My intro to psychology classes was one of the most valuable classes I ever took, just with the way it systematically shattered my own notion of how much I could trust my own notions of perception and thought to be a rational and accurate reflection of reality. I definitely had a notion of how irrational “people” could be before that, but of course I somehow thought I was above all that.
Excellent book. The high point for me was the enterprising fellow who set up a stall in London during the South Sea Bubble (the original bubble!), allowing people to invest in "An undertaking of great advantage, but nobody to know what it is." People lined up for a couple of days to give the fellow their money...after which the fellow disappeared, never to be seen again. No lies detected!
Along similar lines, the economist John Kenneth Galbraith has a book on financial bubbles and irrational crowd mentalities in financial market over the centuries: A Short History of Financial Euphoria [1]. Short, approachable, and interesting.
This is a fun book, but it famously embellishes, exaggerates, and sensationalizes the tulip bubble [1]. The efficient markets people obviously don't like the story, but there doesn't seem to be much evidence that it happened on the same scale that Mackay portrays it.
Interestingly, Charles Mackay, the author of Extraordinary Popular Delusions and the Madness of Crowds, was himself one of the most ardent cheerleaders for the Railway Mania [0] "urging people to put their money into the railways and pooh-poohing those who were concerned." and "He had become famous by mocking the bubbles of the past - but had rather less to say about the far more serious bubble that he himself had helped to inflate."[1]
If you're interested in this type of stuff I strongly recommend "The True Believer" by Eric Hoffer. He describes the social psychology of mass movements, looking largely at religion and nationalism. He wrote it in 1951, but feels nearly perfectly applicable to today's global nationalistic trends. It's an incredibly compelling read.
This book is an interesting chronicle of financial bubble history, but a far more distilled and actionable understanding of crowd psychology is Gustav Le Bonn's "The Crowd - A Study of the popular Mind" (1895): https://www.gutenberg.org/ebooks/445
You have to be careful while studying Gustave Le Bon and his works. He was a product of his times and so there is an undercurrent of racism in this book due his being influenced by pseudo-scientific "Social Darwinism" theories - https://en.wikipedia.org/wiki/Social_Darwinism
Approach it as just a sociological/psychological case study of the 1800s and there is much to learn.
The guy was horrified by Napoleon and the violence of the French Revolution, so he mainly spends the book criticizing his fellow white catholic people in France. Yes, he says racist things about other nations, but the parts about France which was all his exact same ethnic group / religion are more timeless.
For a more recent and way more reliable book on economics mania I would suggest “Boom and Bust: A Global History of Financial Bubbles” by William Quinn and John D. Turner
This book is a contribution to the natural history of nonsense. It is a study in the paleontology of delusion. It is an antibody for all who are allergic to Stardust. It is a manual of chiropody for feet of clay.
...
This book is intended as a sort of handbook for young recruits in the gay cause of common sense. It indicates where the main armies of ignorance are now encamped and tells in a secret code what garrisons are undermanned or mutinous. It tries to show the use of cover and camouflage and the techniques of infiltration and retreat. It maps road blocks and mine fields and shows how to rig a booby trap. It warns of counterespionage and gives— again in code—the five infallible signs to know a fool. When the recruit has finished with it he can toss it over the wall into the enemy's barracks. It may encourage desertion.
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[ 5.1 ms ] story [ 37.9 ms ] threadBut why are you trusting the psychology class? Do you believe it was made by special people with rational and accurate perception of reality?
[1] https://www.goodreads.com/en/book/show/270746.A_Short_Histor...
[1] https://en.wikipedia.org/wiki/Tulip_mania#Modern_views
[0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1927396
[1] https://www.bbc.com/news/business-51311368
[1]: https://en.wikipedia.org/wiki/The_True_Believer
https://spinchange.github.io/memoirs-of-extraordinary-popula...
The visual design of the actual online book/HTML is excellent.
Approach it as just a sociological/psychological case study of the 1800s and there is much to learn.
Book overview and excerpts - https://en.wikipedia.org/wiki/The_Crowd:_A_Study_of_the_Popu...
Author - https://en.wikipedia.org/wiki/Gustave_Le_Bon
https://www.goodreads.com/book/show/48989633-boom-and-bust
Author - https://en.wikipedia.org/wiki/Bergen_Evans
Reviews - https://www.goodreads.com/book/show/375107.The_Natural_Histo...
Pdf - https://tzmvirginia.wordpress.com/wp-content/uploads/2013/12...
Excerpt:
This book is a contribution to the natural history of nonsense. It is a study in the paleontology of delusion. It is an antibody for all who are allergic to Stardust. It is a manual of chiropody for feet of clay.
...
This book is intended as a sort of handbook for young recruits in the gay cause of common sense. It indicates where the main armies of ignorance are now encamped and tells in a secret code what garrisons are undermanned or mutinous. It tries to show the use of cover and camouflage and the techniques of infiltration and retreat. It maps road blocks and mine fields and shows how to rig a booby trap. It warns of counterespionage and gives— again in code—the five infallible signs to know a fool. When the recruit has finished with it he can toss it over the wall into the enemy's barracks. It may encourage desertion.