how market speculation can destroy intelligence, 23 Feb 2006
this small book shows in a logical way how speculation can make intelligent people do stupid things.galbraith shows in detail how money can in a practical sense buys up the intelligence of those involved in it.the recent dot.com mania demonstrates galbraiths analysis at work,as people were swept away in the dot.com tide.galbraith is a true prophet,may he live to a hundred.

Bubble Story, 02 Jul 2001
IN THIS SMALL but witty and well-crafted book, Galbraith chronicles the major speculative episodes, from the seventeenth-century tulipmania to the junk-bond follies of the eighties. The book was first published in 1990 and thus the recent dotcom-bubble burst is not covered. Nevertheless, the Harvard professor's book is still worth reading. A reason is that he claims to have identified common patterns in the history of financial euphoria. 'In small ways the history of the great speculative boom and its aftermath does change. Much, much more remains the same', he predicts.

The perennial features are these. Some seemingly new and desirable artifact or development captures the financial imagination of a large number of people (say, group 1). The arrival of tulips in Western Europe, gold in Louisiana, the advent of joint-stock companies (corporations), real estate in Florida, or the economic designs of Reagan are all examples. The price of the object of speculation goes up. The object when bought today is worth more tomorrow. This attracts new buyers and assures a further price increase. Those in group 1 are persuaded that the new price-enhancing circumstance is under control, and expect the market to stay up and go up, perhaps indefinitely. The individual or institution that discovered the novelty (in group 2) is thought to be ahead of the mob. Fewer in number, individuals of group 2 perceive the speculative mood of the moment, try to get the maximum reward from the increase as it continues, and plan to be out before the eventual crash. The affluence of group 2 is wrongly associated, by group 1, with a miraculous financial genius. When something triggers the ultimate reversal, group 2 decides now is time to get out. Group 1 finds its illusion abruptly destroyed. Both groups sell or try to sell. The market collapses.

Galbraith observes that, in this process, 'speculation buys up the intelligence of those involved'. The crowd converts the individual in group 1 from possessing reasonable good sense to stupidity. Those in group 2 also make errors of vanity by thinking they will beat the speculative game. It seems that 'all people are most credulous when they are most happy'. Reputable public and financial opinion reinforces euphoria by condemning those who express doubt or dissent by warning of a crash. The celebrated Yale economist Irving Fisher, for instance, spoke out sharply against Roger Babson, who foresaw the crash of 1929. But the critic must wait until after the crash for any approval, Galbraith laments.

Despite the fact that common features in speculative episodes recur, history counts little because a financial disaster is quickly forgotten by a new, self-confident generation. Something is perceived as a financial novelty merely because the financial memory is short: 'financial operations do not lend themselves to innovation'. Insightfully, Galbraith notices that all financial innovation involves the creation of debt leveraged against more limited assets. This is the case of banks, whose debt is leveraged on a given volume of hard cash. This is also the case of the holding companies created in the 1920s, whose stockholders issued bonds and preferred stock to buy other stocks. And this is the case, too, of the junk bonds of the mergers-and-acquisitions mania in the 1980s, when high-risk, higher-interest bonds were issued in greater volume against the credit of the companies being taken over. As Galbraith puts it: 'the world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version'.

However a crisis may strike at any moment whenever a debt is perceived to become dangerously out of scale in relation to the underlying means of payment. After the crash, group 1 expresses anger against the 'financial genius' of group 2. 'Financial genius is before the fall', Galbraith prophesies. Group 1 finally realizes that having more money may mean that a person in group 2 is indifferent to moral constraints. Group 2 could have even gone beyond the law, as far as leverage is concerned. Incarceration of some individuals of group 2 may follow. Leverage is seen as morally disputable at last.

Talks of regulation and reform follow. However, the speculation itself or the aberrant optimism that lay behind it will not be discussed. 'Nothing is more remarkable than this: in the aftermath of speculation, the reality will be all but ignored.' Why? Because it is easier for group 1 to blame one individual or a few individuals in group 2 than to take responsibility for its own widespread naivety. And also because there is a need to find a cause for the crash that is external to the market itself. After all, the market is believed to be 'a neutral and accurate reflection of external influences; it is not supposed to be subject to an inherent and internal dynamic of error'. The deficit in the federal budget was, for instance, blamed for the 1987 crash. Another anecdotal account of Black Monday has been that the crash was caused by portfolio insurance computer programs which sold stocks as the market went lower.

Galbraith's book is compulsory reading for economists, especially those working on behavioural finance or econophysics. Being an antidote to illusory financial euphoria, the book is thus of interest to the general public as well. Galbraith's own sense of déjà vu towards speculative financial bubbles enabled him to predict the crash of 19 October 1987. People really seem to be intrinsically unable to prevent getting stuck in the error-prone dynamics of bull markets, as in his 'bubble story'. But perhaps they have already learned some minor lessons on how to better protect themselves in the aftermath of crashes. Indeed despite the fact that the Black Monday crash was nearly twice as severe as the stock market collapse of 1929, it did not trigger a depression. Likewise the internet-bubble burst of 2000 had a surprisingly modest effect on wealth. Will we finally learn to learn from history?

ok as in introduction, but other texts provide more depth, 01 May 2001
I bought this book after having read, and enjoyed immensely, Edward Chancellor's "Devil Take the Hindmost". Chancellor's text is a very readable book which serves as an excellent intoduction to financial speculation and bubble-mania. I bought Galbraith on the expectation of some greater insights - Galbraith's book on the Great Crash of 1929 is after all the definitive work on that episode. What I got was an introductory essay on the subject with a few, but not enough (at least for me), acute words of wisdom from the great man.

I should have noted that this book is described as a primer. Neverthless, this is 100 page book that could easily have been fitted into half that with a proper font and pagination. One shouldn't judge a book by its length, rather its quality, but I have to say I was expecting rather more for my money.

All that said, Galbraith's book is an interesting read and his insights into the popular linking of money and intelligence in particular are well articulated. He also resists the temptation to say "I told you so", one of a very few who could rightly claim the foresight to do so.

This is not a bad book, merely an introductory essay. For the interested reader I would suggest jumping straight in with The Great Crash, or turning to Devil Take The Hindmost for a popularist, but nevertheless scholarly overview.

how market speculation can destroy intelligence, 23 Feb 2006
this small book shows in a logical way how speculation can make intelligent people do stupid things.galbraith shows in detail how money can in a practical sense buys up the intelligence of those involved in it.the recent dot.com mania demonstrates galbraiths analysis at work,as people were swept away in the dot.com tide.galbraith is a true prophet,may he live to a hundred.

Bubble Story, 02 Jul 2001
IN THIS SMALL but witty and well-crafted book, Galbraith chronicles the major speculative episodes, from the seventeenth-century tulipmania to the junk-bond follies of the eighties. The book was first published in 1990 and thus the recent dotcom-bubble burst is not covered. Nevertheless, the Harvard professor's book is still worth reading. A reason is that he claims to have identified common patterns in the history of financial euphoria. 'In small ways the history of the great speculative boom and its aftermath does change. Much, much more remains the same', he predicts.

The perennial features are these. Some seemingly new and desirable artifact or development captures the financial imagination of a large number of people (say, group 1). The arrival of tulips in Western Europe, gold in Louisiana, the advent of joint-stock companies (corporations), real estate in Florida, or the economic designs of Reagan are all examples. The price of the object of speculation goes up. The object when bought today is worth more tomorrow. This attracts new buyers and assures a further price increase. Those in group 1 are persuaded that the new price-enhancing circumstance is under control, and expect the market to stay up and go up, perhaps indefinitely. The individual or institution that discovered the novelty (in group 2) is thought to be ahead of the mob. Fewer in number, individuals of group 2 perceive the speculative mood of the moment, try to get the maximum reward from the increase as it continues, and plan to be out before the eventual crash. The affluence of group 2 is wrongly associated, by group 1, with a miraculous financial genius. When something triggers the ultimate reversal, group 2 decides now is time to get out. Group 1 finds its illusion abruptly destroyed. Both groups sell or try to sell. The market collapses.

Galbraith observes that, in this process, 'speculation buys up the intelligence of those involved'. The crowd converts the individual in group 1 from possessing reasonable good sense to stupidity. Those in group 2 also make errors of vanity by thinking they will beat the speculative game. It seems that 'all people are most credulous when they are most happy'. Reputable public and financial opinion reinforces euphoria by condemning those who express doubt or dissent by warning of a crash. The celebrated Yale economist Irving Fisher, for instance, spoke out sharply against Roger Babson, who foresaw the crash of 1929. But the critic must wait until after the crash for any approval, Galbraith laments.

Despite the fact that common features in speculative episodes recur, history counts little because a financial disaster is quickly forgotten by a new, self-confident generation. Something is perceived as a financial novelty merely because the financial memory is short: 'financial operations do not lend themselves to innovation'. Insightfully, Galbraith notices that all financial innovation involves the creation of debt leveraged against more limited assets. This is the case of banks, whose debt is leveraged on a given volume of hard cash. This is also the case of the holding companies created in the 1920s, whose stockholders issued bonds and preferred stock to buy other stocks. And this is the case, too, of the junk bonds of the mergers-and-acquisitions mania in the 1980s, when high-risk, higher-interest bonds were issued in greater volume against the credit of the companies being taken over. As Galbraith puts it: 'the world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version'.

However a crisis may strike at any moment whenever a debt is perceived to become dangerously out of scale in relation to the underlying means of payment. After the crash, group 1 expresses anger against the 'financial genius' of group 2. 'Financial genius is before the fall', Galbraith prophesies. Group 1 finally realizes that having more money may mean that a person in group 2 is indifferent to moral constraints. Group 2 could have even gone beyond the law, as far as leverage is concerned. Incarceration of some individuals of group 2 may follow. Leverage is seen as morally disputable at last.

Talks of regulation and reform follow. However, the speculation itself or the aberrant optimism that lay behind it will not be discussed. 'Nothing is more remarkable than this: in the aftermath of speculation, the reality will be all but ignored.' Why? Because it is easier for group 1 to blame one individual or a few individuals in group 2 than to take responsibility for its own widespread naivety. And also because there is a need to find a cause for the crash that is external to the market itself. After all, the market is believed to be 'a neutral and accurate reflection of external influences; it is not supposed to be subject to an inherent and internal dynamic of error'. The deficit in the federal budget was, for instance, blamed for the 1987 crash. Another anecdotal account of Black Monday has been that the crash was caused by portfolio insurance computer programs which sold stocks as the market went lower.

Galbraith's book is compulsory reading for economists, especially those working on behavioural finance or econophysics. Being an antidote to illusory financial euphoria, the book is thus of interest to the general public as well. Galbraith's own sense of déjà vu towards speculative financial bubbles enabled him to predict the crash of 19 October 1987. People really seem to be intrinsically unable to prevent getting stuck in the error-prone dynamics of bull markets, as in his 'bubble story'. But perhaps they have already learned some minor lessons on how to better protect themselves in the aftermath of crashes. Indeed despite the fact that the Black Monday crash was nearly twice as severe as the stock market collapse of 1929, it did not trigger a depression. Likewise the internet-bubble burst of 2000 had a surprisingly modest effect on wealth. Will we finally learn to learn from history?

ok as in introduction, but other texts provide more depth, 01 May 2001
I bought this book after having read, and enjoyed immensely, Edward Chancellor's "Devil Take the Hindmost". Chancellor's text is a very readable book which serves as an excellent intoduction to financial speculation and bubble-mania. I bought Galbraith on the expectation of some greater insights - Galbraith's book on the Great Crash of 1929 is after all the definitive work on that episode. What I got was an introductory essay on the subject with a few, but not enough (at least for me), acute words of wisdom from the great man.

I should have noted that this book is described as a primer. Neverthless, this is 100 page book that could easily have been fitted into half that with a proper font and pagination. One shouldn't judge a book by its length, rather its quality, but I have to say I was expecting rather more for my money.

All that said, Galbraith's book is an interesting read and his insights into the popular linking of money and intelligence in particular are well articulated. He also resists the temptation to say "I told you so", one of a very few who could rightly claim the foresight to do so.

This is not a bad book, merely an introductory essay. For the interested reader I would suggest jumping straight in with The Great Crash, or turning to Devil Take The Hindmost for a popularist, but nevertheless scholarly overview.

Not bad but not one of the best books in the series, 15 Nov 2008
I have worked my way through a large number of books in the "Very Short Introduction" series.

Most are excellent although a few have been duds.

I have also read a fair amount of economics previously.

I found that the approach used in this book was rather unusual and made the book ssem rather mediocre to me. It seemed to me that this book tried to find examples that are a bit unusual but may have been better in such a small volume sticking to central concerns.

how market speculation can destroy intelligence, 23 Feb 2006
this small book shows in a logical way how speculation can make intelligent people do stupid things.galbraith shows in detail how money can in a practical sense buys up the intelligence of those involved in it.the recent dot.com mania demonstrates galbraiths analysis at work,as people were swept away in the dot.com tide.galbraith is a true prophet,may he live to a hundred.

Bubble Story, 02 Jul 2001
IN THIS SMALL but witty and well-crafted book, Galbraith chronicles the major speculative episodes, from the seventeenth-century tulipmania to the junk-bond follies of the eighties. The book was first published in 1990 and thus the recent dotcom-bubble burst is not covered. Nevertheless, the Harvard professor's book is still worth reading. A reason is that he claims to have identified common patterns in the history of financial euphoria. 'In small ways the history of the great speculative boom and its aftermath does change. Much, much more remains the same', he predicts.

The perennial features are these. Some seemingly new and desirable artifact or development captures the financial imagination of a large number of people (say, group 1). The arrival of tulips in Western Europe, gold in Louisiana, the advent of joint-stock companies (corporations), real estate in Florida, or the economic designs of Reagan are all examples. The price of the object of speculation goes up. The object when bought today is worth more tomorrow. This attracts new buyers and assures a further price increase. Those in group 1 are persuaded that the new price-enhancing circumstance is under control, and expect the market to stay up and go up, perhaps indefinitely. The individual or institution that discovered the novelty (in group 2) is thought to be ahead of the mob. Fewer in number, individuals of group 2 perceive the speculative mood of the moment, try to get the maximum reward from the increase as it continues, and plan to be out before the eventual crash. The affluence of group 2 is wrongly associated, by group 1, with a miraculous financial genius. When something triggers the ultimate reversal, group 2 decides now is time to get out. Group 1 finds its illusion abruptly destroyed. Both groups sell or try to sell. The market collapses.

Galbraith observes that, in this process, 'speculation buys up the intelligence of those involved'. The crowd converts the individual in group 1 from possessing reasonable good sense to stupidity. Those in group 2 also make errors of vanity by thinking they will beat the speculative game. It seems that 'all people are most credulous when they are most happy'. Reputable public and financial opinion reinforces euphoria by condemning those who express doubt or dissent by warning of a crash. The celebrated Yale economist Irving Fisher, for instance, spoke out sharply against Roger Babson, who foresaw the crash of 1929. But the critic must wait until after the crash for any approval, Galbraith laments.

Despite the fact that common features in speculative episodes recur, history counts little because a financial disaster is quickly forgotten by a new, self-confident generation. Something is perceived as a financial novelty merely because the financial memory is short: 'financial operations do not lend themselves to innovation'. Insightfully, Galbraith notices that all financial innovation involves the creation of debt leveraged against more limited assets. This is the case of banks, whose debt is leveraged on a given volume of hard cash. This is also the case of the holding companies created in the 1920s, whose stockholders issued bonds and preferred stock to buy other stocks. And this is the case, too, of the junk bonds of the mergers-and-acquisitions mania in the 1980s, when high-risk, higher-interest bonds were issued in greater volume against the credit of the companies being taken over. As Galbraith puts it: 'the world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version'.

However a crisis may strike at any moment whenever a debt is perceived to become dangerously out of scale in relation to the underlying means of payment. After the crash, group 1 expresses anger against the 'financial genius' of group 2. 'Financial genius is before the fall', Galbraith prophesies. Group 1 finally realizes that having more money may mean that a person in group 2 is indifferent to moral constraints. Group 2 could have even gone beyond the law, as far as leverage is concerned. Incarceration of some individuals of group 2 may follow. Leverage is seen as morally disputable at last.

Talks of regulation and reform follow. However, the speculation itself or the aberrant optimism that lay behind it will not be discussed. 'Nothing is more remarkable than this: in the aftermath of speculation, the reality will be all but ignored.' Why? Because it is easier for group 1 to blame one individual or a few individuals in group 2 than to take responsibility for its own widespread naivety. And also because there is a need to find a cause for the crash that is external to the market itself. After all, the market is believed to be 'a neutral and accurate reflection of external influences; it is not supposed to be subject to an inherent and internal dynamic of error'. The deficit in the federal budget was, for instance, blamed for the 1987 crash. Another anecdotal account of Black Monday has been that the crash was caused by portfolio insurance computer programs which sold stocks as the market went lower.

Galbraith's book is compulsory reading for economists, especially those working on behavioural finance or econophysics. Being an antidote to illusory financial euphoria, the book is thus of interest to the general public as well. Galbraith's own sense of déjà vu towards speculative financial bubbles enabled him to predict the crash of 19 October 1987. People really seem to be intrinsically unable to prevent getting stuck in the error-prone dynamics of bull markets, as in his 'bubble story'. But perhaps they have already learned some minor lessons on how to better protect themselves in the aftermath of crashes. Indeed despite the fact that the Black Monday crash was nearly twice as severe as the stock market collapse of 1929, it did not trigger a depression. Likewise the internet-bubble burst of 2000 had a surprisingly modest effect on wealth. Will we finally learn to learn from history?

ok as in introduction, but other texts provide more depth, 01 May 2001
I bought this book after having read, and enjoyed immensely, Edward Chancellor's "Devil Take the Hindmost". Chancellor's text is a very readable book which serves as an excellent intoduction to financial speculation and bubble-mania. I bought Galbraith on the expectation of some greater insights - Galbraith's book on the Great Crash of 1929 is after all the definitive work on that episode. What I got was an introductory essay on the subject with a few, but not enough (at least for me), acute words of wisdom from the great man.

I should have noted that this book is described as a primer. Neverthless, this is 100 page book that could easily have been fitted into half that with a proper font and pagination. One shouldn't judge a book by its length, rather its quality, but I have to say I was expecting rather more for my money.

All that said, Galbraith's book is an interesting read and his insights into the popular linking of money and intelligence in particular are well articulated. He also resists the temptation to say "I told you so", one of a very few who could rightly claim the foresight to do so.

This is not a bad book, merely an introductory essay. For the interested reader I would suggest jumping straight in with The Great Crash, or turning to Devil Take The Hindmost for a popularist, but nevertheless scholarly overview.

Not bad but not one of the best books in the series, 15 Nov 2008
I have worked my way through a large number of books in the "Very Short Introduction" series.

Most are excellent although a few have been duds.

I have also read a fair amount of economics previously.

I found that the approach used in this book was rather unusual and made the book ssem rather mediocre to me. It seemed to me that this book tried to find examples that are a bit unusual but may have been better in such a small volume sticking to central concerns.

A cobbler should stick to his last, 28 Dec 2007
This book usually comes highly recommended. A 'classic' by a Nobel prize winner. Hayek was in fact an economist, but for the purposes of this book he assumed a political commentator's stance. His thesis is that Socialism is slavery, that the fascist Right and the fascist Left are two sides of the same coin, and that where there is dirty work to be done, dirty men will come forward to do it. Now you might say that's a no-brainer and wonder how it merits the 'classic' tag. Well you won't find the answer in the book. Overblown and in places pompous, you could be forgiven for thinking the author was being paid by the line. What is it with academics that one word won't do when four or five can be squeezed out instead? Perhaps they think verbosity succours the thesis. First published in 1944 and still going strong, The Road to Serfdom suffers primarily from being blinded by the times it was written in, and the way the world has changed since. Socialism is indeed slavery, but if Hayek had stuck to being an economist he might have foreseen the last gasp of the gold standard, the rise of globalism, fiat money, and fractional reserve banking. For debt is also slavery with the neat twist that the debtor usually can't wait to sign himself into bondage. The first step on the road to serfdom was simply the abolition of hard-asset backed currencies - after that, it was downhill all the way.

An interesting read, at least from a historical perpsective, 05 Dec 2007
I read this in conjunction with a number of "pro-socialism" books. While I disagreed with much of what Hayek had to say here it was nevertheless an interesting read, and an insight into right-wing economic thinking.

The basic premise of the book is to assert a necessary relationship between socialism and totalitarianism. Obviously the necessity of this link has subsequently been disproven by cases such as Sweden. And his case against the use of propaganda within socialist society can now be equally clearly drawn against capitalist states. The basis of his case was German National Socialism (Nazism). He emphasised the socialist aspect of that regime but I felt that the nationalist aspect of it was underplayed as he tried to make his case against socialism.

He also seriously underplayed the claimed rationale for socialism and made no serious attempt to explore socialist doctrine, although his discussion about collectivism and central planning was interesting (even though such planning may not be essential to a socialist system). He made some small noise about welfare systems and such but frankly these were all but lost in the noise.

Other writers in that period such as Popper and Russell managed to reach some similar results without the overt hostility, and they on the whole were considerably more prepared to discuss hybrid systems and search for compromisal solutions to the problems raised both by pure socialism and pure unfettered capitalism. I'd recommend reading these and other authors for a more balanced thesis.

The book is at least well thought out and cohesive - much more so perhaps than the typical Macarthyist thinking that borrows its conclusion without its reasoning.

That this book was written at the tail of WW2 should not be forgotten. This book, while seriously flawed, is very much a product of a world in chaos and in a state of rapid change. It is that, moreso than its message that makes this a compelling read.


A terrible book espousing a vile philosophy, 16 Nov 2007
It is my belief that this text is one of the most abhorrent in the history of political philosophy and that despite the very best intentions (a defense of liberal democracy) by Friedrich Von Hayek, is fundamentally flawed in its arguement and damaging in its impact.

The attack on totalitarian form of governments is logical and articulate, but it is when he turns to socialism that it all falls apart, to an extent I initially thought he was being satirical till the horrible truth dawned. Hayek's uncompromising libertarian views make a huge leap of logic in linking basic socialist reform, such as the establishment of the welfare state, to totalitarianism, even likening Stafford Cripps, a decent hardworking Chancellor whose sole goal was to see the realisation of the Beveridge Report, with Joseph Stalin. Of course this makes perfect sense, likening a man who slaved away to try and stamp out inequality and poverty in Britain and provide a safety net for those on the edges of society with a murdering tyrant responsible for millions of deaths.

He does not even consider the essential nature of the welfare state as a protection from those in society that are less fortunate, and that cutting back on it just to lower taxes would only benefit the rich while leaving the average hard-working man with no social security, no free healthcare and no private pension.

Then theres the chapter that he likens socialism with Nazism. True, Hitler's party was named the National Socialists, but it wasn't so, merely claimed to be to stir up working class support. Though both do promote economic planning, that is the only similarity. The ideology is completely different. Hitler was a fiersome anti-socialist who rounded up and socialists and sent them to concentration camps! He identifies Bolshevik socialism as the opposite of Nazism (talk about straight from the horses mouth). Fascism is a corporatist philosophy that views property completely differently, it assumes racial superiority and promotes imperialist empire building. Hayek's link between the two is as tenuous as you can possibly get, a clear example of Godwin's law ie the groundless comparison between Nazism and the object of your criticism to discredit it.

Of course the most evil thing about this text apart from the selfish, heartless, morally disgusting philosophy it spouts is the way it influenced the neo-liberalism of Margaret Thatcher. That's right, the tyrant whose reign was characterised by doubled unemployment, civil unrest, TWO recessions attributable to monetarism, unelected Quangos, regressive taxation, a massive widening in the rich-poor gap, the start of the credit card culture, the poll tax riots, degradations of social occupations, the destruction of british industry, the slashing of workers rights, the selling of state companies for a rediculously low price, botched privatisation of the infastructure, doubled crime and the creation of a broken, selfish society was operating following the gospel according to Hayek!

Yes, as you may have guessed, I am a socialist, but I am also a passionate defender of democracy. To me, Hayek creates a bogeyman picture of the best vehicle for equality and opportunity the world has: democratic socialism. As a result people fear this model and are driven to a selfish and damaging alternative. Hayek thinks that he is standing up for freedom and benefitting the people but he couldn't be more wrong. What use is a small state if people are unemployed and starving? what use are cheap taxes if vital institutions are controlled by greedy profiteering corporations who care less about the people than their prophet margins?

Hayek is not a Karl Popper, mouting an intelligent attack on Marxism, he is a ranting right winger who thinks he is making a blueprint for a libertarian heaven when instead he is pointing towards the hell of a broken society. Do not be fooled by his arguements, what he is promoting is a "survival of the richest and strongest" philosophy that cares not for the needy, the unemployed, the sick, the empoverished or the disadvantaged but merely for those on the top of society. Read it by all means, but do not as many do blindly accept the arguements made. It is a truly vile book.

Ultimately disappoints, 27 Jul 2007
This is one of the greatest simple anti-state capitalist manifestos you will find, its punchy, its pacey, lots of utopian eulogising of what Hayek thought were much malinged and misunderstood market forces.

However for any sensible and clear sighted reader this book is bound to disappoint, Hayek treats very different ideological and political forces as essentially similar, it has the combination of promise and threat that most market populism has (market forces will deliver/market forces will strike back) and just doesnt seem to take issues like unemployment or other consequences of unmitigated market forces that seriously or treats them with a kind of unreality.

It is a book, I suspect, which will ultimately prove most pleasing to anyone searching for a pretty plain and simple world view with clear cut heroes and villains, much like its mirror opposites in some socialist and conservative literature.

However that said it is well written and deserves to receive a wide readership, in fact I would say the very socialist or (welfare) liberal circles who Hayek protrays as either villains or the fatally conceited "useful idiots" of villains could benefit from reading it, while, like myself, they are unlikely to agree.

Good defence of liberal democracy from the dark 1940s, 05 Jul 2007
First published in 1944, Hayek's polemical work is a defence of classical liberalism in the face of totalitarianisms of both right- and left-wing hues. The author deplores all sorts of `collectivism', that is departures from such aspects of liberalism as the free market, individualism and the minimal state. Thus, conservatives such as Bismarck (responsible for business cartels) share the dock with communists such as Lenin. In a chapter entitled `The Socialist Roots of National Socialism', Hayek argues that collectivist achievements such as the welfare state and the war economy paved the way for the collectivism of the Nazis: `Few are ready to recognize that the rise of Fascism and Nazism was not a reaction against the socialist trends of the preceding period, but a necessary outcome of those tendencies.' (p. 4). This is a mirror image of the classic Marxist argument that Fascism, far from being a reaction against the upheaval in the capitalist economy in the 1930s, was in fact the logical culmination of capitalism, the last redoubt of the bourgeoisie.
Intriguing an argument as it is, I think Hayek over emphasizes the socialist element of National Socialism: as far as I know Hitler was quite happy to allow German capitalists to make large profits as long as they agreed to economic planning. Also, the German Workers' Party adopted `National Socialist' and `Workers' in the title only to attract working class votes, and not out of any enthusiasm for Marxism. Hayek would probably object that planning is planning regardless of whether capitalists are allowed to make profits or not.
This, of course, is the central conceit of the book and its Achilles heel: that all planning is bad and precipitates the onset of totalitarianism: `There is no other possibility than either the order governed by the impersonal discipline of the market or that directed by the will of a few individuals...' (p. 205). This argument is disingenuous. While Hayek recognizes that there are degrees of classical liberalism - he eschews what he calls the `dogmatic laissez-faire attitude' (p. 37) - he fails to concede that there are likewise degrees of collectivism. As a work of prediction, 'Serfdom' proved very wide of the mark, for although various postwar European governments instituted what Hayek would refer to as `collectivism' and `planning', they operated within the framework of liberal democracy, private property, and individual political liberty.
In spite of such objections, given all I had read about it, I was expecting Serfdom to be worse than it was. Given the atmosphere it was written in, the book's thesis is actually quite progressive. Maybe that's why such progressives as John Maynard Keynes, Bertrand Russell and George Orwell either gave it favorable reviews or were sympathetic to its argument. As a defence of liberal democracy, Hayek's polemic is indispensable.

how market speculation can destroy intelligence, 23 Feb 2006
this small book shows in a logical way how speculation can make intelligent people do stupid things.galbraith shows in detail how money can in a practical sense buys up the intelligence of those involved in it.the recent dot.com mania demonstrates galbraiths analysis at work,as people were swept away in the dot.com tide.galbraith is a true prophet,may he live to a hundred.

Bubble Story, 02 Jul 2001
IN THIS SMALL but witty and well-crafted book, Galbraith chronicles the major speculative episodes, from the seventeenth-century tulipmania to the junk-bond follies of the eighties. The book was first published in 1990 and thus the recent dotcom-bubble burst is not covered. Nevertheless, the Harvard professor's book is still worth reading. A reason is that he claims to have identified common patterns in the history of financial euphoria. 'In small ways the history of the great speculative boom and its aftermath does change. Much, much more remains the same', he predicts.

The perennial features are these. Some seemingly new and desirable artifact or development captures the financial imagination of a large number of people (say, group 1). The arrival of tulips in Western Europe, gold in Louisiana, the advent of joint-stock companies (corporations), real estate in Florida, or the economic designs of Reagan are all examples. The price of the object of speculation goes up. The object when bought today is worth more tomorrow. This attracts new buyers and assures a further price increase. Those in group 1 are persuaded that the new price-enhancing circumstance is under control, and expect the market to stay up and go up, perhaps indefinitely. The individual or institution that discovered the novelty (in group 2) is thought to be ahead of the mob. Fewer in number, individuals of group 2 perceive the speculative mood of the moment, try to get the maximum reward from the increase as it continues, and plan to be out before the eventual crash. The affluence of group 2 is wrongly associated, by group 1, with a miraculous financial genius. When something triggers the ultimate reversal, group 2 decides now is time to get out. Group 1 finds its illusion abruptly destroyed. Both groups sell or try to sell. The market collapses.

Galbraith observes that, in this process, 'speculation buys up the intelligence of those involved'. The crowd converts the individual in group 1 from possessing reasonable good sense to stupidity. Those in group 2 also make errors of vanity by thinking they will beat the speculative game. It seems that 'all people are most credulous when they are most happy'. Reputable public and financial opinion reinforces euphoria by condemning those who express doubt or dissent by warning of a crash. The celebrated Yale economist Irving Fisher, for instance, spoke out sharply against Roger Babson, who foresaw the crash of 1929. But the critic must wait until after the crash for any approval, Galbraith laments.

Despite the fact that common features in speculative episodes recur, history counts little because a financial disaster is quickly forgotten by a new, self-confident generation. Something is perceived as a financial novelty merely because the financial memory is short: 'financial operations do not lend themselves to innovation'. Insightfully, Galbraith notices that all financial innovation involves the creation of debt leveraged against more limited assets. This is the case of banks, whose debt is leveraged on a given volume of hard cash. This is also the case of the holding companies created in the 1920s, whose stockholders issued bonds and preferred stock to buy other stocks. And this is the case, too, of the junk bonds of the mergers-and-acquisitions mania in the 1980s, when high-risk, higher-interest bonds were issued in greater volume against the credit of the companies being taken over. As Galbraith puts it: 'the world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version'.

However a crisis may strike at any moment whenever a debt is perceived to become dangerously out of scale in relation to the underlying means of payment. After the crash, group 1 expresses anger against the 'financial genius' of group 2. 'Financial genius is before the fall', Galbraith prophesies. Group 1 finally realizes that having more money may mean that a person in group 2 is indifferent to moral constraints. Group 2 could have even gone beyond the law, as far as leverage is concerned. Incarceration of some individuals of group 2 may follow. Leverage is seen as morally disputable at last.

Talks of regulation and reform follow. However, the speculation itself or the aberrant optimism that lay behind it will not be discussed. 'Nothing is more remarkable than this: in the aftermath of speculation, the reality will be all but ignored.' Why? Because it is easier for group 1 to blame one individual or a few individuals in group 2 than to take responsibility for its own widespread naivety. And also because there is a need to find a cause for the crash that is external to the market itself. After all, the market is believed to be 'a neutral and accurate reflection of external influences; it is not supposed to be subject to an inherent and internal dynamic of error'. The deficit in the federal budget was, for instance, blamed for the 1987 crash. Another anecdotal account of Black Monday has been that the crash was caused by portfolio insurance computer programs which sold stocks as the market went lower.

Galbraith's book is compulsory reading for economists, especially those working on behavioural finance or econophysics. Being an antidote to illusory financial euphoria, the book is thus of interest to the general public as well. Galbraith's own sense of déjà vu towards speculative financial bubbles enabled him to predict the crash of 19 October 1987. People really seem to be intrinsically unable to prevent getting stuck in the error-prone dynamics of bull markets, as in his 'bubble story'. But perhaps they have already learned some minor lessons on how to better protect themselves in the aftermath of crashes. Indeed despite the fact that the Black Monday crash was nearly twice as severe as the stock market collapse of 1929, it did not trigger a depression. Likewise the internet-bubble burst of 2000 had a surprisingly modest effect on wealth. Will we finally learn to learn from history?

ok as in introduction, but other texts provide more depth, 01 May 2001
I bought this book after having read, and enjoyed immensely, Edward Chancellor's "Devil Take the Hindmost". Chancellor's text is a very readable book which serves as an excellent intoduction to financial speculation and bubble-mania. I bought Galbraith on the expectation of some greater insights - Galbraith's book on the Great Crash of 1929 is after all the definitive work on that episode. What I got was an introductory essay on the subject with a few, but not enough (at least for me), acute words of wisdom from the great man.

I should have noted that this book is described as a primer. Neverthless, this is 100 page book that could easily have been fitted into half that with a proper font and pagination. One shouldn't judge a book by its length, rather its quality, but I have to say I was expecting rather more for my money.

All that said, Galbraith's book is an interesting read and his insights into the popular linking of money and intelligence in particular are well articulated. He also resists the temptation to say "I told you so", one of a very few who could rightly claim the foresight to do so.

This is not a bad book, merely an introductory essay. For the interested reader I would suggest jumping straight in with The Great Crash, or turning to Devil Take The Hindmost for a popularist, but nevertheless scholarly overview.

Not bad but not one of the best books in the series, 15 Nov 2008
I have worked my way through a large number of books in the "Very Short Introduction" series.

Most are excellent although a few have been duds.

I have also read a fair amount of economics previously.

I found that the approach used in this book was rather unusual and made the book ssem rather mediocre to me. It seemed to me that this book tried to find examples that are a bit unusual but may have been better in such a small volume sticking to central concerns.

A cobbler should stick to his last, 28 Dec 2007
This book usually comes highly recommended. A 'classic' by a Nobel prize winner. Hayek was in fact an economist, but for the purposes of this book he assumed a political commentator's stance. His thesis is that Socialism is slavery, that the fascist Right and the fascist Left are two sides of the same coin, and that where there is dirty work to be done, dirty men will come forward to do it. Now you might say that's a no-brainer and wonder how it merits the 'classic' tag. Well you won't find the answer in the book. Overblown and in places pompous, you could be forgiven for thinking the author was being paid by the line. What is it with academics that one word won't do when four or five can be squeezed out instead? Perhaps they think verbosity succours the thesis. First published in 1944 and still going strong, The Road to Serfdom suffers primarily from being blinded by the times it was written in, and the way the world has changed since. Socialism is indeed slavery, but if Hayek had stuck to being an economist he might have foreseen the last gasp of the gold standard, the rise of globalism, fiat money, and fractional reserve banking. For debt is also slavery with the neat twist that the debtor usually can't wait to sign himself into bondage. The first step on the road to serfdom was simply the abolition of hard-asset backed currencies - after that, it was downhill all the way.

An interesting read, at least from a historical perpsective, 05 Dec 2007
I read this in conjunction with a number of "pro-socialism" books. While I disagreed with much of what Hayek had to say here it was nevertheless an interesting read, and an insight into right-wing economic thinking.

The basic premise of the book is to assert a necessary relationship between socialism and totalitarianism. Obviously the necessity of this link has subsequently been disproven by cases such as Sweden. And his case against the use of propaganda within socialist society can now be equally clearly drawn against capitalist states. The basis of his case was German National Socialism (Nazism). He emphasised the socialist aspect of that regime but I felt that the nationalist aspect of it was underplayed as he tried to make his case against socialism.

He also seriously underplayed the claimed rationale for socialism and made no serious attempt to explore socialist doctrine, although his discussion about collectivism and central planning was interesting (even though such planning may not be essential to a socialist system). He made some small noise about welfare systems and such but frankly these were all but lost in the noise.

Other writers in that period such as Popper and Russell managed to reach some similar results without the overt hostility, and they on the whole were considerably more prepared to discuss hybrid systems and search for compromisal solutions to the problems raised both by pure socialism and pure unfettered capitalism. I'd recommend reading these and other authors for a more balanced thesis.

The book is at least well thought out and cohesive - much more so perhaps than the typical Macarthyist thinking that borrows its conclusion without its reasoning.

That this book was written at the tail of WW2 should not be forgotten. This book, while seriously flawed, is very much a product of a world in chaos and in a state of rapid change. It is that, moreso than its message that makes this a compelling read.


A terrible book espousing a vile philosophy, 16 Nov 2007
It is my belief that this text is one of the most abhorrent in the history of political philosophy and that despite the very best intentions (a defense of liberal democracy) by Friedrich Von Hayek, is fundamentally flawed in its arguement and damaging in its impact.

The attack on totalitarian form of governments is logical and articulate, but it is when he turns to socialism that it all falls apart, to an extent I initially thought he was being satirical till the horrible truth dawned. Hayek's uncompromising libertarian views make a huge leap of logic in linking basic socialist reform, such as the establishment of the welfare state, to totalitarianism, even likening Stafford Cripps, a decent hardworking Chancellor whose sole goal was to see the realisation of the Beveridge Report, with Joseph Stalin. Of course this makes perfect sense, likening a man who slaved away to try and stamp out inequality and poverty in Britain and provide a safety net for those on the edges of society with a murdering tyrant responsible for millions of deaths.

He does not even consider the essential nature of the welfare state as a protection from those in society that are less fortunate, and that cutting back on it just to lower taxes would only benefit the rich while leaving the average hard-working man with no social security, no free healthcare and no private pension.

Then theres the chapter that he likens socialism with Nazism. True, Hitler's party was named the National Socialists, but it wasn't so, merely claimed to be to stir up working class support. Though both do promote economic planning, that is the only similarity. The ideology is completely different. Hitler was a fiersome anti-socialist who rounded up and socialists and sent them to concentration camps! He identifies Bolshevik socialism as the opposite of Nazism (talk about straight from the horses mouth). Fascism is a corporatist philosophy that views property completely differently, it assumes racial superiority and promotes imperialist empire building. Hayek's link between the two is as tenuous as you can possibly get, a clear example of Godwin's law ie the groundless comparison between Nazism and the object of your criticism to discredit it.

Of course the most evil thing about this text apart from the selfish, heartless, morally disgusting philosophy it spouts is the way it influenced the neo-liberalism of Margaret Thatcher. That's right, the tyrant whose reign was characterised by doubled unemployment, civil unrest, TWO recessions attributable to monetarism, unelected Quangos, regressive taxation, a massive widening in the rich-poor gap, the start of the credit card culture, the poll tax riots, degradations of social occupations, the destruction of british industry, the slashing of workers rights, the selling of state companies for a rediculously low price, botched privatisation of the infastructure, doubled crime and the creation of a broken, selfish society was operating following the gospel according to Hayek!

Yes, as you may have guessed, I am a socialist, but I am also a passionate defender of democracy. To me, Hayek creates a bogeyman picture of the best vehicle for equality and opportunity the world has: democratic socialism. As a result people fear this model and are driven to a selfish and damaging alternative. Hayek thinks that he is standing up for freedom and benefitting the people but he couldn't be more wrong. What use is a small state if people are unemployed and starving? what use are cheap taxes if vital institutions are controlled by greedy profiteering corporations who care less about the people than their prophet margins?

Hayek is not a Karl Popper, mouting an intelligent attack on Marxism, he is a ranting right winger who thinks he is making a blueprint for a libertarian heaven when instead he is pointing towards the hell of a broken society. Do not be fooled by his arguements, what he is promoting is a "survival of the richest and strongest" philosophy that cares not for the needy, the unemployed, the sick, the empoverished or the disadvantaged but merely for those on the top of society. Read it by all means, but do not as many do blindly accept the arguements made. It is a truly vile book.

Ultimately disappoints, 27 Jul 2007
This is one of the greatest simple anti-state capitalist manifestos you will find, its punchy, its pacey, lots of utopian eulogising of what Hayek thought were much malinged and misunderstood market forces.

However for any sensible and clear sighted reader this book is bound to disappoint, Hayek treats very different ideological and political forces as essentially similar, it has the combination of promise and threat that most market populism has (market forces will deliver/market forces will strike back) and just doesnt seem to take issues like unemployment or other consequences of unmitigated market forces that seriously or treats them with a kind of unreality.

It is a book, I suspect, which will ultimately prove most pleasing to anyone searching for a pretty plain and simple world view with clear cut heroes and villains, much like its mirror opposites in some socialist and conservative literature.

However that said it is well written and deserves to receive a wide readership, in fact I would say the very socialist or (welfare) liberal circles who Hayek protrays as either villains or the fatally conceited "useful idiots" of villains could benefit from reading it, while, like myself, they are unlikely to agree.

Good defence of liberal democracy from the dark 1940s, 05 Jul 2007
First published in 1944, Hayek's polemical work is a defence of classical liberalism in the face of totalitarianisms of both right- and left-wing hues. The author deplores all sorts of `collectivism', that is departures from such aspects of liberalism as the free market, individualism and the minimal state. Thus, conservatives such as Bismarck (responsible for business cartels) share the dock with communists such as Lenin. In a chapter entitled `The Socialist Roots of National Socialism', Hayek argues that collectivist achievements such as the welfare state and the war economy paved the way for the collectivism of the Nazis: `Few are ready to recognize that the rise of Fascism and Nazism was not a reaction against the socialist trends of the preceding period, but a necessary outcome of those tendencies.' (p. 4). This is a mirror image of the classic Marxist argument that Fascism, far from being a reaction against the upheaval in the capitalist economy in the 1930s, was in fact the logical culmination of capitalism, the last redoubt of the bourgeoisie.
Intriguing an argument as it is, I think Hayek over emphasizes the socialist element of National Socialism: as far as I know Hitler was quite happy to allow German capitalists to make large profits as long as they agreed to economic planning. Also, the German Workers' Party adopted `National Socialist' and `Workers' in the title only to attract working class votes, and not out of any enthusiasm for Marxism. Hayek would probably object that planning is planning regardless of whether capitalists are allowed to make profits or not.
This, of course, is the central conceit of the book and its Achilles heel: that all planning is bad and precipitates the onset of totalitarianism: `There is no other possibility than either the order governed by the impersonal discipline of the market or that directed by the will of a few individuals...' (p. 205). This argument is disingenuous. While Hayek recognizes that there are degrees of classical liberalism - he eschews what he calls the `dogmatic laissez-faire attitude' (p. 37) - he fails to concede that there are likewise degrees of collectivism. As a work of prediction, 'Serfdom' proved very wide of the mark, for although various postwar European governments instituted what Hayek would refer to as `collectivism' and `planning', they operated within the framework of liberal democracy, private property, and individual political liberty.
In spite of such objections, given all I had read about it, I was expecting Serfdom to be worse than it was. Given the atmosphere it was written in, the book's thesis is actually quite progressive. Maybe that's why such progressives as John Maynard Keynes, Bertrand Russell and George Orwell either gave it favorable reviews or were sympathetic to its argument. As a defence of liberal democracy, Hayek's polemic is indispensable.


A useful crash course on Adam Smith's discourse, 22 Sep 2008
I can only describe this particular edition of Wealth of Nations as a useful crash course on Adam Smith's discourse, mindful of the fact that there were five editions of this historically significant work. But then that's the beauty of this condensed compendium.

Most editions available in the market draw on Smith's Wealth of Nation Volume I (Of the causes of improvement), Volume II (Of the Nature, Accumulation, and Employment of Stock) and Volume III (Of the different Progress of Opulence in different Nations) at the most. However, this edition contains healthy inclusions from Book IV (Of Systems of political Economy) and Book V (Of the Revenue of the Sovereign or Commonwealth). For this alone, the editor Kathryn Sutherland deserves credit.

It is not a mouthful but a practical handy book on Wealth of Nations. Those who have never studied economics would enjoy reading it too if they are so inclined, especially students of history and philosophy. Since this is a complex work authored over two hundred years ago, the editor's footnotes and references enhance comprehension.

Yet the wonderful details of Smith's key thoughts have not been stifled in any way - working of the markets, division of labour, general prosperity, government and taxation are all there. In essence, Wealth of Nations remains a true classic and I found this edition of it to be an easy and enjoyable read. Overall, its a handy reference book to have on your bookshelf.

where many things began, 16 May 2003
I loved this book, not for it's economic content but for it's wonderfully overarching principles and view of history, philosophy and economics. I have never studied economics in any way and read this book purely on it's historical importants, and yet I found it facinating. I would not say this is the book for anyone wanting to understand the complexeties of the modern ecomemy, interest rates, futures markets or whatever, but for those who whant a very complete and well thought out examination of how the human world is put together this work cannot be faulted.

Though it was writeen over 2 centuries ago this edition makes perfect sence of the text without changing it, it's almost 200 pages of footnotes provide innumerate refrences to interesting asspects of history and sociaology meaning that that you never have to go and look things up anywhere else, whilst the decision to mix smits own spellings and spellings and inconsistancies with a more modern english gives the book an atmosphere when reading it of what the authour really meant.

It's use today is primerilly one of historical importance, his analesis of tax collection for example bares hardly any relation to modern tax systems, or at least those in the weastern world, but wht it does do is represent a model of the world on which it is very easy to hang modern principles and situations, havingt read this book you realise just how integrated things can be, and how things have evolved.

Smith explains all this in wonderful deatail with many examples and explanations which mean that though his ideas may seem confusing the dedicated reader should not get to confused, and at the end I was very much left with the impression that it had all been worth it.

a real gem

Money comes second:Smith was a enlightened moral philosopher, 05 Aug 2000
Adam Smith (Professor of Moral Philosophy at Glasgow) had previously written 'The Moral Theory of Sentiments' and had probably intended to write a third (spiritual) overarching work. He died. The accute analyses he finished have flaws as well as much merit. His works are in the first division of merit. To consider him only as an economist (he was the first) is to think of life partially. Wealth of Nations (hasn't Porter essentially copied the economics) is a broader attempt to understand the relationships between money and people.

I come here by accident, but don't many

Angus

Oh, How much we owe Smith!, 20 Jul 1999
I must take exception to the Amazon review: saying that Smith viewed Capitalism suspiciously is utterly untenable. From the very first chapter, Smith makes clear the genius of markets, the benefits of the division of labor, and how government intrusion upon "perfect liberty" creates economic inefficiencies. As the Industrial Revolution was in its infancy, Smith keenly perceived the theoretical framework for its future development: property rights, markets, free trade, and government non-intervention. These institutions allowed for unprecedented economic growth (there was more economic growth in the 19th century than in the preceeding 4000 years) and thus the sustainability of modern life. We cannot express enough gratitude to Dr. Smith.

The Great Work of a Great Mind., 10 Jun 1999
Although this book is hailed as one of the greatest works in Economics ever and set the foundations for contemporary Economic thought, the Wealth of Nations is not a good read. It is extremely difficult to digest and requires extreme concentration. Few would read the book unless required in an Economics course or the like. Smith was undoubtedly a genius - way ahead of his time. However, the reader must have as great an intellect to fully comprehend what Smith is writing. Perhaps "user-friendly" books were not the fashion of the times.

how market speculation can destroy intelligence, 23 Feb 2006
this small book shows in a logical way how speculation can make intelligent people do stupid things.galbraith shows in detail how money can in a practical sense buys up the intelligence of those involved in it.the recent dot.com mania demonstrates galbraiths analysis at work,as people were swept away in the dot.com tide.galbraith is a true prophet,may he live to a hundred.

Bubble Story, 02 Jul 2001
IN THIS SMALL but witty and well-crafted book, Galbraith chronicles the major speculative episodes, from the seventeenth-century tulipmania to the junk-bond follies of the eighties. The book was first published in 1990 and thus the recent dotcom-bubble burst is not covered. Nevertheless, the Harvard professor's book is still worth reading. A reason is that he claims to have identified common patterns in the history of financial euphoria. 'In small ways the history of the great speculative boom and its aftermath does change. Much, much more remains the same', he predicts.

The perennial features are these. Some seemingly new and desirable artifact or development captures the financial imagination of a large number of people (say, group 1). The arrival of tulips in Western Europe, gold in Louisiana, the advent of joint-stock companies (corporations), real estate in Florida, or the economic designs of Reagan are all examples. The price of the object of speculation goes up. The object when bought today is worth more tomorrow. This attracts new buyers and assures a further price increase. Those in group 1 are persuaded that the new price-enhancing circumstance is under control, and expect the market to stay up and go up, perhaps indefinitely. The individual or institution that discovered the novelty (in group 2) is thought to be ahead of the mob. Fewer in number, individuals of group 2 perceive the speculative mood of the moment, try to get the maximum reward from the increase as it continues, and plan to be out before the eventual crash. The affluence of group 2 is wrongly associated, by group 1, with a miraculous financial genius. When something triggers the ultimate reversal, group 2 decides now is time to get out. Group 1 finds its illusion abruptly destroyed. Both groups sell or try to sell. The market collapses.

Galbraith observes that, in this process, 'speculation buys up the intelligence of those involved'. The crowd converts the individual in group 1 from possessing reasonable good sense to stupidity. Those in group 2 also make errors of vanity by thinking they will beat the speculative game. It seems that 'all people are most credulous when they are most happy'. Reputable public and financial opinion reinforces euphoria by condemning those who express doubt or dissent by warning of a crash. The celebrated Yale economist Irving Fisher, for instance, spoke out sharply against Roger Babson, who foresaw the crash of 1929. But the critic must wait until after the crash for any approval, Galbraith laments.

Despite the fact that common features in speculative episodes recur, history counts little because a financial disaster is quickly forgotten by a new, self-confident generation. Something is perceived as a financial novelty merely because the financial memory is short: 'financial operations do not lend themselves to innovation'. Insightfully, Galbraith notices that all financial innovation involves the creation of debt leveraged against more limited assets. This is the case of banks, whose debt is leveraged on a given volume of hard cash. This is also the case of the holding companies created in the 1920s, whose stockholders issued bonds and preferred stock to buy other stocks. And this is the case, too, of the junk bonds of the mergers-and-acquisitions mania in the 1980s, when high-risk, higher-interest bonds were issued in greater volume against the credit of the companies being taken over. As Galbraith puts it: 'the world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version'.

However a crisis may strike at any moment whenever a debt is perceived to become dangerously out of scale in relation to the underlying means of payment. After the crash, group 1 expresses anger against the 'financial genius' of group 2. 'Financial genius is before the fall', Galbraith prophesies. Group 1 finally realizes that having more money may mean that a person in group 2 is indifferent to moral constraints. Group 2 could have even gone beyond the law, as far as leverage is concerned. Incarceration of some individuals of group 2 may follow. Leverage is seen as morally disputable at last.

Talks of regulation and reform follow. However, the speculation itself or the aberrant optimism that lay behind it will not be discussed. 'Nothing is more remarkable than this: in the aftermath of speculation, the reality will be all but ignored.' Why? Because it is easier for group 1 to blame one individual or a few individuals in group 2 than to take responsibility for its own widespread naivety. And also because there is a need to find a cause for the crash that is external to the market itself. After all, the market is believed to be 'a neutral and accurate reflection of external influences; it is not supposed to be subject to an inherent and internal dynamic of error'. The deficit in the federal budget was, for instance, blamed for the 1987 crash. Another anecdotal account of Black Monday has been that the crash was caused by portfolio insurance computer programs which sold stocks as the market went lower.

Galbraith's book is compulsory reading for economists, especially those working on behavioural finance or econophysics. Being an antidote to illusory financial euphoria, the book is thus of interest to the general public as well. Galbraith's own sense of déjà vu towards speculative financial bubbles enabled him to predict the crash of 19 October 1987. People really seem to be intrinsically unable to prevent getting stuck in the error-prone dynamics of bull markets, as in his 'bubble story'. But perhaps they have already learned some minor lessons on how to better protect themselves in the aftermath of crashes. Indeed despite the fact that the Black Monday crash was nearly twice as severe as the stock market collapse of 1929, it did not trigger a depression. Likewise the internet-bubble burst of 2000 had a surprisingly modest effect on wealth. Will we finally learn to learn from history?

ok as in introduction, but other texts provide more depth, 01 May 2001
I bought this book after having read, and enjoyed immensely, Edward Chancellor's "Devil Take the Hindmost". Chancellor's text is a very readable book which serves as an excellent intoduction to financial speculation and bubble-mania. I bought Galbraith on the expectation of some greater insights - Galbraith's book on the Great Crash of 1929 is after all the definitive work on that episode. What I got was an introductory essay on the subject with a few, but not enough (at least for me), acute words of wisdom from the great man.

I should have noted that this book is described as a primer. Neverthless, this is 100 page book that could easily have been fitted into half that with a proper font and pagination. One shouldn't judge a book by its length, rather its quality, but I have to say I was expecting rather more for my money.

All that said, Galbraith's book is an interesting read and his insights into the popular linking of money and intelligence in particular are well articulated. He also resists the temptation to say "I told you so", one of a very few who could rightly claim the foresight to do so.

This is not a bad book, merely an introductory essay. For the interested reader I would suggest jumping straight in with The Great Crash, or turning to Devil Take The Hindmost for a popularist, but nevertheless scholarly overview.

Not bad but not one of the best books in the series, 15 Nov 2008
I have worked my way through a large number of books in the "Very Short Introduction" series.

Most are excellent although a few have been duds.

I have also read a fair amount of economics previously.

I found that the approach used in this book was rather unusual and made the book ssem rather mediocre to me. It seemed to me that this book tried to find examples that are a bit unusual but may have been better in such a small volume sticking to central concerns.

A cobbler should stick to his last, 28 Dec 2007
This book usually comes highly recommended. A 'classic' by a Nobel prize winner. Hayek was in fact an economist, but for the purposes of this book he assumed a political commentator's stance. His thesis is that Socialism is slavery, that the fascist Right and the fascist Left are two sides of the same coin, and that where there is dirty work to be done, dirty men will come forward to do it. Now you might say that's a no-brainer and wonder how it merits the 'classic' tag. Well you won't find the answer in the book. Overblown and in places pompous, you could be forgiven for thinking the author was being paid by the line. What is it with academics that one word won't do when four or five can be squeezed out instead? Perhaps they think verbosity succours the thesis. First published in 1944 and still going strong, The Road to Serfdom suffers primarily from being blinded by the times it was written in, and the way the world has changed since. Socialism is indeed slavery, but if Hayek had stuck to being an economist he might have foreseen the last gasp of the gold standard, the rise of globalism, fiat money, and fractional reserve banking. For debt is also slavery with the neat twist that the debtor usually can't wait to sign himself into bondage. The first step on the road to serfdom was simply the abolition of hard-asset backed currencies - after that, it was downhill all the way.

An interesting read, at least from a historical perpsective, 05 Dec 2007
I read this in conjunction with a number of "pro-socialism" books. While I disagreed with much of what Hayek had to say here it was nevertheless an interesting read, and an insight into right-wing economic thinking.

The basic premise of the book is to assert a necessary relationship between socialism and totalitarianism. Obviously the necessity of this link has subsequently been disproven by cases such as Sweden. And his case against the use of propaganda within socialist society can now be equally clearly drawn against capitalist states. The basis of his case was German National Socialism (Nazism). He emphasised the socialist aspect of that regime but I felt that the nationalist aspect of it was underplayed as he tried to make his case against socialism.

He also seriously underplayed the claimed rationale for socialism and made no serious attempt to explore socialist doctrine, although his discussion about collectivism and central planning was interesting (even though such planning may not be essential to a socialist system). He made some small noise about welfare systems and such but frankly these were all but lost in the noise.

Other writers in that period such as Popper and Russell managed to reach some similar results without the overt hostility, and they on the whole were considerably more prepared to discuss hybrid systems and search for compromisal solutions to the problems raised both by pure socialism and pure unfettered capitalism. I'd recommend reading these and other authors for a more balanced thesis.

The book is at least well thought out and cohesive - much more so perhaps than the typical Macarthyist thinking that borrows its conclusion without its reasoning.

That this book was written at the tail of WW2 should not be forgotten. This book, while seriously flawed, is very much a product of a world in chaos and in a state of rapid change. It is that, moreso than its message that makes this a compelling read.


A terrible book espousing a vile philosophy, 16 Nov 2007
It is my belief that this text is one of the most abhorrent in the history of political philosophy and that despite the very best intentions (a defense of liberal democracy) by Friedrich Von Hayek, is fundamentally flawed in its arguement and damaging in its impact.

The attack on totalitarian form of governments is logical and articulate, but it is when he turns to socialism that it all falls apart, to an extent I initially thought he was being satirical till the horrible truth dawned. Hayek's uncompromising libertarian views make a huge leap of logic in linking basic socialist reform, such as the establishment of the welfare state, to totalitarianism, even likening Stafford Cripps, a decent hardworking Chancellor whose sole goal was to see the realisation of the Beveridge Report, with Joseph Stalin. Of course this makes perfect sense, likening a man who slaved away to try and stamp out inequality and poverty in Britain and provide a safety net for those on the edges of society with a murdering tyrant responsible for millions of deaths.

He does not even consider the essential nature of the welfare state as a protection from those in society that are less fortunate, and that cutting back on it just to lower taxes would only benefit the rich while leaving the average hard-working man with no social security, no free healthcare and no private pension.

Then theres the chapter that he likens socialism with Nazism. True, Hitler's party was named the National Socialists, but it wasn't so, merely claimed to be to stir up working class support. Though both do promote economic planning, that is the only similarity. The ideology is completely different. Hitler was a fiersome anti-socialist who rounded up and socialists and sent them to concentration camps! He identifies Bolshevik socialism as the opposite of Nazism (talk about straight from the horses mouth). Fascism is a corporatist philosophy that views property completely differently, it assumes racial superiority and promotes imperialist empire building. Hayek's link between the two is as tenuous as you can possibly get, a clear example of Godwin's law ie the groundless comparison between Nazism and the object of your criticism to discredit it.

Of course the most evil thing about this text apart from the selfish, heartless, morally disgusting philosophy it spouts is the way it influenced the neo-liberalism of Margaret Thatcher. That's right, the tyrant whose reign was characterised by doubled unemployment, civil unrest, TWO recessions attributable to monetarism, unelected Quangos, regressive taxation, a massive widening in the rich-poor gap, the start of the credit card culture, the poll tax riots, degradations of social occupations, the destruction of british industry, the slashing of workers rights, the selling of state companies for a rediculously low price, botched privatisation of the infastructure, doubled crime and the creation of a broken, selfish society was operating following the gospel according to Hayek!

Yes, as you may have guessed, I am a socialist, but I am also a passionate defender of democracy. To me, Hayek creates a bogeyman picture of the best vehicle for equality and opportunity the world has: democratic socialism. As a result people fear this model and are driven to a selfish and damaging alternative. Hayek thinks that he is standing up for freedom and benefitting the people but he couldn't be more wrong. What use is a small state if people are unemployed and starving? what use are cheap taxes if vital institutions are controlled by greedy profiteering corporations who care less about the people than their prophet margins?

Hayek is not a Karl Popper, mouting an intelligent attack on Marxism, he is a ranting right winger who thinks he is making a blueprint for a libertarian heaven when instead he is pointing towards the hell of a broken society. Do not be fooled by his arguements, what he is promoting is a "survival of the richest and strongest" philosophy that cares not for the needy, the unemployed, the sick, the empoverished or the disadvantaged but merely for those on the top of society. Read it by all means, but do not as many do blindly accept the arguements made. It is a truly vile book.

Ultimately disappoints, 27 Jul 2007
This is one of the greatest simple anti-state capitalist manifestos you will find, its punchy, its pacey, lots of utopian eulogising of what Hayek thought were much malinged and misunderstood market forces.

However for any sensible and clear sighted reader this book is bound to disappoint, Hayek treats very different ideological and political forces as essentially similar, it has the combination of promise and threat that most market populism has (market forces will deliver/market forces will strike back) and just doesnt seem to take issues like unemployment or other consequences of unmitigated market forces that seriously or treats them with a kind of unreality.

It is a book, I suspect, which will ultimately prove most pleasing to anyone searching for a pretty plain and simple world view with clear cut heroes and villains, much like its mirror opposites in some socialist and conservative literature.

However that said it is well written and deserves to receive a wide readership, in fact I would say the very socialist or (welfare) liberal circles who Hayek protrays as either villains or the fatally conceited "useful idiots" of villains could benefit from reading it, while, like myself, they are unlikely to agree.

Good defence of liberal democracy from the dark 1940s, 05 Jul 2007
First published in 1944, Hayek's polemical work is a defence of classical liberalism in the face of totalitarianisms of both right- and left-wing hues. The author deplores all sorts of `collectivism', that is departures from such aspects of liberalism as the free market, individualism and the minimal state. Thus, conservatives such as Bismarck (responsible for business cartels) share the dock with communists such as Lenin. In a chapter entitled `The Socialist Roots of National Socialism', Hayek argues that collectivist achievements such as the welfare state and the war economy paved the way for the collectivism of the Nazis: `Few are ready to recognize that the rise of Fascism and Nazism was not a reaction against the socialist trends of the preceding period, but a necessary outcome of those tendencies.' (p. 4). This is a mirror image of the classic Marxist argument that Fascism, far from being a reaction against the upheaval in the capitalist economy in the 1930s, was in fact the logical culmination of capitalism, the last redoubt of the bourgeoisie.
Intriguing an argument as it is, I think Hayek over emphasizes the socialist element of National Socialism: as far as I know Hitler was quite happy to allow German capitalists to make large profits as long as they agreed to economic planning. Also, the German Workers' Party adopted `National Socialist' and `Workers' in the title only to attract working class votes, and not out of any enthusiasm for Marxism. Hayek would probably object that planning is planning regardless of whether capitalists are allowed to make profits or not.
This, of course, is the central conceit of the book and its Achilles heel: that all planning is bad and precipitates the onset of totalitarianism: `There is no other possibility than either the order governed by the impersonal discipline of the market or that directed by the will of a few individuals...' (p. 205). This argument is disingenuous. While Hayek recognizes that there are degrees of classical liberalism - he eschews what he calls the `dogmatic laissez-faire attitude' (p. 37) - he fails to concede that there are likewise degrees of collectivism. As a work of prediction, 'Serfdom' proved very wide of the mark, for although various postwar European governments instituted what Hayek would refer to as `collectivism' and `planning', they operated within the framework of liberal democracy, private property, and individual political liberty.
In spite of such objections, given all I had read about it, I was expecting Serfdom to be worse than it was. Given the atmosphere it was written in, the book's thesis is actually quite progressive. Maybe that's why such progressives as John Maynard Keynes, Bertrand Russell and George Orwell either gave it favorable reviews or were sympathetic to its argument. As a defence of liberal democracy, Hayek's polemic is indispensable.


A useful crash course on Adam Smith's discourse, 22 Sep 2008
I can only describe this particular edition of Wealth of Nations as a useful crash course on Adam Smith's discourse, mindful of the fact that there were five editions of this historically significant work. But then that's the beauty of this condensed compendium.

Most editions available in the market draw on Smith's Wealth of Nation Volume I (Of the causes of improvement), Volume II (Of the Nature, Accumulation, and Employment of Stock) and Volume III (Of the different Progress of Opulence in different Nations) at the most. However, this edition contains healthy inclusions from Book IV (Of Systems of political Economy) and Book V (Of the Revenue of the Sovereign or Commonwealth). For this alone, the editor Kathryn Sutherland deserves credit.

It is not a mouthful but a practical handy book on Wealth of Nations. Those who have never studied economics would enjoy reading it too if they are so inclined, especially students of history and philosophy. Since this is a complex work authored over two hundred years ago, the editor's footnotes and references enhance comprehension.

Yet the wonderful details of Smith's key thoughts have not been stifled in any way - working of the markets, division of labour, general prosperity, government and taxation are all there. In essence, Wealth of Nations remains a true classic and I found this edition of it to be an easy and enjoyable read. Overall, its a handy reference book to have on your bookshelf.

where many things began, 16 May 2003
I loved this book, not for it's economic content but for it's wonderfully overarching principles and view of history, philosophy and economics. I have never studied economics in any way and read this book purely on it's historical importants, and yet I found it facinating. I would not say this is the book for anyone wanting to understand the complexeties of the modern ecomemy, interest rates, futures markets or whatever, but for those who whant a very complete and well thought out examination of how the human world is put together this work cannot be faulted.

Though it was writeen over 2 centuries ago this edition makes perfect sence of the text without changing it, it's almost 200 pages of footnotes provide innumerate refrences to interesting asspects of history and sociaology meaning that that you never have to go and look things up anywhere else, whilst the decision to mix smits own spellings and spellings and inconsistancies with a more modern english gives the book an atmosphere when reading it of what the authour really meant.

It's use today is primerilly one of historical importance, his analesis of tax collection for example bares hardly any relation to modern tax systems, or at least those in the weastern world, but wht it does do is represent a model of the world on which it is very easy to hang modern principles and situations, havingt read this book you realise just how integrated things can be, and how things have evolved.

Smith explains all this in wonderful deatail with many examples and explanations which mean that though his ideas may seem confusing the dedicated reader should not get to confused, and at the end I was very much left with the impression that it had all been worth it.

a real gem

Money comes second:Smith was a enlightened moral philosopher, 05 Aug 2000
Adam Smith (Professor of Moral Philosophy at Glasgow) had previously written 'The Moral Theory of Sentiments' and had probably intended to write a third (spiritual) overarching work. He died. The accute analyses he finished have flaws as well as much merit. His works are in the first division of merit. To consider him only as an economist (he was the first) is to think of life partially. Wealth of Nations (hasn't Porter essentially copied the economics) is a broader attempt to understand the relationships between money and people.

I come here by accident, but don't many

Angus

Oh, How much we owe Smith!, 20 Jul 1999
I must take exception to the Amazon review: saying that Smith viewed Capitalism suspiciously is utterly untenable. From the very first chapter, Smith makes clear the genius of markets, the benefits of the division of labor, and how government intrusion upon "perfect liberty" creates economic inefficiencies. As the Industrial Revolution was in its infancy, Smith keenly perceived the theoretical framework for its future development: property rights, markets, free trade, and government non-intervention. These institutions allowed for unprecedented economic growth (there was more economic growth in the 19th century than in the preceeding 4000 years) and thus the sustainability of modern life. We cannot express enough gratitude to Dr. Smith.

The Great Work of a Great Mind., 10 Jun 1999
Although this book is hailed as one of the greatest works in Economics ever and set the foundations for contemporary Economic thought, the Wealth of Nations is not a good read. It is extremely difficult to digest and requires extreme concentration. Few would read the book unless required in an Economics course or the like. Smith was undoubtedly a genius - way ahead of his time. However, the reader must have as great an intellect to fully comprehend what Smith is writing. Perhaps "user-friendly" books were not the fashion of the times.

A vivid history and critique of the 1907 financial crisis, 21 Oct 2008
If you compare the 1907 crisis that struck U.S. and European financial institutions with 2008's economic emergencies, you will discover striking similarities. (In fact, the uncanny parallels have made this fascinating book a bestseller.) Strong interconnectivity between financial firms meant that trouble at one migrated to others. Both crises involved serious credit and liquidity concerns. Both provoked populist attacks against Wall Street. In part, the trusts hit trouble in 1907 because of insufficient regulation. The 1907 crisis started on Wall Street, and quickly jumped to European institutions. In 2008, the trajectory was even more global. Of course, marked differences also separate these episodes. In 1907, fabled financier J.P. Morgan exercised remarkable leadership to end the crisis, and to reassure depositors and investors that their savings and equity holdings were secure. Morgan calmed the waters so the panic would not spread. "This is the place to stop this trouble," he said of the Trust Company of America. Robert F. Bruner and Sean D. Carr explain why the 1907 panic occurred and use it as a valuable case study for understanding other monetary crises. getAbstract is confident that history lovers, businesspeople, financial executives and anyone who enjoys a well-told, real-life drama will love this book.

how market speculation can destroy intelligence, 23 Feb 2006
this small book shows in a logical way how speculation can make intelligent people do stupid things.galbraith shows in detail how money can in a practical sense buys up the intelligence of those involved in it.the recent dot.com mania demonstrates galbraiths analysis at work,as people were swept away in the dot.com tide.galbraith is a true prophet,may he live to a hundred.

Bubble Story, 02 Jul 2001
IN THIS SMALL but witty and well-crafted book, Galbraith chronicles the major speculative episodes, from the seventeenth-century tulipmania to the junk-bond follies of the eighties. The book was first published in 1990 and thus the recent dotcom-bubble burst is not covered. Nevertheless, the Harvard professor's book is still worth reading. A reason is that he claims to have identified common patterns in the history of financial euphoria. 'In small ways the history of the great speculative boom and its aftermath does change. Much, much more remains the same', he predicts.

The perennial features are these. Some seemingly new and desirable artifact or development captures the financial imagination of a large number of people (say, group 1). The arrival of tulips in Western Europe, gold in Louisiana, the advent of joint-stock companies (corporations), real estate in Florida, or the economic designs of Reagan are all examples. The price of the object of speculation goes up. The object when bought today is worth more tomorrow. This attracts new buyers and assures a further price increase. Those in group 1 are persuaded that the new price-enhancing circumstance is under control, and expect the market to stay up and go up, perhaps indefinitely. The individual or institution that discovered the novelty (in group 2) is thought to be ahead of the mob. Fewer in number, individuals of group 2 perceive the speculative mood of the moment, try to get the maximum reward from the increase as it continues, and plan to be out before the eventual crash. The affluence of group 2 is wrongly associated, by group 1, with a miraculous financial genius. When something triggers the ultimate reversal, group 2 decides now is time to get out. Group 1 finds its illusion abruptly destroyed. Both groups sell or try to sell. The market collapses.

Galbraith observes that, in this process, 'speculation buys up the intelligence of those involved'. The crowd converts the individual in group 1 from possessing reasonable good sense to stupidity. Those in group 2 also make errors of vanity by thinking they will beat the speculative game. It seems that 'all people are most credulous when they are most happy'. Reputable public and financial opinion reinforces euphoria by condemning those who express doubt or dissent by warning of a crash. The celebrated Yale economist Irving Fisher, for instance, spoke out sharply against Roger Babson, who foresaw the crash of 1929. But the critic must wait until after the crash for any approval, Galbraith laments.

Despite the fact that common features in speculative episodes recur, history counts little because a financial disaster is quickly forgotten by a new, self-confident generation. Something is perceived as a financial novelty merely because the financial memory is short: 'financial operations do not lend themselves to innovation'. Insightfully, Galbraith notices that all financial innovation involves the creation of debt leveraged against more limited assets. This is the case of banks, whose debt is leveraged on a given volume of hard cash. This is also the case of the holding companies created in the 1920s, whose stockholders issued bonds and preferred stock to buy other stocks. And this is the case, too, of the junk bonds of the mergers-and-acquisitions mania in the 1980s, when high-risk, higher-interest bonds were issued in greater volume against the credit of the companies being taken over. As Galbraith puts it: 'the world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version'.

However a crisis may strike at any moment whenever a debt is perceived to become dangerously out of scale in relation to the underlying means of payment. After the crash, group 1 expresses anger against the 'financial genius' of group 2. 'Financial genius is before the fall', Galbraith prophesies. Group 1 finally realizes that having more money may mean that a person in group 2 is indifferent to moral constraints. Group 2 could have even gone beyond the law, as far as leverage is concerned. Incarceration of some individuals of group 2 may follow. Leverage is seen as morally disputable at last.

Talks of regulation and reform follow. However, the speculation itself or the aberrant optimism that lay behind it will not be discussed. 'Nothing is more remarkable than this: in the aftermath of speculation, the reality will be all but ignored.' Why? Because it is easier for group 1 to blame one individual or a few individuals in group 2 than to take responsibility for its own widespread naivety. And also because there is a need to find a cause for the crash that is external to the market itself. After all, the market is believed to be 'a neutral and accurate reflection of external influences; it is not supposed to be subject to an inherent and internal dynamic of error'. The deficit in the federal budget was, for instance, blamed for the 1987 crash. Another anecdotal account of Black Monday has been that the crash was caused by portfolio insurance computer programs which sold stocks as the market went lower.

Galbraith's book is compulsory reading for economists, especially those working on behavioural finance or econophysics. Being an antidote to illusory financial euphoria, the book is thus of interest to the general public as well. Galbraith's own sense of déjà vu towards speculative financial bubbles enabled him to predict the crash of 19 October 1987. People really seem to be intrinsically unable to prevent getting stuck in the error-prone dynamics of bull markets, as in his 'bubble story'. But perhaps they have already learned some minor lessons on how to better protect themselves in the aftermath of crashes. Indeed despite the fact that the Black Monday crash was nearly twice as severe as the stock market collapse of 1929, it did not trigger a depression. Likewise the internet-bubble burst of 2000 had a surprisingly modest effect on wealth. Will we finally learn to learn from history?

ok as in introduction, but other texts provide more depth, 01 May 2001
I bought this book after having read, and enjoyed immensely, Edward Chancellor's "Devil Take the Hindmost". Chancellor's text is a very readable book which serves as an excellent intoduction to financial speculation and bubble-mania. I bought Galbraith on the expectation of some greater insights - Galbraith's book on the Great Crash of 1929 is after all the definitive work on that episode. What I got was an introductory essay on the subject with a few, but not enough (at least for me), acute words of wisdom from the great man.

I should have noted that this book is described as a primer. Neverthless, this is 100 page book that could easily have been fitted into half that with a proper font and pagination. One shouldn't judge a book by its length, rather its quality, but I have to say I was expecting rather more for my money.

All that said, Galbraith's book is an interesting read and his insights into the popular linking of money and intelligence in particular are well articulated. He also resists the temptation to say "I told you so", one of a very few who could rightly claim the foresight to do so.

This is not a bad book, merely an introductory essay. For the interested reader I would suggest jumping straight in with The Great Crash, or turning to Devil Take The Hindmost for a popularist, but nevertheless scholarly overview.

Not bad but not one of the best books in the series, 15 Nov 2008
I have worked my way through a large number of books in the "Very Short Introduction" series.

Most are excellent although a few have been duds.

I have also read a fair amount of economics previously.

I found that the approach used in this book was rather unusual and made the book ssem rather mediocre to me. It seemed to me that this book tried to find examples that are a bit unusual but may have been better in such a small volume sticking to central concerns.

A cobbler should stick to his last, 28 Dec 2007
This book usually comes highly recommended. A 'classic' by a Nobel prize winner. Hayek was in fact an economist, but for the purposes of this book he assumed a political commentator's stance. His thesis is that Socialism is slavery, that the fascist Right and the fascist Left are two sides of the same coin, and that where there is dirty work to be done, dirty men will come forward to do it. Now you might say that's a no-brainer and wonder how it merits the 'classic' tag. Well you won't find the answer in the book. Overblown and in places pompous, you could be forgiven for thinking the author was being paid by the line. What is it with academics that one word won't do when four or five can be squeezed out instead? Perhaps they think verbosity succours the thesis. First published in 1944 and still going strong, The Road to Serfdom suffers primarily from being blinded by the times it was written in, and the way the world has changed since. Socialism is indeed slavery, but if Hayek had stuck to being an economist he might have foreseen the last gasp of the gold standard, the rise of globalism, fiat money, and fractional reserve banking. For debt is also slavery with the neat twist that the debtor usually can't wait to sign himself into bondage. The first step on the road to serfdom was simply the abolition of hard-asset backed currencies - after that, it was downhill all the way.

An interesting read, at least from a historical perpsective, 05 Dec 2007
I read this in conjunction with a number of "pro-socialism" books. While I disagreed with much of what Hayek had to say here it was nevertheless an interesting read, and an insight into right-wing economic thinking.

The basic premise of the book is to assert a necessary relationship between socialism and totalitarianism. Obviously the necessity of this link has subsequently been disproven by cases such as Sweden. And his case against the use of propaganda within socialist society can now be equally clearly drawn against capitalist states. The basis of his case was German National Socialism (Nazism). He emphasised the socialist aspect of that regime but I felt that the nationalist aspect of it was underplayed as he tried to make his case against socialism.

He also seriously underplayed the claimed rationale for socialism and made no serious attempt to explore