HIST 201: Manias, Bubbles and Market Failures

Instructor: D'Maris Coffman

[Fulfills research requirement.]

Charles Mackay's nineteenth-century classic, Extraordinary Popular Delusions and the Madness of Crowds, has left generations of readers convinced of the irrational greed behind Tulip Mania, the South Sea Bubble, and the Mississippi Scheme. This course takes these three early modern bubbles as case studies in market failure. We will investigate what, if any, market fundamentals drove investor behavior and will study the contemporary polemical literature which followed in the wake of each speculative disaster. Students will learn why modern financial and economic historians consider interpretations of these three crises pivotal to theoretical debates about rational and efficient markets. Students will develop their own research projects in which they interrogate the market realities behind a financial bubble of their choosing. Given the recent collapse of the sub-prime lending market and the earlier demise of the e-commerce boom, history, economics, political science, sociology and finance majors should find this course especially useful.

Course requirements include regular participation in seminars (including an oral presentation), a term paper based upon original research (15-20 pages) and a final examination. This course fulfills both the research requirement and the pre-1800 requirement for the major/minor.