Populism and the madness of crowds

Although written in 1841, it has always been in print: Extraordinary Popular Delusions and the Madness of Crowds. The reason, of course, is because everyone – and that means you (and me) – likes to laugh at the stupid ideas other people have. The problem with the governance in our democracies is that those at the top – our elites – harbour a set of delusions so truly unfounded it is hard to credit anyone with such bizarre ideas. Open borders, global warming, demand-driven crony-capitalist economic theories, are forms of delusion that for some reason make these elites rich while making the rest of society poor. So they do all the laughing and we try to wok out how to stop them from ruining us even further.

Let me take you to the delusion I know best, the belief taught in virtually every economics course across the West, that economies can be made to grow through public spending on unproductive forms of capital. In a recession, lift the level of “G”. Works every time, other than on every single occasion it has been tried. But if you are on the receiving end of this expenditure, the idea seems utterly fantastic.

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