As people struggle to work out what has been happening on the world’s financial and stock markets over the past few weeks, the two questions which seem to crop up most frequently are: why did the so-called ‘Crash of ’87’ occur; and what happens next? Even in the first few days, the pundits were clamouring to offer answers. Just about everything was blamed by someone – greed, government incompetence, even President Reagan’s difficulties in securing Senate approval for his nominee for the Supreme Court, Robert Bork. Few people have been honest enough to admit that they didn’t really know the answer to either question. After all, those who did know were either the clever market operators who escaped intact before the crash happened; or the Cassandras whose predictions of disaster were happily ignored until it was too late.
The full text of this essay is only available to subscribers of the London Review of Books.