Animal spirits and organization

Abstract:

The purpose of this paper is to explore the scope for analyzing animal spirits as a social and cultural phenomenon that is heavily influenced by the organizational structure of firms and industries as well as by national structures. Animal spirits are considered in terms of unsubstantiated optimism, low uncertainty perception, and low uncertainty aversion. We distinguish between animal spirits with respect to expanding capacity, on the one hand, and animal spirits with respect to innovation, on the other. The first case is analyzed primarily in terms of fluctuations in spontaneous optimism and uncertainty perception, while the emphasis for the second is more on the enduring dispositions of organizations and individuals. Animal spirits in both contexts are shown to be influenced by structural factors that are open to policy management.

Key Words::

• animal spirits
• uncertainty
• organization
• innovation

Additional information

Notes on contributors

Sheila C. Dow

Sheila C. Dow is professor emeritus in the Division of Economics, Stirling Management School at the University of Stirling, Stirling, UK, and adjunct professor in the Department of Economics at the University of Victoria, Canada. This paper has benefited from comments following presentation of earlier versions at the Association for Heterodox Economics Conference at London Metropolitan University, July 2013, and the Department of Economics, School of Oriental and African Studies, November 2013, and in particular from Alexander Dow, Peter Earl, Ben Fine, Bill Lazonick, David Tuckett, and an anonymous referee.