Low animal spirits

ABSTRACT

John Maynard Keynes’s phrase Low Animal Spirits describes a paradox found in human nature that locates a herd-like mentality, as well as unpredictability and uncertainty, at the core of international finance: a model of mass behavioural procedures. Low Animal Spirits was a work made in collaboration with Richard Cochrane that took its cue from the oft-mentioned loss of the referent in both language and the economy that was speculated about wildly after the economic collapse of 2007/08. It employs a high-frequency trading (HFT) algorithm written by Cochrane (a former Vice President of Goldman Sachs), and ‘deals’ in words sourced from global news feeds for virtual ‘profit’, whilst speculating on their usage. The analysis produces new phenomena in the form of speculative headlines tweeted from the twitterbot @LowAnimalSpirit. As various social productions, including news, are increasingly enmeshed within algorithmic procedures, through their production, distribution and reception, it seemed an apt moment to apply an extreme version of algorithmic operation in the form of HFT to global news production. The Associated Press twitter hack of 2013 that brought about a 1% drop in the financial market in 1 minute was displayed during the exhibition as a polished metal graphic: Breaking News – Flash Crash, and generated further investigation into high-speed algorithmic procedures that seemingly conjoin language and the economy. The work developed through procedural experimentation and the following writing traces some of the ideas that came before, after and through the work, often in conversation with others. It is best thought of in terms of a report: a taking stock.

KEYWORDS:

• Low animal spirits
• @LowAnimalSpirit
• keynes
• HFT
• language
• economy
• the linguistic turn
• affect
• probability
• speculation
• correlation supersedes causation
• news
• clickbait
• theory of least squares
• feedback
• high-frequency trading
• derivatives
• Kensho
• Dataminr
• RavenPack
• Gnip
• DataSift
• Topsy
• Twitter
• latency
• topology
• N. Katherine Hayles
• Mercedes Bunz
• Brian Massumi
• Maurizio Lazzarato
• ICA
• liquidity symposium

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Ami Clarke is an artist whose practice explores the limits of contemporary art within a differential economy as an increasingly general condition. She is also founder of Banner Repeater; a reading room with a public Archive of Artists’ Publishing and project space, opening up an experimental space for others, on a working train station platform at Hackney Downs station, London. Ideas that come of publishing, distribution, and dissemination, that lead to a critical analysis of post-digital art production, are shared in her practice as an artist and inform the working remit of Banner Repeater. She has recently exhibited/curated works at the ICA, Wysing Arts Centre, Museo Del Chopo Mexico City, the Hayward Gallery, Ithuba Gallery Johannesburg, David Roberts Arts Foundation, Camden Arts Centre and The Container Japan. She continues to commission new artists/writers works through the Banner Repeater platform, and several publishing imprints: Banner Repeater paperbacks, Banner Repeater publishing, and the UN-PUBLISH series. She teaches across the UK with a focus on Publishing as Process: post-digital art production and publishing.

Notes

1. In 2009, the economists Akerlof and Shiller advised 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 (Akerlof and Shiller 2009, 9).

2. ‘It’s difficult, if not impossible, to draw a clear line between … software and hardware’ (Cramer 2005, 121).

3. Further writing traces cryptology and language through mathematics and probability – Markov is of notable interest here through his study of the frequency of vowels in the Russian writer A. S. Pushkin’s literary work Eugene Onegin. Markov was the first to develop a complete theory that took into account the connections between letters, and worked through his research applying the technique developed by Legendre in his 1805 text: Nouvelles méthodes pour la détermination des orbites des comètes and Gauss’s 1809 text: Theoria motus corporum coelestium: the method of least squares (Link 2006, 323/4). Brian Hayes summarises that Markov’s methodology went beyond coin-flipping and dice-rolling (where each event is independent of all others) to chains of linked events (where what happens next depends on the current state of the system).

4. ‘in applying dynamical principles to the motion of immense numbers of atoms, the limitation of our faculties forces us to abandon the attempt to express the exact history of each atom, and to be content with estimating the average condition of a group of atoms large enough to be visible’ (Bender and Marrinan 2010, 179).

5. An early review of Low Animal Spirits in which the editors of the art magazine Art Slant ‘optimized’ the story with a particularly optimised headline – review by Phoebe Stubbs. 30 September 2014 http://www.artslant.com/lon/articles/show/40931

6. In 2007, there were 55,000 full-time journalists at nearly 1400 daily papers; in 2015, there were 32,900, according to a census by the American Society of News Editors and the School of Journalism and Mass Communication at Florida International University. … 105 newspapers closed in 2009 alone – whittled away by the rise of the Internet and decline of display ads, with the migration of classified advertising to Craigslist hitting particularly hard. Between 2000 and 2007, a thousand newspapers lost $5 billion to the free site, according to a 2013 study by Robert Seamans of New York University’s Stern School of Business and Feng Zhu of the Harvard Business School (Maharidge 2016).

7. Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending – restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down (Krugman 2009).

8. There has been speculation that neutrino’s could be successfully ‘time-encoded and pointed from one financial centre to another, through the earth itself’, so with ‘neutrino-based buy-and-sell messages via a 10,000 km shortcut through earth; high-velocity traders could handily beat their competitors’ (Dorminey 2012).

9. The shortest and hence fastest route between two places (MacKenzie 2014).

10. Exhibition: with Low Animal Spirits, September 2014.

11. Wiping out $136.5 billion of the Standard & Poor’s 500 Index’s value (Karppi and Crawford 2015).

12. Twitter uses the term ‘firehose’ for complete access to its social media data (Karppi and Crawford 2015).

13. Walter Benjamin: The Author as Producer (1934) – comments on the impatience of ‘the speculator waiting for a tip-off’ from the newspapers.

14. Almost all finance and exchange relies on credit/indebtedness, but this could be seen as a new phase.