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The Freaks of Fortune: Moral Responsibility for Booms and Busts in Nineteenth-Century America

Published online by Cambridge University Press:  28 September 2011

Jonathan Levy
Jonathan Levy*
Affiliation:
Princeton University
*
[email protected]
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Type
Forum: Boom and Bust
Information
The Journal of the Gilded Age and Progressive Era , Volume 10 , Issue 4 , October 2011 , pp. 435 - 446
Copyright
Copyright © Society for Historians of the Gilded Age and Progressive Era 2011

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References

1 Cheyne, T.K., The Prophecies of Isaiah, vol. 2 (London, 1880), 124Google Scholar. The King James translation reads:

Yea, they have chosen their own ways, and their soul delighteth in their abominations. I also will choose their delusions, and will bring their fears upon them; because when I called, none did answer; when I spake, they did not hear: but they did evil before mine eyes, and chose that in which I delighted not.

The Revised Standard version renders the word in question as “affliction.”

2 See Thomas, Keith, Religion and the Decline of Magic (1971; New York, 1997)Google Scholar.

3 See Taylor, Charles, A Secular Age (Cambridge, MA, 2007), esp. pt. 2Google Scholar.

4 “Freaks of Fortune,” Harper's New Monthly Magazine, Aug. 1858, 344–49Google Scholar. On the relationship between nineteenth-century American capitalism and chance, Lears, Jackson, Something for Nothing: Luck in America (New York, 2003)Google Scholar. Lears identifies an enduring battle across American history between a “culture of control” and a “culture of “chance” and links the opposing cultures to changing conceptions of selfhood. The “freaks of fortune” can fit into this narrative, but my treatment of the phrase in this essay is focused more narrowly on the ideal of freedom as risk taking, a model of economic personhood that arose in the mid-nineteenth century and that mixed together various elements of the cultures of chance and control.

5 Freeley, Edwin T., A Practical Treatise on Business (Philadelphia, 1856), 269, 273, 109, 171, and 312Google Scholar. Imprudence, excessive debt, and over-speculation could still ruin someone both materially and morally. It was also unethical to risk another man's property without his consent. Risks were individual entities, belonging to discrete individuals. On this general ethos, see Balleisen, Edward J., Navigating Failure: Bankruptcy and Commercial Society in Antebellum America (Chapel Hill, 2001)Google Scholar; and Kreitner, Roy, Calculating Promises: The Emergence of Modern American Contract Doctrine (Palo Alto, CA, 2007)Google Scholar.

6 See Daston, Lorraine and Park, Katharine, Wonders and the Order of Nature, 1150–1750 (New York, 1998)Google Scholar.

7 Howells, William Dean, A Hazard of New Fortunes (New York, 1890), 252Google Scholar. Howell dealt with the concept more directly but less successfully in The World of Chance (New York, 1893)Google Scholar. See Puskar, Jason, “William Dean Howells and the Insurance of the Real,” American Literary History 18 (Spring 2006): 29–58Google Scholar.

8 See Rodgers, Daniel T., The Work Ethic in Industrial America, 1850–1920 (Chicago, 1974), esp. 12Google Scholar; Huston, James L., Securing the Fruits of Labor: The American Concept of Wealth Distribution, 1765–1900 (Baton Rouge, 1998)Google Scholar; Stanley, Amy Dru, From Bondage to Contract: Wage Labor, Marriage, and the Market in the Age of Slave Emancipation (New York, 1998), esp. ch. 3CrossRefGoogle Scholar.

9 “A Freak of Fortune,” New Orleans Times Picayune, July 2, 1881Google Scholar.

10 Alger's protagonists often benefited from lucky breaks, but the author always portrayed the break as a reward for virtuous moral character and a good dose of pluck. The morality is karmic. This mindset is already apparent in Alger, 's first successful tale, Ragged Dick: Or, Street Life in New York (New York, 1868)Google Scholar.

11 “Freaks of Fortune,” 344.

12 Especially when compared to the kind of chances faced by pre-modern populations, likely consigned to a fate that was nasty, brutish, and short (and poor). See Rothschild, Emma, Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment (Cambridge, MA, 2001), esp. ch.1Google Scholar.

13 In the parades of the democratic-republican societies of the 1790s, for instance, it was common for citizens to draw lots to determine who would march in front and who in the back. See Clark, Christopher, Social Change in America: From the Revolution to the Civil War (Chicago, 2006)Google Scholar; and Appleby, Joyce, Inheriting the Revolution: The First Generation of Americans (Cambridge, MA, 2000)Google Scholar.

14 In fiction, freaks of fortune often determined the fate of a protagonist—a source of power and authority preferable to a father, husband, or town elder. For examples among popular novels: Jones, John Beauchamp, The Freaks of Fortune: or, the History and Adventures of Ned Lorn (New York, 1854)Google Scholar; and Optic, Oliver, Freaks of Fortune: or, Half Round the World (New York, 1868)Google Scholar.

15 Tocqueville famously commented on this phenomenon. Members of democracies were enthusiastic about “all undertaking in which chance plays a part.” Thus, Americans were “all led to engage in commerce, not only for the sake of the profit it holds out to them, but for the love of the constant excitement occasioned by that pursuit.” Life became a “vast lottery,” a “game of chance.” Tocqueville, Alexis de, Democracy in America, ed. and trans. Bradley, Philip (New York, 1945), 1:305; 2:165, 248–49Google Scholar.

16 On the imagery of Fortuna versus Justitia, see Daston, Lorraine, “Life, Chance & Life Chances,” Daedalus 137 (Winter 2008): 6CrossRefGoogle Scholar.

17 “A Lucky Freak of Fortune,” Daily True Delta, Jan. 6, 1861Google Scholar.

18 Lears wonderfully captures the dynamic between providence and chance. Lears, Something for Nothing.

19 Many Americans did turn to a Job-like explanation of commercial flux. Ann Fabian, in her comparative study of the panics of 1837 and 1857, finds that the first panic was often interpreted in terms of divine judgment. The panic of 1857, though, not so much. “God was still there,” she writes “but his presence was more remote.” The commercial realm was increasingly interpreted as part of a blind, natural world. Fabian, Ann, “Speculation on Distress: The Popular Discourse of the Panics of 1837 and 1857,” Yale Journal of Criticism 3 (Fall 1989): 132Google Scholar.

20 On the Civil War as a catalyst for secularization, Noll, Mark A., The Civil War as a Theological Crisis (Chapel Hill, 2006)Google Scholar.

21 Ber, R.H., “Agriculture,” Ohio Farmer, Feb. 20, 1875Google Scholar.

22 On the link between the loss of landed wealth, the rise of mobile forms of property, and changing notions of economic personality, Pocock, J.G.A., “The Mobility of Property and the Rise of Eighteenth-Century Sociology” in Virtue, Commerce, and History (New York, 1985), 103–24CrossRefGoogle Scholar.

23 On antebellum farmers and risk, Atack, Jeremy and Bateman, Fred, To Their Own Soil: Agriculture in the Antebellum North (Aimes, IA, 1987)Google Scholar.

24 Huston, Securing the Fruits, 89, table 2.

25 The rate of increase in per capita income rose from 1.5 percent per year between 1840 and 1860 to 2.5 percent per year between 1870 and 1910, despite cyclical fluctuations. See Gallman, Robert E., “Economic Growth and Structural Change in the Long Nineteenth Century” in Cambridge Economic History of the United States, vol. 2, The Long Nineteenth Century, eds. Engerman, Stanley L. and Gallman, Robert E. (New York, 2000), 23Google Scholar.

26 Huston, Securing the Fruits, 84, table 1.

27 Genovese, Eugene and Fox-Genovese, Elizabeth, Slavery in White and Black: Class and Race in the Southern Slaveholder's New World Order (New York, 2008)CrossRefGoogle Scholar.

28 “Freaks of Fortune,” New Orleans Time Picayune, Jan. 29, 1879Google Scholar.

29 See Ransom, Roger and Sutch, Richard, “Capitalists Without Capital: The Burden of Slavery and the Impact of Emancipation,” Agricultural History 62 (Summer 1988): 133–60Google Scholar.

30 Of course, industrial capital had its own fixed forms: railroads, industrial plant, and so forth.

31 See, for instance, Rodgers, Daniel T., Atlantic Crossings: Social Politics in a Progressive Age (Cambridge, MA, 2000), ch. 6Google Scholar.

32 On bankruptcy and commercial failure, see Balleisen, Navigating Failure; and Sandage, Scott A., Born Losers: A History of Failure in America (Cambridge, MA, 2005)CrossRefGoogle Scholar.

33 On futures, see Levy, Jonathan Ira, “Contemplating Delivery: Futures Trading and the Problem of Commodity Exchange in the United States, 1875–1905,” American Historical Review 111 (Apr. 2006): 307–35CrossRefGoogle Scholar; on mortgage-backed securities, Jonathan Ira Levy, “The Mortgage Worked the Hardest: The Fate of Landed Independence in Nineteenth-Century America” in Capitalism Takes Command: Essays on Nineteenth-Century American Capitalism, eds. Gary Kornblith and Micahel Zakim (forthcoming); on corporate securities, Ott, Julia C., “The Free and Open People's Market: Political Ideology and Retail Brokerage at the New York Stock Exchange, 1913–1933,” Journal of American History 96 (June 2009): 44–71CrossRefGoogle Scholar.

34 “Freaks of Fortune,” National Police Gazette, June 21, 1884Google Scholar.

35 Marx, Karl, Capital, trans. Fowkes, Ben (New York, 1977), 1:273–74Google Scholar.

36 Marx, Karl and Engels, Friedrich, The German Ideology (repr. New York, 1970)Google Scholar, 84, 86. Marx and Engels compared this to feudalism, where an individual's social identity was “a feature inseparable from individuality.” “Thus in imagination, individuals seem freer . . . than before, because their conditions of life seem accidental.” The relevant German word in the passage, Zufälligkeit, denotes an accidental circumstance or a coincidence.

37 Hayek, F.A., Law, Legislation, and Liberty, vol. 2: The Mirage of Social Justice (London, 1976), 74Google Scholar.

38 For instance, Schumpeter, Joseph A.: “Wherever the bourgeois way of life asserts itself sufficiently . . . the large majority of supernormal brains . . . identify success with business success. They are not preferred at random; yet there is a sufficiently enticing admixture of chance: the game is not like roulette, it is more like poker.” Capitalism, Socialism, and Democracy (1942; New York: Harper, 1962), 74Google Scholar. Schumpeter took much of this from perhaps the greatest work on the relationship between capitalism and chance, Knight, Frank, Risk, Uncertainty and Profit (Boston, 1921)Google Scholar, as did Keynes, John Maynard, in his treatment of “pure uncertainty” in the capitalist system, A Theory on Probability (London, 1921)Google Scholar. The loudest dissenting voice in this illustrious group was Knight's student Milton Friedman. See Friedman, Milton, “Choice, Chance, and the Personal Distribution of Income,” Journal of Political Economy 61 (Aug. 1953): 277–90CrossRefGoogle Scholar.

39 “A Freak of Fortune,” Life, Nov. 11, 1886.

40 “A Freak of Fortune,” Cincinnati Commercial Tribune, Dec. 21, 1881.

41 “Freaks of Fortune,” National Police Gazette, June 21, 1884.

42 “Instability of Fortune,” Messenger, March 21, 1877.

43 Packard, S.S., “Commercial Business,” The Chautauquan, Feb. 1887, 266–68Google Scholar.

44 On nineteenth-century American actuarial science, Daniel Bouk, “The Science of Difference: Designing Tools for Discrimination in the American Life Insurance Industry, 1830–1930” (PhD diss., Princeton University, 2009).

45 On forecasting and the Gilded Age assault on chance, Jamie Pietruska, “Propheteering: A Cultural History of Prediction in the Gilded Age” (PhD diss., Massachusetts Institute of Technology, 2009).

46 See Murphy, Sharon A., Investing in Life: Insurance in Antebellum America (Baltimore, 2010)Google Scholar; and Zelizer, Viviana A. Rotman, Morals and Markets: The Development of Life Insurance in the United States (New York, 1983)Google Scholar.

47 When Howells invoked the “economic chance-world” in 1890, he called it one “we men seem to have created.” Howells, A Hazard of New Fortunes, 252. More recently, economist Paul Samuelson, a year before he died at age 94, blamed the “fiendish Frankenstein monsters” of financial engineering for the 2008 crisis. Paul Samuelson, “Pure Capitalism Prevailed in 1915–1929, My Own Childhood Days. Who Killed It?” Tribune Media Services, Oct. 15, 2008.

48 “Greenspan Says He Was Wrong on Regulation,” Washington Post, Oct. 24, 2008Google Scholar.