Anthropologists in the Stock Exchange A Financial History of Victorian Science
by Marc Flandreau
University of Chicago Press, 2016
Cloth: 978-0-226-36030-0 | Paper: 978-0-226-36044-7 | Electronic: 978-0-226-36058-4
DOI: 10.7208/chicago/9780226360584.001.0001


Uncovering strange plots by early British anthropologists to use scientific status to manipulate the stock market, Anthropologists in the Stock Exchange tells a provocative story that marries the birth of the social sciences with the exploits of global finance. Marc Flandreau tracks a group of Victorian gentleman-swindlers as they shuffled between the corridors of the London Stock Exchange and the meeting rooms of learned society, showing that anthropological studies were integral to investment and speculation in foreign government debt, and, inversely, that finance played a crucial role in shaping the contours of human knowledge.
Flandreau argues that finance and science were at the heart of a new brand of imperialism born during Benjamin Disraeli’s first term as Britain’s prime minister in the 1860s. As anthropologists advocated the study of Miskito Indians or stated their views on a Jamaican rebellion, they were in fact catering to the impulses of the stock exchange—for their own benefit. In this way the very development of the field of anthropology was deeply tied to issues relevant to the financial market—from trust to corruption. Moreover, this book shows how the interplay between anthropology and finance formed the foundational structures of late nineteenth-century British imperialism and helped produce essential technologies of globalization as we know it today. 


Marc Flandreau is professor at the Graduate Institute for International Studies and Development in Geneva under joint appointments in the departments of history and economics. He is the author of The Making of Global Finance 1880–1913 and The Glitter of Gold and is the editor of Money Doctors: The Experience of International Financial Advising 1850–2000


“Flandreau’s new book is simply remarkable. It will force us to rethink the foundations of anthropology.”
— David Shankland, Director of the Royal Anthropological Institute

“This path-breaking book explores the intersection between scientific enterprise, the evolution of Victorian learned societies, and finance. That imperial states used science and science ideologies to advance territorial claims—this is well known. That finance used ethnographic and geographic ‘truths’ debated in the fledgling anthropological and geographical societies for the crucial creation of ‘value’ to monetize largely tropical speculative ventures has been a hidden history. The human sciences and the institutions that developed around them were key elements not just in the globalization of knowledge but also that of finance capital and speculation. This remarkable history captures the depth of the interlinkages among protagonists whose identities and practices regularly blurred their economic and scientific roles. In this engagingly written volume, the rivalries, collusions, and corruptions that shaped tropical scrambles, tropical science, as well as money markets, come vividly to life.”
— Susanna B. Hecht, author of The Scramble for the Amazon and the “Lost Paradise” of Euclides da Cunha

“How did personal networks and exchanges evolve into the impersonal networks and stock exchanges that formed the global financial markets of the late nineteenth century? Flandreau keeps exploring the sources and personalities of key players in the London Stock Exchange, where most of the debts of the world were traded. The deeper he goes, the more interesting become his findings—this time for the role played by promoters and anthropologists in expanding the scope of Britain’s informal empire.”
— Larry D. Neal, author of A Concise History of International Finance

“This is one of the most fascinating books I have ever read. Flandreau’s breathtaking account of Victorian anthropology is a unique combination of economic insight, historical acumen, and literary brio. It challenges our understanding of the relationship between knowledge and empire. Moreover, it is a compelling denunciation of the vested interests lurking behind academic inquiry. The cannibals portrayed in this story are still with us. From the centers of global financial power they continue to shape the agenda of modern social science.”
— Francesco Boldizzoni, author of The Poverty of Clio

“An original and bold account showing that anthropologists in Victorian England were not only complicit in white-collar crimes but that anthropology itself benefited from and developed by the position of its personnel in both the scientific and financial sectors.”
— Kevin Yelvington

“Economic historian Flandreau takes seriously the role anthropologists played as brokers when European colonialism and empire dominated the globe during the mid-19th century. He provides a different lens or modality of knowledge than the traditional bureaucratic modality, which links bureaucratic authority to knowledge production and institution creation. The author calls the new framework the ‘stock exchange modality,’ and views it as important because commercial expansion was the financial context to the formation of imperial knowledge. Flandreau seeks to ‘derive a novel theoretical perspective on the making of anthropology through a renewed understanding of the making of its institutions.’ He cleverly demonstrates who, why, and how anthropology was used and valued by the agents of the London Stock Exchange, which was heavily invested (literally and figuratively) in assessing the value of colonial assets. The author artfully describes how some of the same social and political underpinnings deployed to promote railroads and steamships were used to promote learned societies. Flandreau, a detailed historian and great storyteller, describes the unsavory white-collar criminals and sophisticated scientists who manipulated and captured the value of science based on the rules of capital markets. Highly recommended.”
— Choice

"Flandreau’s study of how science, power and the stock exchange mutually influence each other is a powerful product of this era, which began with the fall of Lehman Brothers in 2008. Perhaps it is no accident that Flandreau, of all economic historians, has performed the most radical break away from the quantitative orientation of his discipline."
— Neue Zürcher Zeitung

"Flandreau goes a long way to revealing the complex interplay that existed in the creation of British anthropology."
— Journal of Pacific History

"For scholars interested in the short-lived Anthropological Society or any of the key figures considered (Pim, Hyde Clarke, George Earl Church) there is plenty of detailed and valuable information to be found here."
— British Society for Literature and Science

"Flandreau makes some real contributions... He has investigated several of the shadier gentlemanly capitalists, and he has demonstrated that financial chicanery could motivate anthropological research."
— American Historical Review


DOI: 10.7208/chicago/9780226360584.003.0000
[informal empire;colonial knowledge modalities;financial market]
This chapter reviews the previous literature on the relation between anthropology and imperialism. It argues that it has focused on anthropological science as embedded in colonial bureaucracies. It claims that “informal empire” and financial expansion beyond bureaucracies and large-scale chartered companies generated an original form of knowledge, which I call the stock exchange modality.

DOI: 10.7208/chicago/9780226360584.003.0001
[Anthropological Society of London;foreign debt bubbles;digital resources]
After a brief exposé of the making of the Anthropological Society of London and the controversies it triggered, this chapter provides a methodological introduction to the kind of history writing this book advocates. It identifies a coincidence between the rise of anthropology and the making of a foreign debt bubble and shows that a number of individuals (in particular, Hyde Clarke) connect the two threads. It suggests an explanation for the fact that the evidence in the book has been side-lined before. Writing about the entanglement of anthropology and the stock exchange requires connecting scattered evidence. Digital technologies have revolutionized the way such diffuse, marginal evidence can be retrieved and re-organized. As illustration it shows how Hyde Clarke’s spanning of several universes can be documented rigorously.

DOI: 10.7208/chicago/9780226360584.003.0002
[Richard F. Burton;Ethnological Society of London;Anthropological Society of London;American Civil War;Athenaeum Club]
The chapter reviews existing debates on the rise of the Anthropological Society. It questions anthropologist George W. Stocking’s almost complete exclusion of explorer Richard F. Burton from the narrative. Burton’s influence on the ways and means of the Anthropological Society of London was paramount. The chapter also criticizes Adrian Desmond and James Moore’s suggestion that the ASL was just an instrument of Confederate propaganda in London during the Civil War. The ASL’s apex was reached one year after the Confederate defeat, precluding such a characterization. Last, the chapter suggests that the most obvious criterion to delineate the ASL from it’s rival ESL (Ethnological Society of London) is sociological. The ESL was more aristocratic and the ASL included predominantly individuals from the technical professions and imperial bureaucracies who found in empire a mean of enrichment social rise.

DOI: 10.7208/chicago/9780226360584.003.0003
[Royal Geographical Society;Sources of the Nile controversy;Learned Societies’ membership;Anthropological Institute of Great Britain and Ireland]
This chapter provides an alternative narrative to the rise and fall of the Anthropological Society. It suggests interpreting it as a “geographical secession”, i.e. a secession from the all powerful Royal Geographical Society. It suggests that the reason why Burton wanted to develop a learned society he would control had to do with the Sources of the Nile controversy. The chapter thus takes a view, which emphasizes learned societies as tools and agencies. In the same movement, the chapter narrates the continued clash with Sir Roderick Murchison’s RGS as an important factor for the subsequent decline of the ASL. After producing data documenting the rise and fall of the “anthropological bubble”, it narrates this decline until the merger with the ESL, giving rise to the Anthropological Institute of Great Britain and Ireland in 1871. It argues that using the language of business history sheds a useful light on the whole episode.

DOI: 10.7208/chicago/9780226360584.003.0004
[foreign debt;foreign debt mania;railways;white collar crime;vulture investors;learned sociability]
This chapter provides a deconstruction of the stigmatizing process characterizing financial discourse during the last quarter of the 19th century and the heyday of the colonial era. It underscores the importance of white-collar criminality in the 1860s and early 1870s and the challenge it posed to trust and foreign investment. Relying in part on material disclosed around the investigations of the select committee on loans to foreign states (1875) it does outline the relevance of a specific clique, the “foreign bondholders”, a group of brokers and stock exchange specialists who played a crucial role in exploring the financial side of imperialism during the era. The chapter deconstructs their politics, underscoring their interest for large colonization projects and the value they found, from this vantage point, in associating with certain learned societies, such as the Geographical or Anthropological Society.

DOI: 10.7208/chicago/9780226360584.003.0005
[Bolivia;Ecuador;colonization companies;Isidor Gerstenberg;George E. Church;bondholders;certification]
This chapter takes a detailed look at the role of learned societies in the process of foreign debt origination. It uncovers the existence of tight links between the securitization of a railway line and navigation company in Bolivia, colonization schemes and geographical and anthropological science. The example of George E. Church’s Bolivian loan of 1872 provides opportunity to clarify the role of learned societies in the “foreign debt food chain”. Learned societies, I argue, became an instrument of certification essential in the process of floating risky and hard to evaluate foreign securities.

DOI: 10.7208/chicago/9780226360584.003.0006
[bona fides;trust;gentlemanly science;gentlemanly capitalism;displays;rituals;gentlemanliness]
This chapter provides an account of the “bona fides” man in Victorian Britain. It elaborates on a heretofore unnoticed parallel between financial history and the history of sciences. Both separately emphasize the role of certain forms of sociability (in particular something conventionally referred to as “gentlemanliness”) and their relation to trust. This chapter provides an economic interpretation to the parallel, underscoring that, seen as a social technology, gentlemanliness served an identical purpose in both science and finance: It helped to make statements credible. This explains the overlap between scientific truths and financial truths and enables one to explain the sociological aspects of the disputes between the Anthropological Society and the Ethnological Society and the ritualization of scientific performances.

DOI: 10.7208/chicago/9780226360584.003.0007
[Bedford Pim;Negro and Jamaica;Franklin expeditions;HMS Herald;Arctic;Siberia;Mosquito Coast;Central American crossing]
This is the first of two consecutive chapters devoted to the career of Bedford Pim who plays, legitimately, an important role in traditional narrative of the history of the ASL, because of his infamous racist pamphlet and lecture, Negro and Jamaica, published in the aftermath of the Jamaica Rebellion of 1865. In contrast with previous narratives that have had Pim “rushed in” as member of the ASL on the occasion of the Rebellion, the chapter tracks Pim previous pedigree as a prize winner of the Royal Geographical Society and characteristic “entrepreneur in globalization”, emphasizing that he was characteristic of the type of individuals on which the ASL drew its inspiration and strength. Starting with a descriptions of the micro-politics of informal empire in the context of the Mosquito Coast, the chapter shows that Pim’s entrepreneurial endeavors in Nicaragua led him to find himself in open rebellion against the Admiralty. The Anthropological Society of London then became a natural anchor for Pim’s mercurial efforts leading him to join it at an early stage as Local Secretary for Nicaragua. This position as an expert in Caribbean anthropology designated him as a natural ASL spokesperson in the aftermath of the Jamaica Rebellion.

DOI: 10.7208/chicago/9780226360584.003.0008
[Bedford Pim;Mosquito Indians;Waikna;George Ephraim Squier;Sambo;Central American Association Limited]
This chapter continues the narrative of Pim’s career undertaken in the previous chapter. By exploring the interlocking directorates of Bedford Pim’s mining, railway and colonization companies launched in the mid-1860s, the chapter shows the structure of the science and finance nexus. It also shows how anthropology was embedded in financial engineering. In particular, taking the example of the competition between US anthropologist George Ephraim Squier and anthropologist Bedford Pim as a case in point, the chapter shows how statements about race and racial identity were ultimately tied to alternative financial concerns. The result was the plasticity of racial beliefs, which could be adjusted depending on financial logic. An intellectual history of racism that would ignore its financial underpinning and the problem of scientific credibility would miss some essential ingredients that shaped the contours of the “science of man.”

DOI: 10.7208/chicago/9780226360584.003.0009
[Benjamin Disraeli;empire;Reform Bill;Abyssinian Expedition;King Theodore of Abyssinia;Tewodros II;practical anthropology;Bronislaw Malinowski]
This chapter brings into the narrative the politics of empire as they began to be reshaped in the mid 1860s as part of Benjamin Disraeli’s first term as Chancellor of the Exchequer, then Prime Minister. The chapter argues that during the period under study, the attractiveness and success of learned societies helped, and was helped by, their transformation into collective action institutions. Societies such as the Geographical, or the Anthropological, just as the Ethnological Society before, began to play an active role in domestic politics and the politics of empire. The chapter details the mechanism at work in the context of the British Expedition to Abyssinia, which played such an important role in helping Disraeli articulate what he meant by a new, assertive, imperialism. The criticisms that learned societies voiced against the previous administration (by the Liberal Premier John Russell) came to play an important role in public debates. The Abyssinian War to release King Theodore’s hostages (two of whom being members of the ASL) was supported by such pressure groups as the Anthropological who asserted their right over foreign policy by talking about “practical anthropology” (an expression that would be reinvented by anthropologist Bronislaw Malinowski in the 20th century).

DOI: 10.7208/chicago/9780226360584.003.0010
[The Athenaeum;Smyrna-Aidin Railway Company Limited;jobbing;Hyde Clarke;Honduras Ship Railway;Bedford Pim]
Drawing on the previous chapters and on new evidence of the way Hyde Clarke straddled finance and science, this chapter provides a new narrative of the way the Anthropological Society was brought down after the famous letter published by Hyde Clarke in the Athenaeum, where he criticized vehemently the ASL’s accounts and governance. Hyde Clarke’s career from the railway boom in the 1840s to the Athenaeum episode in the Summer of 1868 (just a dozen weeks before the election that was to bring Gladstone to power following a Liberal landslide). Putting the conflict between Hyde Clarke and the leaders of the ASL in 1868 (including Bedford Pim) in parallel with the dispute that took place between Hyde Clarke and Bedford Pim in 1872 over a Honduras railway, the chapter underscores the complete identity that existed between the technique used by Clarke in 1868 to provoke a “run” of ASL fellows and the one he used to provoke a run on Honduras bondholders, the chapter suggests that the coming of the Anthropological Institute in 1871 can be likened to a hostile takeover raid by leaders of the Ethnological Society of London.

DOI: 10.7208/chicago/9780226360584.003.0011
[bipartisan;Anthropological Institute of Great Britain and Ireland;Corporation of Foreign Bondholders;John Lubbock;insiders;knowledge;property rights]
The chapter describes the simultaneous coming of age of a bi-partisan learned society (the Anthropological Institute) and of a bi-partisan bondholder protection body (the Corporation of Foreign Bondholders) whose respective top managements displayed large overlap with one another. The chapter interprets this coincidence in reference to the broader context, one of the creation of bi-partisan, more politicized institutions, that ensured political control over the institutions that provided information relevant to imperial policy making. Anthropology as an institution (materialized by the creation of the Anthropological Institute in 1871) played a central role in the relatively consensual structuring of empire as it emerged in the early 1870s and was maintained afterwards despite changes in the orientation of the ruling majority in parliament. The re-organization of anthropology in an Anthropological Institute, the chapter argues was part of the process of “subjection” that took place at this point. In conclusion, the chapter emphasizes the role of knowledge as a kind of property right and the institutions of knowledge as instruments that project the power of these property rights.

DOI: 10.7208/chicago/9780226360584.003.0012
[stock exchange modality;securitization;techniques of globalization;social editing;trust;white collar crime;white collar criminality]
The conclusion returns to the central themes of the book – and to the questions opened in the introduction. By reviewing the book’s contribution, it emphasizes the advantages of an approach that does integrate the study of the history of science to the history of finance. Because the social sciences are deeply involved in processes of valuation they are in fact at the root of any process of securitization. The chapter concludes that the “stock exchange modality” expounded in the book could serve as a useful starting point to understand imperialism, old and new.