In response to David Colander's query about bubbles, or crises
generally, and the development of economic thought. The relationship
has been very close on a number of occasions.

Banking theory in the early nineteenth century developed in strict
relationship to the events of the day. Think in particular of the
bullion debate, and the later controversy between currency and banking
schools. The debate on Say's law began when people (beginning from
Sismondi) started disputing it on the occasion of the crisis following
the end of the Napoleonic wars. Marx's work on the Grundrisse (and
what follows) was sparked off by the approaching of the 1857 crisis.
Marx himself noted (but he wasn't the first, or the last) that each
crisis gives rise to a huge literature of pamphlets and various sorts
of writings on the event --where one can find the germs of theoretical
approaches that were developed in full at a later date. A large number
of theoretical advances in the interwar years were stimulated by a
general attention to business cycles, which had become a sub- discipline
precisely because the recurrence of crises was itself a
phenomenon visible enough.

As to Benjamin Mitra-Kahn's observation that the South Sea Bubble had
a short-living effect: perhaps so, but surely it had a long lasting
effect on people's perception. In the daily press of the entire
century that followed (and still later) the events were often
recollected --surely at each bursting of a new bubble (I have a short
paper quoting a number of examples between the 1760s and the 1850s in
the fortcoming issue of Storia del Pensiero Economico).

Daniele Besomi