Finance and Society

Readings

CLASS #	TOPICS	READINGS
Part 1: Credit & Credibility: Finance’s Early Modern Beginnings, to 1800
1	Introduction: Finance as a Technology	No readings
2	Italian Innovations: Late Medieval and Renaissance Technologies of Finance	Jansen, Katherine L., Joanna Drell, et al, eds. “Usury: Six Texts (1161–1419).” In Medieval Italy: Texts in Translation. Translated by Lawrin Armstrong. University of Pennsylvania Press, 2010, pp. 104–09. ISBN: 9780812220582. [Preview with Google Books] Goetzmann, William N. “Fibonacci and the Financial Revolution.” In The Origins of Value: The Financial Innovations That Created Modern Capital Markets. Edited by William N. Goetzmann & K. Geert Rouwenhorst. Oxford University Press, 2005, pp. 123–44. ISBN: 9780195175714. [Preview with Google Books]
3	The “Golden Age” of Dutch Finance	Dam, Pieter van. “Description of the Founding of the V.O.C., the Dutch East India Company.” The Low Countries in Early Modern Times: A Documentary History. Translated by Herbert H. Rowen. Macmillan, 1972, pp. 145–9. ISBN: 9780333091883. (1693–1701) “A Conversation Between Waermondt and Gaergoedt About the Rise and Decline of Flora.” In The Low Countries in Early Modern Times: A Documentary History. Translated by Herbert H. Rowen. Macmillan, 1972, pp. 165–70. ISBN: 9780333091883. (1637) Gelderblom, Oscar, and Joost Jonker. “Completing a Financial Revolution: The Finance of the Dutch East India Trade and the Rise of the Amsterdam Capital Market, 1595–1612.” The Journal of Economic History 64, no. 3 (2004): 641–72.
4	Credit and Credibility in Britain’s “Financial Revolution”	Houghton, John. “Selections on Stocks (1694).” (PDF) In Collection for the Improvement of Husbandry and Trade, vol. I. Edited by Richard Bradley (1727): 261–76. North, Douglass C., and Barry R. Weingast. “Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England.” The Journal of Economic History 49, no. 4 (1989): 803–32. Suggested Davenant, Charles. “Concerning Credit, and the Means by Which It May Be Restored.” (PDF) In Discourses on the Publick Revenues, and on Trade (1698) in The Political and Commercial Works. Edited by Charles Whitworth (1771): 150–67.
5	First Crashes: The Bubbles of 1720	Swift, Jonathan. The Bubble: A Poem (PDF). (1721). Trenchard, John, and Thomas Gordon. Cato’s Letters or Essays on Liberty, Civil and Religious, and Other Important Subjects. Edited by Ronald Hamowy. Liberty Fund, 1995, pp. 40–63. ISBN: 9780865971295. Chancellor, Edward. Chapter 3 in Devil Take the Hindmost: A History of Financial Speculation. Plume Books, 2000. ISBN: 9780452281806. Optional Velde, François R. “John Law’s System.” American Economic Review 97, no. 2 (2007): 276–9.
Part II: Making A Financial World, 1800–1945
6	Financing a New Nation: The U.S. “Financial Revolution” of the 1790s	Hamilton, Alexander. “First Report on the Public Credit.” In Liberty and Order: The First American Party Struggle. Liberty Fund, 2004. ISBN: 9780865974180. Baning, Lance. “James Madison to Thomas Jefferson, on Speculative Excess.” In Liberty and Order: The First American Party Struggle. Liberty Fund, 2004. ISBN: 9780865974180. Logan, George. Five letters, Addressed to the Yeomanry of the United States: Containing Some Observations on the Dangerous Scheme of Governor Duer and Mr. Secretary Hamilton, to Establish National Manufactories. Gale, 2012. ISBN: 9781275691390. (Letters I-III & V) Sylla, Richard. “Hamilton and the Federalist Financial Revolution, 1789–1795.” (PDF) The New York Journal of American History 65, no. 3 (2004): 32–39.
7	Capitalizing on Lives in the 19th Century, Free and Unfree	Garrison, William Lloyd. “Insurance.” Liberator, February 1850. Nott, Josiah. “Life Insurance at the South.” In The Commercial Review of the South and West. A Monthly Journal of Trade, Commerce, Commercial Polity, Agriculture, Manufactures, Internal Improvements, and General Literature. Edited by J. D. B. and De Bow. Office of the Commercial Review, 1847, pp. 357–64. [Preview with Google Books] ———. “Statistics of Southern Slave Population. With Especial Reference to Life Insurance.” In The Commercial Review of the South and West. A Monthly Journal of Trade, Commerce, Commercial Polity, Agriculture, Manufactures, Internal Improvements, and General Literature. Edited by J. D. B. and De Bow. Office of the Commercial Review, 1847, pp. 275–90. [Preview with Google Books]
8	Making Money in 19th Century America	Jackson, Andrew. “Veto Message Regarding the Bank of the United States.” The Avalon Project, 1832. Fowler, William Worthington. Ten Years in Wall Street; or, Revelations of Inside Life and Experience on ‘Change. Dustin, 1870, pp. 19–45, 99–117, 144–58, and 449–60. [Preview with Google Books]
9	Financial Empires and Global Crises in the Late 19th Century	“Panic in Wall Street.” Harper’s New Monthly Magazine 48, no. 283 (1874): 126–34. Lawson, W. R. “Gaucho Banking.” (PDF) The Bankers’ 51 (1891): 33–52.
10	Pricing the Future: Chicago and the Commodities Trade, 1850-1900	A Corner in Wheat. Directed by D. W. Griffith. Black and white, 14 min, 1909. (Based on the Novel The Pit: A Story of Chicago, by Frank Norris, Silent film) Cronon, William. Chapter 3 in Nature’s Metropolis: Chicago and the Great West. W. W. Norton, 1992. ISBN: 9780393308730.
11	Other People’s Money?: Big Banks and Big Bankers in the Early 20th Century	Baker, Ray Stannard. “J. Pierpont Morgan.” McClure’s XVII, October 1901, pp. 507–18. Conant, Charles Arthur. Preface and chapter 3 in Wall Street and the Country: A Study of Recent Financial Tendencies. University of Machigan Library, 1904, pp. iii-viii and 83–116. Brandeis, Louis D. “Our Financial Oligarchy.” Chapter 1 in Other People’s Money: And How the Bankers Use It. Frederick A. Stokes, 1914.
12	Before Black Tuesday: Marginal Investments and the Roaring'20s	Moorhouse, H. W. “What’s Happening in Wall Street?” The North American Review 226, no. 6 (1928): 673–9. Ott, Julia. “‘The Free and Open People’s Market’: Political Ideology and Retail Brokerage at the New York Stock Exchange, 1913-1933.” The Journal of American History 96, no. 1 (2009): 44–71.
13	Black Tuesday and Beyond: The Crash of 1929 and the Great Depression	Franklin D. Roosevelt. “FDR’s First Fireside Chat: The Banking Crisis.” March 12, 1933. Youtube. (Text available on American Rhetoric) “The Glass-Steagall Banking Act of 1933.” Harvard Law Review 47, no. 2 (1933): 325–34.
Part III: Mathematization and “Financialization” 1945–2000
14	Random Walks and Wall Street: A New Mathematics of Finance	Cowles, Alfred, 3rd. “Can Stock Market Forecasters Forecast?” Econometrica 1, no. 3 (1933): 309–24. Fama, Eugene F. “Random Walks in Stock Market Prices.” Financial Analysts Journal 21, no. 5 (1965): 55–59.
15	Performing Financial Theories: The Black-Scholes Model and Its World	MacKenzie, Donald. Chapters 4 and 5 in An Engine, Not a Camera: How Financial Models Shape Markets. MIT Press, 2006. ISBN: 9780262134606.
16	“Greed Is Good?”: Finance Takes Over in the ’80s	Friedman, Milton “The Social Responsibility of Business is to Increase Its Profits.” The New York Times, September 1970. Jensen, Michael C. “The Takeover Controversy: The Restructuring of Corporate America.” The Podium (Beta Gamma Sigma: St. Louis, MO, September 1987). Fourcade, Marion, and Rakesh Khurana. “[From Social Control to Financial Economics: The Linked Ecologies of Economics and Business in Twentieth Century America](http://dx.doi.org/ 10.1007/s11186-012-9187-3).” Theory & Society 42, no. 2 (2011): 121–59.
17	Financialization, Deregulation, and Globalization at the End of the 20th Century	Clinton, William J. “Statement on Signing the Gramm-Leach-Bliley Act.” (November 12, 1999). Krippner, Greta R. “The Financialization of the American Economy.” Socio-Economic Review 3, no. 2 (2005): 173–208.
18	In-class Exam
19	Financial Globalization and its Discontents	Williamson, John. “What Washington Means by Policy Reform.” In Latin American Adjustment: How Much Has Happened? Institute for International Economics, 1990. ISBN: 9780881321258. Stiglitz, Joseph E. Chapters 1 and 4 in Globalization and its Discontents. W. W. Norton and Company, 2003. ISBN: 9780393324396. Abelson, Max, and Katia Porzecanski. “Paul Singer Will Make Argentina Pay,” Bloomberg News, August 7, 2014.
20	Arbitrage: Practice and Epistemology on the Trading Floor	Beunza, Daniel, and David Stark. “Tools of the Trade: The Socio-Technology of Arbitrage in a Wall Street Trading Room.” In Living in a Material World: Economic Sociology Meets Science and Technology Studies. Edited by Trevor Pinch and Richard Swedberg. MIT Press, 2008, pp. 253–90. ISBN: 9780262662079. Miyazaki, Hirokazu. “Between Arbitrage and Speculation: An Economy of Belief and Doubt.” Economy & Society 36, no. 3 (2007): 396–415.
21	(In)Securitization: Financial Engineering and the Great Crash of 2008	Koval, Joshua, Jakub Jurek, et al. “The Economics of Structured Finance.” Journal of Economic Perspectives 23, no. 1 (2009): 3–25. Salmon, Felix. “Recipe for Disaster: The Formula That Killed Wall Street.” Wired 17, no. 3 (2009). The Big Short. Directed by Adam McKay. Color, 130 min., 2015.
22	Meltdown: Thinking About Risk and Regulation in Finance	Perrow, Charles. Normal Accidents: Living with High-Risk Technologies. Priceton University Press, 1999, pp. 3–31. ISBN: 9780691004129. Nocera, Joe. “Risk Mismanagement.” The New York Times, January 2009. Moss, David A. “An Ounce of Prevention.” Harvard Magazine, September-October 2009, pp. 24–29.
23	High-Frequency Trading and the Materiality of Finance in a Digital Age	MacKenzie, Donald, Daniel Beunza, et al. “Drilling Through the Allegheny Mountains: Liquidity, Materiality and High-Frequency Trading.” Journal of Cultural Economy 5, no. 3 (2012): 279–96. Lewis, Michael. “The Wolf Hunters of Wall Street: An Adaptation from Flash Boys: A Wall Street Revolt.” The New York Times, March, 2014. O’Brien, William, Brad Katsuyama, et al. “The Great HFT Debate With Michael Lewis On CNBC.” April 2, 2014. YouTube.
24	Engineering Alternative Futures: Islamic Finance and Bitcoin	Maurer, Bill. “Engineering an Islamic Future: Speculations on Islamic Financial Alternatives.” Anthropology Today 17, no. 1 (2002): 8–11. Davis, Joshua. “The Crypto-Currency: Bitcoin and its Mysterious Inventor.” The New Yorker, October 2011. Maurer, Bill, Taylor Nelms, et al. “‘When Perhaps the Real Problem is Money Itself:’ The Practical Materiality of Bitcoin.” Social Semiotics 23, no. 2 (2013): 261–77.
25	Nothing Ventured, Nothing Gained: Finance, Innovation, and Philanthropy	Heilemann, John. “The Networker.” The New Yorker, August 1997: 28–36. Weiss, Tara, and Hannah Clark. “Spreading the Wealth.” Forbes, June 2006. Shapin, Steven. “Uncertainty and Virtue in the World of High-Tech and Venture Capital.” In The Scientific Life: A Moral History of a Late Modern Vocation. University of Chicago Press, 2010, pp. 269–304. ISBN: 9780226750255.