Reviving the Animal Spirits

The erosion of animal spirits feeds on itself.

They're not ideas, they're instincts.

Led by mysterious instincts through that waste

Kind of a lower animal sort of thing.

Love between parent and child is the most primitive instinct of all.

These instincts are essential for survival in both real and virtual worlds.

I'm going to ask you to consider for a moment the intuitions and the gut instincts that are going through your head and your heart as you look at them.

Kind of a human thing, it seems to me. Don't you make a distinction between the two, Major?

Animal spirits are not always shattered by extraordinary economic events. But then, not all economic convulsions are alike.

It was easy to sell, and it appealed to people s humanitarian instincts.

While some of these instincts may be innate, most are learned, and all of them are hardwired into our brains.

And so, in our opinion, she is suffering from acute repression of the libido of the natural instincts.

Our past has built up layer upon layer of instincts, propensities, habits of thought, patterns of interaction, and material resources.

Of particular importance in Keynes' theories was his explanation of economic behavior as also being led by animal spirits .

It had to add to the frontal part, so that you would have instincts, because they had to cope on land.

Perhaps the saving grace in this situation is that animal spirits can and sometimes do change direction.

Whereas, if we're born with certain instincts, then perhaps some of them might condemn us to selfishness, prejudice and violence.

This man, who has brains... if he had decent instincts, could have made an honest living.

The fatal human instincts of greed and hubris can be tamed only with some elementary ethical norms.

You might say that what they are doing is never going to work and that we are doomed to fall to our primal instincts.

As humans, what's important to remember is that we've developed, we've evolved over time to temper, or tame, these basic animal instincts.

I use spoken word to help my students rediscover wonder, to fight their instincts to be cool and unfazed and, instead, actively pursue being engaged with what goes on around them, so that they can reinterpret and create something from it.

And former Fed Chairman Alan Greenspan resisted any attempts to rein in the animal spirits of the wealth creators on Wall Street.

The animal spirits that Keynes identified generations ago remain with us today.

It drives people from the smart part of the brain that dark, deep well of the subconscious, where instincts and experience, and all the other factors of creativity and good judgment are it drives us to the thin veneer of conscious logic.

Now, however, the so called animal spirits of China s first generation of entrepreneurs have become another source of overheating risk.

This is powerful stuff, and dwarfs the narrow technocratic instincts of Mrs. Clinton, whose schoolgirl approach to the campaign has justly earned her defeat after defeat in the primaries.

In my 2009 book with George Akerlof, Animal Spirits , we describe the ups and downs of a macroeconomy as being substantially driven by stories .

This, in turn, should revive corporate animal spirits, leading to higher investment in new plants and equipment, together with higher wages and salaries.

Rather than try to figure them out, I'm going to ask you to consider for a moment the intuitions and the gut instincts that are going through your head and your heart as you look at them.

It is difficult to invent a more potentially explosive moniker, for the name proudly proclaims a division between us and them the most ancient and most destructive of human instincts.

George Akerlof and I have just written a book by the same name, but by the time Animal Spirits appears later this winter, the world economy may be even worse than it is now.

The wealth effects generated by frothy financial markets are then presumed to rejuvenate long dormant animal spirits and get consumers spending again, irrespective of lingering balance sheet strains.

After all, we can assume that the animal spirits of investors and financiers has been further depressed as a psychological reaction to the exuberant belief just a few years ago in the powers of financial engineering.

The idea is that price action will trigger both the wealth effect and animal spirits, thus inducing consumers to spend more and companies to invest in future capacity.

It drives people from the smart part of the brain that dark, deep well of the subconscious, where instincts and experience, and all the other factors of creativity and good judgment are it drives us to the thin veneer of conscious logic.

Perhaps even more importantly, economic policy should not break a society s confidence in itself what economists call animal spirits must be able to reflect hope for the future.

The nihilistic and destructive instincts that some young Germans of the Baader Meinhof generation acquired from extreme leftist ideology in the 1970 s, it seems, can be transformed into a romanticization of al Qaeda.

A fundamental problem in forecasting nowadays is that the ultimate causes of the slowdown are really psychological and sociological, and relate to fluctuating confidence and changing animal spirits, about which George Akerlof and I have written.

As George Akerlof and I argue in our recent book Animal Spirits , the current financial crisis was driven by speculative bubbles in the housing market, the stock market, and energy and other commodities markets.

When the lack of it takes on severe proportions, it often leads to depression, self destructive behavior or even suicide.

I use spoken word to help my students rediscover wonder, to fight their instincts to be cool and unfazed and, instead, actively pursue being engaged with what goes on around them, so that they can reinterpret and create something from it.

Keynes's dictum has become the ruling wisdom of monetary policy (one of his few to survive). Governments, according to the conventional wisdom, should aim for stable prices, with a slight bias toward inflation to stimulate the animal spirits of businessmen and shoppers.

Similarly, we have to hope that some of the same old stories that propelled us in the past the rise of capitalism and its internationalization throughout the world economy can somehow be dusted off and revived yet again to invigorate the animal spirits that drive economic recovery.