In 1955, the economist John Kenneth Galbraith published a slim volume entitled The Great Crash 1929, a history of the Wall Street crash. In it, he chronicled, with his customary caustic wit, the rampant speculation that led to the catastrophe and its striking resemblance to all speculative bubbles in one key respect: speculators’ endearing belief that they can become rich without doing any work. The book ran through many editions and reprints, for many of which Galbraith wrote new prefaces. When his Harvard colleagues asked him why he continued to do this, his reply was that a good knowledge of what happened in 1929 would be the best safeguard against its recurrence.
In believing this, Galbraith was uncharacteristically naive, as even a cursory inspection of recent history will confirm. Consider, for example, the first internet boom of 1995-2000, in which dotcom startups that possessed websites but had neither revenues nor customers briefly acquired valuations in excess of General Motors. Or think of Ireland’s “Celtic tiger” moment between the mid-1990s and 2008, with its attendant property boom fostered by a government that functioned as the political wing of the construction industry. And just to bring the story of human greed and foolishness up to date, consider the frenzy about cryptocurrencies, “Web3” and blockchain in which we are enmeshed.
