We like to believe that as a civilization, we are too advanced to buy into fairy tales and myths, that we are simply too intelligent to believe there is a place where there are mountains made of pickled kielbasa and hardboiled eggs down which torrents of draft beer pour to the music of naked nymphs dancing on dew drops.
Or so we think.
Yet, there is one myth our oligarchs cling to that is taking us down the tubes, and that is an irrational belief in the existence of a free market where rational players make decisions based on rational self interest and in doing so benefit not only themselves but society in general.
Mob psychology is not rational. And that is what rules the market, not rational self interest. The current economic debacle came about because of the irrational belief that computers and arcane mathematical formulae had neutralized the boom and bust of the marketplace.
Then there was the merger and acquisition mania in which companies plunged into debt to buy other companies in the belief that by tweaking the numbers on a computer screen it could turn their red ink into black.
Of course, we must not forget the dot.com bubble. That was back when it was gospel that online shopping marked the end of the brick and mortar store, a belief that overlooked the fact that brick and mortar stores had survived the introduction of catalog shopping quite well.
But, it’s more than mob psychology. It’s also a matter of dysfunctional interpersonal relationships. If a boss tells an underling to do something totally irrational and counterintuitive, the very same supervisor who controls the underling's promotion and pay, then it is likely the underling will find a way to rationalize the bosses irrationality.
Idiocy, once it has passed through the underling’s matrix, becomes rational policy, especially if it can be quantified.
In all fairness, this is not a phenomenon found only in the corporate world. We see the same phenomenon at work in Afghanistan and Congress.
Then there is the ultimate madness found in the shadow of an emerging bubble, and that is the death-dealing four words, “It’s different this time.”
Personally, I prefer naked nymphs dancing on dew drops.