Speculation: A History

Banner takes the long view of the last two centuries of American ambivalence around the role of speculation in finance in this entertaining if narrow historic exploration. He focuses not so much on the actual crises wrought by financial gambling but on how public opinion responded to and shaped attempts at speculation. For the last 200 years, Americans have tried to balance the risk and the reward of speculation by experimenting with different forms of regulation. In the meantime, speculation is still viewed with suspicion, if not outright disapproval or even religious condemnation. Banner walks readers through the changing views on risk throughout the 19th and early 20th century, from the rabidly antispeculation Lincoln, to the anti-option era when farmers lobbied against speculation, to the 1929 Wall Street Crash and the lesser-known 1925 Florida real estate bust. In the 20th century, investment started being seen with less suspicion, as long as a conservative, long-term approach was taken. And regulators—who have typically encouraged investment while discouraging speculation—started to shift their focus from legislation to taxation. Banner concludes that Americans still don’t really know how to view speculation, or how to handle it. Readers interested in financial history will appreciate the lively narrative, but the thesis itself is too narrow for the space allotted. (Jan.)