Bipolar Expeditions (39 page)

Beginning with Alan Greenspan's use of the term in 1996, business commentators in the following years frequently linked “irrational exuberance” to Keynes's more old-fashioned words on emotions and the market.
Barclays Capital
described “irrational exuberance” as a phenomenon that periodically inflates the value of the market “beyond any limit that might be justified by rational expectations, [and] is no more than an extreme representation of our ‘Animal Spirits,' without which, in Keynes's words, ‘enterprise will fade and die.'”
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Other accounts, written in a more sanguine mood, also invoked Keynes: in October 2001,
Business Week
correspondent Christopher Farrell asked whether investors are “irrationally exuberant” given that despite all the threats of the last month, stock values were already above their pre—September 11 level. He argued, “Investors aren't suffering from delusion, a speculative frenzy, false consciousness, or some other distressing form of mass mania.” Instead they are expressing an important wellspring of economic growth, risk taking, what economist John Maynard Keynes called “the animal spirits of capitalism.”
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In 2002, patience with the bipolar market began to wear thin.
Business 2.0
complained

Bipolar disorder. Is that the problem? High as a weather balloon in one session, deep in the Dauphon's dungeon in the next. Or it is paranoia, perhaps? The stock market has certainly been distracted by a Babel of nagging voices—suspicious that inflation or a slowdown in corporate profits or a tech burnout or all of the above are out to destroy it. A quick read of the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) fails to pinpoint the malady. But I still suspect that most of its problems are in its head. My message to the stock market, as the immortal Cher once said: “Snap out of it.”
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Here the diagnosis of bipolar disorder is considered alongside paranoia and both are dismissed as malingering, excuses that businessmen should stop giving.
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Clearly, the connection between mania and the market is more than metaphorical. This is a moment in which manic depression and the economic order have become linked through structures of feeling. There are fascinating homologies to be sure, which is part of the reason for the efflorescence of attention in the media. As I noted in
chapter 1
, people living under the description of manic depression feel gripped by an inevitable force—their exhilaration will inevitably be followed by despair—and this feeling resonates with the sense that market swings are also inevitable. But structures of feeling do more than highlight homologies, because when people notice them, things happen in the world: people can change their minds about what a condition means, alter their self-perception, or take different kinds of action. Much signifying and political work is done when cultural linkages between a mental illness and an economic system catch public attention. A new aesthetic attached to a new kind of person can emerge, but so also can new possibilities for promoting or curtailing the workings of an economic system.

Although manic energy is often celebrated in the case of individual CEOs or traders, an excess of manic energy in the market is usually a cause for concern. One of the ways manic depression, the psychological condition, is good to “think with” when it comes to manic depression, the market condition, is this: manic depression, the psychological condition, is part of a system of moods that oscillate. Depression will be followed inevitably by mania and mania by depression. This gives manic depression its regenerative character (a sign of power) and its self-limiting character (a sign of control). Regenerating power and self limiting control are both characteristics a healthy market would be glad to have.

Emotion in the Market

Significant attention (usually tinged with fear and caution) is now being devoted to patterns of emotional volatility in markets of the past. Mike Dash revisits the classic mania for tulips in Holland in the seventeenth century.
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He sees this mania as a kind of disease, a virus, that spread by means of the emotions of greed and love of beauty.
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Andrew Tobias reissued a new edition of the nineteenth-century
Extraordinary Popular Delusions and the Madness of Crowds
in 1980. Tobias's introduction recommends the book as a caution against following the madness of crowds, as encouragement to buck the crowd, and as a way to become wealthy.
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Charles Kindleberger's
Manias, Panics, and Crashes
was published in three editions from 1978 to 1996. It documents how frequent manic markets have been in the past and warns that market manias risk causing financial crisis and panic that may spread through many markets near and far.
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Kindleberger argues that market mania “connotes a loss of touch with reality or rationality, even something close to mass hysteria or insanity.” He contends that manias and panics are “associated on occasion with general irrationality or mob psychology.”
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Yet he is perplexed because this irrationality is not addressed by economic theory or the social sciences generally, which assume that “men are rational.” He wonders how the two views can be reconciled, warning that we ignore the irrational at the heart of economic cycles at our peril.
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Excess emotion in the market looks dangerous to Kindleberger, but he might agree with the architects of modern markets that some emo tion is necessarily part of economic activity. Long before Keynes, in the eighteenth century Condorcet and Adam Smith saw economic life as imbued with feelings. In the 1770s and 1780s, commercial judgments were thought to be “a combination of reasons and sentiments.” Entrepreneurs should be men of “imagination” and “passion” more than of “sober reason and experience,” entranced by the “golden dreams” of mining, empire, and capital investment.
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However, emotions in the market could get out of control. Booms and busts in the value of public stock were regarded with dismay and fear. Seen as feeding on itself and without moral limit, the market, a pathologically unstable force, placed “politics at the mercy of a self-generated hysteria (in the full sexist sense).”
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Many political and philosophical efforts were exerted to throw a net of rational control (refinement and politeness) over the eighteenth-century “economic man.” The historian John Pocock argues that eighteenth-century markets were seen as “female.” The market was an “effeminate being wrestling with his own passions and hysterias and with interior and exterior forces let loose by his fantasies and appetites, and symbolised by such archetypically female goddesses of disorder as Fortune, Luxury, and most recently Credit herself.”
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The goddess Fortuna was often depicted standing on a ball or a globe to signify her instability.

By the nineteenth century, the kinds of emotions associated with a well-functioning market were more explicitly defined and began to shift their gendered alignments. In northeastern America, according to historian John Corrigan's research into the business culture of the time, “Economic downturns were understood to be the product of overexcitement of the market. When speculation became ‘frenzied,' when managers departed from sound standards of regulation of investment, the market in a burst of activity overheated, burning itself out and collapsing.” The hope was that just enough capital could be fed to the market to reach its peak performance, without allowing it to tumble out of control.
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The lives of businessmen were supposed to reflect the moderation and cyclicity that lay under the workings of the market: “[T]oo much emotion was as bad as too little emotion in a businessman.”
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After a serious crash in 1857, which was accompanied by many businessmen's suicides, a Businessman's Revival was held as a public display of emotion “grounded in an understanding of emotion as a valuable commodity that could be exchanged for various other things.” The revival was based on a “feminized Christianity that valued emotional religion.” However, the revival complemented its emphasis on feminine emotion with additional emphasis on the “masculine qualities of initiative, courage, daring, and speaking one's mind.”
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The revival focused on the issue of how businessmen's emotions could be
regulated
in order to keep them from boiling over and creating an overstimulated market.

Far from causing an outbreak of religious enthusiasm, the crash in fact influenced the nascent revival toward stricter controls of emotional expression in religious gatherings … the language of the revival focused on highly scripted performances of emotion in which expression was constrained by specific regulations about the interval of public prayer (three to five minutes), the form of petitioning (make specific requests), and the duration of meetings (one hour, so businessmen could return to work and immediately take up their duties).
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Unlike earlier revivals, mid-century revivals were attended by large numbers of men. There were widespread accounts of men weeping, laughing, and making other displays of emotion. This behavior must have been unusual because at the time, men were not “particularly emotional creatures.” In general in the nineteenth century, it was women who normally expressed emotion and nurtured it in their families. At mid-century revivals, women did not necessarily become less emotional, but men clearly became more so.
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These historical examples echo the gendered reversal described above: ideas about the scary “female” instability of eighteenth-century markets were giving way. By the nineteenth century, the American “economic man” had become firmly masculine.
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The wild, passionate “female” energy that fueled the speculative economics of the eighteenth century gave way to the more controlled masculine energy of the nineteenth- and early twentieth-century robber barons and industrial Titans, but much of their Titanic energy was still provided by emotion.

A Few Manic Heroes, Past and Present

Recently, a number of historical and contemporary figures have been held up as exemplars of the manic style. They succeed as entrepreneurs because they are regarded as enterprising, risk taking, and creative. They come from all the major corridors of power in which entrepreneurial energy is at a premium: politics, scientific exploration, entertainment, business, and organized crime. In its section on manic depression, a major textbook in introductory psychology inserted a new sidebar in the 1995 edition. Above a photograph of Theodore Roosevelt, the caption reads: “There is evidence that Theodore Roosevelt was a manic-depressive, and that his mania contributed to his political success.” Teddy Roosevelt has also come in for other kinds of attention in recent years, including the second volume of a major biography and a PBS documentary,
TR: The Story of Theodore Roosevelt.
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The reviewer of the documentary in
Newsday
notes that he was “volatile and voluble,” “the most manic president in American history,” a “hyperactive eccentric president.”
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Attending to another kind of leadership, in 2002 PBS ran an episode of
Nova
about the early twentieth-century Antarctic explorer Ernest Shackleton. The documentary, “Shackleton's Voyage of Endurance,” described Shackleton as “inordinately ambitious,” with “a huge amount of energy,” a man whose “sheer willpower and personal magnetism made him an irresistible leader.” He had “some force of character, some flame that burns within a man. You can't learn it. You can't develop it. It's something you radiate. He had this.”
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By happenstance or echoing patterns in the Zeitgeist, many other productions about Shackleton appeared around this time: an exhibition at the American Museum of Natural History (1999), a giant-screen PBS movie,
Shackletons Antarctic Adventure
(2001), and an A&E miniseries,
Shackleton
(2002). While descriptions in these films stop short of calling Shackleton “manic,” reviewers referred to his “wild optimism” and his “manic determination.”
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Stephanie Capparell at the
Wall Street Journal
wondered what was fueling such intense interest, and dubbed it “Shackleton-Mania.”
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Later she coauthored a book that attests to the inspiration Shackleton has been to business leaders, among them James Cramer, and promotes him as a model for others because of his optimism even in the face of disaster.
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In a similar revisiting of mania in the past, Larissa MacFarquhar reviews a classic text: “[W]hen [George Gilder's]
Wealth and Poverty
was first published [in 1981], Gilder's depiction of the irrational entrepreneur was considered quite eccentric, but in the intervening twenty years it has become conventional wisdom.” Gilder despises materialism as well as rationality and calculation: “Genius, to him, is to be found in intuitive, irrational leaps; in flashes of insight whose origins cannot be traced; in risks so bold that their outcomes cannot possibly be predicted.” For human creativity to flourish, minds must remain open to “chance, intuition and mystery.”
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A more approving, even exuberant, description of the merits of irrationality could not be had, unless it were a special issue of
Time
magazine, “Builders and Titans,” which presented biographies of the most powerful business leaders during the last one hundred years. A section called “Crazy and in Charge” was devoted to successful leaders whose “craziness”—from eccentricity to “mental illness”—led them to excel in the marketplace.
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Numerous well-known contemporary larger-than-life leaders and CEOs have been described as manics. Karl Rove, advisor to George W. Bush, Jeff Taylor, founder and CEO of
Monster.com
, and Steve Jobs, founder and CEO of Apple Inc., are among them.
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Entering their company more recently, Dov Charney, CEO of the innovative company American Apparel, is said to be “passionate to the point of mania,” leaving the impression that “he might just burst into flames at any moment.”
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