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On Ticks and Tapes: Financial Knowledge, Communicative Practices, and the Rise of Financial Information Technologies
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On Ticks and Tapes
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I. Introduction
This is the story of the ticker. In the age of the Ethernet, of mobile communication
technologies and instant, satellite-supported price transmission, the ticker survives mostly onscreens like those of Bloomberg television, or in the windows of brokerage firms like E*Trade. Itis adapted to contemporary computer technologies and directed at the broad public. The narrowpaper tape has been replaced by a pixel strip at the lower edge of computer monitors. Such is itsafterlife. The last mechanical device for commercial use was produced in 1960, being afterwardsreplaced by electronic ones. Nowadays, mechanical tickers are manufactured only for collectors.Its fellow travelers—the telegraph and the telephone—have been privileged by economichistorians and sociologists alike, but the ticker has been rather neglected. While the relevance ofcommunication technologies for financial globalization has been much discussed, most of thetimes it does not even get cursory mentions as an “also ran.” As I will argue below, the tickerplayed a key role in the financial marketplace.
However, the main aim of this paper is not so much to do justice to a neglected
technology. The ticker confronts us with a paradoxical situation: why was it necessary to have itinvented when the telegraph was already there? Why have stock prices transmitted by the tickerwhen the telegraph could do the same? How can we explain the tremendous success of the ticker(and its survival in the 21
st
century) if it was so redundant? While the electric telegraph had been
in operation since the 1840s, and the first transatlantic cable became operational in 1865, theticker appeared in December 1867. During the 1870s, its success was tremendous and itsexpansion rapid. Sociologically speaking, we are confronted with a situation where financialmarkets, the paragon of rationalization and efficiency, rapidly adopted an apparently redundant,useless technology. While economic historians unanimously agree that in the late 19
th
century
financial markets grew more and more efficient, integrated, and global, these very markets werealso ready to invest effortand money in useless things. Were they then less efficient than onemight think? Efficiency and rationality are inextricably tied to information and knowledge. Thisbrings us to the question I will examine here, namely that of the relationship between financialinformation, knowledge, and (communication) technologies. Are these latter a simple, transparentmedium for the rapid, efficient transmission of financial information or are they more than that?If they are something more, and different from a transparent medium, how do they affectfinancial knowledge, information, and the specific forms of market rationality? What is theirimpact on the behavior of market actors? If we take into account the role played bycommunication technologies in contemporary financial markets, these are key questions, stillwaiting for an answer. Seen in this perspective, the story of the ticker is not just about anotherneglected technology.
My argument here is that financial markets-related communication technologies (in this
case: the ticker) cannot be conceived as a transparent medium which (a) accelerates thetransmission of market-relevant information without affecting it in any way, (b) enlargesaccessibility to information without shaping investors’ behavior, or (c) contributes to marketrationalization and globalization without essentially changing the social shape of financialtransactions. I will show instead that the ticker was not a mere medium for the speedy, accuratetransmission of price information. It profoundly changed the ways in which financial marketoperated. I discuss the ticker as a nexus of mutually reinforcing language and representationmodes, cognitive instruments and rules, and teleo-affective structures (Schatzki 1996, pp. 99,103; 2001, p. 48; Preda 2001a).
The data I use here is provided by US investor manuals, brochures, newspaper articles,
reports, investors’ diaries, and the correspondence of stockbrokers covering a period from about
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| | Authors: Preda, Alexandru. |
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On Ticks and Tapes
2
I. Introduction
This is the story of the ticker. In the age of the Ethernet, of mobile communication
technologies and instant, satellite-supported price transmission, the ticker survives mostly on
screens like those of Bloomberg television, or in the windows of brokerage firms like E*Trade. It
is adapted to contemporary computer technologies and directed at the broad public. The narrow
paper tape has been replaced by a pixel strip at the lower edge of computer monitors. Such is its
afterlife. The last mechanical device for commercial use was produced in 1960, being afterwards
replaced by electronic ones. Nowadays, mechanical tickers are manufactured only for collectors.
Its fellow travelers—the telegraph and the telephone—have been privileged by economic
historians and sociologists alike, but the ticker has been rather neglected. While the relevance of
communication technologies for financial globalization has been much discussed, most of the
times it does not even get cursory mentions as an “also ran.” As I will argue below, the ticker
played a key role in the financial marketplace.
However, the main aim of this paper is not so much to do justice to a neglected
technology. The ticker confronts us with a paradoxical situation: why was it necessary to have it
invented when the telegraph was already there? Why have stock prices transmitted by the ticker
when the telegraph could do the same? How can we explain the tremendous success of the ticker
(and its survival in the 21
st
century) if it was so redundant? While the electric telegraph had been
in operation since the 1840s, and the first transatlantic cable became operational in 1865, the
ticker appeared in December 1867. During the 1870s, its success was tremendous and its
expansion rapid. Sociologically speaking, we are confronted with a situation where financial
markets, the paragon of rationalization and efficiency, rapidly adopted an apparently redundant,
useless technology. While economic historians unanimously agree that in the late 19
th
century
financial markets grew more and more efficient, integrated, and global, these very markets were
also ready to invest effortand money in useless things. Were they then less efficient than one
might think? Efficiency and rationality are inextricably tied to information and knowledge. This
brings us to the question I will examine here, namely that of the relationship between financial
information, knowledge, and (communication) technologies. Are these latter a simple, transparent
medium for the rapid, efficient transmission of financial information or are they more than that?
If they are something more, and different from a transparent medium, how do they affect
financial knowledge, information, and the specific forms of market rationality? What is their
impact on the behavior of market actors? If we take into account the role played by
communication technologies in contemporary financial markets, these are key questions, still
waiting for an answer. Seen in this perspective, the story of the ticker is not just about another
neglected technology.
My argument here is that financial markets-related communication technologies (in this
case: the ticker) cannot be conceived as a transparent medium which (a) accelerates the
transmission of market-relevant information without affecting it in any way, (b) enlarges
accessibility to information without shaping investors’ behavior, or (c) contributes to market
rationalization and globalization without essentially changing the social shape of financial
transactions. I will show instead that the ticker was not a mere medium for the speedy, accurate
transmission of price information. It profoundly changed the ways in which financial market
operated. I discuss the ticker as a nexus of mutually reinforcing language and representation
modes, cognitive instruments and rules, and teleo-affective structures (Schatzki 1996, pp. 99,
103; 2001, p. 48; Preda 2001a).
The data I use here is provided by US investor manuals, brochures, newspaper articles,
reports, investors’ diaries, and the correspondence of stockbrokers covering a period from about
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