Clever Geek Handbook
27 January 2026

Devil Take the Hindmost

Recommendation

This is a thoroughly engaging book about the world of financial speculation. Edward Chancellor discusses the origins of financial markets from the time of the Roman Empire through the modern Internet bubble. The book offers great insights about stock exchanges, outbreaks of speculation mania, and the fraud and greed that accompany any human endeavor. He presents in-depth reviews of many well-known "speculative manias" and several of the lesser-known ones. BooksInShort recommends this book to anyone who wants a thoughtful treatment of a subject that touches all our lives.

Take-Aways

  • Speculation and gambling have similar psychological origins.
  • A bubble is a period of time during which speculation is no longer rationally based.
  • The Tulip mania of the 1630s is memorable as a speculative bubble because it closely parallels stock market manias.
  • The Technology bubble of the 1990s is dangerously similar to the technology bubble of the 1920s.
  • The speculative paradigm is based upon crowd psychology, particularly when investors’ rationality is weakened.
  • When the rewards of the bubble are great enough, speculators will accept a high level of cognitive dissonance.
  • We have moved from distrusting speculation to embracing it as necessary and valuable.
  • There is no such thing as an efficient market.
  • Be very suspicious of analysts who claim that the market is fundamentally different this time.
  • The "Greater Fool Theory" is that tomorrow there will be someone foolish enough to purchase the shares you bought today for an even higher price.

Summary

Speculation and Human Nature

What is speculation? Some modern, intense examples include Internet companies, day trading, and the 1990s rise of the U.S. economy. Adam Smith believed the speculator "...is defined by his readiness to pursue short-term opportunities." John Maynard Keynes called speculation "...the activity of forecasting the psychology of the market." Fred Schwed said, "speculation is an effort...to turn a little money into a lot. Investment is an effort...to prevent a lot of money becoming little."

“Speculative manias commonly occur at the inception of a new industry or technology when people overestimate the potential gains and too much capital is attracted to new ventures.”

Many people view speculation as a form of gambling, believing that, the "psychologies of speculation and gambling are almost indistinguishable: both are dangerously addictive habits that appeal to fortune." During investment bubbles, speculators follow a herd mentality that rejects traditional risk analysis. In fact, it can be argued that investors today are pursing the Internet the same way investors in the past pursued land, gold, cars, and railroads.

Rome, The Tulip Mania and The Modern Age of Speculation

The earliest speculation goes back to ancient Rome. Roman law allowed free transfer of property, money lending, currency transfers, and payments via bankers’ drafts. In these ancient days before developers, legal entities existed that received contracts to do jobs for the state, such as building temples. Stockholders owned these intermediaries. Their shares were traded publicly and fluctuated in value.

“The most striking similarity between the 1920s and 1990s bull markets is the notion that traditional measures of stock valuation had become obsolete.”

The growth of speculation from Roman times through the later middle ages was limited. Medieval Europe viewed the pursuit of profit as morally corrupt. But, in the fourteenth century several Italian city-states began issuing government securities. These securities were actively traded in Venice, Florence, Pisa, Verona, and Genoa. By the late 1590s, Amsterdam and the Dutch Republic were the leading centers of speculation. In 1602, the United East India Company received the first joint-stock company government charter, enabling it to exploit "commercial opportunities in the Americas." As the company grew, speculation increased. The company issued futures, options, and ducation shares. Ducation shares permitted less wealthy people to speculate because they were valued at a tenth of the price of ordinary shares. These modern day equivalents of derivatives permitted holders to leverage their investments, thus increasing the prospect for speculative gain.

“The success of the American economy in the 1990s has largely been the product of speculative funds flowing into the stock market.”

The first great speculative bubble, the "Tulip Mania," occurred in the Dutch Republic during the 1630s. At the time, no one knew that a virus that attacked the bulbs caused colors and pattern variations. Thus an inherent chance existed in bulb cultivation. Because of this element of chance, cultivators recorded the histories of their bulbs on separate sheets and assigned each bulb an individual number. Prices soared in Paris and Northern France. As word of these rising prices spread, new growers entered the market. As the market changed, "private negotiations between individuals gave way to informal meetings...where traders and speculators could trade in convivial surroundings." Personal credit notes were issued to cover the purchase price of the bulbs. Contracts to purchase bulbs were resold before the bulbs were dug up and delivered. From late 1636 through early 1637, speculators raced to buy and sell contracts. On February 3, 1637, the tulip market crashed.

“The new paradigm ideology is simply a product of the bull market. As long as investors maintain their faith in a new era and ignore dissonant information, then stocks will continue to rise.”

The tulip mania’s significance was the resemblance between the tulip and stock markets. The higher-priced variegated bulbs resembled blue chip stocks, while the lower-priced breeder bulbs resembled penny stocks. Tulip mania was stimulated by a sharp increase in the price for rarer bulbs. That encouraged new players to enter the market. Share prices climbed sharply. This pattern repeated with railway stocks in the 1840s and motorcars in the 1920s. Some argue that Internet stocks follow the same pattern established during the tulip mania. In general, speculative manias tend to occur, "at the inception of a new industry or technology." This is "when people over-estimate the potential new gains and too much capital is attracted to new venture."

Schemes and Manias

The emergence of the stock market in London in the late 1690s was a significant event for speculation. Before that, no regular market existed for trading shares. As early as 1692, a periodical emerged that listed stock market prices. Gambling was also common. Writers at that time recognized the similarities between gambling and speculating in the stock market. When Edmund Halley produced the first mortality tables, the issue of statistical probability - in the form of life insurance - was added to the speculative mix.

“The theory of the ’rational bubble’ appears to be nothing more than an elaborate restatement of the ’greater fool’ investment strategy whereby the speculator knowingly buys shares above their intrinsic value hoping that a ’greater fool’ will pay more for them later.”

With the stock market came fraud. The term stock jobbing described the act of "blowing up shares above their true value while simultaneously running down a company’s real prospects." The 1697 economic crisis was blamed on stock jobbing. Seventy percent of all English and Scottish companies failed. In a pattern that would repeat throughout history, investor euphoria was inflated, but only promoters and stock operators profited.

“The term stock-jobbing - synonymous with speculation as well as the trade in shares - also described the act of blowing up shares above their true value while simultaneously running down a company’s real prospects.”

The South Sea scheme was the next great bubble. A successful investment scheme called "Mississippi" was launched in France. It transferred French government debt to an investment company in exchange for trade rights in French Louisiana. Speculators bought shares in the investment company. Based on "Mississippi," the English launched their own scheme speculating upon future profits from investments made in far away lands. In the South Sea scheme, English government debt was converted to stock in a company that took over government debt. In exchange, the company received interest payments and a trade monopoly with South American’s Spanish colonies. Both schemes substituted paper currency for gold and created a great inflationary spiral for their respective shares.

“No one is satisfied with even exorbitant gains, but everyone thirsts for more, and all this is founded upon a machine of paper credit supported only by imagination.”

In the South Sea scheme, the government debt consisted of various annuities that could only be converted voluntarily by their owners. The South Sea Company had to offer an incentive to the owners to convert their shares. Essentially, it raised the value of its shares to make the conversion more attractive to annuity holders. All parties involved had a vested interest in maintaining an inflated share price. Share prices started to rise when the plan was announced to Parliament on January 21, 1720. Shares began at 128 pounds each, and reached more than 300 pounds by March, while Parliament debated the conversion scheme. Everyone benefited from the continued rise in the share price. However, share price quickly outgrew the venture’s ability to earn enough profit to justify it.

“The term emerging market was first coined in 1986 by a bureaucrat at the International Finance Corporation, a World Bank affiliate. It sounded like a more appealing place in which to invest than the third world or a less developed country.”

In addition, the share prices were manipulated through loans to shareholders. The loans were made from the sale of shares. Thus the company itself fueled the demand for the stock by using stock proceeds to lend money to allow new investors to purchase stock at higher prices. Eventually, this combination of investor irrationality and company greed created an unstable condition. Just before the stock collapsed, the company offered a 50 percent dividend to encourage subscription sales. By September, the stock price fell from 800 pounds to less than 200 pounds in four weeks. The bubble collapsed as fast as it developed.

The Railway Bubble

A similar bubble occurred with the introduction of a new technology - the railway - in the 1840s. The speculative mania for railways began in 1842 when Prince Albert persuaded Queen Victoria to make her first train trip. Writers proclaimed the revolutionary effect railways would have on human civilization. By 1845, sixteen new railway schemes had been proposed. More than fifty new companies registered. Six months later, a parliamentary report identified more than 20,000 stock subscribers. As with earlier schemes, many subscribers purchased subscriptions beyond their means. They hoped to sell them before they took possession of their shares. Writers denounced this speculative behavior. For example, a piece in The Economist said, "The market value depends, not on the opinion as to the ultimate success of the undertaking, but rather how far circumstances will tend to sustain or increase public appetite for speculation." By 1848, the bubble burst.

The Crash of 1929

The greatest stock bubble of modern times was the crash of 1929. In the 1920s, people in the United States believed that the country had entered "a new era of limitless prosperity." Writers discussed the "new economics" of the times. The Federal Reserve System, established in 1913, was "the remedy to the whole problem of booms, slumps, and panics." Scientific corporate management techniques began to replace older, more tired management methods. A well-educated, trained speculative class, particularly alumni from Harvard School of Business Administration, improved productivity in ways never seen before in business. The United States’ citizenry believed the county had entered "a new era without depressions".

“The boom in leveraged buyouts became the driving force behind the bull market of the mid-1980s.”

The belief in a new era of business was buoyed by income tax, capital gain tax, and corporate tax rate reductions. These reductions freed up more money for wealthy individuals to invest and retain. Consumer buying power did not appreciate the same way. Two events increased the mania and fueled the bull market among consumers. First, brokerage houses expanded their offices and boosted their sales. Second, margin loans became a popular source of personal credit. This does not explain the full effect of the eventual crash. By 1929, more than two million Americans were stock market players, but millions more were interested. John Kenneth Galbraith wrote, "...the striking thing about the stock market speculation of 1929 was not the massiveness of the participation. Rather, it was the way it became central to the culture."

“Speculative euphoria is often a symptom of hubris.”

A crowd is intellectually inferior to an individual. A crowd’s intellectual shortcomings show in its ability to filter and manipulate information to fit its beliefs. Psychologists call this "cognitive dissonance." However, people tolerate dissonance for big enough rewards. The bull market of the 1920s offered such rewards.

“The first description of stock market activity in Western Europe is provided by Joseph Penso de la Vega in his Confusion de Confusiones. He describes the stock market as a madhouse, full of strange superstitions, peculiar practices, and compulsive attractions.”

The crash started Thursday, October 24, 1929. The panic started for no reason. The money market wasn’t tight. Banks, brokerages, and industries were not failing. Yet stocks started to drop ten points between trades and, by mid-morning, "air pockets" existed for several stocks, when no bid was offered. On Tuesday, October 29, a wave of sale orders hit the market as speculators tried to cover their margin calls. Glamour stocks collapsed by as much as 75 percent, while other stocks received no bid offers.

The Past and the Present

Does the crash of the 1920s bull market set an example for the bull market of the 1990s? The current bull market has been fueled by similar events. Low interest rates, rapid technological expansion and consumer credit stimulate current speculation. The1990s market was fueled by an explosive growth in mutual funds; in the 1920s, it was investment trusts. But even more significant is the reintroduction of the "paradigm shift" mentality in financial circles. Instead of viewing the bull market as a bubble, many analysts maintain that the present bull market - like the one in the 1920s - is a paradigm shift. They say it is moving away from traditional measures of stock investing to new methods or economies. Talk of a "New Economy" is in full swing.

About the Author

Edward Chancellor studied history at Cambridge and Oxford. In the early 1990s, he worked for the investment bank Lazard Brothers. He is a freelance contributor to the Financial Times and The Economist.

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Devil Take the Hindmost

Book Devil Take the Hindmost

A History of Financial Speculation

FSG,
 


27 January 2026

The Prize

Recommendation

This significant tome is Daniel Yergin’s fascinating, 1992 Pulitzer prize-winning account of the personalities, politics, adventures and misadventures behind the evolution of the ruthless global oil business. This authoritative, intelligent and highly entertaining book reports on the past, present and future of the commodity that shapes the world power struggle. Yergin delves knowledgeably into fulcrum events. For example, shortly before World War I, Winston Churchill made the fateful decision to convert British navy’s fuel from coal to Iranian oil. This decision set off the modern Western quest for Middle Eastern oil. The world is still feeling its wrenching impact, and Yergin shows how and why. BooksInShort finds that this book provides an essential context for understanding today’s international conflicts.

Take-Aways

  • Oil is the world’s largest business. Modern society is based on hydrocarbons.
  • Standard Oil was the world’s first and largest multinational corporation. Its founder, John D. Rockefeller, was “the single most important figure in shaping the oil industry.”
  • By 1879, Rockefeller’s Standard Oil controlled 90% of U.S. refining capacity.
  • The invention of the electric light bulb in 1882 made kerosene obsolete, but the popularity of the automobile made gasoline the most important oil by-product.
  • Churchill shaped energy’s history by powering England’s WWI navy with Iranian oil.
  • The Nobel and Rothschild families developed oil fields in Russia’s Baku region to sell oil to Europe and Asia.
  • European and U.S. oil companies later focused on Mexico and then on the Persian Gulf.
  • Andrew Mellon actively lobbied for Gulf Oil as U.S. ambassador to Great Britain.
  • In 1960, oil-rich nations formed OPEC, the Organization of Oil Producing and Exporting Countries, to balance the pricing and production power of the oil companies.
  • Muammar al-Qaddafi’s Libyan coup in 1969 forever shifted power from the oil companies to the oil countries.

Summary

Inside Oil

Three overarching themes emerge from the history of the oil business:

  1. Oil is intertwined with capitalism and modern corporations – Oil is the world’s largest business. It powers the industry that developed modern pricing, marketing, corporate strategy and technology, both in the U.S. and internationally. Yet despite these deliberate efforts, luck, fate, risk and reward also have shaped the industry. It is so profitable that seven of the top 20 Fortune 500 firms are oil companies.
  2. Oil is intrinsic to international politics and economics – World War I helped define oil’s geographical boundaries as replacement for the horse and the coal-fired engine. In World War II, Japan, Germany and the Allies all coveted oil. Japan attacked Pearl Harbor to gain access to oil in the East Indies, while the Nazis sought control of the oil fields in Russia’s Caucasus Mountains. After WWII, oil was the prize at stake in the 1956 Suez Crisis, which marked the end of European colonial power. Since the 1970s, oil has played a large role in the Iraq wars. It drove U.S. misadventures in Mexico, Russia and Iran.
  3. Hydrocarbons impelled the modernization of society – The advent of kerosene light started a fundamental societal shift when it illuminated the night and allowed people to work longer. Its popularity and functionality made John D. Rockefeller the richest man in America. Gasoline, originally a useless kerosene by-product, sold for two cents a gallon or just got dumped into rivers. But the invention of the light bulb and then the internal combustion engine meant the end of kerosene and the beginning of a gas-based society.
“At the beginning of the 1990s – almost 80 years after Churchill made the commitment to petroleum, after two World Wars and a long Cold War, and in what was supposed to be...a new, more peaceful era – oil once again became the focus of global conflict.”

Today, oil has helped create suburbia, modern agriculture, the chemical industry and worldwide transportation, all accompanied by political instability, scarcity and environmental degradation. These forces will continue to clash in the face of population expansion, economic development and the constant need for more oil-based energy products.

“Rock Oil”

Entrepreneur George Bissell drilled the U.S.’s first oil wells in Titusville, PA, in 1859. The area was renowned for surface oil that bubbled up through crevices. People mopped it up with blankets or collected it in buckets for use in medicines. Bissell and his partners, including foreman Edwin Drake, tried adapting rock-salt drilling methods to extract oil they could sell as fuel for kerosene lights. Their venture proceeded under tough circumstances until they hit oil 69 feet underground that August, just days before the deadline set by their frustrated investors.

“Virtually from the very beginning, petroleum was an international business.”

Oil was discovered and pumped under the “rule of capture,” a part of English common law that originally applied to hunting. It said drillers could pump as much oil as possible even if some of it came from under adjacent land owned by other parties. Since determining where the oil resided was impossible, all landowners had the right to drill for oil on their own property and to pump as much out as possible. Thus, an oil discovery on one lot spawned more wells on all the adjacent properties. Those who drilled fastest won. This created wild swings in prices and population as people dashed to areas where oil was found. However, installing too many wells dissipated a field’s internal pressure, preventing more oil from flowing to the surface. Given the primitive state of pumping technology, this made more oil unrecoverable, hastening further exploration.

“The enthusiasm for oil seemed to know no limits, and it became not only a source of illumination and lubrication, but also part of popular culture.”

The oil industry attracted many talented, energetic individuals, including John D. Rockefeller, 26, who became the majority owner of a successful refinery in 1865 when he bought out his fellow senior partner, Maurice Clark, for $72,500 and began building his oil monolith. In 1870, Rockefeller and his new partner, Henry Flagler, raised capital to form Standard Oil. Soon after, oversupply plagued the industry; a barrel of oil sold for 48 cents, three cents less than a barrel of drinking water. Refineries were underpriced during this surplus, so Rockefeller began buying his competitors, seizing the opportunity to “consolidate the industry in his own grasp.” By 1879, he controlled 90% of United States’ refining capacity.

“A central theme underlay Rockefeller’s management; he believed in oil, and his faith never wavered.”

Rockefeller became “the single most important figure in shaping the oil industry,” and his company became one of the first and largest global businesses. He started with refineries and soon began exporting kerosene. Linking supply and distribution, he manufactured his own barrels, opened warehouses, and bought oil-transport ships and train cars. He hoarded cash, so he would not be dependent on bankers when business conditions worsened.

“The Great War had made abundantly clear that petroleum had become an essential element of nations.”

Step by step, he created the first vertically integrated oil company, from mining to shipping to refining, garnering charges of monopolistic, unethical practices along the way. Standard’s competitors fought back and circumvented its shipping monopoly by creating a 110-mile pipeline from the Pennsylvania oil fields to the Reading Railroad, an engineering feat comparable to building the Brooklyn Bridge.

Going International

In 1861, the first shipment of American kerosene journeyed on specially designed ships from Philadelphia to London, opening the way for international oil shipments. Europe was especially receptive to buying kerosene from the world’s largest refiner, Standard Oil. That changed in the 1870s, when Ludwig Nobel developed a closer source in the Russian province of Baku. Nobel, whose brothers built fortunes in dynamite and armaments, worked on a Rockefeller-sized scale. He developed the first oil tanker ships and built scientifically advanced refineries.

“The politicians and bureaucrats...would now rush headlong into the center of the struggle, drawn into the competition by a common perception – that the postwar world would acquire ever-greater quantities of oil for economic prosperity and national power.”

But the Nobels soon found themselves competing with the Rothschilds, refinery and railroad owners who also pursued new kerosene supplies from Baku. Russian oil production soon rivaled that of the U.S., as the Nobels and Rothschilds opened marketing operations in Great Britain to compete with Standard Oil. The Rothschilds soon looked to Asia for a new market for kerosene, their “illuminating oil.” To expand, the Rothschilds partnered with Marcus Samuel, the future founder of Shell Oil, who had good business contacts in the Far East.

“In 1940, the area including Iran, Iraq, and the entire Arabian Peninsula produced less than 5% of world oil, compared to 63% for the United States.”

Around this time, Aeilko Jans Zijlker, a Dutchman managing a tobacco farm in Sumatra, noticed that the natives’ torches produced oddly bright flames. He learned that they dipped their torches into a waxy mineral they took from small natural ponds. That “muddy substance” turned out to be about 60% kerosene. By 1895, an oil company named Royal Dutch was drilling successful wells in East Sumatra. The company’s quick, though not easy, success and marketing prowess soon beckoned Standard Oil, which tried to buy a controlling interest. The Dutch refused the offer.

Cars, Gasoline and Fuel Oil

By 1882, Thomas Edison paired one of his inventions, the incandescent light bulb, with an electric illumination system, and lit American homes and businesses. This innovation signaled the demise of kerosene as the world’s lamp fuel. To develop a new market, refining companies turned to the horseless carriage. Henry Ford, chief engineer at the Edison Illuminating Company in Detroit, quit his job to produce cars. By 1905, gasoline-powered cars had won out over those powered by electricity and steam. This created a new demand for gasoline (which sold for two cents a gallon in 1892), as well as for fuel oil to power boilers in factories, ships and trains.

“Total world energy consumption more than tripled between 1949 and 1972.”

Also in 1892, in Texas, one-armed mechanic Patillo Higgins took his Sunday school class on a hike to Spindletop, a sand hill in Beaumont. Higgins noticed gas escaping from the sand. Suspecting oil, he formed a drilling company, but found nothing. Persisting in his quest, he enlisted a partner and then some wildcatters who discovered the nation’s first oil gusher in 1901, a well that produced 75,000 barrels a day. This started the Texas oil boom, which moved oil production from Pennsylvania to the Southwest, and eventually to Louisiana and Oklahoma. This discovery also attracted the attention of Shell Oil’s Samuels, who wanted an alternative to his fields at Baku. Texas crude oil had another benefit; it was well suited for being made into fuel oil, allowing the oil conversion of existing coal boilers. Texas attracted other families who founded oil companies: the Mellons of Gulf Oil, the Pews of Sun Oil and the Cullinans of Texaco.

Oil and Power

Oil was also discovered in Mexico, which was shipping it worldwide by 1913. Mexico played a chief role in WWI and was a major international oil producer by 1921. However, dating from its new constitution in 1917, controversy erupted over who owned Mexico’s oil and mineral rights. The country asserted that it owned its subsoil, no matter who drilled it. Reluctant to commit to ventures they could not control, the oil companies pressed for a change. Royal Dutch/Shell owned Mexican Eagle, a British firm that handled some 65% of Mexico’s production; a Standard Oil-led trio of U.S. firms managed the rest. These companies slowed production amid political uncertainty. In 1938, Mexico nationalized the oil business, particularly hurting Mexican Eagle. England broke relations, but new customers stepped in: Nazi Germany, fascist Italy and Japan.

“While privately owned oil companies will still have great impact because of their sheer size and wealth, they have lost their once unique strength.”

Oil ventures then focused on Venezuela, ruled by General Juan Vicente Gómez, a tyrant. In 1922, British and U.S. companies already were drilling profitably in the Maracaibo Basin on leases owned by Gomez, but concerns over his regime’s future political stability forced the oil companies to build refineries on two nearby Dutch islands, Aruba and Curaçao.

“Whatever the evolution of this new international order, oil will remain the strategic commodity, critical to national strategies and international politics.”

The end of WWI initiated intense competition among England, France and the U.S. for access to oil. The struggle started in British-controlled Mesopotamia, which had been carved out of the Ottoman Empire and included Iraq. Each country wanted an aligned oil company in place to secure its national position, profits and security. The companies wanted autonomy and access to top prices. Finding an ally in the Sharif of Mecca, in 1921, Britain made his third son, Faisal, the king of Iraq. His brother, Abdullah, became king of “the vacant lot which the British christened the Amirate of Transjordan.” In 1928, the competing nations signed the Red Line Agreement, dividing up the oil fields inside the old Ottoman Empire, except those located within Persia and Kuwait.

“Of course, the ‘free market’ approach rested upon a contradiction: After all, a cartel, OPEC, was preventing a big fall in the price of oil, this providing the incentives for conservation and energy development in the United States and elsewhere.”

In the late 1920s, itinerant American mining engineer Major Frank Holmes was working to exploit his oil concessions in Bahrain, Kuwait and today’s Saudi Arabia. The British barred outsiders, including Holmes’ group, from drilling in the Gulf, but the Arabs still see Holmes as the “Father of Oil.” In the early ’30s, Saudi Arabia’s ruler, Ibn Saud, needed cash. Though he wanted to preserve his traditional relationships, including that with Sunni Islam’s Wahabi branch, he gave foreigners exploration rights. This led to the development of modern Saudi Arabia.

“Over almost a century and a half, oil has brought out both the best and the worst of our civilization.”

Western oil activity in the area also turned to Kuwait, whose economy rested on natural pearls. When Japanese noodle vendor Kokichi Mikimoto developed a way to make cultured pearls artificially, Kuwait’s pearl business evaporated. This forced its ruler, Sheikh Ahmad, to seek oil developers. He invited British and U.S. oil companies to bid on his concession, even though that angered Britain, which supported Kuwait militarily against Saudi Arabia, Iraq and Iran. This rivalry between Britain and the U.S. reached the cabinet level. Under pressure, England allowed U.S. companies to compete in Kuwait. Andrew Mellon, U.S. ambassador to Great Britain, was a major force behind this decision. A former U.S. Treasury Secretary and scion of the Gulf Oil family, he lobbied the British on Gulf’s behalf. Bidding for Kuwait drilling came down to Gulf and Britain’s Anglo-Persian oil company, which formed a 50-50 joint venture under British control in 1934. The sheikh gave the new Kuwait Oil Company a 75-year concession.

Modern Oil and OPEC

In 1960, Standard Oil of New Jersey and other companies cut their price on Mid-East crude, reducing the revenues of major oil-producing countries. This unilateral cut generated a sharp reaction from the Mid East and Venezuela. In 1960, they created the Organization of Oil Producing and Exporting Countries (OPEC) to counterbalance the oil companies’ pricing and production power. Initially, OPEC made only a slight impact. After the 1967 Six-Day War, the 20-year surplus of abundant, cheap oil showed no signs of declining.

But things were changing. Britain and the U.S. were losing influence. In 1968, Britain ended its Persian Gulf military presence, though the Arab sheikhs wanted it to stay. Instead, with President Richard Nixon’s assent, the Shah of Iran filled the gap. By the 1970s, global demand for oil skyrocketed. But as the search for more oil began, the environmental movement gained strength. Then, in 1969, Muammar al-Qaddafi’s Libyan coup shut down Western military bases. He ordered the 21 oil companies in Libya to pay him more or face nationalization. After tense negotiations, the Libyans won. Power shifted from the oil companies to the oil countries, changing the oil business forever and launching the nationalism that dominates it today.

About the Author

Daniel Yergin heads an international energy consulting firm. A former lecturer at the Harvard Business School and at Harvard’s John F. Kennedy School, he co-authored the bestseller Energy Future. His book Shattered Peace is a classic history on the origins of the Cold War.

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The Prize

Book The Prize

The Epic Quest for Oil, Money & Power

Free Press,
First Edition:1991
 


27 January 2026

Powerlines

Recommendation

“Powerlines” aren’t just thick black wires carrying electrical current. They also lend their name to the jingles, slogans and taglines that have proven powerful enough to make a long-lasting imprint on the collective consciousness. If you’ve ever found yourself humming, “M’m, M’m, Good,” as you open a can of soup, or telling yourself, “Just Do It!” when you go for a run, then you are familiar with this phenomenon. Author Steve Cone ponders why some phrases stick while others live fleetingly and make no impression. He identifies several factors that give powerlines their punch, such as inserting unexpected words, telling a story that resonates with the listener, and using rhythm, cadence and music. Strangely, the book lacks in-depth instruction on how to compose a powerline. Cone prefers to dwell on his favorites, packing the book with quotes and examples, which makes it a fun read for those who want to take a nostalgic stroll down Communication Lane. BooksInShort recommends this enjoyable book to media and political buffs, advertising students, marketers and campaign managers.

Take-Aways

  • Powerful words can move you to vote a certain way, buy a particular product or change your thinking.
  • Powerlines create awareness, build a brand promise and motivate consumers.
  • Powerlines are truthful, relate a benefit, suggest an action or promise satisfaction.
  • To make your powerline effective, include it in every touchpoint. Never change it.
  • Since the American Revolution, the U.S. government has used slogans to propagate its agenda.
  • Many phrases that began as dialogue in movies have evolved into powerlines.
  • Radio and television are the ideal vehicles for bringing slogans to a mass audience.
  • Jingles are powerlines set to music, which makes them even more memorable.
  • Being generic, pretentious, untrue, ambiguous, confusing or mundane can make a tagline fail.
  • Taglines are more relatable when uttered by a spokesperson or by a character, either real or imaginary.

Summary

“Car 54 Rides On”

Ask any American man of a certain age if he can recite the theme song from the popular early ’60s sitcom, Car 54, Where Are You? and he’ll most likely burst out singing:

“There’s a holdup in the Bronx, Brooklyn’s broken out in fights. There’s a traffic jam in Harlem that’s backed up to Jackson Heights. There’s a scout troop short a child. Khrushchev’s due at Idlewild. Car 54, where are you?”

“Companies, candidates, countries, and cultures can rise or fall on powerful lines, mottos and sayings.”

Why do such lyrics endure? Catchy phrases that combine music and words to deliver a message are memorable. Such “powerlines” become part of each person’s individual memories and makeup, as well as the cultural lexicon. Powerful words can awe, inspire and move you to vote a certain way, buy a product or change your thinking. Unfortunately, new millennium marketers have not yet produced the caliber of powerlines that dominated advertising in the mid-20th century.

Powerlines and Brands

Powerlines follow six basic rules:

  1. Powerlines must be honest, and portray a real or invented but accurate experience. They should differentiate a product from its competition.
  2. If a powerline works, don’t change it.
  3. Powerlines should relate a benefit, demonstrate how the product can enhance the user’s life, suggest an action or promise some kind of fulfillment.
  4. Powerlines work best when set to music.
  5. Powerlines should move when displayed visually.
  6. To implant a powerline, marketers must include it prominently in all of their advertising and make it easy to read.
“Most companies that have been market leaders over long periods of time employed taglines that built their brand promise into a powerful motivator for consumers to react to and purchase their products.”

The best product powerlines ever written include DeBeers’s “A diamond is forever,” Philip Morris’s “Come to Marlboro Country,” Coca-Cola’s “The pause that refreshes,” Nike’s “Just do it,” McDonald’s “You deserve a break today” and Morton Salt’s “When it rains it pours.”

To have true impact, a tagline should tell a unique story, use creative wordplay and call upon emotion or attitude. One of today’s most successful taglines comes from the City of Las Vegas. “What happens here, stays here,” has attitude, and captures the soul and excitement of the gambling city. Such lines create awareness, build the brand promise and motivate the consumer.

Powerlines and Marketing

What makes powerlines different from other phrases? First, they relate a gripping, influential story. Second, they impart a universal, recognizable truth. Third, they engage the listener’s emotions with sound, either spoken or put to music. As their use grows, they gain more power through repetition. The human brain is programmed to remember stories and phrases that help it survive. To navigate the present and predict the future, people amass and recall an infinite number of songs, jingles and rhymes. That’s why Federal Express’s, “When it absolutely, positively has to be there overnight,” is so moving. The tagline rang true to the thousands of people who were frustrated with the slow package delivery options that predated FedEx. This powerline appeals to the listener’s primary concern, survival, because it promises to make life easier by removing a common worry.

Powerlines and the Media

Radio brought the spoken word into people’s homes. By 1931, almost half of all Americans owned a radio, and by the late ’30s, they had radios in their cars as well. President Franklin Roosevelt was one of the first to recognize the power of radio, which he used for his “Fireside Chats.” After the bombing of Pearl Harbor, his speech to Congress was broadcast via radio, giving birth to the powerline, “a date that will live in infamy.” The use of the unusual word “infamy” gave the line its jolt and resonated with Americans. Advertisers quickly learned radio’s value and launched many memorable powerlines, such as:

  • “Lucky Strike Green has gone to war” – The Lucky cigarette package had a signature green color. When the military diverted green dye for the war effort, Lucky changed to a distinctive red and black pack, and advertised about it to show its patriotism.
  • “More doctors smoke Camels than any other cigarette” – What better way to calm the public’s fears regarding smoking than to use trusted authority figures.
  • “Pepsi-Cola hits the spot” – The first line of this jingle was played on radio more than 300,000 times.
“To understand powerlines is to understand ourselves – what we value and remember and what we discard and forget.”

With the first 30-second television commercial for a Bulova Watch in 1941, advertisers were hooked on the new medium. TV changed the way candidates campaign for office. Lyndon Johnson’s commercial, “Daisy,” by Doyle Dane Bernbach, showed a little girl picking daisies as a nuclear bomb exploded in the distance. Johnson’s opponent Barry Goldwater, who supported the nuclear effort, fell victim to this powerful, manipulative commercial and lost in a landslide.

Powerlines and Government

When governments use powerlines, many call it propaganda. However, since the American Revolution, the U.S. has used slogans to advance its agenda. Just recall the words schoolchildren learn even today, such as “No Taxation without Representation.” More recently, the U.S. Army successfully used the powerline, “Be All You Can Be,” to get new recruits. The best political campaign slogans are rallying cries. They speak to constituents’ hearts and minds, setting the candidates apart from their opponents and appealing to the voters. The best presidential election campaign slogans include:

  • “Tippecanoe and Tyler Too” – William Henry Harrison, 1840
  • “Don’t swap horses in the middle of the stream” – Abraham Lincoln, 1864
  • “Keep cool with Coolidge” – Calvin Coolidge, 1924
  • “A chicken in every pot and a car in every garage” – Herbert Hoover, 1928
  • “Happy days are here again” – Franklin D. Roosevelt, 1932
  • “I like Ike” – Dwight Eisenhower, 1952
  • “All the way with LBJ!” – Lyndon Johnson, 1964
  • “It’s morning again in America” – Ronald Reagan, 1984
“We instinctively pay attention when the message has a cadence, when the words rhyme, or are repeated in the same sequence.”

War also has inspired memorable powerlines, from Caesar’s “Veni, vidi, vici” (I came, I saw, I conquered) to Oliver Cromwell’s “Put your trust in God, but keep your powder dry.”

Powerlines in Movies and TV Shows

Movies and TV shows are the ideal media for verbal expressions. Phrases that began as movie dialogue have morphed into powerlines as they became embedded in the viewers’ consciousness. Musical or verbal phrases can evoke instant recall in the human brain. Movie powerlines have unique inflection and dramatic context, as well as, sometimes, a musical score. Great movie powerlines include:

  • “Frankly my dear, I don’t give a damn.” – Gone With the Wind, 1939
  • “There’s no place like home.” – The Wizard of Oz, 1939
  • “Here’s looking at you, kid.” – Casablanca, 1942
  • “I’m gonna make him an offer he can’t refuse.” – The Godfather, 1972
  • “I’m mad as hell and I’m not going to take it anymore.” – Network, 1976
“A powerline is one of the most valuable and powerful tools available to any marketer.”

The push to bring viewers into theaters has inspired hot powerlines in movie marketing, such as:

  • “Love means never having to say you’re sorry.” – Love Story, 1970
  • “A long time ago in a galaxy far, far away.” – Star Wars, 1977
  • “Just when you thought it was safe to go back in the water.” – Jaws 2, 1978
  • “In space no one can hear you scream.” – Alien, 1979
“With a little bit of thought and the courage to get beyond soulless expressions, anyone can sell attitude.”

Television marketers also have learned how to turn taglines into powerlines. They repeat the tagline the same way in every show to make a promise and then fulfill it by telling a story:

  • “Tonight, we have a really big show.” – The Ed Sullivan Show
  • “Look! Up in the sky! It’s a bird. It’s a plane! It’s Superman!” – Superman
  • “The thrill of victory, and the agony of defeat.” – ABC’s Wide World of Sports
  • “To boldly go where no man has gone before.” – Star Trek
  • “...And that’s the way it is.” – CBS Evening News with Walter Cronkite

Powerlines and Jingles

Jingles are powerlines set to music, which enhances their appeal and anchors them in the listeners’ memory. The 1950s were the jingle’s heyday. Current marketers prefer to use existing popular songs to sell their products. These songs are instantly recognizable, but they lack the jingle’s association with a particular brand. Advertising Age magazine’s top 10 jingles from the 20th century are: McDonald’s “You deserve a break today,” the U.S. Army’s “Be all that you can be,” Pepsi’s “Pepsi Cola hits the spot,” Campbell Soup’s “M’m! M’m! Good,” Chevy’s “See the U.S.A. in your Chevrolet,” Oscar Mayer’s “I wish I were an Oscar Mayer wiener,” Wrigley Gum’s “Double your pleasure, double your fun,” Winston Cigarettes’ “Winston tastes good like a cigarette should,” Coca-Cola’s “It’s the real thing” and Brylcreem’s “A little dab’ll do ya.”

Powerlines without Power

Hundreds of messages constantly vie for the consumers’ attention, but your powerline can cut through the clutter if you follow a few rules. Emphasize your brand name and highlight a primary benefit. Make it believable and original. Taglines that are generic, pretentious, untrue, ambiguous, confusing or mundane won’t capture consumers. These failures are best forgotten:

  • “The Coke Side of Life” – Coca-Cola faltered here. Avoid using the word “life” in a tagline. It’s hackneyed, trite and played out.
  • “Your World. Delivered” – AT&T liked it, but can you figure out what it means?
  • “Life/Changing” – If you’ve been to Iowa, you might disagree with the state slogan.
  • “The Last Real Beer” – Coors claimed it, but beer connoisseurs didn’t buy it.
  • “Higher Standards” – Bank of America boasted of this attribute, but it’s too generic.

Powerlines and Spokespeople

People relate to a tagline more easily when a spokesperson or a recognizable character, real or imaginary, says it. Famous advertising characters include Smokey the Bear, Morris the Cat, the AFLAC Duck, Tony the Tiger and, to get away from animals, Mr. Clean. To be effective, such characters and spokespeople must appeal to almost every demographic, be exclusive to one brand and appear to be a natural fit with the product. Include the spokesperson’s contribution in all touch points and seldom, if ever, change it. Spokespeople must be committed to the product they promote. Memorable, successful spokespeople include:

  • Brooke Shields swore, “Nothing comes between me and my Calvins.”
  • Clara Peller promoted Wendy’s with the famous question, “Where’s the Beef?”
  • “Fred the Baker” got up early at Dunkin’ Donuts because, as he said, “It’s time to make the donuts.”
  • “Joe Isuzu” said Isuzu’s cars were good, promising, “You have my word on it.”
“The alchemy of the television commercial remains part truth, part fiction, part staging, part substance, all to create a heavy dose of image with tremendous impact on the behavior and attitudes of viewers.”

Actor John Houseman intoned that at “Smith Barney, they make money the old-fashioned way. They EARN it.”

About the Author

Steve Cone has worked in marketing for more than three decades. His first book was Steal These Ideas! He is currently the chief marketing officer for Epsilon. His past clients include Apple, Citigroup, American Express and United Airlines.

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Powerlines

Book Powerlines

Words That Sell Brands, Grip Fans, & Sometimes Change History

Bloomberg Press,
 



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