Animal Spirits

Date: May 18, 2014 Category:

Animal Spirits

As the financial market shifted from an actual marketplace in the eighteenth century to an increasingly disembodied and placeless circuit of exchange in the late nineteenth century, it became harder to imagine in its entirety. At times an individual speculator – heroic or villainous – has been made to stand in for the vast confusion of the entire market, representing the animating spirit that operates the economic machinery. At others the focus has been not on an individual titan or devil standing behind the spectacle of finance and pulling its strings, but on the collapse of economic rationality in the madness of crowds during a panic. Market players, both insiders and outsiders, have often been portrayed as a herd of wild beasts moved by those ‘animal spirits’ of nervous excitement that supposedly make financial capitalism tick. More recently, the market itself has come to be thought of as a person with a mind and a will of its own, often as an omniscient but angry god who must be placated at all costs.

During the course of the nineteenth century the image of the stock broker slowly became more respectable, as speculation in the market came to be distinguished from gambling. The idea of the stock market as a legitimate space of economic activity was in part created by those who wanted to think of themselves as financial professionals able to perceive opportunities and shoulder risk. They wanted to be seen as different from reckless amateurs taking a punt. The image these stock market insiders presented to the public was one of prudence and morality, downplaying the traditional archetype of the stockjobbing villain. The images of the stock market created by these insiders emphasised its technical efficiency, often by presenting the exchanges devoid of the frenzied mob of speculators. They tended to focus instead on the neoclassical elegance of the buildings and the modern communications equipment. In contrast many popular representations of the stock market continued to see it as a realm of immorality and irrationality. A great number of satirical illustrations, particularly in the United States, focused on the larger-than-life ‘robber barons’ who seemed to control Wall Street, operating above the law, seeing them as beasts or giants or gods in human form. Other depictions focused instead on the madness of crowds, as the market was shown as a seething mass that was impossible to understand.

Wind-Kraamer en Grossier (‘The Wholesale Wind-Peddler’s Fair’), from Het groote Tafereel der Dwaasheid (‘The Great Mirror of Folly’) (Amsterdam, 1720). © Trustees of the British Museum
Udo J. Keppler, The Triumph of the Bear in the Wall Street Arena, Puck, v. 53, no. 1373 (24 June 1903), cover. Prints & Photographs Division, Library of Congress, LC-DIG-ppmsca-25752
William Holbrook Beard, The Bulls and Bears in the Market (1879) Courtesy of The New York Historical Society

Het groote Tafereel der Dwaasheid (in English, The Great Mirror of Folly), a Dutch collection of satirical prints and writings, was published as an immediate response to the financial crises that spread across Europe in 1720 as a result of the collapse of the South Sea Bubble in England, John Law’s ruinous experiments with paper money in France, and the collapse of the speculative bubble in the Dutch stock market. The volume includes satirical prints, plays, poems, as well as maps and playing cards. In ‘Wind-Kraamer en Grossier’ (‘The Wholesale Wind-Peddler’s Fair’) a speculator, seated on a cloud with a heavenly head blowing hot air that emerges as if out of his backside, is accompanied by a man using a pair of bellows to send aloft a cat floating from four balloons. The ‘wind-peddler’ distributes paper securities in an image that suggests the very essence of inflationary bubbles.

By the turn of the twentieth century depictions of the ‘animal spirits’ of finance had become ritualised. W. A. Rogers’s cartoon ‘Great Activity in Wall Street’ features anthropomorphised bulls, bears and lambs (naïve investors, ready to be ‘fleeced’), dressed up in the latest fashions, and all following one another in merry dance. The suggestion is that what looks to the outsider like ‘great activity in Wall Street’ is merely an endless and highly ritualised circle of buying and selling governed by the fixed behaviour of the different market ‘beasts’. In a neat doubled metaphor ‘The Triumph of the Bear in the Wall Street Arena’ has market bulls and bears dressed as Roman gladiators. Although bull and bear imagery was most common, other animal metaphors were deployed. A Puck cover from 1913 features J. P. Morgan (complete with a bulbous, purple nose) as a monstrous spider representing ‘flim-flam finance’ at the centre of the web of Wall Street, an idea familiar to many satirical cartoons of the muckraking era that picture corporations as octopuses, and their financial leaders as giants astride the nation, or spiders at the centre of a web. In this case however, the caption informs us that ‘the flies got wise’, with the public keeping clear of the web.

William Holbrook Beard made a name for himself from the 1860s onwards in New York as a painter of humorous scenes involving people in the guise of animals. The Bulls and Bears in the Market was painted in 1879, and is a satire of the animalistic behaviour of the stock market. It depicts Broad Street in New York with the New York Stock Exchange on the left (replaced in 1903 with the current building) and the Sub-treasury Building on the right. Rampaging through the heart of Manhattan’s financial district are bulls and bears, the former who hope that the market will rise, and the latter who bet that prices will fall. Although the painting has humorous touches, such as the bear studying his account book on the far right, it is an attack on the vicious ‘animal spirits’ at work in the Wall Street panic of 1873, that led to worst economic depression of the nineteenth century in the US

The Bubblers bubbl’d or the Devil take the Hindmost, print made by James Cole from original in The Great Mirror of Folly (1720) © Trustees of the British Museum
Grant E. Hamilton, ‘“I Never Speculate”—Jay Gould’, Judge 9 (9 January 1886): back cover. Harvard College Library
The Bubblers bubbl’d or the Devil take the Hindmost, print made by James Cole from original in The Great Mirror of Folly (1720) © Trustees of the British Museum

The Bubblers Bubbl’d’, a cartoon from the English version of The Great Mirror of Folly, produced in reaction to the collapse of the South Sea Bubble and John Law’s Mississippi Bubble in Paris. It depicts the stock jobbers in the London Stock Exchange passing stock certificates that flutter down from above from one to another in a circle, as part of a demented dance that they cannot escape, as they try and pass the worthless paper to the greater fool behind them.

The American public thought of the notorious stock market manipulator Jay Gould as the ‘Mephistopheles of Wall Street’, a cold and calculating devil manipulating the market with ease. A satirical illustration from Judge magazine of 1886 calls to account the outrageous claim made by Gould to a newspaper reporter that he never speculated. The cartoon shows Gould seated in the bell jar of a gigantic ticker machine. Unseen by the frenzied stock market players beneath, he dictates market prices directly onto the ticker tape itself. Here Gould is the very personification of market manipulation, with stock prices moved not by the ‘invisible hand’ of supply and demand, but by the visible hand of the Mephistopheles of Wall Street himself. The cartoon thus ironically confirms Gould’s scandalous denial: he would have no need to engage in risky speculations if he were able to accurately predict price movements because he was creating them himself.

The French engraver Robert Brichet contributed to a collection of etchings of human social types issued in 1784-5 by the Austrian illustrator Joseph Franz von Götz. In addition to the corpulent and successul professional ‘Financier’, Brichet depicted the type of the ‘Speculator’ as a wretched specimen who has fallen on hard times, presumably as a result of being seduced into unwise financial dealings.

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