Dr, Benjamin Rush served as Treasurer of the United States Mint from 1797 to 1813. He was also not only a signer of the Declaration of Independence and civic leader, he was a physician, politician, social reformer, humanitarian, and educator. A forthcoming book credits Rush with a sea change on how people thought about speculative manias.
I added an image of Rush's c1818 portrait by Charles Willson Peale.
Today, there are manias in everything from bitcoin and nonfungible tokens to SPACs and meme stocks – obscure corners of the market that are getting increased attention. Whether these are the next bubbles to burst remains to be seen.
... I learned while researching my book "Speculation: A Cultural History from Aristotle to AI," which will be published in June 2021, financial speculation hasn't always been understood as a widespread craze – or even outside of individual choice.
... Smith, Washington and others still saw speculators of all types as individuals making calculated decisions, not as part of some maniacal collective or epidemic contagion.
That began to change thanks largely to the early American physician and thinker Benjamin Rush.
As surgeon general of the Continental Army and a prolific publisher of studies of mental illness, Rush penned a widely circulated article in 1787, "On the Different Species of Mania." In it, he characterized speculative gambling alongside 25 other types of "manias" that he wrote had become pronounced in American life, including "land mania," "horse mania," "machine mania" and "monarchical mania."
For Rush, speculation was a disease of the mind that spread from one to many and threatened the health of a young democracy that relied on rational decision-making by voters and politicians. The "spirit of speculation," he foresaw, was not a good-hearted "spirit" of nation building, but rather could "destroy patriotism and friendship in many people."
Rush's terminology and his way of thinking caught on quickly. In the summer of 1791, "Scripomania" took hold as Alexander Hamilton sold the rights to buy shares – known as scrips for "subscriptions" – in the newfound Bank of the United States to shore up the nation's finances following the Revolutionary War. Demand for the scrips soared; the Philadelphia General Advertiser declared that "an inveterate madness for speculation seems to possess this country!"
To read the complete articles, see:
From tulips and scrips to bitcoin and meme stocks – how the act of speculating became a financial mania
Wayne Homren, Editor
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