The England football team are perennial underachievers. Every major tournament sees them exit well before the semi-final stages and after every exit there is the usual inquest into why it happened. The usual suspects are tactics (England should have played a 4-3-3 instead of a 4-2-3-1), tired players, unrealistic press expectations, bored players, and injuries to key players. Imagine my shock when I read a Daily Telegraph article at breakfast this morning which blamed England's early exit on market capitalism! Click here to read the article.
My colleague and former PhD student Gareth Campbell has created a website about the British Railway Mania - click here . This episode has been described by the Economist as probably the greatest bubble in human history. Gareth's website provides background on the Mania and posits some explanations for the 'bubble'. In his explanation of why the bubble happened, Gareth places a lot of emphasis on investor myopia regarding future dividends and uncalled capital. His study of investors during the episode does not support the view that this episode was fuelled by naive and irrational investors.