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 | | The Great Crash 1929 by John Kenneth Galbraith ISBN-10: 9780395859995 ISBN-10: 0-395-85999-9 ISBN-13: 9780395859995 ISBN-13: 978-0-395-85999-5 Paperback 1997-04-30 Mariner Books Find Lowest Price |
Editorials | ||
Amazon.com Rampant speculation. Record trading volumes. Assets bought not because of their value but because the buyer believes he can sell them for more in a day or two, or an hour or two. Welcome to the late 1920s. There are obvious and absolute parallels to the great bull market of the late 1990s, writes Galbraith in a new introduction dated 1997. Of course, Galbraith notes, every financial bubble since 1929 has been compared to the Great Crash, which is why this book has never been out of print since it became a bestseller in 1955. Galbraith writes with great wit and erudition about the perilous actions of investors, and the curious inaction of the government. He notes that the problem wasn't a scarcity of securities to buy and sell; "the ingenuity and zeal with which companies were devised in which securities might be sold was as remarkable as anything." Those words become strikingly relevant in light of revenue-negative start-up companies coming into the market each week in the 1990s, along with fragmented pieces of established companies, like real estate and bottling plants. Of course, the 1920s were different from the 1990s. There was no safety net below citizens, no unemployment insurance or Social Security. And today we don't have the creepy investment trusts--in which shares of companies that held some stocks and bonds were sold for several times the assets' market value. But, boy, are the similarities spooky, particularly the prevailing trend at the time toward corporate mergers and industry consolidations--not to mention all the partially informed people who imagined themselves to be financial geniuses because the shares of stock they bought kept going up. --Lou Schuler | ||
Product Description Of Galbraith's classic examination of the 1929 financial collapse, the Atlantic Monthly said:"Economic writings are seldom notable for their entertainment value, but this book is. Galbraith's prose has grace and wit, and he distills a good deal of sardonic fun from the whopping errors of the nation's oracles and the wondrous antics of the financial community." Now, with the stock market riding historic highs, the celebrated economist returns with new insights on the legacy of our past and the consequences of blind optimism and power plays within the financial community. | ||
Reviews | ||
Essential Reading I found this book captivating, in a "gallows humor" sort of way. Although written many years ago, and recounting events in the distant past, it should be required reading for anyone in the markets today. More specifically, it should have been required reading a year ago (mid 2007) for those invested in finance and property sectors. Whether the malaise in those sectors (some stocks down 90%) spreads eventually to the general indexes remains to be seen. Tony Loton, author -- DON'T LOSE MONEY! (in the Stock Markets) Financial Trading Patterns | ||
EXCELLENT INTRODUCTION TO THE 1929 CRASH There are bigger and more detailed accounts of the 1929 Crash, but Galbraith's effort is excellent at distilling and depicting what happened and why. It's a great place to begin a study of the Great Depression. I was surprised at how well Galbraith wrote, and his command of the subject. None of it is difficult to grasp, which is why it's a great place to begin. | ||
4.5 Stars-Galbraith could have gotten 5 stars if he had integrated the ancient wisdom of Adam Smith into his book. Galbraith does an excellent job in demonstrating how the private sector commercial bankers' unregulated short run,short sighted, penny wise ,pound foolish profit and sales maximizing behavior provided the financing and leverage for the real estate and stock market bubbles of the mid to late 1920's that led to the financial collapse of the DOW by mid 1931.The writing and analysis is excellent. I have one major criticism.No mention is made of the analysis provided by Adam Smith of precisely the problem discussed by Galbraith in this book. Smith's analysis covers nearly 100 pages and correctly identifies what the problem is-loans made by private commercial banks to 3 different categories of borrower-prodigals,imprudent risk takers(the "new" balloon payment financing of the 1925-1928 real estate bubble closely resembles the sub prime and alternative- A loans of the 2003-2006 period).Galbraith certainly could have used the analysis provided by Smith on pp.250-340 of The Wealth of Nations [1776;Modern Library (Cannan)edition] to buttress his position . Unfortunately,it appears that Galbraith never read Smith's book. He could have made use of the support provided by Smith,universally acknowledged as the world's greatest economist. The WN is a timeless classic that is just as applicable and relevant today as it was in 1776. Washington and Hamilton used Smith as the base of early American economic policy .The reader of Galbraith's book is advised to purchase a copy of WN as well. | ||
Economics at its best When I was an undergraduate, the church around which the campus was centered hosted informal luncheons twice a month. These affairs were held in the church's large and comfortable basement, and usually had nothing to do with religion. The enticement for students to attend the luncheons (aside from a free box lunch) was the reputation or position of a fellow diner the church had managed to ensnare, and to be included at a gathering, a student had only to sign up while space was still available. Sometimes this personage would be as humble as the Dean of Student Affairs. On one occasion, it was John Kenneth Galbraith. Galbraith, I remember, was arrogant, intelligent, and witty, and all three of these attributes permeate his contribution to the literature on the crash. Galbraith himself remarks in the introduction that he "never enjoyed writing a book more," and I can well imagine that he laughed out loud as he penned the hilarious passages that make this book so enjoyable. His explanation of the increase in embezzlement during the late twenties, which he euphemistically calls "informal financial arrangements," and the fall of various illustrious personages associated with the Wall Street crash make for some of the funniest reading I have ever encountered. There is a serious side to the book, however, wherein Galbraith succinctly analyzes the causes of the crash (in his humble opinion). For those looking for parallels in today's market, there is one striking similarity between 1929 and today: the impact that the collapse in securities prices had on the well-to-do. Because the well-to-do, then as now, "disposed of a large proportion of consumer income," and "were a source of a lion's share of personal saving and investment," the losses suffered by this group of investor's "had broad effects on expenditure and income in the economy at large." This, perhaps, is Galbraith's indictment of the capitalist system, and the fact that he offers no remedy for this situation is tacit acceptance of the inherent flaw of capitalism. Galbraith, though, is no socialist or economic radical. As he casually claimed during the luncheon I attended, he ran the US economy during World War II, and I've never heard of any extreme economic policies that were instituted during the war. On the other hand, I'm not now, nor have I ever been, an economist. Galbraith does a brilliant job of tracing the fluctuations in the market from 1927 to 1932, demonstrating in the process that the crash was not confined to a single day, nor even to a single month. He explodes a few myths about the crash (it was caused by a lack of available securities; suicides after the crash skyrocketed) and explains the impact of the growth of investment trusts and the lack of involvement by regulatory bodies (such as they were). It is unlikely a better short course on the crash of 1929 exists, and it is a certainty that no more entertaining book on the subject exists. Galbraith's little tome is convincing evidence that the dismal science need not be. | ||
Black Tuesday .. Is interesting to know more about one of the most dramatic events in the history of financial markets. If you really want to know what really speculation is, you have to read this book, because great part of the problem that happened that bloody October of 1929 was due to an overvalued market thanks to the speculators. It is also interesting to note that in those days, despite the stocks prices were dropping, there was always somebody buying for the rise. This crash of the stock market took on a bad foot the economy, igniting the great depression. In my opinion the problem with the book is that is not very engaging, but despite of that this book was a good reading --- 3,5 stars! | ||