It’s been three years since the collapse of the last economic bubble, so it’s probably time to start worrying about the next one. Sure enough, commentators are increasingly concerned about gold bubbles, Tech 2.0 bubbles and venture capital bubbles. To be clear, I know nothing about any of these bubbles; this post isn’t about the virtues of a Groupon IPO or the true value of precious metals. Instead, I’m interested in the persistence of all bubbles. Why are they so inevitable? Why don’t we ever learn? And can they be prevented?

But first, a little history: One of the first financial bubbles was...