Robin, it is difficult for me to see the connection between the kinds
of bubbles that Veblen had in mind and a bubble in gasoline prices.
One is an anomaly; the other is a characteristic feature of an
non-renewable resource industry in which the determinants of supply
are highly variable over time. Indeed, given national governments'
manipulation of money and the consequent effect on purchasing power
and international exchange rates, even the determinants of demand
exhibit substantial variability that speculators are incapable of
accurately predicting and capitalizing. The bubbles that occurred in
the US during Veblen's time were, I think, quite different. I have in
mind a land price bubble that is financed by the credit expansion of
local or regional banks that are not part of a network of banks
regulated by a central authority like the FED and FDIC. (Economic
crises and trade cycles are of a different genre.)

Your reference to Veblen is worth a comment. I assume that you are
repeating or rephrasing what you read in Veblen. If so, it would be
helpful if you provided a reference. In any case, what you say about
the method of studying bubbles is more or less identical with that of
the early neoclassicals to whom I referred. Because Veblen was an
excellent neoclassical economist, among other things, studying his
work is one way to learn the method; although I prefer Clark,
Wicksteed, and (as some list members know) Davenport.

It is important to keep in mind that what you are discussing here is a
_method_ of accomplishing a goal and not the actual goal accomplishing
act. The method stays the same in perpetuity because economic theory
requires one to conceive of (1) change due to human intervention by
contrasting it with (2) the absence of change such as that which
exists in the static equilibrium. Perhaps the greatest accomplishment
of founders of early neoclassical economics (Menger, Walras, Jevons,
J. B. Clark) was to build the image of the static equilibrium in which
the conditions of the marginal productivity theory of distribution
prevailed. Finding out how to apply this image to a world of
human-initiated change became a major goal of subsequent writers
during the era. (With the emergence of mathematical economics and
aggregate analysis, pursuit of this goal went underground, along with
some of early neoclassicals achievements.)

Knowing about this method is important and I agree that it is the
appropriate method (actually it is the only method) of comprehending
bubbles, cycles, crises, and economic growth. But it does not inform
us at all about their causes. To know the causes requires knowledge of
the particulars of the system in which the change occurs, among other
things. So the devil is in "technical and institutional" details along
with the specific knowledge and other characteristics that distinctly
human actors bring to bear. It is precisely this reasoning that led me
to perceive the review and I presume also the book itself as both
shallow and reminiscent of a method (namely, Popperian historicism)
that cannot be used to achieve the goal to which the authors of the
book seems to aspire.

Pat Gunning
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