Market Manipulations

Credits: 3


A major objective of the course is student understanding both of the forms and management of several major kinds of market manipulations, and of the historical contexts and consequences of such actions.

After discussing what factors facilitated the Great Recession that began in 2008, we begin with an examination of the nature of a market, its limitations or “failures,” the “market levers” that can be manipulated to influence market behaviors, and the types of market manipulations commonly observed, such as speculative events like bubbles or scams like Ponzi schemes. We then examine the evolution of the business firm and how the institutions of the firm and its environment evolved as mechanisms to manage risks, including a look at what I have termed the Landa problem. Next we examine what Mark Twain called the “Gilded Age,” looking at the construction of the transcontinental railroad and the Credit Mobilier scandal, and then examining and comparing the business entrepreneurship of Andrew Carnegie, John D. Rockefeller, and George Westinghouse. We will look at the Homestead Steel Strike in detail (associated with Carnegie and Frick) and compare it to the Ludlow Massacre (associated with a company owned by John D. Rockefeller, Jr.). We then review and compare a succession of panics in American business history – those associated with 1837, 1857, 1869, 1873, 1893/5, and 1907.

We then shift to the Progressive Era, and the pushback that occurred. We look at Coxey’s Army as an attempt at market manipulation via mass movement (the first such effort in American history), and Coxey’s anticipation of the New Deal. We examine the activities of such muckrakers as Ida Tarbell, Lincoln Steffens, Ray Stannard Baker, Samuel Hopkins Adams, and Upton Sinclair. We look at the growth of government attempts to regulate industry so that it behaves more like the designers think markets should behave. We look at the Triangle Shirtwaist Company Fire of 1911 and examine the interplay of reformers and government, focusing on New York. We look at the career of Frances Perkins. We compare the Crash of 1929 to the panics previously considered in the course, and to what should be called the Panic of 2008.

Prerequisite(s): None.