“We are the apes who tell stories,” writes William Bernstein. “And no matter how misleading the narrative, if it is compelling enough it will nearly always trump the facts.” As Bernstein shows in his eloquent and persuasive new book, The Delusions of Crowds, throughout human history compelling stories have catalyzed the spread of contagious narratives through susceptible groups—with enormous, often disastrous, consequences.
Inspired by Charles Mackay’s 19th-century classic Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, Bernstein engages with mass delusion with the same curiosity and passion, but armed with the latest scientific research that explains the biological, evolutionary, and psychosocial roots of human irrationality. Bernstein tells the stories of dramatic religious and financial mania in western society over the last 500 years—from the Anabaptist Madness that afflicted the Low Countries in the 1530s to the dangerous End-Times beliefs that animate ISIS and pervade today’s polarized America; and from the South Sea Bubble to the Enron scandal and dot com bubbles of recent years. Through Bernstein’s supple prose, the participants are as colorful as their motivation, invariably “the desire to improve one’s well-being in this life or the next.”
As revealing about human nature as they are historically significant, Bernstein’s chronicles reveal the huge cost and alarming implications of mass mania: for example, belief in dispensationalist End-Times has over decades profoundly affected U.S. Middle East policy. Bernstein observes that if we can absorb the history and biology of mass delusion, we can recognize it more readily in our own time, and avoid its frequently dire impact.
Praise for A Splendid Exchange:
“[An] entertaining and greatly enlightening book . . . Bernstein is a fine writer and knows how to tell a great story well. . . . He never loses sight of his overall goal: to show how trade shaped the world in the past and will shape the world in the future. . . . A Splendid Exchange is a splendid book.”—New York Times
“A Splendid Exchange is a timely and readable reminder that the desire to trade is not only one of the oldest human instincts but also the cause of many of the most important developments in our shared history. . . . With an ability to switch gracefully from the macro to the micro, Mr. Bernstein whisks his reader on a tumultuous journey. . . . The strength of Mr. Bernstein’s book is the analytical rigor that overlays the rollicking history and the way in which he seamlessly weaves in the theoretical with the practical. For anyone wanting a painless primer in the ideas of Adam Smith, David Ricardo or more recent economists, such as Paul Samuelson, this is the place to find it.”—Economist
“Sparkling . . . One freewheeling historical passage follows another . . . A Splendid Exchange is saved from any possible tedium by its feast of contrarian conclusions, its broad historical sweep, and, especially, its vivid characters . . . Fascinating.”—BusinessWeek
“Superb . . . [A] significant contribution . . . The chronological range of Bernstein’s book is staggering. . . . A Splendid Exchange is a work of which Adam Smith and Max Weber would have approved. And it is all the more interesting because it is written by someone who is deeply knowledgeable about and active in the financial world yet finds the time to write graceful and insightful history with a delicate display of scholarship that conceals a vast erudition. What really marks Bernstein out is his talent in understanding, and then explaining, international commercial linkages.”—Foreign Affairs
“Vivid . . . Colourful . . . Highly entertaining . . . A fascinating journey through the evolution of trade . . . Bernstein’s enthusiasm for his subject and impressive organisation of a wealth of material enable him to plot with pace and verve a largely chronological account of man’s trading history.”—Financial Times
“A Splendid Exchange is filled with adroit observations on the evolution of trade from the ancient world to today. Bernstein draws upon a vast historical context to show how trade’s development is part of society’s natural progression toward prosperity, and he makes a convincing case that trade and trade policy have been the catalyst for the development of ambitious nations. He correctly asserts that we must be aware of how it has shaped the past because it will continue to have a pivotal role—for better and for worse—as we move into the future. Politicians take heed!”—Arthur Laffer, founder and chairman, Laffer Associates
“A Splendid Exchange is really much more than a history of trade. In William Bernstein’s deft treatment, it becomes pretty much a history of the world. The age-old urge to profit by buying low and selling high led to empires, wars, trade restrictions, and—more recently—violent protests against economic and financial globalization. Bernstein’s vast knowledge of trade’s past is great preparation for dealing effectively with today’s controversies about its future.”—Richard Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets, and Professor of Economics, NYU’s Stern School of Business
“Financial theorist and historian Bernstein is equally at home plumbing the romantic dawn of trade or untwisting the mind-wracking complexity of modern international commerce . . . An excellent exposition of key factors in a perennial economic conundrum.”—Kirkus Reviews (starred review)