“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one!”
Many years ago I bought a book called Extraordinary Popular Delusions and the Madness of Crowds. Written in 1841 by Charles Mackay, it examines times throughout history where large groups of people have been led to believe in falsehoods and what has been the fallout of those beliefs. I have thought of this book many times recently when reading about the financial follies of Wall Street and Madoff’s scheme. What caused so many smart people to “believe” that things were working just fine? From the book, it is clear that people are easily led to believe in schemes that promise them wealth even when on the face of it, it makes no sense.
In the 17th century, wealthy Europeans were throwing their fortunes into tulip bulbs only to lose bundles when the prices fell to rational levels! In the 18th century, the South Sea bubble was more like our current mess though. But at after it all fell apart, at least “the estates of the directors of the company were confiscated and used to relieve the suffering of the victims.” I am appalled that the CEOs, CFOs, and others who were at the helm when everything fell apart are still getting their huge salaries and even bemoaning the losses of their bonuses. Why can’t we take their estates and spread it around for the victims.