Psychotherapist and former banker Lucy Beresford says we’re all in denial about our guilt for the debt crisis
During the recent economic nervous breakdown, pundits everywhere put forward every possible financial cause. But they only told part of the story. Economics is also governed partly by human behaviour. So a fuller understanding of the crisis, and our reactions to it, requires psychological interpretation. Trouble is, it makes for such uncomfortable reading: like alcoholics refusing to admit our addiction, we are in acute denial about our collective guilt.
It’s easy to see why people reacted to the financial meltdown by panicking. We are group creatures after all, and historically our very survival depended on being able to detect correctly the signals within the tribe. Misinterpret the look on your fellow spear-carrier’s face and you became the local mammoth’s next lunch. A year ago, the queues outside Northern Rock tapped into our fear of annihilation, where money (our savings, our mortgages, our pensions) equals our very sense of self. Fast forward to rumours of HBOS going under and hysteria — understandable in psychological terms — ensues.
But what’s fascinating about the crisis is how skilfully we have resisted acknowledging our part in it. Our collective ‘shadow side’ took risks, but the ease of access to high-interest accounts, cheap credit and 125 per cent mortgages blinded us to the real value of those risks. Psychologically we thought we’d become invincible — which is how hedge funds evolved, their creators truly believing they could outsmart the market. We felt omnipotent, rather in the manner of a child who believes he is the centre of the universe. This ‘Little Prince’ syndrome is typical of narcissists, who are always right and who hate to be criticised.
Comments
Join the debate for just £1 a month
Be part of the conversation with other Spectator readers by getting your first three months for £3.
UNLOCK ACCESS Just £1 a monthAlready a subscriber? Log in