HOMO-ECONOMICUS AND HOMO-POLITICUS - NONECONOMIC RATIONALITY IN THE EARLY 18TH-CENTURY LONDON STOCK-MARKET

The case of the early 18th-century London stock market is used to eval uate economic and sociological theories of market trading. Data from 1 712 on shares in two companies (the Bank of England and the East India Company), and on trading among three different groups (political part ies, ethnic-religious groups, and guilds) are used to show how economi c theories of rational trading do not account for market behavior, eve n though the 1712 London stock market was a highly centralized, organi zed and active capital market. Trading was embedded in domestic and in ternational politics as party groups used the market to control joint- stock companies, and as ethnic-religious groups used the market to pro vide financial support for Britain's war with France. In addition to e conomic goals, political goals were pursued in the market.