A short life of the author
Charles Mackay is one of those Victorian authors whose reputation rests almost entirely on a single book — but what a book. Extraordinary Popular Delusions and the Madness of Crowds (1841) is one of the most durable works of popular social history ever written, a catalogue of human folly that has been in continuous print for nearly two centuries and that remains, despite its age, one of the most widely quoted books in the literature of finance, psychology, and mass behaviour. Bernard Baruch, the legendary Wall Street financier, credited the book with saving him millions; it is cited in virtually every modern study of financial bubbles, speculative manias, and crowd psychology.
Life and Career
Charles Mackay was born in Perth, Scotland, in 1814. His mother died when he was young, and he was raised partly in London and partly in Brussels, where he received a French education that gave him a cosmopolitan perspective unusual for a Scottish journalist of his era. He began his career as a journalist and songwriter, contributing to a variety of London periodicals.
His songs — particularly “There’s a Good Time Coming,” “Cheer, Boys, Cheer,” and “The Good Time Coming” — were enormously popular in mid-Victorian Britain and were set to music by Henry Russell. They were moral, optimistic, and sentimental in a way that appealed to Victorian audiences, and several became standard fare for public gatherings and political meetings.
In 1852, Mackay became editor of the Illustrated London News, a position he held for six years and which made him one of the most influential journalists in Britain. He was also a correspondent for The Times during the American Civil War, covering the conflict from the Confederate side — a posting that drew criticism for his sympathetic portrayal of the Southern cause.
Extraordinary Popular Delusions
The book was first published in 1841 as Memoirs of Extraordinary Popular Delusions (3 volumes) and expanded in the second edition of 1852 as Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. It has been known by various shortened titles ever since.
Mackay’s thesis is simple and powerful: human beings are prone to collective irrationality, to manias that sweep through populations like epidemics, and the historical record is littered with episodes in which entire societies lost their capacity for rational judgement. He organises his examples into three broad categories: financial manias, alchemical and occult delusions, and “peculiar follies” including crusades, witch hunts, duelling, prophecy, and popular admiration for criminals.
The financial chapters are the most famous and the most enduring. Mackay’s accounts of the Mississippi Scheme (John Law’s disastrous paper-money experiment in France, 1716–1720), the South Sea Bubble (the speculative mania that gripped England in 1720), and Tulipmania (the Dutch tulip-bulb speculation of the 1630s) remain the standard popular narratives of these events, quoted and anthologised more often than any subsequent academic treatment.
His account of Tulipmania — in which single tulip bulbs supposedly sold for the price of houses — has been challenged by modern economic historians, notably Anne Goldgar in Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age (2007), who argues that Mackay exaggerated the scale and the consequences of the speculation. Similar criticisms have been made of his treatment of the South Sea Bubble. But even his critics acknowledge that Mackay identified something real and important: the human tendency toward collective irrationality, the way that speculative enthusiasm feeds on itself until it becomes mania, and the characteristic pattern of bubble, crash, and recrimination that has recurred with remarkable consistency from the seventeenth century to the present.
Other Works
Life and Liberty in America (1859) is Mackay’s account of a tour of the United States and Canada in 1857–1858, an observant and sometimes critical portrait of American society on the eve of the Civil War. A Dictionary of Lowland Scotch (1888) reflects his interest in Scottish language and culture. Forty Years’ Recollections (1877) is his autobiography, covering his career in journalism and his literary acquaintances.
His poetry collections, once widely read, have not survived the general Victorian poetic collapse, but his songs retain a place in the history of popular music.
Legacy and Influence
Mackay’s influence on modern finance and behavioural economics is substantial. Extraordinary Popular Delusions is routinely cited in works on behavioural finance, from Robert Shiller’s Irrational Exuberance to Michael Lewis’s accounts of Wall Street excess. The book’s central insight — that markets are driven by psychology as much as by economics, and that the crowd can be spectacularly wrong — anticipated the entire field of behavioural economics by more than a century.
Collecting Mackay
Memoirs of Extraordinary Popular Delusions (Richard Bentley, 1841, 3 volumes) in first edition is a major collecting target — scarce in the original three-volume format. The 1852 expanded edition (Office of the National Illustrated Library) is also collected. Modern reprints are ubiquitous; the original editions are rare.