Stuart Banner


On his book Speculation: A History of the Fine Line between Gambling and Investing

Cover Interview of September 10, 2017

In a nutshell

Speculation is about a dilemma that has troubled the legal system for a long time. For centuries, there has been a consensus that investment is necessary and ought to be encouraged. There has also been a near consensus, one that has weakened recently but is still substantial, that gambling is dangerous and ought to be discouraged or even prohibited. But what about speculation?

Speculation lies somewhere between investing and gambling. It has attributes of both. Should speculation be legal? Should it be illegal? Should some kinds be legal and others illegal? Which kinds? Throughout American history (and the history of other places too, but this book is just about the United States), speculation has presented a puzzle to the legal system. To figure out how to treat speculation, we have always needed to distinguish between two kinds of risky commerce, a good kind the law should promote and a bad kind the law should deter. But how should that line be drawn?

My book traces the history of debates on this set of questions, from the crash of 1792 to the present.