1 - Banking on panic: the historical record and a theoretical frame

Summary

If we were in a more primitive state, if we lived under roofs of leaves, and kept cows and sheep and creatures, instead of banker's accounts … well and good.

It has not been sufficiently observed how very peculiar and technical is the sense in which we now talk of “panic.” It would naturally signify a general destruction of all confidence, a universal distrust, a cessation of credit in general. But a panic is now come to mean a state in which there is a confidence in the Bank of England, and in nothing but the Bank of England.

When Walter Bagehot declared in 1864 that “panic” had become virtually an economic term, he articulated what Judith Halberstam refers to as “a Gothic economy,” a condition in which the “logic” of capitalism transforms “even the most supernatural of images into material images of capitalism itself.” Many critics point out that it is no coincidence that fiction became the most popular genre at the same time that capitalism's construction of reality required that a new discourse be developed around “the economy.” Academic studies of nineteenth-century British economics vis-à-vis literature also assume that in the Victorian period economics fashions fictions, and fiction produces economic realities. Fashionable cultural studies chiasms, of which the previous statement is one, are themselves illustrations of a Gothic economy in which different ideological modes or ontological entities haunt their others.