Perhaps the danger is not 2008, 1999, 1973 or even 1873, but 1789. Schumpeter The Economist

Charles Mackay’s “Extraordinary Popular Delusions and the Madness of Crowds” (1841)

Reviled by historians and revered among traders. The book is best known for its colourful passages on tulip mania in the 17th century and the South Sea bubble in the 18th. 

But those wanting to understand business in the 21st should instead turn to Mackay’s chapter on the “epidemic terror of the end of the world”.

Apocalyptic thinking is the strongest impulse in American capitalism today. Elon Musk, a character who could be straight from Mackay’s pages, will soon float SpaceX, a rocket company whose professed mission is to avert existential threats to humanity by establishing a colony on Mars. 

Much of Wall Street is in a fatalistic mood. Investor withdrawals from hitherto unknown private-credit funds recently shook faith in all private markets. 

The list of financial innovations central bankers say pose “systemic” risks to the economy is so long it’s hard to believe the system hasn’t collapsed under the weight of its own anxiety. 

One of these, cryptocurrency, is itself an intrinsically apocalyptic endeavour, since it claims to offer protection against government control and inflation caused by Uncle Sam’s spending 

Dates of previous calamities assume almost superstitious significance. The most read book on Wall Street last year was called “1929”. A good bet for this year is “1873”.

Traders describe the stockmarket in terms of previous catastrophes. “Will 1999 turn into 2000 or 1987? Or will the clock reset back to 1996?” wrote a strategist at Deutsche Bank this week. That’s before you even consider the prospect of a 1973. And surely a 1999 would increase the likelihood of another 2008?

Perhaps the danger is not 2008, 1999, 1973 or even 1873, but 1789.

Schumpeter The Economist 3 June 2026

https://www.economist.com/business/2026/06/03/american-capitalism-has-taken-an-apocalyptic-turn

 

Overshooting and correction is in the nature of investment booms, which in the past tended to benefit society even if not always those who did the investing.

We’re still using fiber-optic cable laid in the late 1990s and early 2000s, and relying on some railroad infrastructure from 1873. 

https://englundmacro.blogspot.com/2025/10/goldman-one-thing-could-turn-ai-into.html


Panic of 1873

https://en.wikipedia.org/wiki/Panic_of_1873

https://www.perplexity.ai/search/eb124da6-21c8-44be-83ff-25fc93dc7e98


Britain’s 1846 Railway Mania

https://englundmacro.blogspot.com/2020/09/britains-1846-railway-mania.html


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