Memoirs of Extraordinary Popular Delusions and the Madness of CrowdsAge-adapted version

People are not always rational. They can become infected by an idea as if by a fever. Then they all run in the same direction, cheering and buying and promising, believing they have found a shortcut to happiness. When things go wrong, they do not wake up together. They wake up one by one, as if from a dream that lasted too long.

Thus this story tells it from the very start.

It follows mostly the tales of money that transformed ordinary people into adventurers, and cities into circuses. It also follows the dream of turning lead into gold and life into eternity. For in both the money rush and alchemy we find the same heart: the desire to stop being afraid, to stop striving, to stop waiting.

We begin in Paris. A Scotsman named John Law was handsome, clever, and a little dangerous. He calculated quickly and played hard. As a young man he shot a man in a duel and had to flee England. In Europe he lived by gambling and ideas, and his idea was simple and grand: paper money could make an entire nation breathe easier. When the Sun King died in 1715, France was weary, debt-ridden, and suspicious. Coins were constantly changed in weight and value. Trade stalled. John Law came to Paris and found a friend in the regent, the Duke of Orléans, who ruled for a minor king. Now Law had his chance.

In 1716 he opened a private bank that printed notes everyone could exchange. While coins constantly changed value, the notes remained stable. Trust awakened. People paid more easily, trade flowed, and the city felt a mild breeze of hope.

The following year, Law took the next leap. He created a trading company that was granted exclusive rights to the land of Louisiana and to trade along the Mississippi River. The company accepted government securities that the world had lost faith in, as if they were worth full value. Imagination ignited. People envisioned ships full of silver and gold from endless rivers. The bank gained royal luster, and the regent pushed out more and more notes to cover old debt. Here Law's own rule broke: the paper had to have solid ground beneath it. Now the notes were tied to political mood.

Opponents warned: too much paper can crush the soul of coin. They were pushed aside. The cashbox hatches stood open. In 1719 the company was blown up larger, with rights to India, China, and the South Seas. New shares came with promises of fabulous dividends. Paris lost its composure. High and low flocked to a narrow street, Rue Quincampoix. Small booths creaked, money changed hands, dreams were bought with quick handwriting. The street became too narrow for greed, so traders moved to squares, gardens, and pavilions, like an amusement park of hope and quarrels.

Anecdotes said more than numbers. Learned men who first moralized were seen in secret near the booths. Ladies pretended to faint in order to fall into Law's arms. Another cried 'fire!' only to be carried near him. Servants bought carriages, old families sold their names in marriage to get the newcomers' money. Meanwhile crimes grew coarser. Count d'Horn killed a broker for notes, and when the nobility begged for mercy, the regent said no. The people cheered when fine gentlemen had to pay like ordinary criminals.

Prosperity glittered. Wages and prices rose. Paris danced an expensive minuet. The regent bought an enormous diamond; everyone talked about it. Law converted to Catholicism, gained a powerful position, and gave lavish gifts. The court's hangers-on waited for hours in his antechamber to be seen. 'Spice dukes' carried their own sacks, people joked. Songs in the streets hailed Law as a savior.

But beneath the gold dust lay a flimsy plank. The paper was not backed by goods and labor, but by the state's needs. In early 1720 came the first clear tremors. Prince de Conti demanded huge sums in coin. The regent forced him to return much of it, and Law smoothed things over as best he could. But now the experienced began to hoard silver. Some sent metal out of the country; others smuggled it back in large balls under hay and straw to profit from exchange rate differences. A sharp fellow reportedly drove almost a million livres hidden in a dung cart. The bright trust got a crack.

The powers tried to mend the damage with force. First a little, then more. The value of coin was reduced relative to paper. The bank rationed payments. Then came a hated edict: no one could own more than five hundred livres in metal. Houses were searched. Servants informed on masters. An English ambassador sneered that Law had in a short time given Paris both a miracle and an inquisition: he had turned gold into paper, and let spies rake through people's cupboards. The street grew quieter. Love for the system died. Fear lived.

The regime also tried theater. Starving people were marched through the city with spades and picks, as if on their way to new lives along the Mississippi. Half were back within three weeks. Reality under the banners was empty. Yet new notes poured out, enough to cover the city's sky in thin sheets.

For a while it helped that the bank and company were merged. Then distrust awakened again, sharper than before. One day in May it was announced that notes and shares would halve in value over a year.

Rage in the streets forced a reversal after a week. Then coin payments were stopped.

Law and his close associates were dismissed. The regent laid the blame on the Scotsman in the open – and then beckoned him into his opera box as a friend. In the street stones flew at Law's gate. His wife and daughter were attacked. Soldiers had to guard the house. Law sought refuge in the Palais Royal.

A cautious chancellor, d'Aguesseau, was brought back. The ban on owning metal was lifted. Silver was allowed to jingle again. At the city hall, notes were burned as in a worldly mass. People were crushed to death in the queues. Soldiers shot over the heads of men screaming for coin in a garden, and some fell. The parliament, which had defied the regent and been sent into exile, held balls and concerts as a kind of sarcastic holiday. Now the songs and drawings were bitter. They mocked 'Lass' who had made everyone as poor as monks.

Autumn came with less coercion and more emptiness. The company lost its great privileges and became a shadow. Shareholders were ordered to contribute more money than they could afford. Many tried to escape with jewelry and silver, but the gates were guarded. Law asked to retire to an estate. Eventually, he was granted a passport. He refused money.

He traveled via Brussels to Venice. People believed he was rich. But he had tied almost everything into French land and permits that were taken from him. The last thing he owned was a diamond that he pawned and redeemed several times. He died poor in 1729. Someone wrote bitterly: "He who with algebra put France in hospital."

The aftermath was calculations and sweeping. It was said that notes worth 2.7 billion livres were in circulation. Fake claims were burned. Some were fined, some imprisoned. The Regent died in 1723, and with him died the possibility of preserving Law's good core: a strict bank that keeps credit tied to trade, not to the whims of politicians. The lesson stood, clear and heavy: paper only floats as long as hearts believe. When hearts turn, one silver coin weighs more than a cart of notes.

Let us cross the sea. In England, another way was found to lure dreamers. The South Sea Company was created to clean up the state's debt. As bait, it received a monopoly on trade in the South Seas. The actual trade was small: a little slave trading, and permission to send one ship per year with goods to Latin America, where the Spanish king would take his share and the customs officials theirs. But the myth was stronger than the route. London imagined Peru and Mexico as silver vaults right into the city's heart.

England rearranged its debt in 1717–1718. Both the Bank of England and the South Sea Company participated. When Paris went mad over the Mississippi, London did not want to be outdone. The company proposed something grand and "respectable": take over large portions of the state's debt, convert it into its own shares, and promise wealth in the same breath. Parliament itself was to give its seal.

Robert Walpole, with cool brow and calm voice, warned: This will draw money away from work and goods and into paper and air. If it succeeds, the company will own the state. If it fails, rage and ruin will follow. He did not get a majority. In April 1720, the law was pushed through. Prices shot up, and London boiled.

Bubbles grew everywhere, like algae in the sun. Each week new "companies" appeared: for fishing, for sailcloth, for insuring horses, for making perpetual motion machines. One man openly presented his project: "A company for an undertaking of great advantage, but no one is to know what it is." People lined up. They paid a small deposit, were to pay the rest in a month, and were promised one hundred pounds in annual returns. The next night he crossed the Channel and disappeared. London laughed bitterly.

The South Sea stock rose steeply in May and June, buoyed by the directors' own purchases and borrowed crutches. Then, in early June, the price trembled. The stock fell hard. The company pushed it back up. In August, it was ten times its starting point. Rumors swarmed: the chiefs had secretly sold out. Confidence lurched.

On September 8, a general meeting was held. The streets were blocked by people. Inside the hall, a minister called for calm and patience. Outside, the words were dry. The price continued to fall. Banks began to crack. Sword Blade Company, which held the company's cash, closed its doors. People ran to the goldsmith banks to get coin. The Bank of England paid quickly but would not commit to half-written rescues. The price plummeted, with wild jumps. The damage could no longer be hidden.

The king returned home earlier than planned. Parliament was convened. From all over the country came demands for revenge. Some wanted to sew the directors into sacks and throw them into the Thames. Walpole said: Put out the fire first. Then we can look for those who lit it. Secret committees were set up. Books and papers were seized. Borders were closed. The treasurer with the most dangerous documents nevertheless escaped, was caught, released due to odd local rules, and disappeared for good.

The reports from the committees stank. Fictitious entries, deleted lines, blank forms without names. Before the law was passed, more than a million pounds in "sold" shares were said to have been handed out as bribes. Famous names appeared in the lists. Some were acquitted, others fell heavily. Aislabie, the Chancellor of the Exchequer, was expelled, sent to the Tower, and ordered to secure money for the victims. Others were fined and stripped. Directors had to give up fortunes, some almost everything. People in silk were led through streets while the mob shouted, and some wept quietly in carriages on the way to prison.

Finally, the company was dissolved. The state's debt was rewritten, and the city's pulse slowly found its rhythm again. Some of the profit that never existed was used to ease the losses. Loans that rested on bubble air were settled for a fraction of the sum. Trade rose slowly and stiffly, as after an illness. The lesson was nearly the same as in Paris: debt can be wrapped in gold paper, but it does not become gold.

A seal from the law can make a promise polite, but not true. And an entire nation can for a time lose its taste for work because everyone wants to be a winner in the same harvest. Then winter comes with accounting.

While London dried its tears, the Netherlands sang its old, quiet madness: the tulip's. The tulip came as a Turkish turban flower. In nature, it is often uniform in color, somewhat coarse. When cultivated, the petals can get flames and marbling, like glass. The strange thing was that the sick bulbs produced the most beautiful flowers.

The more broken, the more beautiful. This paradox became like a love story. First, it was wealthy collectors who wanted them.

Then the passion slid down the stairs: merchants, craftsmen, ordinary people. The bulbs were measured in tiny units and given grand names: Admiral, Emperor, Viceroy. A Semper Augustus was traded for thousands of florins. A Viceroy could be traded for an entire farm in kind: oxen, pigs, sheep, grain loads, wine, beer, butter, cheese, a bed, clothes, and a silver beaker – all for one bulb.

The markets were stock exchange rooms and taverns. Notaries wrote their own rules for tulip trading. The festivities around the flowers became part of the cult. For a while, everyone profited. They bought and sold promises of bulbs they had never even seen, like tickets to a future bloom.

Prices lifted houses and land. Then came the whispers: who will be left when the music stops? One winter, it burst. Contracts came due. Buyers refused to accept bulbs at old prices.

The courts said: this resembles gambling. They would not enforce the claims.

Cities tried to create mild rules: perhaps pay a tenth and be free? No one was satisfied. Some stories lingered in the air like small, evil fairy tales: a sailor who took a rare bulb for an ordinary one and ate it with herring, and a scholar who dissected a costly bulb as if it were a medical specimen and was arrested. The lesson was simple and harsh: when the price is painted in air, even the most beautiful flower is at last only bulb and water.

Longest of all shortcuts stood alchemy – the art of making base metals noble, prolonging life, and hearing the future. It springs from three human wounds: we die, we struggle, we do not know what will happen tomorrow. And it promises three comforts: the elixir of life, the philosopher's stone, and that spirits will answer. Many who chased one also chased the others. Alchemists were often astrologers, physicians, and – when the money ran out – a bit of swindlers.

People placed its origin where they liked best. Some pointed to Egypt and the wise Hermes. Some to China. Others to Arabic scholars. The first that everyone cited was Geber, around the year 730. He believed metals could be matured into gold, and that an elixir could heal both body and kingdom. He dreamed big – but he also laid real stones in the foundation of science: he wrote about acids no one had mentioned before, about substances like corrosive water and silver that changed itself.

After Geber came more names, like stars behind a cloud. Alfarabi, who played the court to tears and laughter with his lute. Avicenna, the physician who wrote seven treatises on the stone and healed princes – and himself – with wine. Albertus Magnus, who gained a reputation for having made a talking bronze statue that his student Thomas Aquinas smashed in fury. The stories tell more about the audience than about the men. But they remained.

There were also those who waltzed on the edge between poetry and deceit. Artefius, who boasted of being a thousand years old. Alain de Lisle, called "the universal doctor". Arnold de Villeneuve, both praised and condemned, wrapped in recipes for youth. Pietro d'Apone, who was said to have seven demons in seven glasses; he died under the hand of the Inquisition, and his bones were burned afterwards.

Purer stands Raymond Lull in legend, a courtier who became a pilgrim of Christ after a heartbreak. He threw himself into languages and logic, and for some years into alchemy. Legends gave him profit in the Tower of London; he himself wrote that he once transformed large sums into gold. No one could show more than words. He died after being stoned for his preaching on a journey home from Africa.

Roger Bacon bound alchemy to true curiosity: optics, lenses, magic lanterns, and gunpowder – discoveries that many years later were recognized as real breakthroughs through the darkness. A pope himself wrote about the transmutation of metals and at the same time cracked down on false alchemists. People said he died rich from the stone. Skeptics replied that he was just good at counting.

Amid all this appears a Parisian scribe who became Europe's favorite myth: Nicolas Flamel. He came to the city without inheritance and found warmth in books. One day he bought a strange book, written with a steel stylus on bark, with three times seven leaves and pictures that were like dreams: snakes swallowing staves, sun and moon in children's blood, mountain flowers guarded by griffins.

It bore the name "Abraham, patriarch and priest". Flamel read and understood enough to believe, but not enough to know. For over twenty years he groped, alone and with scholars in Paris. He went as a pilgrim to Spain, met a converted Jew named Cauchès, who burned to see the book. On the way back, Cauchès died. Flamel took the sorrow home.

Two years later, posterity tells, a small sentence from Cauchès fell into place in his memory. Then, in the winter of 1382, he made a test on mercury and obtained "very good silver". In the spring of the same year, he transformed more and said it was gold. Whether the elixir of life gave him extra years, we do not know.

But this is certain: he and his wife, Petronella, did not spend money on luxury.

They gave to churches, hospitals, and small chapels where the poor could find warmth. He was silent about the key, even for the most powerful. He died in 1415. His house was for centuries picked and knocked at in hope of a secret niche. Nothing was found – except hope itself.

In England, the law tried to steer between belief and fraud. In 1404, it was forbidden to "make gold" with words and fire, so that no one could raise private armies. Later the ban was softened. A king allowed some to try, on condition that if they succeeded, they paid tax in real coin. A commission of scholars was asked to judge whether the stone could be found. Thus the pendulum swung between fear and expectation.

Some names burn a little brighter. George Ripley, churchman and poet, wrote The Twelve Gates. Later he asked that his books be burned, or that people at least read them as poems, not proofs. Basil Valentine, prior in Erfurt, was said to have left manuscripts in a pillar that lightning struck. Bernard of Trèves, born rich, burned his youth and money on furnaces and travels.

He went from master to master, distilled everything, even that which no one should distill. He was tricked in Vienna by a "master Henry" who proved error by a trick. After three years in the hot ovens of Rhodes came his insight: the secret was contentment. He died almost without money, but perhaps richer in peace.

Johannes Trithemius, a diligent abbot, built libraries and work ethics in his monastery, while writing books about secret scripts and angels. People who envied him said he must have found the stone. Others called him a wizard. Between the prosaic virtue of work and the public's thirst for miracles, he became a sign that book, oven, and devil were three sides of the same coin.

Sometimes the thirst for shortcuts took a darker path. Gilles de Rais was a French hero from the war against the English, handsome, brave, rich. He built a theater in his garden, squandered like a king, and when the money ran out, he clung to alchemy and nocturnal promises. A Paduan who called himself Prelati claimed he could help him with a demon named Barron.

The price was gruesome.

In the vicinity, children began to disappear. Whispers turned into shouts. The Inquisition and the Bishop of Nantes intervened. The charges were heavy: sorcery, debauchery, murder. Prelati confirmed under pressure the most terrible acts. Gilles was strangled before his body burned. Prelati went up in ashes. If anyone that day still saw in alchemy a sacred flame, this story extinguished the last glimmer.

But alchemy was also a theater over ordinary sins. Jacques Cœur, son of a poor goldsmith, became the king's master of the mint and treasurer through shrewdness and friendship at court. He understood the rhythm of buying and selling. When he was accused of counterfeiting and tampering with coinage, he let alchemists stay with him and filled the palace with symbols, as if signs could cover tracks.

The court found him guilty of practical things—selling weapons to the Turks for profit and debasing the currency. The king perhaps inwardly believed he was better than his reputation, but the pressure won. Cœur was sent into exile and died in Cyprus. For some alchemists he was a hero. For those who looked for traces in the earth, he was a financier with a mask.

There are more names than we can carry on one page: men who wrote, swore, and vanished in smoke. John Dowston, Richard with his Correctorium, Peter of Lombardy, Odomare in Paris, John de Rupecissa—a Franciscan who wrote from a dark dungeon about light and essences. Dutchmen, Poles. A French king who filled his court with alchemists and astrologers, and wrote a book that was magnificent and nearly unreadable.

At the threshold of a new era, new words mixed in the old pot.

Rosicrucians dreamed of reconciliation between man and the divine. Paracelsus made medicine with new means. John Dee in England spoke with spirits in cracked mirrors. Poets found words.

One of them, Augurello, dedicated his poem on the art of gold to the pope. The pope gave him an empty purse and smiled: "Since you can make gold, this is the right gift." The poet died poor, but with steady verses.

Now we can look back over the entire path: from Rue Quincampoix in Paris to Change Alley in London, from Haarlem where the bulbs bloomed in the air, to monasteries and laboratories where men with singed fingers whispered about stones that were never there. Each story bears the same rhythm. Hope builds quickly. The glitter is contagious. Reason is dulled when many eyes look into the same mirror and forget that the mirror has no soul of its own. When it shatters, it shatters in bodies and lives, not just in papers and glass.

Imagine Paris, where people stood in bank queues so tight that some were crushed to death, just to get a handful of coins. Imagine London, where men in silk were taken to the Tower while the crowd shouted, and where a cold, patient voice in Parliament asked to put out the fire before hunting for the arsonists. Imagine Haarlem, where merchants sat with useless bulbs while the herring lay heavy in their stomachs. Imagine cellars and stalls where men with burnt sleeves promised to twist lead into gold and death into life—and discovered, some of them, that the only thing they transformed was their own years into ash and salt.

But there is not only mockery in these tales. They are also mirrors of our stubborn ability to find new paths. The same forces that make us dream too far also make us invent. Geber found acids in the quest for gold. Bacon played with lenses while searching for the stone.

Banks can learn to be sober after being reckless. Reason returns, slowly and reluctantly, after the fever. Nations lose their wits in a flock. When the fever is highest, they laugh at those who say the fire needs more wood, not more sparks. Later, when the smoke has settled, reason comes back, one by one.

Then there is usually someone left in the square shouting that next time will be different. That is perhaps our most human delusion—and our comfort. For without the ability to believe too much, we would never dare to try what actually works. The lesson from money crazes and gold follies still stands: Paper only floats as long as hearts believe. When hearts turn, a silver coin weighs more than a thousand promises in the air. And the most beautiful flower is, in the end, a bulb in the hand.