In 1880, a popular English translation of the Book of Isaiah enlisted a very nineteenth-century turn of phrase, “freaks of fortune,” in place of the King James version's “delusions.” According to the prophet, the Judeans had committed all the usual sins—including the worship of pagan idols and gods—and now God would terrorize them with “freaks of fortune.”

This use of the phrase, however, was an oddity. By 1880 the term “freaks of fortune” was most common in popular discussions of economic life. These were moral discussions, to be sure, but ones in which Christian worldviews were strikingly absent. As the biblical scholars of Jacobean England, steeped in Renaissance philology, would have affirmed, the Judeo-Christian God did not send “freaks of fortune.” That was the whim of the goddess Fortuna. Early modern Christianity's affirmation of divine providence had striven to put the genie of chance, luck, or fortune back in the bottle.Footnote ² The Enlightenment's secularization of providence had continued the trend.Footnote ³ However, the nineteenth century, at least according to the writer of an 1857 Harper's Magazine essay entitled “Freaks of Fortune,” had granted the goddess Fortuna a new lease on life. She “hangs up her banner in the busy streets of trade.”Footnote ⁴

In the nineteenth century, in particular in the three decades after the American Civil War—decades of boom and bust—Americans invoked the freaks of fortune when attempting to make moral sense of the increasing volatility of their economic lives. What they were grappling with, I would argue, was a new ideal of economic freedom, which was this: In a competitive market society, there was rightful economic reward for risk taking. The individual who took a risk, facing the terrors of market uncertainty, was morally responsible for any good or ill fortune that resulted. He had earned his just deserts—no different than if by the sweat of his own brow. The effort and the outcome resided within the inviolate sphere of individual autonomy. Until 1840 the word “risk” was a technical term for the commodity bought and sold in an insurance contract and had very little colloquial usage. Afterwards “risk” became a commonly used extension of the liberal ideal of self-ownership.

To elucidate the historical emergence of this ideal would require a separate essay. Let me briefly flag snippets from a popular 1856 work, A Practical Treatise on Business, a how-to manual on commercial success. The author first recommends all the staid bourgeois virtues. However, commerce is also a “game of chance.” “A man has the right to risk his own capital.” Commercial “gain” was a product of that “risk.” Wealth was the rightful reward for risk taking. A Practical Treatise quoted the business advice of P.T. Barnum: A man was the “architect of his own fortune.”Footnote ⁵

The freaks of fortune exposed to Americans the limits and contradictions of this ideal. Freaks were most often sudden, utterly unforeseeable, extreme turns of wealth— turns in either direction. The word “freak,” in fact, appears in English texts in the sixteenth century, defined as a “sudden change of fortune.”Footnote ⁶ Freaks of fortune came so fast and were so outsized that they could not possibly be attributable to human striving. Furthermore, after the Civil War, it seemed the freaks began to visit more often. Americans had entered, to quote William Dean Howells's 1890 novel A Hazard of New Fortunes, an “economic chance-world.”Footnote ⁷

This essay pieces together a number of Gilded Age freaks of fortune, to give some sense of the logic of the normative ideal at stake. It will also explain why the freaks seemed to arrive in such numbers after the Civil War and why their presence proved so irksome. The essay will then end with a brief consideration of why in the twentieth century the term “freaks of fortune” all but dropped from the American vernacular.

The freaks defied the moral doctrine of economic reward for risk taking; but they also defied every other moral explanation for why an individual might become rich or poor: the Protestant work ethic, the labor theory of wealth or of value, the moral sanctity of contract.Footnote ⁸ Such was the implication of an 1881 newspaper article entitled, “Freak of Fortune,” an account of the life of an anonymous Chicago merchant. An entire life, the article mused, could constitute a freak of fortune, fully directed by the whims of chance. As a young man, out of work and sick and tired, this unnamed protagonist collapsed on the sidewalk. He awoke to find inside his hat a number of small coins! He kept up “this business” for six years, accumulating $20,000, and through a speculation in stocks turned that into $227,000. By 1881, his net worth was $800,000. He lived the life of a “gentlemen.”Footnote ⁹

Freaks of fortune were often recounted in this narrative form—an anti-Horatio Alger plotline.Footnote ¹⁰ A life was first depicted to illustrate that a freak came for no particularly just or unjust reason. A new life came into view, to prove the transformative power of the freaks. An inadvertent beggar now lounged in a gilded civic club. The freaks might turn the social ladder upside down, literally in this case at the drop of a hat. In this, the freaks called into question not only the relationship between chance, personhood, and commerce, but also democracy.

To return to the 1857 disquisition on the subject in Harper's: 1857 was after all a year of financial panic, the first since 1837. The essayist observed:

A “wide margin of apparent chance” shaped “human destiny.” There was in the world “another party quite as powerful as human will—a mighty and mysterious power.”Footnote ¹¹

However, Harper's also linked the freaks with democratization—with the very notion of popular sovereignty. The freaks, in fact, worked their way equally through “the election returns” as they did the “stock market.” Were not the rulers in a democracy, rather than a monarchy, the contingent products of a popular election? The people, generations of anti-democratic thinkers reminded, were fickle. In 1857, with not only commercial panic, but also with divisions over slavery throwing political calculations into turmoil, the freaks seemed to have American society under its thumb.

Still, even from the perspective of 1857, with its economic upheaval and ominous political atmosphere, to many antebellum Americans the link between chance, democracy, and a competitive marketplace was a good thing.Footnote ¹² Chance struck a blow at the kind of aristocratic, hierarchical social order detested by so many antebellum Americans busily on the make.Footnote ¹³ Freaks of fortune, in fact, were a common popular literary device—the democratic deus ex machina.Footnote ¹⁴ The possibility of freaks could energize the democratic will. Americans often invoked the wheel of fortune—a long enduring image—in describing the logic of their social order. In one vision, democracy, commerce, and chance harmonized.Footnote ¹⁵

The Harper's essayist perceived freaks of fortune as a new, “mighty and mysterious power.” As a factor shaping people's good or bad fortune, what most distinguished the freaks was their amorality.Footnote ¹⁶ Fortuna, a “fickle goddess,” a New Orleans newspaper editorial reminded readers in 1861, possessed a “capricious mood.” For no reason, “she snatches some unfortunate mortal, and drags him down to obscurity, and then she raises some humble child of poverty and insignificance to affluence and social distinction.”Footnote ¹⁷ The amorality is striking when contrasted to a long Puritan tradition in American culture that vested the contingent workings of the world in the hands of divine providence.Footnote ¹⁸ Providence too posited a mysteriously working cosmic order, but it was ultimately a just one. One asks: Why did nineteenth-century Americans turn to the freaks and not the lesson of Job?

As Cheyne's curious translation of Isaiah reveals, it was possible for a Protestant God in the late nineteenth century to send “freaks of fortune.” Harper's 1857 essay explicitly contrasted the freaks against the ways of providence. The two forces battled it out, while free will sat on the sideline and watched. The author, however, ultimately sided with providence. “Strictly speaking,” he reminded, “there is no such thing as chance; for with the Almighty Mind there can be nothing casual or fortuitous.” Despite the freaks, Americans were still children of providence.Footnote ¹⁹

The rush of freaks of fortune in the decades following the Civil War was unimaginable without the relative intellectual loss of providence. The expansion of the “economic chance-world” identified by Howells no doubt furthered the process. However, there was also the Civil War itself. North and South marched off to battle, both believing that God was on its side. After the cataclysm and perhaps partly because of it, American thought and culture secularized, albeit in various directions. The loss of providence at the center of the culture created intellectual space for the freaks of fortune.Footnote ²⁰

Economic transformations were also responsible for the freaks. This is apparent in an account in the Ohio Farmer in 1875, in the wake of yet another commercial panic and subsequent bust. In championing the relative “independence” of farming, the author argued, “The freaks of fortune play less wildly with us than any others; we are too well grounded to be affected by those changeful breezes.” The farmer's life was subject to the natural perils of drought and insect and the fluctuations of markets, but he owned land; he controlled productive property. “He can always find work on the farm,” and the “essentials of life are always at hand.”Footnote ²¹ There were always markets for his goods, for the rising urban population had to eat. The American farmer was fundamentally a commercial risk taker, generating staggering marketable surpluses. Because he owned land, however, he was secure enough that he was not as subject to the freaks of fortune.

The freaks crested with the postbellum loss of this traditional form of economic security.Footnote ²² Antebellum Americans accumulated wealth and capital mostly in land—in farms that offered the means of commercial risk taking, but also bulwarks of economic security.Footnote ²³ This built-in hedge, the Ohio Farmer still claimed, warded off the freaks. Many farmers regarded this as providence at work. “Seed time and Harvest . . . Shall not Fail,” as God told Noah after the flood. In 1800, 90 percent of the population was employed in agriculture. In the 1880s, the percentage dipped below 50 for the first time. Likewise, in 1850, 50 percent of all national wealth was still held in farm property. By 1880, it was 25 percent.Footnote ²⁴ These trends—evidence of the rapid accumulation of wealth and capital in the financial and industrial sectors—would only continue. These transformations fueled an increase in per capita income, but it also generated increased inequality of wealth.Footnote ²⁵ In 1870, the wealthiest 1 percent of Americans—this 1 percent territory, after all, was where the freaks of fortune roamed—held 27 percent of national wealth. By 1912, they held 56 percent.Footnote ²⁶ The freaks of fortune arrived with the move away from a more egalitarian, land-based, agrarian commercial republic.

The only other antebellum asset class that rivaled land was slaves. Slaves were of course the foundation of southern economic life. To late antebellum proslavery theorists, the master-slave relation was of providential design; it provided a form of social and economic security premised upon personal, customary, hierarchical relations of dominion and dependence. The free North was letting the genie of chance out of the bottle.Footnote ²⁷ Notably, one finds the moral ideal of “freedom as risk taking” most clearly articulated in antislavery thought. Self-ownership consisted of the ownership of a risk. The slave's risk—his destiny—was owned and controlled by his master. Emancipation thus opened freed people to freaks of fortune, as in an 1879 New Orleans newspaper account of the “Remarkable Career of a Man Once a Slave Who Died Worth $85,000.” In a truly freakish twist of events, this former slave found himself in possession of property on the Long Island Sound valued at $90,000.Footnote ²⁸ In any event, the decades after the Civil War featured a dramatic transformation in the asset basis of the American economy. Relatively, farm property was a diminished piece of the pie. Slave property was destroyed.Footnote ²⁹

The freaks arrived in American society with more volatile and abstract forms of wealth, capital, and income.Footnote ³⁰ The rising class of industrial wage earners had incomes subject to the risks of accident, unemployment, and old age.Footnote ³¹ For the middling and upper classes, apart from the risk of bankruptcy, there was an increase in financial assets—savings accounts, insurance policies, and, in time, pensions.Footnote ³² There were new paper assets and financial derivatives—the commodity futures of the 1870s, the mortgage-backed securities of the 1880s, or the new flood of railroad and then industrial corporate securities.Footnote ³³ Unlike landed wealth, if a railroad bankrupted, the value of its stock was zero. However, people could still hope for a friendly freak, as in an 1884 National Police Gazette story of a young man investing his “last dollar” in a financial speculation that gained for him $15,000.Footnote ³⁴ Such extremes must have strained the agrarian imagination.

These were the cultural and economic contexts for the postbellum wave of freaks. Stripped of belief in providence and of secure forms of wealth and income, many individuals stood newly naked before the expanding economic chance-world. As such, Americans might be said to have enjoyed a double freedom: a freedom to call the fruits of the chance-world their own, but also a freedom from traditional forms of economic security—and thus, in turn, an unnerving sense of a loss of moral responsibility whenever the freaks struck. I am obviously invoking Karl Marx's famous description in Capital of the double freedom of the proletarian, free to sell his labor-power, free from any other means of livelihood—and thus, in turn, free to face a real threat of physical starvation.Footnote ³⁵ However, a younger Marx once called the United States a society in which “individuals were free to enjoy the freaks of fortune.” “This right to undisturbed enjoyment of fortuity and chance,” he continued, “has up till now been called personal freedom.”Footnote ³⁶ However, this was and is not a particularly Marxist perspective on the relationship between capitalism and chance. In 1976, F.A. Hayek admitted that under capitalism “rewards will be based only partly on achievement and partly on mere chance.”Footnote ³⁷ Mere chance plays a role in all the major theories of capitalism, of whatever political or methodological stripe.Footnote ³⁸

Nevertheless, what was so striking about the Gilded Age freaks was their destruction of moral responsibility, even when freaks dispensed riches. At stake was the very possibility of independent personhood, as in this 1886 poem with the title “A Freak of Fortune”:

The lesson of this double freak was clear: Rather than individual agency leading to economic reward, one had to adjust to the sudden, blind whims of chance or risk insanity, even death.

Freaks put the lie to the notion that everyone always got what they deserved in a capitalist economy. There were edges ruled by no ethical agent. An 1881 article in a Cincinnati paper labeled the life of Daniel Dale Haskel a “freak of fortune.” Haskel once managed a successful banking house, earning a yearly income of $79,000. The bank failed in the 1870s bust, even after Haskel “gave all his means to endeavor to save the bank.” He died in an almshouse, “a broken down vermin-infested beggar.”Footnote ⁴⁰ On the flipside, an 1884 freak struck a young farmer of Mount Olivet, Kentucky. “Was I embarrassed? Yes; a little.” People crowded around “and closely watched me as I passed along the streets as though I was a wild animal that had escaped from some circus”—as if he was a freak itself.Footnote ⁴¹ Still, this man did not go insane with riches. Tellingly, he used the windfall to buy a farm.

What to do about the freaks? Often, the suggested response was stoic. An 1877 meditation raised the subject of economic volatility: “Many a one does not know how to adapt himself to this freakishness.” This author decided, “When I am prosperous, I will not be elated,” and “when it goes ill, I will not despair.”Footnote ⁴² His economic fate was subject to the freaks, but his personality need not be. In 1887, a New York schoolteacher's lecture on “Commercial Business” informed students of the presence of the freaks, but he reminded that “the wealth most to be desired is the possession of one's self.”Footnote ⁴³ The incipient economic chance-world of the antebellum period was liberating to many Americans, stuck in small worlds, under the thumb of masters of many different stripes. By the close of the nineteenth century, one senses the emergence of stoical resignation to a new, perplexing kind of master.

Well, what happened to the freaks of fortune? Stoicism is hardly a form of politics. For one, Americans did not dump the moral doctrine of reward for risk. It lived on as a powerful ideal of economic freedom. However, twentieth-century Americans did wage war on the freaks, more so to salvage than to scrap this liberal notion of economic freedom. One weapon was conceptual: the science of statistical probability. Probability theory had centuries-long roots, but in the United States, only in the final decades of the nineteenth century did it fully emerge into mainstream culture out of the shell of the actuarial insurance industry (which itself only dated to the 1840s).Footnote ⁴⁴ Ultimately, probability would displace providence as a new determinism, running together with Darwinian currents in American thought that naturalized and tamed chance, economic or otherwise. Meanwhile, an entire new field of scientific judgment called “forecasting”—market forecasting, weather forecasting, crop forecasting—came to life.Footnote ⁴⁵ Freaks of fortune became “outliers.”

Probabilistic science was also the foundation of new liberal forms of economic security, premised on the ideal self-ownership. A life insurance policy, for instance, bought the “life risk” of an individual. In 1880, there was already about $2 billion of personal insurance in force in the United States. By 1900, there would be over $10 billion. Rather than old farm freeholds, Americans acquired new personal financial balance sheets. They turned to financial markets for economic security.Footnote ⁴⁶

There were risks inherent to that endeavor, however, as the greatest of market busts would soon prove. The welfare state that emerged from the Great Depression made baseline economic security a citizenship right. It introduced the technique of macroeconomic steering, the technique Hayek railed against in his 1976 musing on chance. Economic volatility declined. The Gilded Age rise of wealth inequality was reversed. It was in these years that the expression “freaks of fortune” dropped from the language.

The Gilded Age freaks thus represented a gap between two bookends—between the passing of providence and the triumph of probability, between the passing of a land-based economy and the triumph of a welfare economy.

Obviously, this is not where the story ends. The repressed has returned, seemingly at our own beckoning.Footnote ⁴⁷ Can there be any doubt that in the twenty-first century something like the freaks roam among us again, even if they go by the name “bonuses,” “outliers,” “fat tails,” “black swans,” or, in the October 2008 words of Alan Greenspan, a “once-in-a-century credit tsunami?”Footnote ⁴⁸ The vexatious subject of our individual and collective moral responsibility within the economic chance-world once again demands full attention.