Cautionary Tales Ep 5 – Buried by the Wall Street crash
Two of the greatest economists who ever lived, Irving Fisher and John Maynard Keynes, thought they could predict the future and make a killing on the stock market. Both of them failed to see the Wall Street crash, the greatest financial disaster of the age – and arguably, of any age. Yet having made the same forecasting error, Fisher and Keynes went on to meet very different fates. What does it take to see into the future? And when you fail, what does it take to bounce back from ruin?
Featuring: Alan Cumming, Russell Tovey, Mircea Monroe, Rufus Wright, Ed Gaughan, and Melanie Gutteridge.
Producers: Ryan Dilley and Marilyn Rust. Sound design/mix/musical composition: Pascal Wyse. Fact checking: Joseph Fridman. Editor: Julia Barton. Recording: Wardour Studios, London. GSI Studios, New York. PR: Christine Ragasa.
Thanks to the team at Pushkin Industries, Heather Fain, Mia Lobel, Carly Migliori, Jacob Weisberg, and of course, the mighty Malcolm Gladwell.
Walter Friedman’s The Fortune Tellers is a key source on Fisher. It’s a history of all economic forecasting in the US. I loved it.
Sylvia Nasar’s excellent Grand Pursuit has much more on both Keynes and Fisher.
On Keynes, the central source on his investment performances is David Chambers and Elroy Dimson. 2013. “Retrospectives: John Maynard Keynes, Investment Innovator.” Journal of Economic Perspectives, 27 (3): 213-28.DOI: 10.1257/jep.27.3.213. There’s more biographical detail in the more informal Keynes’s Way To Wealth by John Wasik.
Philip Tetlock’s original study is detailed in his subtle, scholarly and ground-breaking Expert Political Judgment. His more recent book with Dan Gardner, Superforecasting is more journalistic and covers his recent discoveries. Both books are very good, but quite different in style.
The case of Dorothy Martin and the UFO cult is told first hand by Festinger and his colleagues in When Prophecy Fails. There’s further discussion in Mistakes Were Made (But Not By Me), an excellent guide to all the ways in which we can fail to notice we’re wrong, by Carol Tavris and Elliot Aronson.