In Our Time

The South Sea Bubble

Dec 20, 2012

Melvyn Bragg and guests delve into The South Sea Bubble, a financial disaster of early 18th-century England. The podcast explores the rise and fall of the South Sea Company, the impact on investors, societal reactions, and parallels to modern market bubbles like the dot com era. They discuss the company's involvement in the slave trade, political maneuvering, and lessons learned from this historic stock market boom and bust.

41:52

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Episode guests

Melvyn Bragg

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Quick takeaways

The South Sea Company was established to restructure government debt and engage in profitable trade, including the slave trade in South America.

The South Sea Bubble of the early 18th century led to widespread financial ruin but also opportunities for fortune for some investors.

Deep dives

Establishment of the South Sea Company and Political Backdrop

The South Sea Company was established in 1711 to counter Whig dominance, led by Prime Minister Robert Harley, in a volatile political landscape of shifting alliances. The company aimed to manage national debt and engage in profitable trade, urged by the Whig war context to end conflicts and stabilize debt.

Introduction

2min

Establishment and Expansion of the South Sea Company

12min

The Rise and Fall of John Law's Financial System

2min

Emergence of London as a Financial Center in the 1690s

4min

Political Maneuvering and Intrigues in the Early 18th Century

2min

Exploring Financial Strategies and Overreaching Ambitions in the 1719-1720 Boom Period

2min

Rise and Fall of the South Sea Company

7min

Reactions and Consequences of the South Sea Bubble

12min

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?

With:

Anne Murphy Senior Lecturer in History at the University of Hertfordshire

Helen Paul Lecturer in Economics and Economic History at the University of Southampton

Roey Sweet Head of the School of History at the University of Leicester

Producer: Natalia Fernandez.

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In Our Time

The South Sea Bubble

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Establishment of the South Sea Company and Political Backdrop

Impact of Wars on National Debt

Purpose of the South Sea Company

Stock Market Boom, Bubbles, and Bust

Remember Everything You Learn from Podcasts