The South Sea Bubble

Melvyn Bragg and his guests discuss The South Sea Bubble, the speculation mania in early 18th-century England which ended in the financial ruin of many of its investors. The South Sea Company was founded in 1711 with a view to restructuring government debt and restoring public credit. The company would ostensibly trade with South America, hence its name; and indeed, it did trade in slaves for the Spanish market even after the Bubble burst in 1720. People from all walks of life bought shares in the South Sea Company, from servants to gentry, and it was said the entire country was gripped by South Sea speculation mania. When the shares crashed and the company collapsed there was a public outcry and many people faced financial ruin, although some investors sold before the crash and made substantial amounts of money. For example, the bookseller Thomas Guy made his fortune and founded a hospital in his name the following year. But how did such a financial crisis develop and were there any lessons learnt following this early example of a stock market boom and bust?

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Guests

• Anne Murphy No other episodes
  Senior Lecturer in History at the University of Hertfordshire
• Helen Paul 8 episodes
  Lecturer in Economics and Economic History at the University of Southampton
• Roey Sweet No other episodes
  Head of the School of History at the University of Leicester

Reading list

• A Very English Deceit: The Secret History of the South Sea Bubble and the World's First Great Financial Scandal
  Malcolm Balen (Fourth Estate, 2009) Google Books →
• The South Sea Bubble
  John Carswell (Cresset, second edition, 1961) Google Books →
• The Financial Revolution in England: A Study in the Development of Public Credit, 1688-1756
  Peter Dickson (Gregg Revivals; new ed of 1967 ed, 1993) Google Books →
• A Land of Liberty?: England 1689-1727
  Julian Hoppit (Oxford University Press, 2000) Google Books →
• Extraordinary Popular Delusions and the Madness of Crowds
  Charles Mackay (Wordsworth Editions; new edition, 1995) Google Books →
• The Origins of English Financial Markets
  Anne L. Murphy (Cambridge University Press, 2009) Google Books →
• The South Sea Bubble: An Economic History of its Origins and Consequences
  Helen Paul (Routledge, 2011) Google Books →
• The Financial Revolution 1660-1760
  Henry Roseveare (Longman, 1991) Google Books →

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Programme ID: b01pcs5g

Episode page: bbc.co.uk/programmes/b01pcs5g

Auto-category: 332 (Financial economics)

Hello (First sentence from this episode)

Hello. In September 1720, England was plunged into economic crisis when the South Sea Company collapsed, one of the first examples of a financial boom and bust, and one which gave rise to the term bubble, to refer to such an incident of spectacular stock market failure.