Animal Spirits

Thousands of years ago, life was even more mysterious than it is today.

Priests and scholars tried their best to explain why living things were so different from dead things. Plato and Aristotle described a force that provided life both to humans and all other living things, and the two philosophers debated as to whether this spirit was a part of the body or not (Aristotle thought so; Plato didn’t).

A few centuries later in Ancient Rome, Galen took things a step further by describing what he called spiritus animalis, or animal spirits. Actually, Galen said that there were three types of spirit: natural, which lived in the liver; vital spirits, which were found in the heart; and animal spirits, created in the brain.

Galen was something of a proto-scientist, performing experiments and trying to discover how things worked through observation. Nevertheless, he was limited by the corpus of human knowledge up to this point, and by the limited technology at his disposal.

Even still, Galen’s ideas were incredibly influential. This concept of an animal spirit that controls a body and allows it to move around inspired theologists of Christianity and Islam tremendously over the ensuring centuries, and the idea became the dominant paradigm in science and medicine for the next fifteen centuries.

It was Luigi Galvani who inadvertently started the dominos falling that would overturn this concept.

Galvani's intention was to figure out how the animating spirits actually worked, not to debunk them. He noticed that an electrical current would cause a dead frog’s legs to jump and twitch, and this seemed to suggest the idea that electricity was at least a part of the answer to Galen’s and Aristotle’s puzzles.

However, the further Galvani went along, the less it seemed as though Galen’s old ideas were right. When he passed two exposed frog nerves to one another, he noticed (with what I can imagine was some shock) that an electrical charge could pass between them, causing a dead frog’s leg to twitch… without any external electrical source.

Perhaps, then, there was no flow of “animal spirits” from the outside. It was the human body itself that generated the mysterious force that made things move.

It has been uphill ever since Galvani, with a cascade of 19th and 20th century discoveries and experiments on how our bodies move, how nerves and neurons work. We’re still on this uphill path today, gradually increasing in our understanding of physiology every year.

There’s another meaning of animal spirits, though, and you might be more familiar with this other meaning. It comes from the stock market, coined by John Maynard Keynes in his 1936 The General Theory of Employment, Interest and Money:

Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits – of a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.

Keynes wasn’t only talking about financial markets here, but instead about the human condition. Keynes conjures immediate irrationality that enters from the outside, invoking Galen’s meaning of the term as a metaphor for all human behavior. However, it was Wall Street who took this phrase and ran with it, because it’s an amazingly poetic phrase, and because it quite aptly describes the behavior of investors and traders.

Anyone who has ever watched a stock market crash will notice these animal spirts at play. First, there was the irrational exuberance when everyone thought this time was different. Tulips become worth more than houses, and the good times will go on forever.

Then, suddenly, everything seems to turn on a dime. The madness of the crowd takes over—dominated now not by enthusiasm, but by fear. Keynes’s animal spirits are in the diver’s seat both on the way up and on the way down, as irrational panic drives the price to absurdly low levels.

It’s interesting to me that Keynes chose this antiquated term to describe human behavior in markets. He really nailed the way humans behave, as though controlled by outside forces as a collective corpus. This animal spirit comes in the form of bulls and bears, Wall Street jargon already baked in by the time of Keynes’s General Theory.

Repurposing phrases that are no longer in vogue is something that has continued to happen throughout our history. The old meaning of artificial is, essentially, full of art, but that’s not at all how we use the modern word, just for one example.

Can you think of any other turns of phrase that used to mean something entirely different, then went out of fashion, and now they’re used once again? I’ve been pushing this idea around in my mind, but nothing has come to the surface yet. Help me out by commenting today: