EXPLAINER: Decoding the animal spirits that guide the economy

The global economy is frequently disguised as a hard, impenetrable physical science, wrapped in the intimidating jargon of quantitative easing, asset-backed securities, stochastic modelling and rational expectations.

But at its very core, the economy is merely the aggregate sum of human behaviour. It is a system built, maintained and occasionally destroyed by a species driven by deep biological imperatives, hormonal surges, fear, greed, the demand for social fairness and the love of a compelling narrative.

And then a group of economic nerds decided to characterise certain aspects of the world they observe in the market movements as a menagerie of animals that keep the machine moving.

Addressing a room full of local media at the 2026 Bloomberg Africa Business Media Innovators conference, Bloomberg News editor-in-chief emeritus Matthew Winkler delivered an optimistic assessment of South Africa’s economic trajectory, declaring that “the best may be yet to come”.

Reflecting on the political and financial shifts since 2024, Winkler remarked: “Leave it to the bond market to prove democracy is a capital school.”

He was certainly bullish about the economic future. Or he could be talking a bunch of bull… But he did have fancy Bloomberg Terminal-style slides in his presentation, so we give him the benefit of the doubt.

Not a circus

Apparently, South Africa has consistently stood out as the “best emerging market in the world”, Winkler continued. He also revealed that rand-denominated South African government bonds had delivered a 70% return.

For comparison, the benchmark Bloomberg Emerging Market Global Currency and Government Bond Index gained 15%, while second-place Colombia trailed South Africa by 20 percentage points.

Among 136 publicly traded South African firms with market capitalisations exceeding $200-million, the communication services sector is projected to achieve 10% revenue growth in 2027 and 11% in 2028, spurred in part by global AI momentum.

In 1936 (read: the tail end of the Great Depression), John Maynard Keynes repurposed the term “animal spirits” in The General Theory of Employment, Interest and Money to overturn the classical economics framework that didn’t survive contact with the reality of the 1929 Wall Street crash.

Keynes argued that economic decisions under radical uncertainty cannot be calculated purely by multiplying mathematical probabilities by expected profits. The world needed a more organic vocabulary to map the fading enterprises and cash hoarding of prolonged recessions.

Following the 2008 financial crisis (read: another market crash), Nobel-laureate economists George Akerlof and Robert Shiller revived Keynesian animal spirits within behavioural economics.

What these two responses reveal is that standard mainstream macroeconomic models rely on rational expectations, assuming market actors possess perfect foresight and processing power. Because these mathematical equations completely failed to predict major financial crises or systemic panics, gatekeepers use animal spirits as a convenient framework to explain unforecastable market movements.

Welcome to the financial zoo

A bull attacks by thrusting its horns upward. This market actor believes every stock is headed to the moon, views market crashes as buying opportunities, and treats economic gravity as a personal insult.

The bear, meanwhile, doesn’t hibernate in the winter in this economic characterisation. Instead it attacks by swiping its heavy paws downward, like the shape of the market graph during the downturn.

Bears live in a dark cave of pessimism, hoarding cash under the mattress, waiting gleefully for a financial apocalypse to rub in the bull’s face.

Monetary policy hawks, meanwhile, have visions of price increases and consumer inflation that whip them into a rate-hiking frenzy, while the doves they prey on just want the good vibes of full employment and are not shy of hitting the money printer if needed.

EU central bank chief Christine Lagarde calls herself an owl to avoid being pigeonholed as a rigid hawk or free dove. It provides her the policy flexibility to act meeting-by-meeting without making binding commitments to financial markets – and the traders can’t set their clocks to her policy decisions.

Why? Because modern macroeconomics confirms that economic cycles are heavily driven by sentiment shocks and viral narratives. Abstract mathematical formulations (such as yield curves, the Taylor rule and credit default swaps) are inaccessible to the general public. Translating monetary policy into relatable animal behaviours allows policymakers to communicate complex economic realities effectively through simplified storytelling.

Animal farm

Outside of these characterisations exists a more niche branch of animal metaphors. Stags buy and sell newly listed stock as frequently as Ramaphosa appoints commissions. Pigs, however, get greedy and hold their positions too long, while chickens would rather stick to bonds, slow growth savings and index funds.

Then you get the algorithm traders who mechanically follow only what the trends dictate – they’re called turtles because their messiah Richard Dennis farmed them like the turtles he saw while on holiday, not because they’re market ninjas.

And while it’s easy to picture our hat-wearing minister of finance as Marshal BraveStarr summoning animal totem powers in the face of the many market disruptions he has experienced in his tenure, there is no magic shaman who will help us navigate these turbulent times.

Instead, these creaturely metaphors are simply our way of making sense of a global financial machine driven by human emotion and unpredictable narrative shifts.

And while it feels like the global economy is hurtling towards the next crisis, which may or may not be an AI bubble pop, all we can hope for is that Winkler’s words are a true bullish move and not observations of a dead cat bounce. DM