Wolf of Wall Street
Posted: May 22, 2026 Filed under: Child Centered Activities Leave a comment
In 1891, with his Mother’s blessings, a 14-year old boy ran away from home in Acton, Massachusetts. Needing help on the family farm, his father had withdrawn him from school, but the strong-headed boy refused and so, with $5 from his Mother, off to Boston he went to seek his future. He found work as a “board boy” posting stock quotes at a Paine Webber brokerage. Working six days per week, five trading hours per weekday and two hours on Saturday, he was paid $5 per week.
96 miles north, but a lifetime away, the workers in Maine’s paper and pulp mills toiled 10 to 12 hours per day, 6 days per week, amidst deafening noise, excessive heat with high-pressure steam, and exposure to toxic chemicals like chlorine and sulfur dioxide. The “machine men” were paid $18 per week, while the “rag women” earned between $4.80 to $6 per week.
In 1890, only 45% of American workers earned an income above poverty level. Children, as young as 4 or 5 years old, but often by age 7 worked eight to twelve hours per day, six days per week, to earn $1. The Maine Memory Network reports, “Two million school-age children each worked fifty to seventy hours a week. Some of the children’s parents could not take care of them, so they were put in a place where they were forced to work while being contained by barbed wires.” In 1900 1 out of every 5 children was employed, but to the Puritan mill and factory owners this was a social good, even a favor, providing gainful employment.
Down in Boston, our “board boy” – quick with numbers and exceedingly clever – began frequenting the “bucket shops,” businesses that allowed bets on the rise and fall of stocks or commodities without actually purchasing the underlying contract; modern day prediction markets – Polymarket, Kalshi or Predictit – are high tech bucket shops.
In 1892 he made his first bet on five shares of the Chicago, Burlington and Quincy Railroad, returning a profit of $3.12, for a 62% return. By the age of 16 he quit his job and began trading full time, earning about $200 per week (the equivalent of $7,800 today). To repay his Mother’s gift that helped him run away, he returned home with $1,000; she disapproved of his gambling, to which he explained that he was, in fact, “speculating.” With his rare gift, he pioneered day trading.
By the age of 20 he had achieved a 1,000% return from his trading, and was banned from Boston. He moved to New York City, where he turned $10,000 into $50,000 in five days, and then, in 1901 at the age of 24, he went long the Northern Pacific Railway turning $10,000 into $500,000 (equivalent to $19.5 Million today). Such is the extraordinary power of trading the stock of fictive persons.
Back north in Maine, 1901, Hugh Chisholm’s International Paper Company controlled 60% of the American newsprint market, but espying an opportunity in the high-quality book and specialty papers, he established the Oxford Paper Company, its Rumford Mill producing both pulp and paper, about 44 tons of paper per day. Through International Paper, Chisholm controlled the paper trust, while through Oxford Paper he had the monopoly on producing all postal cards for the United States Post Office.
This is a story of “thought bearing animals,” real persons, using fictive persons – joint stock companies – to achieve dominance and power over their peers, the persons – men, women and children – who make things.
With each passing year, our “board boy” grew stronger, until he became known as the “Wolf of Wall Street.” 1906, still in his 20s, he went short the Union Pacific Railroad before the San Francisco earthquake; anticipating a decline, he sold the shares and when their value went down he made a quick $250,000 profit. During the Panic of 1907 he was short the entire market, making $1 Million in a single day.
The panic of 1907 caused a severe nationwide recession, surpassed only by the Great Depression. Bank runs caused widespread failures, jobs were cut and as credit dried up, industrial output dropped by 30%. J.P. Morgan personally stepped in to bail out the entire New York Stock Exchange and to persuade the “Wolf” to stop selling. The Wolf did, but then went long, buying back shares to earn $3 Million, on the rebound.
To the clever and cunning, the fictive person can be beneficent. Back north, in the river valleys of Maine, for real persons hardship only worsened. On Wall Street, the Wolf could earn $1 Million in a day, while in Maine’s paper mills, unskilled laborers earned $1.50, machine tenders $2.50 to $2.75, while Foremen earned up to $3.50 per day. With the market for paper weak, the warehouses full, International Paper Company and the Oxford Paper Company served notice that wages would be cut by 7.75%. But the cost of living had increased 11% in two years, and so the Paper Makers Union respectfully declined the Company’s offer. On 2 August 1908 the workers in Jay, Rumford, Livermore Falls and Orono went on strike.
The Union made two serious errors in judgment. The high inventory meant the corporations held the position of strength, so they shut down the mills entirely, laying off all the workers, including the Pulp & Sulphite Union members. The Paper Makers Union had acted alone, not including the Pulp & Sulphite Union in their decision. The corporate fictive person, using the strategy “divide and conquer,” easily argued they wanted to keep people working but had been forced to shut down. Things only got worse. International Paper rejected the Paper Makers Union demands and reopened the mills, the Pulp & Sulphite Union gladly returning to work, at a 5% wage reduction. International Paper advertised for strike breakers, who took those Union jobs. Capitalism does not work by majority rule, the real persons toiling in the paper mills lacked power; they were forced into a one-sided employment contract.
This discussion about fictive persons versus real persons rests upon a legal cornerstone laid down almost 90 years earlier, neither in Maine nor Massachusetts, but in neighboring New Hampshire. Trustees of Dartmouth College v Woodward is the landmark United States Supreme Court decision, in 1819, that established corporate charters are contracts inviolate and sacrosanct, protected by the Contracts Clause, Article I, Section 10 of the United States’ Constitution.
The argument was over education, and the irony is that education emphatically is and has been of local control, per Amendment 10 of the Constitution. The state wanted to make the private college public, to benefit all of its citizens. The State Supreme Court agreed, ruling in favor of the public good. But on appeal, at the Federal level, private contracts trumped public education when the United States Supreme Court ruled 5-1 that the contract is unassailable, regardless of the public will. The Dartmouth ruling became the bedrock of American free enterprise, protecting and empowering the growth of private corporations.
The fault line in that bedrock, however, is the myth that real persons are entirely rational actors. That fault line emerged in 1776, not in the “City of Brotherly Love,” but in London, England where Adam Smith published The Wealth of Nations, the foundational text of classical economics. Smith argued that “natural liberty” (free enterprise) was more effective and efficient than heavily regulated trade. His famous quote is, “”It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
That idea eventually grew to embrace Homo Economicus (Economic Man) which defined real persons as perfectly rational, narrowly selfish agents driven entirely to maximize utility and personal gain; markets are efficient because they are wholly rational. To his credit, Adam Smith cautioned that free enterprise, if unchecked, would lead to collusion and monopolies, “a conspiracy against the public, or in some contrivance to raise prices.” In the river valleys of Maine, the fictive person Homo Economicus arguably did conspire against the better interests of the public, being the real persons.
The Wolf of Wall Street was wise to that myth. Extraordinary Popular Delusions and the Madness of Crowds is a history of financial mania and non-rational herd behavior, a seminal book published in 1841 that directly contradicts the cherished myth of Homo Economicus. The Wolf studied that book closely, feverishly, which in part is why he went short the market – making fortunes – both in 1907 and at the Great Crash of 1929.
Here at our homeschool academy, the working definition puts a premium on the multidimensional, rather than the mono-rational, person. We embrace emotional intelligence more than narrow productive output.
My son is the same age as was the Wolf when he ran away from his childhood home in Acton, Massachusetts. My son can tour the river valleys of western Maine and see first hand the cause and effect of inviolate contracts and rational self interest of fictive persons. My task is to broaden his understanding, to deepen his empathy, to prepare him for a world that seems increasingly out of balance, as if real persons matter only as mere workers to feed the industrial machine.
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Red Bud covered with blossoms, Gaia shouts, “summer is near!”
an Art Farm 