Symptoms of denial, omnipotence, triumphalism and over-activity were manifest in reaction to a series of crises—the fall of the Soviet Union, the Japanese and the Asian/LTCM crises—when the West did not respond with caution but instead by increasing risk:
I suggest that these ruptures caused considerable anxiety among these leaders, but that, rather than heeding the lessons of these crises, such leaders responded by manic, omnipotent and triumphant attempts to prove the superiority of their economies in relation to the vulnerabilities thrown up by these ruptures. This response thus entailed the destruction and obfuscation of the data and the dismantling of regulatory warning systems, as well as the creation of reassuring myths such as the ‘great moderation’, all of which led to a culture in which massive increases in risk-taking were seen to be justified. I go on to argue that this manic culture was influenced by a triumphant response in the West to the collapse of communism. I argue that the conditions for the 2008 credit crisis were thereby set in place.
Stein warns that continuing on this path will lead to collapse:
If the financial crisis of 2008 startled us, we should be reminded that this was not the first time that a social and economic system should founder on the rocks of mania and triumphalism. Writing in the 5th Century BC, the Greek historian Thucydides described how the omnipotence of the Athenians—as well as their desire to triumph over the Spartan enemy—led the great Athenian civilisation to disaster (Thucydides, 1972). In my attempt to follow the tradition set by Thucydides, I hope that, by analysing and trying to understand history, I can make some contribution to the literature that will help us learn from the past. While I have argued that our culture is unwittingly and subtly influenced by forces of which we often have limited awareness and control, I hope that our understanding of these matters will go some way to diminish the power of these forces in the future.
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