Realizing Capital: Financial and Psychic Economies in Victorian Form

Realizing Capital: Financial and Psychic Economies in Victorian Form

Realizing Capital: Financial and Psychic Economies in Victorian Form

Realizing Capital: Financial and Psychic Economies in Victorian Form

Synopsis

During a tumultuous period when financial speculation began rapidly to outpace industrial production and consumption, Victorian financial journalists commonly explained the instability of finance by criticizing its inherent artifice drawing persistent attention to what they called "fictitious capital." In a shift that naturalized this artifice, this critique of fictitious capital virtually disappeared by the 1860s, being replaced by notions of fickle investor psychology and mental equilibrium encapsulated in the fascinating metaphor of "psychic economy." In close rhetorical readings of financial journalism, political economy, and the works of Dickens, Eliot, and Trollope, Kornbluh examines the psychological framing of economics, one of the nineteenth century's most enduring legacies, reminding us that the current dominant paradigm for understanding financial crisis has a history of its own. She shows how novels illuminate this displacement and ironize ideological metaphors linking psychology and economics, thus demonstrating literature's unique facility for evaluating ideas in process. Inheritors of this novelistic project, Marx and Freud each advance a critique of psychic economy that refuses to naturalize capitalism.

Excerpt

As we contemplated the fire, and as I thought what a difficult vision
to realize Capital sometimes was, I put my hands into my pockets.

—Charles Dickens, Great Expectations, 1860

“To realize capital” is no mean feat. When Dickens’s narrator glumly appraises the dim financial prospects of his naïve enterprising friend, the simple indicative clause “I put my hands into my pockets” effectuates a contrast between the materiality of hands and the ideality of vision, the physical gesture and the metaphysical realization. Beside the worldly difficulties of acquiring capital, such a contrast underscores, stand the philosophical difficulties of realizing capital, securing the status of “real” for something evidently ethereal. Ambitious naïfs and their generous friends—and every other player in the mid-Victorian economy—found themselves beset by these difficulties of the real as a result of the ascendance of capital propelled by “financialization,” the transition to an economy in which the speculative begetting of money from money supersedes the industrial production and consumption of goods. During the nineteenth century, shifts in what counted as “real” ignited considerable havoc: the era of financialization saw fiery debates and explosive volatility, chronic insecurity and—most surprisingly for anyone who shares Alan Greenspan’s “shocked disbelief” at the financial catastrophe of 2008—regular, constant crisis. From the 1830s to the 1880s, crises were rampant and recurrent. Financialization developed from rapidly paced legal innovation: every few years, new individual legal measures—like the 1833 Bank of England Charter Act, the 1844 Limited Liability Act, and the 1856 Joint Stock Companies Act—licensed the corporation, created the corporate person, and codified instruments like shares, futures, and derivatives. Each new act drew fierce contest, followed by yet another large-scale crisis.

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