In “Babylon Revisited,” F. Scott Fitzgerald’s 1931 short story about the aftermath of the 1929 Wall Street crash, Fitzgerald makes the point that such collapses are slips in morality as much as financial failures. Charlie Wales, the story’s emotionally fragile hero, returns to Paris in a desperate effort to regain custody of his nine-year-old daughter. “I heard that you lost a lot in the crash,” says the Ritz bartender. Implying his moral lapses, Charlie replies that yes, he did, “but I lost everything I wanted in the boom.” In fact, upper-middle-class people like Charlie hesitated during the first months of the market’s run-up—until early in 1928. That was when they joined the gambling frenzy, and that was when, as John Kenneth Galbraith wrote in The Great Crash, 1929, the “mass escape into make-believe, so much a part of the true speculative orgy, started in earnest.” Eight decades later, stock-market investors like Charlie had no role in bringing on or profiting from the 2008 financial crisis. This time they stood on the sideline as major financial institutions engaged in a speculative orgy. Guided by no moral compass, the most sophisticated financial players in the world were betting big with one another about interest rates, commodity prices, and whether companies or governments would default.

more from William J. Quirk at the American Scholar here.