Tulips, Perpetually Positive Returns and Other Manias

From Wikimedia Commons comes this image of an allegorical painting of the Dutch tulip mania, c. 1640. Flora, goddess of flowers, rides on a wind-blown wagon with a two-faced woman, drunks and money-changers, followed by other low-lifes, all headed for ruin in the sea.


In a WSJ column, Why We Fall for Financial Scams, psychologist Stephen Greenspan cites "the tendency of humans to model their actions -- especially when dealing with matters they don't fully understand -- on the behavior of other humans." Greenspan touches upon a number of financial crazes through the ages, including an inheritance fraud from the 1920s involving the supposed will of Sir Francis Drake.

Professor Greenspan has written a book, Annals of Gullibility. More recently he inadvertently invested some of his life savings with, yes, Bernard Madoff!