Marx and Engels on the railway bubble of 1845

Brad DeLong has a great post for his econ class that includes, as an aside, a quote from Marx and Engels on a 19th century boom and bust ...

April 9 Lecture: Econ 101b: Arguments Against Lender-of-Last Resort Operations

... In the years of prosperity from 1843 to 1845, speculation was concentrated principally in railways, where it was based upon a real demand.... The extension of the English railway system... 1845... the number of bills presented for the formation of railway companies [i.e., IPOs] amounted to 1,035.... The heyday of this speculation was the summer and autumn of 1845. Stock prices rose continuously, and the speculators' profits soon sucked all social classes into the whirlpool. Dukes and earls competed with merchants and manufacturers for the lucrative honour of sitting on the boards of directors of the various companies; members of the House of Commons, the legal profession and the clergy were also represented in large numbers. Anyone who had saved a penny, anyone who had the least credit at his disposal, speculated in railway stocks...

I think something similar was going on in America, and the economic chaos is thought to have played an important role in the Civil War.

The entire quote is fascinating reading.

The railway bubble, though it burst, had very solid foundations. My Irish-Canadian grandparents and their extended family worked largely in the rail industry at the start of the 20th century -- fifty years after the great railway depression of 1848. So the historic analogy is not to the real estate bubble of 2002 - 2007, but to the Internet bubble of 1998 - 2000.

(Incidentally, DeLong is a solid neo-liberal capitalist, his reference to Marx belongs to the history of economic thought.)