Which I intend to do shortly. And further works by the extremely readable Professor Galbraith will most certainly be on my list.
8 of 8 people found the following review helpful
Format:Paperback
This is a surprisingly good reference on the 1929 crash. The book is very readable considering the subject matter. For me the run up to the crash got a bit too much detail whereas the details of aftermath and solutions got less attention than I would have liked. He also focuses on trivia about suicide rates which is quite entertaining but doesn't seem to the point (which for me is to understand and avoid these kind of wild crashes).
We seem to have duplicated the conditions of this crash almost exactly in 2008 and indulged in the same property and derivative based speculation. It's also interesting that JK Galbraith goes against current (neo-liberal) orthodoxy e.g. the rich having too much money is destabilising rather than it being a benefit as 'trickle down' theory suggests.
So a good solid history, perhaps a little light on solutions. But, by ignoring history we seem to have repeated it.
We seem to have duplicated the conditions of this crash almost exactly in 2008 and indulged in the same property and derivative based speculation. It's also interesting that JK Galbraith goes against current (neo-liberal) orthodoxy e.g. the rich having too much money is destabilising rather than it being a benefit as 'trickle down' theory suggests.
So a good solid history, perhaps a little light on solutions. But, by ignoring history we seem to have repeated it.
42 of 45 people found the following review helpful
Format:Paperback
Having recently lived through the crash of the dot-com stocks, I thought it was a particularly appropriate moment to reread John Kenneth Galbraith's famous history of the stock market crash of 1929 in the United States. Professor Galbraith's final words prove to be prophetic as he suggests that as soon as the lessons of 1929 are forgotten, the speculative excesses that led to that debacle will recur. I am sure that when the dot-bomb experience is forgotten, it will be repeated with some new class of speculation in some future generation.
With the recent experience of seeing a market mania, I came away more impressed with this book than before. Professor Galbraith does a fine job of capturing the psychology that builds into and sustains a mania. He also writes like a novelist rather than like an economist. That talent makes the message easy to grasp and appreciate.
I was also impressed by how our popular perceptions of 1929 are so often wrong. For example, most people believe that many "broken" speculators committed suicide. Although some did, there was no significant rise in the suicide rate compared to a general trend in that direction.
Economists often like to fault the Federal Reserve for the crash. That blame seems somewhat misplaced when you learn that there was very little government debt that the Fed could repurchase to create liquidity. Had the Fed acted differently, the crash might have come a little sooner and not been quite so severe . . . but the fundamentals would probably not have changed too much.
Another misperception is that everyone was speculating. By even the most generous measures, the speculators probably never numbered over a million people.
Although this is a history, Professor Galbraith takes on the economic question of how the crash contributed to the Depression. Although we know very little about the economic details of 1929, I was impressed by the point about how much consumer spending was concentrated in the wealthiest people. As they lost vast sums, both spending for consumer goods and savings for capital were decimated. With the broader income distribution of today, such a cataclysm would not be so harmful (as we saw in the aftermath of the dot-com crash).
There is an excellent parallel discussion of the land boom in Florida earlier in the 1920's that is very rewarding. I was intrigued by the ways that ever increasing ways of extending leverage were created so that both bubbles could climb higher. In Florida, people didn't actually buy the land. They bought options to buy the land, and traded those. In the stock market, holding companies sold stock and then floated new holding companies. These were capitalized with common stock, preferred and debt so that all of the appreciation would accrue to the common holders. Naturally, the opposite occurred on the way down. Many stocks fell by over 99 percent, as a result.
Everyone who is tempted to buy any item primarily because it is thought to represent an opportunity for a quick buck should read this book.
Look for true value in all that you do!
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Most Recent Customer Reviews
Pitifully Bad !
It takes a not insignificant amount of skill to take such an amazing and fascinating topic and to drain every ounce of human emotion and feeling out of it. Read more
Published 1 month ago by Bookworm
The best book ever to understand financial crashes
This is probably the most beautifully written financial book of all time, which alone makes it worth reading. Read more
Published 5 months ago by Celia Farnon
Very interesting and well written.
Very interesting and well written with a dry sense of humour. Relevant to our current financial crisis. I would recommend you read this book.
Published 5 months ago by KAH
The great man speaks....
Galbraith is perhaps the most readable of economists. His writing style though somewhat detached and seemingly lofty is laden with humour and a sense of humanity that prevents him... Read more
Published 8 months ago by os
good read, informative and at times entertaining
easy to read account of years leading to 1929 crash, some surprising stories, written in 1950s - it was interesting to compare author's predictions/forecasts with what actually... Read more
Published 8 months ago by gloxius
Very much for our times!
Let me simply say that Galbraith's "Great Crash" book is well worth reading as the world comes to terms with the folly of living on so much debt. Read more
Published 10 months ago by A. J. Burgess
Stunning and Witty Expose of a Tragedy
A great reminder of the foolishness of mankind. This is a stunningly amusing read of a disaster that exposes all (ok two - greed and envy) the weaknesses in human nature. Read more
Published 12 months ago by demola
Mistakes of 1929 duplicated
this is a superbly readable account of the 1929 Crash. Its scary to see how closely the current banking crisis replicates 1929. Read more
Published 13 months ago by dcm
Brilliant
This is one of the best books ever written on financial Manias and Panics. Galbraith cuts to the heart of the psychology that drives these events in an engaging and insightful... Read more
Published 15 months ago by Jumping Jack Flash
A must-read for any apprentice speculator
I enjoyed revisiting this classic in the middle of the 2007 crisis. Despite eighty years of innovation and economic growth, the causes of the 1929 crisis sounds familiar:
-... Read more
-... Read more
Published 15 months ago by Avid Reader
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