Financial History Issue 114 (Summer 2015) | Page 11

EDUCATORS’ PERSPECTIVE

How Hen Fever Led to the Chicken of Tomorrow
(Part 1: Hen Fever)
By Brian Grinder and Dan Cooper
The greater fool theory, according to
Burton Malkiel, states that “any price will
do as long as others may be willing to pay
more.” The theory is in operation at all
times, but it is especially evident during
speculative bubbles. The individual who
wrote the letter on the right to George
Burnham in the mid-19th century was
only too happy to take advantage of the
theory. However, the problem with this
theory is that there are only a finite number of fools. When there are no more fools
to take advantage of, the bubble bursts and
chaos reigns supreme.
We are well aware of the various financial market bubbles that have occurred
throughout history, but speculative bubbles do not confine themselves to Wall
Street. In a 1926 article entitled “Agricultural Crazes: A Neglected Chapter in
American Economic History,” Harvard
economist Arthur H. Cole contended
that antebellum agriculture in the United
States was “particularly susceptible to
orgies of speculation when a strange plant
or animal was first brought to attention
here.” According to Cole, there were preCivil War speculative bubbles in Marino
sheep, Chinese mulberry trees, Berkshire
hogs and Asian chickens. Cole notes that
“hen fever” ravaged the country from 1850
to about 1855 and “exhibited a virulence
hardly equaled” by any of the other agricultural crazes he described.
It all began in 1842 when the notorious Captain Ed ݅ɐ