WSJ What’s News - An Economy Built on Speculation—for Better and for Worse

Episode Date: October 19, 2025

From the land mania following the Revolutionary War to the AI craze now, speculation is in the American economy's DNA. These kinds of big bets have shaped our present and continue to fuel tomorrow's economic growth. Host Katherine Sullivan unpacks the past and future of American speculators. This episode is part of The Wall Street Journal’s USA250: The Story of the World’s Greatest Economy, a collection of articles, videos and podcasts aiming to offer a deeper understanding of how America has evolved. Further Reading: From Sports to AI, America Is Awash in Speculative Fever. Washington Is Egging It On. Capitalism and Democracy Often Clash in America. They Usually End Up Better for It. Financial Bubbles Happen Less Often Than You Think Learn more about your ad choices. Visit megaphone.fm/adchoices

When you're with Amex Platinum, you get access to exclusive dining experiences and an annual travel credit. So the best tapas in town might be in a new town altogether. That's the powerful backing of Amex. Terms and conditions apply. Learn more at Amex.ca. either this is a bubble or I am going to be a trillionaire. Like there's no two ways about it.

Imagine if one day your side hobby suddenly became something that people started spending millions of dollars on. That's basically what happened to Mike Winkleman. And it was just like, wait, what? Like people are paying collecting JPEGs, paying money for JPEGs? Like, Winkleman is a 44-year-old father of two originally from Wisconsin. He started making digital art in 1999 when he was a freshman in college, long before something called an NFT existed. The JPEG files he made on his computer were never something he thought would make him rich.

Was it something that you thought you would make a living on? No, 100% not. It wasn't something I saw any way of making a living on. But Winkleman kept at it for the next 20 years. working in web and graphic design, while making art on the side as a passion project, under the name Beeple. His images were surreal, futuristic, and irreverent, often depicting people and themes from news and pop culture.

He gained a big and loyal online following. But, like he expected, he wasn't making any real money on his art. It was just hard to find ways to monetize it. Until, all of a sudden, it wasn't. NFTs. NFTs. NFTs. NFT market.

This is a story about how Americans, for centuries, have been caught up in the throes of speculation, for better and for worse. It's Sunday, October 19th. I'm Catherine Sullivan for the Wall Street Journal. This is USA 250, a podcast series connecting America's economic present to its past. We'll be occasionally dropping into your what's news feed over the next year, with stories that interrogate, celebrate, and make sense of our history. This is episode one, an economy built on speculation. From the Robin Hood trading app to meme coins to the stock markets rally on AI. It seems like a lot of people are taking risky, speculative bets.

Those kinds of bets throughout our history have helped shape our present, and they'll continue to shape our future. I'm on a journey to understand speculation's role in American history, where it's taken us and where we're going. Mike Winkleman started getting messages from his social media followers in 2020 during the COVID pandemic. My sort of like followers and sort of like friends and stuff kind of been like, what is this like NFT thing? If you like look at this NFT thing.

I was like, that does not have anything to do with like what I'm doing. I remember looking at it and being like, I do not get this at all. This is some weird crypto thing. Like I'm not into crypto. You might know a lot about non-fungible tokens. Or you might know very little. Basically, anything, real or digital, can have a corresponding NFT created for it. It's a unique identifier, like a barcode, certifying ownership and authenticity,

and it's recorded on the blockchain, a public, permanent digital ledger showing ownership. Winkleman had been trying to break into the mainstream art market for a while, but it was proving tough. There just wasn't much space for a digital artist. After talking to some other people about what NFTs were and how they could be used, something clicked. I was like, wait a second. This could be that moment for digital art

where it becomes recognized as a real sort of like part of art. Winkelman stopped doing his commercial design work and went all in on marketing his digital art as NFTs. It didn't take long for him to see returns. His first few pieces sold right around the time of the 2020 election. After the election, one of them was revealed to be an animated image of people calmly walking down a sidewalk, while a massive, graffitied carcass looking

eerily similar to Donald Trump lay in the grass behind them, with birds flying around it. It sold for $66,66, and it wasn't just Winkleman or Beeple making lots of money. It was like all of my friends suddenly were making like hundreds of thousands of dollars, and then suddenly some of them started making sort of like low millions of dollars on things. And so it was just like, what the hell is going on? This is just insane. By early 2021, he was approached by the legendary, then-255-year-old auction house, Christies. He offered Christie's a collage of 5,000 different images he had made over the past 13 years, titled Every Days.

It was the first ever piece of digital art offered by a mainstream art auction. On the day of the auction, Winkleman gathered at his home with his own. family to watch a live stream of the bidding. His kids sat coloring in the back of the room while he watched the price tick up and up and up. It was just like surreal and there was like one moment during the auction where it jumped like $20 million and it was like I just made $20 million like that. So we are in my living room and we're watching the closing of the auctions. already at, like, an absolutely ridiculous amount. Jesus Christ, what the hell?

Oh, my God, $50 million. As the end of the auction neared, there was a quick flurry of bidding. 69 million. I think it probably means digital artist here to stay. Winkleman's piece sold for a whopping $69.3 million. The next day, he booked a price. I'd never flown first class before, never flown business class before. And so this was just like what the thing was going on.

Get to this like crazy Airbnb mansion we'd like rented or whatever. And the buyer of the piece was like, okay, let's settle up. After a few hours with lawyers and after the Christie's fees were taken out, the money was transferred via crypto. Literally that next day, I had $55 million in my account. Wow. Done. But he also had a warning for people.

To be quite honest, I was the guy being like, yeah, guys, this is a bubble. I don't know what to tell you, like, it is a bubble. It's official. The NFT market is in the toilet. I mean it. This image of digital toilet paper is worth about $2,000. Here he is on CNN about a week after the auction. It's in some cases placing too much value on the work.

I think we're in some level of like a bubble when you have, you know, the paper NFT selling for $2,000 like that seems like a bit ridiculous. But did people just call NFTs a bubble? 100%. At its peak in 2021, the NFT art market was worth $2.9 billion. In the first quarter of 2025, it was valued at just $23 million. That's a 99% crash. After the break, Wiggle.

all the way back to a bubble at our country's founding. 18th century people could be as ambitious and obsessed with wealth and materialistic as 21st century people. At Desjardin, we speak business. We speak startup funding and comprehensive game plans. We've mastered made-to-measure growth and expansion advice, and we can talk your ear-off about transferring your business when the time comes. Because at Desjardin Business, we speak the same language you do. Business.

So join the more than 400,000 Canadian entrepreneurs who already count on us. And contact Desjardin today. We'd love to talk, business. Speculating over assets, spending. large sums of money in hopes of an even bigger return, that didn't begin in the crypto era. It goes all the way back to this country's founding. But in the 1780s, it wasn't NFTs that people were speculating on. It was something a little more tangible.

Land. People call the rage for land speculation an illness, a madness, a mania, a drug. That's Michael Blagman, an associate professor of history at Princeton University. He's written a book called Speculation Nation, Land Mania in the Revolutionary American Republic. One man in particular embodied this madness, a wealthy merchant named Robert Morris. Robert Morris is, he's like one of the forgotten founders, I guess you could say. Morris was no bit player in the country's founding. He's one of only two people to sign the country's three most important documents, the Declaration of Independence, the Constitution,

and the Articles of Confederation. He's at the center of the politics of the American Revolution and is in a lot of ways kind of single-handedly responsible for the last few years of the war. Morris helped bankroll the revolution, even using his own personal credit to buy supplies and arms when the Continental Army ran out of money. The nickname that he earns as a result of this

is financier of the American Revolution. After the war, Morris and many other wealthy elites in the New Republic became wrapped up in stories about America's untapped potential. There's this really widespread sense in the New Republic that the nation population is just going to absolutely mushroom. And people sort of try to compete with each other to figure out what the math there is going to look like. Early on, Benjamin Franklin kind of comes up with this back-of-the-envelope calculation

that the nation's population is going to double every 20 years. People say, no, the population is going to double every 50 years. The country didn't end up growing that fast. But those projections made people at the time wonder, where would all these future Americans live? There's this assumption that there will be so many settlers eager to establish their own individual yeoman Jeffersonian household, that land is going to be a commodity with basically an infinite market. With such ambitious predictions, how could any good businessman turn down the opportunity to buy in early? Wealthy men like Robert Morris began buying up large swathes of land, hoping to flip it to others.

And so therefore, the thinking is the price of this commodity can only go up. The land speculators literally have no suspicion that the price of land could possibly go down. And why would it go down? The American dream, the very ideals that had just won a war against the world's biggest navy, promised that things could only get better. And the assumption that land in these massive quantities is going to be profitable, it's really closely tied to ideas about the American political experiment and about the promise of the future of this, you know, fledgling American republic.

So there is, I think there is something uniquely American about it, at the time, and people at the time thought there was something uniquely American about it. An Englishman, traveling to the U.S. shortly after independence, attempted to describe the new country to a friend back home in a letter. Calling the new United States a, quote, land of speculation, he wrote, surely there was never a country where that passion was so universal or had such an unbounded scope. Robert Morris exemplified this passion. He dives headfirst in into speculative land schemes. So these really are, they're huge swaths of land.

These are, you know, tracks that are the size of Yellowstone National Park or Rhode Island. Altogether, Morris owned more than 6 million acres of land spread across six states, including an especially large plot in western upstate New York. He and many of the speculators at the time bought these lands on credit from struggling brand-new state governments. I asked Blakeman why these people may be. such big bets. The simplest answer is just that 18th century people could be as ambitious and obsessed with wealth

and materialistic as 21st century people. Speculation in the early American Republic was so rampant that an issue of the newspaper Gazette of the United States ran a poem entitled Speculation in 1791. It begins, what magic this among the people that swells a maypole to a steeple. Touched by the wand of speculation, a frenzy runs through all the nation. The frenzy that had driven speculators like Morris to buy land was built on hope. But that story about a hopeful future was about to collide with reality. For one, the new country was in a post-war economic slump.

Few Americans were ready to settle new plots of land. And there was another fact that speculators overlooked. Much of the land they bought was already occupied. by Native Americans, most of whom were not willing to give up their land to new white settlers. And these are powerful Native nations at the time, right? We're talking about big confederacies, the Shawnee's, the Cherokees, the Six Nations in present-day Western New York. These are really powers to be reckoned with for a lot of the 18th century.

So that kind of scares off a lot of potential purchasers. For Morris, this meant engaging with the Seneca Nation, which occupied much of the land he claimed to own in western New York. Morris had European buyers lined up, but he first needed to get the Seneca to agree to hand over their rights to the land. He starts waging a campaign in the late 1790s to get them to sign a treaty

relinquishing millions of acres of land. Eventually, Morris did force the Seneca's to hand over their land rights, but they held out a lot longer than Morris expected. In that time, jittery creditors started calling in their debts. And Morris couldn't pay. You know, this big web of loans that has underwritten the entire speculation boom starts getting really precarious.

And by early 1797, it's just like a drumbeat of financial failures. Speculators were forced to reckon with reality. They began defaulting on their credit in droves. One after another, wealthy aristocrats were hauled off to death. debtor's prison. Robert Morris, a founding father, the financier of the revolution, was eventually sent to debtor's prison himself, where he spent some of the last few years of his life, alongside other wealthy Sions who bet too big on the land market. When we come back, how booms and busts have become the American way.

Speculation always depends upon a narrative. It always depends upon a story about the future. And who gets to tell that story, who believes that story, who participates in creating that narrative. Jonathan Levy is an economic historian at the Paris University, Seance Poe. He wrote a book called Ages of American Capitalism, a history of the United States, A common theme throughout that history is speculation.

But of course, the word itself has a broader meaning about an investment in an open and uncertain future. And it's certainly the case that many Americans, going back to the colonial beginnings of the country, have often defined the project of the United States with respect to an open future, that the American project itself was speculative. Of course, speculation can often go wrong. It certainly did for Robert Morris. That's even when he had the right story about the future. His bet that the far reaches of the 13 colonies would be settled was correct.

Settlers did eventually move to the land he once owned. Millions of immigrants did come to America and help build cities in western New York, in Kentucky, and Virginia, just not until decades later than he bargained for. There's another more recent example of real estate speculation gone wrong in America. One that you might remember, the 2008 financial crisis. It was a manic Monday in the financial markets. The Dow tumbled more than 500 points after two pillars of the street tumbled over the weekend. Lehman Brothers, a 158-year-old firm, filed for bankruptcy.

In the lead up to 2008, what was the narrative that was driving speculation? It wasn't a bold, new, optimistic vision for the future. It was one that imagined things would never change. Here's Jonathan Levy again. One of the causes of 2008 was that statistics told you that U.S. housing prices had never moved downward nationally, like across the board. But then you construct a market premised upon that belief, and then it happens. And then once it happens, everybody panics. Bankers weren't imagining an ambitious, unknown future.

They weren't even looking at what was really happening in America. Levy says they mostly just wanted to keep making money, as dramatized in this scene from the movie The Big Short. I want to buy swaps on mortgage bonds, a credit default swap. You want to bet against the housing market. Those bonds only fail if millions of Americans don't pay their mortgages. That's never happened in history. This is Wall Street, Dr. Berry.

If you offer us free money, we are going to take it. Levy describes this kind of speculation, speculating for speculation's sake as kind of useless. The money isn't channeled into a new industry or vision. It just circles around, passing back and forth between speculators. Values go up, values go down. There's boom and bust, but it really doesn't relate to the investment or productive side of the economy.

It really doesn't do anything except for sort of spin its own top. When the top stops spinning, we know what happens. And unlike the 1700s, it's not usually with a prison cell full of elite bankers. The subprime mortgage crisis led to the Great Recession, which rippled through the whole economy. Now it's official. We are in a recession. 2008 will be remembered as the worst year since 1929. People are getting hit hard. Businesses and individuals are all struggling.

Nearly 10 million American families lost their homes between 2000. and 2014, the unemployment rate nearly doubled by 2009, and household wealth dropped by 18%. But Levy says there's another side to speculation. I tend to think about speculation driving and furthering productive investment in the future. As destructive as speculation can be, Levy doesn't think it's inherently bad. He thinks it can often be the opposite. It can be generative. And also speculation requires trust. Trust, trusting other people, trusting other people's narratives about the future.

It requires having confidence in the future. For better or worse, it's speculation that's given us a lot of what we have today in this country. Railroads, the Internet, the settling of the West. And maybe now, AI? Just this month, OpenAI's C-O, Brad Lightcap, told Fortune magazine that bubbles are just a normal part of growth. Well, you know, bubbles are kind of a natural part of this. And I think it's somewhat true if you kind of look at the history of it, that bubbles have almost always preceded some important technological shift. Just like land in the 1790s or NFTs in early 2021, no one knows for sure if or when today's speculative bets will backfire.

But even Sam Altman, the CEO of OpenAI, told the verge in August that he believes there will be losses. He said, quote, someone is going to lose a phenomenal amount of money, and a lot of people are going to make a phenomenal amount of money. In the meantime, people keep playing along. So far this year, the NASDAQ 100 has hit more than 30 records, largely driven by AI stocks. Jonathan Levy says that playing along is a natural part of speculation.

It's another narrative that I think has always been important, but it might be more important recently at speculation, and that is like fear of missing out. That's right. FOMO. Sociologists, anthropologists study this seriously, that financial markets, unlike other markets, are not competitive.

Like, competition is not the driving social dynamic. Instead, it's imitation. They're driven by herd behavior, not by individuating competition. He says even he, someone who has closely studied the risks of speculation, has been tempted to jump into speculative, risky bets. Some of his old friends from high school text him about getting into crypto and meme coins. He hasn't bought in, but he's thought about it.

It's a powerful human emotion, right, to feel like everybody's making money off this stuff. You know, shouldn't I be too? And that's it for this special edition of What's New Sunday for October 19th. USA 250 in Economy Built on Speculation is produced by me, Catherine Sullivan, with supervising producer Jana Heron. Additional support from Falana Patterson, Chris Sinsley, and Zoe Colkin, sound design and mixing by Jess Fenton, fact-checking by Aparna Nathan. Special thanks to Charlotte Gartenberg, Angus Berwick, Chris Adamo, Katie Jeminder, Deja Ballardo, and India Price.

Michael LaValle wrote our theme music. Jessica Fenton is our technical manager. Aisha El-Muslim is our development producer. Chris Zinsley is our deputy editor. And Falana Patterson is the Wall Street Journal's head of news audio. I'm Catherine Sullivan, and we'll be back in December with another installment of our USA 250 podcast. What's News? We'll be back with a new episode tomorrow morning.

Thanks for listening. Thank you.