The Evolution of Speculation

Edward Chancellor, Devil Take the Hindmost, Farrar Straus & Giroux, 1999, 368 pages.

"All life is speculation," says noted 19th-century stock trader James R. Keene, quoted in Edward Chancellor's Devil Take the Hindmost, a singular deviation from the standard Wall Street literary fishwrap.

As anybody who's ever leaned over a craps table or crossed a big city boulevard against traffic can attest, Keene was right on the money in this assessment of risk. From the hurly-burly metropolitan squares where ancient Romans bartered for land and money to the digitally enhanced hum of the Nasdaq market, speculation has defined humanity for better or for worse. It acts both as a generational link to our ancestors and as a map showing future generations where to go in their search for an adrenaline rush and profits.

In this finely tuned, exhaustively researched tome, Chancellor places speculation on a pedestal of uniquely human traits, right up there between conscience and bombast. The author tracks the history of speculation, weaving a 368-page web that's as likely to examine the white-hot Dutch tulip trade in the 1600s as it is Hillary Clinton's golden touch with cattle futures more than 350 years later.

The book covers a lot of territory, including the birth and genesis of the London stock market circa 1690 and a circus-like Ponzi scheme involving the British-based South Sea Company, the Prince of Wales, Sir Isaac Newton, the Archbishop of Dublin and scores of duped investors. Chancellor launches us into an ambitious chronological examination of betting, bartering, billionaires and bankruptcy that reaches from the 1600s into the 1990s.

Devil Take the Hindmost begs for a Ken Burns-like "Civil War" documentary treatment, with yellowed photographs and somber voice-overs describing the evolution of speculation. Picture Jason Robards intoning Sir Isaac Newton's quote after frantically unloading his South Sea holdings: "I can calculate the motions of the heavenly bodies, but not the madness of the people."

The title comes from a periodic description of the South Sea debacle in which investors lost millions, back when a million dollars was a lot of money. Noting the zeal that early investors showed for the stock, an anonymous pamphleteer notes that "the only way to prevent a loss must be to sell out betimes [early] so let the Devil take the hindmost."

A prescient observer, Chancellor gathers steam in later chapters on speculation in America and Japan, and tails off a bit in his last chapter on rogue economists, lecturing us on the perils of hedge funds and derivatives. (They're risky? Golly, good thing I got out of those Portuguese debentures!)

All in all, you have to give credit to a book that lays out the evolution of speculation, leapfrogging datelines and oceans with ease, and does so in an anecdotal style that's pleasing to the reader. If you're looking for a worthwhile read, Devil Take the Hindmost is a good bet.

Now what's Ken Burns' phone number?