![[Front cover of Devil Take the Hindmost]](http://www.canadiancapitalist.com/images/books/devil_take_the_hindmost.jpg)
Subtitled A History of Financial Speculation, this book by Edward Chancellor is on the list of books recommended by William Bernstein (of Four Pillars fame). The book is a scholarly account of financial bubbles - from the tulip mania in seventeenth century Netherlands to the Japanese stock market and real estate bubble of the 1980s. As Mr. Chancellor portrays the social and political milieu in considerable detail, the book is far more interesting than simply a dry economic account of historical manias. However, this book isn’t an easy read and I had to struggle to stay awake through some of the chapters.
Still, it is well worth your time and effort because it is striking how often history repeats itself: the internet craze of the late nineties finds an uncanny parallel in the railway mania in England in the middle of the nineteenth century. Therein lies the value of a book like this because the next time another bubble breaks out, we can remind ourselves of the words of Charles Mackay (author of Extraordinary Popular Delusions and the Madness of Crowds, quoted in the book) - “Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” - and hopefully, stay out of trouble.
I was still puzzled about the phrase in the title even after I finished the book. The “hindmost” refers to the last person in a queue, which we definitely don’t want to be if we are caught up in a bubble.
Rating: 9 out of 10
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6 responses so far ↓
1 Four Pillars // Apr 7, 2008 at 7:57 am
I’ll have to check this one out.
I assume the phrase refers to the fact that if you are a crowd-follower then you might end up in the back of the line (ie you line because everyone is lining up) where apparently you are more susceptible to the devil?
This of course would be assuming that the devil is an orderly type and always starts at the back of the line…
2 Michael James // Apr 7, 2008 at 9:16 am
Perhaps the book’s title refers to the fact that the very last people who jump into an investment bubble are harmed the most.
3 David // Apr 7, 2008 at 10:50 am
A quick search for the term indicates it origins in the early 1600’s, and is described as follows:
‘Let the devil take the hindmost’ may well be said when someone doesn’t care too much about the consequence of his actions, as long as he comes out well from the affair. The saying comes from late medieval magic. The Devil was supposed to have a school at either Toledo or Salamanca in Spain. The students, at a certain stage of their training, had to run through a subterranean hall. The last one through was seized by the Devil and became his Imp.
In the case of market bubbles, it might refer to those who quietly exit early, without concern for those just entering that market. Thus the sale of (soon to be worthless) shares to the unsuspecting entrant to that market, fits the above description quite well.
Dear ol’ dad oft quoted a similarly fitting expression, when reflecting on some individual’s behaviour & attitudes: “I’m all right, Jack, to h3ll with you”. However, it probably wouldn’t make as good a book title.
DAvid
4 Canadian Capitalist // Apr 7, 2008 at 12:09 pm
Mike, Michael, David: I have to confess that I hadn’t heard that expression before but it is definitely an apt title for a book about bubbles.
5 james // Apr 8, 2008 at 1:00 am
I think people are more or less aware when they are in a bubble, but they tend to think that they won’t be the last fools in the line and someone else is going to buy their stocks/houses when they are ready to sell.
6 Tony Danza // Apr 8, 2008 at 3:47 pm
I would have thought the phrase “Devil take the hindmost” would equate to the Greater Fool theory.
james, I beg to differ, it can be incredibly difficult if not impossible to tell when you’re in a bubble. Is oil in a bubble right now, gold, Saskatchewan real estate, art, agriculture? You can find many intelligent and very wealthy individuals who are staking their reputations and money on both sides of the aforementioned.
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