You do not currently have permission to view the full text for this document. Please sign in to an account with an active subscription or contact support.
NPR's Renée Montagne was interviewing David Wessel, economics editor of the Wall Street Journal, on the morning of September 21, 2012. The Dow Jones was rising despite worldwide unrest, high unemployment, and the increasing likelihood that a presidential candidate thought to be unfriendly to Wall Street, Barack Obama, would win a second term in November. Montagne asked Wessel why, in the face of all this bad news, stocks were rising.
“Well,” Wessel replied, “it's always hard to know why the stock market does what it does. And it's important to remember that the mood on Wall Street could change abruptly at any moment.”
Wessel's language is so familiar it doesn't strike us as the bizarre cultural phenomenon it is. That's always how commentators describe Wall Street. Apparently, we have all known all along that the financial markets are utterly irrational, but I at least had not paused to consider the implications.
In Minding the Markets David Tuckett shines a laser-sharp light on the obvious but (for most of us) split-off fact that the financial markets are conducted according to the logic of the most primitive of emotions, with scarcely a dose of the rational choice that traditional economic theory assumes is running the show. Tuckett's book, subtitled An Emotional Finance View of Financial Instability, is a brilliant piece of applied psychoanalysis.
Writing for sophisticated nonpsychoanalysts—especially those in economics and finance—Tuckett's dense book takes an ambitious stab at explaining the implosion of the financial markets in 2008 using what might best be termed a “social-psychoanalytic” approach. He relies most heavily on the concepts of disavowal, which for the lay reader he terms