Quotes from John Kenneth Galbraith

I can measure the motions of bodies," Sir Isaac Newton once observed, "but I cannot measure human folly.

The euphoric episode is protected and sustained by the will of those who are involved, in order to justify the circumstances that are making them rich. And it is equally protected by the will to ignore, exorcise, or condemn those who express doubts.

This map by cartographer Herman Moll was commissioned by the South Sea Company. The entire region displayed, with the exception of Brazil, was claimed as the company's trading territory. Disregarded was the fact that Spain claimed the same territory.

There can be few fields of human endeavor in which history counts for so little as in the world of finance.

out of the pecuniary and political pressures and fashions of the time, economics and larger economic and political systems cultivate their own version of the truth. This last has no relation to reality. No one is especially at fault; what is convenient to believe is greatly preferred.

Wealth is the relentless enemy of understanding. The poor man has always a precise view of his problem and its remedy: he hasn't enough and needs more.

Contributing to and supporting this euphoria are two further factors little noted in our time or in past times. The first is the extreme brevity of the financial memory. ... The second ... is the specious association of money and intelligence.

The Reichman brothers, with Robert Campeau the Canadian gift to financial excess, are indubitably broke with depressive effect on the banks that were captured by their euphoric mood.

Nobody blamed the credulity and avarice of the people—the degrading lust of gain…or the infatuation which had made the multitude run their heads with such frantic eagerness into the net held out for them by scheming projectors.

An articulate community, liberal in the United States, social democratic or socialist in Europe and Japan, does ascribe economic or other motive to the interest-serving view. This can be quite wrong. What rewards particular interest may reflect only a normal tendency to self-benefiting expression and action.

The only purpose of economic forecasts is to give astrology a better image.

The only remedy, in fact, is an enhanced skepticism that would resolutely associate too evident optimism with probable foolishness and that would not associate intelligence with the acquisition, the deployment, or, for that matter, the administration of large sums of money.

To these there are no answers; no one knows, and anyone who presumes to answer does not know he doesn't know. But one thing is certain: there will be another of these episodes and yet more beyond. Fools, as it has long been said, are indeed separated, soon or eventually, from their money. So, alas, are those who, responding to a general mood of optimism, are captured by a sense of their own financial acumen. Thus it has been for centuries; thus in the long future it will also be.

Le verità lapalissiane dell'economia non hanno verità scopritori; esse sono evidenti a chiunque abbia occhi per vedere.

When a mood of excitement pervades a market or surrounds an investment prospect, when there is a claim of unique opportunity based on special foresight, all sensible people should circle the wagons; it is the time for caution.

the heavy load of debt incurred in the effort to obtain and retain control during the years of financial pillage and devastation.

It was usually on about the fourth day that I put in that note of spontaneity for which I am known.

Regulation and more orthodox economic knowledge are not what protect the individual and the financial institution when euphoria returns, leading on as it does to wonder at the increase in values and wealth, to the rush to participate that drives up prices, and to the eventual crash and its sullen and painful aftermath.

In the chapters that follow, we will see, and repeatedly, how the investing public is fascinated and captured by the great financial mind. That fascination derives, in turn, from the scale of the financial operations and the feeling that, with so much money involved, the mental resources behind them cannot be less. Only

specialists. In all speculative episodes there is always an element of pride in discovering what is seemingly new and greatly rewarding in the way of financial instrument or investment opportunity. The individual or institution that does so is thought to be wonderfully ahead of the mob.

The rule is that financial operations do not lend themselves to innovation. What

When people are least sure they are often most dogmatic. We

The more obvious features of the speculative episode are manifestly clear to anyone open to understanding. Some artifact or some development, seemingly new and desirable—tulips in Holland, gold in Louisiana, real estate in Florida, the superb economic designs of Ronald Reagan—captures the financial mind or perhaps, more accurately, what so passes. The price of the object of speculation goes up. Securities

Out of that belief, thus instilled, then comes action—the bidding up of values, whether in land, securities, or, as recently, art. The upward movement confirms the commitment to personal and group wisdom. And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by a desperate and largely unsuccessful effort to get out. Inherent