A Short History of Financial Euphoria

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   Each era imagines it has discovered something new in finance, yet it repeats the same speculative mechanisms, only with a different name and technology.

   A Short History of Financial Euphoria · 1990

   Every bubble is sold as novelty, but it's the same speculation wheel with new scenery.

   Galbraith argues that financial euphoria has a short memory because the recollection of losses fades with the generation that lived through them. His mechanism: every bubble arrives with a narrative about novelty — land, railways, the internet — which makes old warnings seem inapplicable. His example is the 1929 crash: many investors believed stocks could only rise, because a new industry had arrived. The book shows that genuine technological novelty does not abolish the psychology of speculation; it merely gives it a fresh setting.

   “The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version.”

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