Animal spirits (Keynes)

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Keynes in 1933

Animal spirits is a term used by John Maynard Keynes in his 1936 book The General Theory of Employment, Interest and Money to describe the instincts, proclivities and emotions that ostensibly influence and guide human behavior, and which can be measured in terms of, for example, consumer confidence.[1]

Use by Keynes[edit]

The original passage by Keynes reads:

Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits – of a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.[2]

Earlier uses[edit]

Philosophy and social science[edit]

The notion of animal spirits has been described by René Descartes, Isaac Newton, and other scientists as how the notion of the vitality of the body is used.

In one of his letters about light, Newton wrote that animated spirits very easily live in "the brain, nerves, and muscles, [which] may become a convenient vessel to hold so subtil a spirit." These spirits, as described by Newton, are animated spirits of an ethereal nature, relating to life in the body. Later, it became a concept that acquired a psychological content but was always thought of in connection with the life processes of the body. Therefore, they retained a lower overall animal status.[3]

William Safire explored the origins of the phrase in his 2009 article "On Language: 'Animal Spirits'":

The phrase that Keynes made famous in economics has a long history. "Physitions teache that there ben thre kindes of spirites", wrote Bartholomew Traheron in his 1543 translation of a text on surgery, "animal, vital, and natural. The animal spirite hath his seate in the brayne ... called animal, bycause it is the first instrument of the soule, which the Latins call animam." William Wood in 1719 was the first to apply it in economics: "The Increase of our Foreign Trade...whence has arisen all those Animal Spirits, those Springs of Riches which has enabled us to spend so many millions for the preservation of our Liberties." Hear, hear. Novelists seized its upbeat sense with enthusiasm. Daniel Defoe, in "Robinson Crusoe": "That the surprise may not drive the Animal Spirits from the Heart." Jane Austen used it to mean "ebullience" in "Pride and Prejudice": "She had high animal spirits." Benjamin Disraeli, a novelist in 1844, used it in that sense: "He...had great animal spirits, and a keen sense of enjoyment."[4]

Thomas Hobbes used the phrase "animal spirits" to refer to passive emotions and instincts, as well as natural functions like breathing.[5]

Ralph Waldo Emerson in Society and Solitude (1870) wrote of "animal spirits" as prompting people to action, in a broader sense than Keynes's:

A cold, sluggish blood thinks it has not facts enough to the purpose, and must decline its turn in the conversation. But they who speak have no more,—have less. 'T is not new facts that avail, but the heat to dissolve everybody's facts. Heat puts you in right relation with magazines of facts. The capital defect of cold, arid natures is the want of animal spirits. They seem a power incredible, as if God should raise the dead.[6]

In social science, Karl Marx refers to "animal spirits" in the 1887 English translation of Capital, Volume 1. Marx speaks of the animal spirits of the workers, which he believes a capitalist can either impel by encouraging social interaction and competition within their factory[7] or depress by adopting assembly-line work whereby the worker repeats a single task.[8]

Earlier and contemporaneous English use[edit]

"Animal spirits" was a euphemistic late-Victorian and Edwardian phrase used by English public school boys such as P. G. Wodehouse (born two years before the Etonian Keynes) who attended Dulwich College. Wodehouse and Arthur Conan Doyle were popular authors for public school boys in England before the Great War. Doyle himself used the phrase "animal spirits" in 1883, the year of Keynes's birth.

Though a hard reader, he was no bookworm, but an active, powerful young fellow, full of animal spirits and vivacity, and extremely popular among his fellow-students.

— Doyle: The Silver Hatchet[9]

Two examples of Wodehouse's use of the phrase are in the 1909 book Mike (later republished in two parts as Mike at Wrykyn and Mike and Psmith). "Animal spirits" denoted an adolescent attitude to authority that resulted in energetically and deliberately acting on advice, opinion, or exhortation to the point of stretching the letter of any regulations involved to the limit. The aim was to maximize short-term disruption of what was considered to be "normal" behavior. Restoring equilibrium required a firm sanction from those in authority and possibly also a re-casting of the regulation to prevent repeat transgressions. The slang term of the era for this was "ragging."[citation needed]

There was, as a matter of fact, nothing much wrong with Stone and Robinson. They were just ordinary raggers of the type found at every public school, small and large. They were absolutely free from brain. They had a certain amount of muscle, and a vast store of animal spirits. They looked on school life purely as a vehicle for ragging.

— Mike, Chapter XXXIX.

"Then what did you MEAN by putting it there?" roared Mr. Downing.

"Animal spirits, sir," said Psmith.

"Animal spirits, sir."

— Mike, Chapter LI.

Wodehouse uses antithesis in the latter example to make comedy out of Mr. Downing's astonishment. Psmith In The City (1910) was based on Wodehouse's own experiences in the 'square mile' and the theme is implicitly elaborated on in the financial environment of the New Asiatic Bank.

John Coates of Cambridge University supports the popular English Edwardian public school intuition that qualities such as dynamism and leadership coexist with less constructive traits such as recklessness, heedlessness, and in-caution.[10] Coates attributes this to fluctuations in hormonal balances; abnormally high levels of testosterone may create individual success but also collective excessive aggression, overconfidence, and herd behavior, while too much cortisol can promote irrational pessimism and risk aversion. The author's remedy for this is to shift the employment balance in finance towards women and older men and monitor traders' biology.

Contemporary research[edit]

Recent research shows that the term "animal spirits" was used in the works of a psychologist that Keynes had studied in 1905 and also suggests that Keynes implicitly drew upon an evolutionary understanding of human instinct.[clarification needed][11]

In 2009, economists George Akerlof and Robert J. Shiller advised in addition that:

The proper role of the government, like the proper role of the advice-book parent, is to set the stage. The stage should give full rein to the creativity of capitalism. But it should also countervail the excesses that occur because of our animal spirits.

— Animal Spirits, page 9[12]

Shiller further contends that "animal spirits" refers also to the sense of trust humans have in one another, including a sense of fairness in economic dealings.[13]

See also[edit]


  1. ^ "Don't Let Your Animal Spirits Influence Your Important Decisions". Investopedia. Retrieved 2021-10-20.
  2. ^ Keynes, John Maynard (2016). General Theory Of Employment , Interest And Money. Atlantic Publishers. p. 144. ISBN 978-81-269-0591-1.
  3. ^ Hypothesis explaining the properties of light Thomas Birch, The History of the Royal Society, vol. 3 (London: 1757), pp. 247-305.
  4. ^ "Animal Spirits", by William Safire, The New York Times, 10 March 2009
  5. ^ Hobbes, Thomas. Leviathan. pp. Chapter 34.
  6. ^ Emerson, Ralph Waldo (1870). Society and Solitude. Boston: Fields, Osgood & Co. p. 11.
  7. ^ Marx, Karl. "Chapter 13: Cooperation". Capital, Volume 1.
  8. ^ Marx, Karl. "Chapter 14: Division of Labour and Manufacture". Capital, Volume 1.
  9. ^ "The Silver Hatchet - the Arthur Conan Doyle Encyclopedia".
  10. ^ Coates, John (14 June 2012). The hour between dog and wolf: risk-taking, gut feelings and the biology of boom and bust (1st American ed.). New York: Penguin Press. ISBN 978-1594203381.
  11. ^ Barnett, Vincent (2015-06-01). "Keynes and the Psychology of Economic Behavior: From Stout and Sully to The General Theory". History of Political Economy. 47 (2): 307–333. doi:10.1215/00182702-2884345. ISSN 0018-2702.
  12. ^ Akerlof, George A.; Shiller, Robert J. (2009). Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism. Princeton, NJ: Princeton University Press. ISBN 978-0691142333.
  13. ^ Shiller, Robert J. (2009-01-27). "Animal Spirits Depend on Trust". Wall Street Journal. ISSN 0099-9660. Retrieved 2022-05-16.

Further reading[edit]

  • Akerlof, George A., and Robert J. Shiller. Animal spirits: How human psychology drives the economy, and why it matters for global capitalism (Princeton University Press, 2010) online.
  • Dow, Alexander, and Sheila C. Dow. "Animal spirits revisited." Capitalism and Society 6.2 (2011). online
  • Francois, Patrick, and Huw Lloyd-Ellis. "Animal spirits through creative destruction." American Economic Review 93.3 (2003): 530–550. online
  • Howitt, Peter, and R. Preston McAfee. "Animal spirits." American Economic Review (1992): 493–507. online
  • Lear, Jackson. Animal Spirits: The American Pursuit of Vitality from Camp Meeting to Wall Street (2023) excerpt

External links[edit]