n the City, they know all too well the theory of the madness of crowds. They like to think they’re above all that, and spend their time trying to seek an individual opportunity here, to get ahead of the pack there.
They will claim to be familiar with Charles Mackay’s great 19th century work, Extraordinary Popular Delusions and the Madness of Crowds, which recounts in gory detail episodes of collective mania: John Law’s Mississippi scheme, Tulipomania and the South Sea Bubble.
Of course, they will say, that won’t happen to us. Alas, piling into dotcoms ahead of their crash and the rolling up of subprime mortgages as a must-have asset – to give just two recent examples – prove them wrong.