Psychopathology at the Limits to Economic Growth: Part Three

The Psychology of Decision Makers, Professionals and the Elite is part of “the system”

To respond rationally to a crisis of the magnitude that humanity faces requires a common understanding of what is happening and widespread agreement of what must be done. Unfortunately a number of features of the psychology of the elite will not make this easy to achieve. Although people think about “personality” as features of “individuals”, certain personality traits, and group responses by those who manage the rest of us, are very common and arise from the very experience and existence of the inequality of power relationships. They are, in fact, features of the system. They are systemic.

It is important to understand that the psychology of the elite is an integral aspect of the system of power. For example, any elite has an inherent tendency to hubris – which involves overestimating their own abilities and power. This is a problem when they take decisions for everyone else. Since ancient times elite actors who overreach and bring about disaster have been the basis for multiple stories of tragedy. These stories often focus on the elite actors – what makes such tragedies even worse though is that they commonly draw in the populations that they lead. We can watch the dramas of the final moments of the heroic defeats as the leaders meet their end – but these defeats only happen after hundreds, thousands or millions of ordinary people have had their lives extinguished. The true tragedy is not that of the leaders it is the stories of these millions.

The issue here is that an elite upbringing and awareness of a historical tradition may instil a feeling of entitlement and self confidence in the offspring of its elite, particularly when they have access to abundant resources as they start out in life. With abundant resources one can fail and fail several times and then start again. Such conditions and the psychology of invulnerability that is created may foster mentalities that are fatally inappropriate in a society nearing a turning point like the limits to economic growth. Looking backwards to triumphant historical narratives rather than accurately looking forward is to fatally delude oneself if a historical turning point is ahead.

Achieving agreement around new systems of ideas is difficult enough without being encumbered by past glories as one’s model for history. As John Maynard Keynes put it

“The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.”

People who are over-specialised are especially vulnerable. They are often quite incapable of thinking outside the box of their specialism.

Difficulties of creating a rational consensus: The idiocy of specialists

For the 18th century moral philosopher and economist Adam Smith it appeared that the division of labour and specialism was a powerful force for increasing the productivity of labour. Economists cling to this idea. Yet specialists can end up as experts across a very narrow subject. Worse, they can end up intellectually warped by their specialism because of a tendency to think that the concepts that they derive from their trade is applicable in other areas where, in reality, it is totally inappropriate.

In France people like this are said to be suffering from “Deformation professionelle”. In Germany people like this are called “Fachidioten”. Examples are the philosophy lecturer who cannot small talk but gives lectures at social parties, the official in an environmental agency whose only topic of conversation is carbon efficiency or the policeman who is unable to take in the environmental crisis as a problem for themselves and their family but, instead, instinctively feels that environmental activists are likely to be law breakers or even “terrorists”.

Specialisation idiocy or “professional character deformation” has serious consequences when its practitioners are influential members of the elite. Police harassment and surveillance of environmental activists is one example but there are many others. For example in the 19th century when societies were turned upside down by industrialisation and by the robbery of the commons from ordinary people, the emerging medical profession made a claim to be able to treat many of those driven to insanity and we still have a dominant medical model of psychiatry with an emphasis on pharmaceutical treatments.

Economists and people working in the finance sector are also candidates for being considered “Fachidioten”. Their distorted thinking completely warps environmental policy.

Take, for example, the prevalent idea that the best way to “protect nature” is to “financialise it” and to “insert nature into financial markets” which is promoted by university professors and by the United Nations Environmental Programme. This insane idea appears to make total sense to the actors and theorists of the market economy – as it would. Their ‘job’ is theorising the making of money in markets – therefore, to save nature, they reason that people must be incentivised to be environmentally friendly by an extrinsic reward system. There has to be money in it.

Means and ends are reversed in this self serving logic – the end of the schemes that they devise are always about making money and the means to make money is by cleverly contriving arrangements in which you make most money by “protecting nature”. However the cunning plans of the economists are gamed and turned into scams – like the VAT fraud in the EU Emissions Trading Scheme or the carbon credits that have been awarded for projects that were not additional but were going to occur anyway….

Economists are clearly right up there helping to maintain the elite consensus about a growth economy in which the way out of the crisis is to rescue too big to fail banks and zomby companies, fostering new techno-fixes for environmental problems which they hope will be new sources of economic growth and, above all, by disciplining the labour force and ordinary people with more doses of austerity to create misery, insecurity and fear. To understand why mainstream economics, obsessionally focused on economic growth despite the ecological crisis, is quite literally suicidal, see my text, The School of Economics as a Suicide Academy.

A key idea of mainstream economists is that for each of the problems there will be a techno-fix which will allow growth to continue. The economists cannot take in mentally that what they propose is not bio-physically viable. It is when one evaluates their faux innovations – like bio-fuels – not as market propositions using money measures but bio-physically using measures like the number of workers needed and the area of land then they fail to stack up as genuine solutions.

Granfalloons – collective delusions fostered by policy

In their book The Biofuel Delusion Mario Giampietro and Kozo Mayumi describe Biofuels as a “Granfalloon”. A Granfalloon is a delusion that appears to be the answer to an environmental problem which is very profitable for a vested interest coalition, but in reality is futile. Given the subsidies to promote them, biofuels make profits for farmers growing crops like maize to be turned into ethanol but when you do the sums you discover that producing biofuels is a waste of time. Thus Giampietro and Mayumi discovered that the energy inputs needed to create the fuel is almost as great as the gross energy delivered in the final fuel output. Huge areas of land and a lot of labour are needed to produce a tiny output of net energy. For Italy to supply 30% of its transport fuel by biofuels without fossil fuel inputs would require an estimated 94% of the Italian labour supply to work in agriculture and around 7 times the agricultural land in production.

Who eats the losses? Self protection by the elite as a barrier to adaptation

There is an inevitable mathematics of the limits to growth crisis. As the economy contracts some people must eat the losses – but which people? From the point of view of avoiding an ecological catastrophe and climate change it would be best if this group were the rich because it is their consumption that accounts for most of the overshoot and most of the climate emissions.

The group of people who constitute the top 10% of income earners account for 50% of lifestyle consumption greenhouse gas emissions. By contrast the poorest 50% of the world’s population account for just 10% of total lifestyle consumption emissions. It follows that solving the ecological crisis is impossible without cutting the consumption of the rich. In effect the social psychology of the rich – their grandiosity and sense of entitlement to a wealthy consumption lifestyle – is their assertion of the right to destroy the climate and biodiversity of the planet for their personal gratification.

For the rich the idea of solving the crisis by cutting their income and consumption is very threatening not just to their bank accounts but to their self regard, to their estimation of themselves. They will say that their vast wealth is earned by what they do or have done and that they have earned it. This is an illusion. A study of the vast wealth of US billionaires found that approximately one third of billionaire wealth comes from inheritance and a further third comes from crony connections of big economic interests with government. [1][2]

Egos measured by bank account balances

The wealthy need their wealth to keep their egos pumped up. Every rich and powerful person has, at some time, in their infancy, been small and vulnerable and their experience at that time has a powerful impact on how their personality will be calibrated in later life. People who are made to feel small, unimportant and vulnerable early live their lives to try and escape such feelings ever occuring again. Take Donald Trump as an example.

In an interview between Aaron Maté and therapist Gabor Maté about “Russiagate”, Gabor Maté says describes Trump like this:

GABOR MATÉ: Donald Trump is the clearest example of a traumatized politician one could ever see. He’s in denial of reality all the time. He is self aggrandizing. His fundamental self concept is that of a nobody. So he has to make himself huge and big all the time and keep proving to the world how powerful and smart, what kind of degrees he’s got and how smart he is. It’s a compensation for terrible self image. He can’t pay attention to anything, which means that his brain is too scattered because it was too painful for him to pay attention.

What does this all come down to? The childhood that we know that he had in the home of a dictatorial child disparaging father, and a very weak

AARON MATÉ: Fred Trump, his father.

GABOR MATÉ: Who demeaned his children mercilessly. One of Trump’s brothers drank himself to death. And Trump compensates for all that by trying to make himself as big and powerful and successful as possible. And, of course, he makes up for his anger towards his mother for not protecting him by attacking women and exploiting women and boasting about it publicly. I mean, it’s a clear trauma example. I’m not saying this to invite sympathy for Trump’s politics. I’m just describing that that’s who the man is. And the fact that such a traumatized individual can be elected to the position of what they call the most powerful person in the world speaks to a traumatized society…..”


The very rich like to profile themselves through and by the display of their wealth and a good way of understanding them is as “marketing personalities” motivated by extrinsic values. In his book Affluenza Oliver James, repeats the findings of Saunders, “Marketing characters experience themselves as commodities whose value and meaning are externally determined.” Such characters have the following traits:

“… eager to consume; wasteful of goods, disposing and replacing them frequently; having
conventional tastes and views; uncritical of themselves or society, un-insightful; agreeing with the
statement “having makes me more”; a tendency to publicise and promote themselves; experiencing themselves as a commodity whose value is determined by possessions and the opinions of others; and with values portrayed in television advertisements.”
(James, 2007)

Studies show people like this are more likely to be “materialistic, conformist, unconcerned about
ecology, expressive of anger, anxious and depressive.” A subsequent study by Saunders, again cited by James, explains how marketing characters:

“… place little value on beauty, freedoms or inner harmony. Their main pursuits are social
recognition, comfort, and having an exciting life. They are extremely individualistic in their
social values and do not regard social equality as desirable. They compare themselves obsessively and enviously with others, always having to have more and better things than others, believing inequality to be man’s natural state.”
(James, Affluenza, 2007, p. 66)

Such people are never contented even when they have lots of money. In an article about what matters to the super rich, columnist George Monbiot describes Saudi Prince Alwaleed. His self-esteem appears to depend on where he is placed on the Forbes global rich list. It seems that the Prince was disturbed when he was listed in Forbes at $7 billion – because this was less than he claims “to be worth”.

A huge amount of ecological damage and resource depletion is accounted for by the lifestyles of these people. Given their motivations and political power it is hard to believe that they will passively let go of the bulk of their wealth as degrowing economies contract. On the contrary during a collapse which threatens the wealth, power and self regard of people like this, they will do everything in their power to be considered “too big to fail”, to be bailed out again and to transfer the losses of the collapse onto “the little people”. As one very rich woman, hotelier Leona Helmsley said, expressing the attitude: “Only the little people pay taxes”.

Hubris, optimism bias and recklessness

To rise to the top most wealthy people must have been successful in conventional terms – which usually means they have been lucky. For example they are likely to have had wealthy parents, have gone to elite schools and universities, and be “well connected”. Even when they make mistakes and experience set-backs they have the resources and backing to start again – possibly several times. They are therefore confident about themselves and their own judgement and lack the caution that others learn from when they suffer set backs experienced at a time when they have few or resources in reserve. A growth economy on the way up is an environment that does not challenge these kind of people with an experience of hard times. Instead it prepares them badly for when the going gets tough.

Political leaders like this lack caution. You can recognise these comfortable and arrogant types by the reckless way that they make plans which impose risks on other people and then denounce those who draw attention to all the things that might go wrong by accusing them of “fearmongering”. To people like this the idea of a “Precautionary Principle” has no place. They seek to undermine regulatory checks on business as well as attacking the need for organisations like trade unions which would put a check on their power.

The incurably comfortable and optimism bias

Whereas mental health problems for the poor can often be related to the impossibility of managing lives that are being driven into destitution there is a opposite problem among the incurably comfortable. Without a lived experience of limits and without the experience of real risk, they operate recklessly – not only with their own lives but by taking risks with the lives of others. Usually they get away with this.

There is research evidence for this in psychological literature about “optimism bias”. The point here is that everyone tends to underestimate what they don’t know in favour of what they do know (or think they know).

In his book, Thinking, Fast and Slow, psychologist Daniel Kahneman labels the common fallacy that underpins most of how we interpret things – he calls it the WYSIATI fallacy – What You See Is All There Is. It is related to “optimism bias” and “planning fallacy” – assuming things will work as we plan them, on time and on budget, because we underestimate the unknown unknowns that drive us off track.

“Optimism bias” also occurs in health and safety risk assessments at work. It occurs when assessing the risks of economic activity having negative environmental impacts. Risks for oneself and others are underestimated, in part because unforeseen things happen. Another name for the same thing is Murphy’s Law. If things can go wrong then eventually they will.

What we see is not all there is – the German philosopher Heidegger describes our experience of being in the world with the metaphor of being in a clearing in a forest. What we see is what’s in the clearing but beyond that things remain unknown to us. Others speak of a “cloud of unknowing”. In different circumstances politicians and military types speak of the “fog of war”. To get a proper sense of where we are really, it helps to realise that there is a limit to our knowledge.

Yet there are some kinds of people – entrepreneurs, politicians, field marshals – who have to give the appearance of knowing just where they are, and exactly what they are doing all the time. To gain a following these wizards must engender confidence. Displaying doubt would remind potential lenders that they might lose their money if they lent it. Doubt might lead potential voters to consider voting for someone else. If the field marshall shows doubt the soldiers might start to think that it is time to run away.

There are reasons to convey total confidence in one’s infallible judgements but there is a problem. No one is infallible. People who over estimate their own judgement and ignore their critics set themselves and other people up for disastrous mistakes.

What Depressive Realism Tells us

A connected idea is that of “depressive realism”. Experiments in the late 1970s seemed to show that people who are depressed were better at judging how much control they had over an experimental situation. People who were not depressed overestimated their degree of control – which boosted their self esteem. The “sadder but wiser” experiments give us a different way of thinking about people who are not depressed. Are they engaged in self deception in favour of self esteem? Psychoanalyst and philosopher Julie Reshe explains how:

“Positive illusions are common cognitive biases based on unrealistically favourable ideas about ourselves, others, our situation and the world around us. Types of positive illusions include, among others, unrealistic optimism, the illusion of control, and illusory superiority that makes us overestimate our abilities and qualities in relation to others. Study after study indicates that such illusions are rife. Around 75-80 per cent of people evaluate themselves as being above average in almost all parameters: in academic ability, job performance, immunity to bias, relationship happiness, IQ. However, cruel mathematical laws tell us that this is an illusion – all, by definition, cannot be above average.”

Rather than thinking of these illusions as being inherent in the psychology of all human beings, we need to be aware that this is an American and western phenomenon. Thus the therapist Oliver James has written about a “rose tinted bubble of positive illusions” and that “The truth is that many societies, especially those in east and south east Asia do not live in the bubble and start, if anything from its opposite: a harshly realistic view is valued.”

So why? If James is right, could it be that it is a social psychological effect of the economic growth process itself? For 200 years, more energy applied to more machines has brought more control over transport, communications, habitat, food and more products… this means that the managers and decision makers who lead a growth society have created a fatally complacent society wedded to hubris. There is an element here that can also be described as “continuity bias” – the forward extrapolation of past trends which it is assumed will go on for ever. This taken for granted assumption is, in this case, based on a failure to understand that continued growth of production and incomes depend on continued growth of the energy supply – yet the energy sector is entering a period of crisis and this is an assumption that is counter to the evidence.[3]

Nevertheless at the time of writing, in September 2020, the collective illusion prevails in policy circles and among the elite. It seems likely that the managers are particularly prone to illusory superiority and unrealistic optimism as a way of justifying to themselves and others their hugely inflated incomes compared to everyone else. In reality of course all that is happening is that central banks are creating huge amounts of money and throwing it at this elite to maintain their confidence in defiance of the crumbling economic reality.

Crackpot Realism

History does not repeat itself exactly but some situations happen over and over again. Cock ups by over confident leaders happen repeatedly. For example, a group of very important people decide that something is a good idea and instruct another group to make it happen. The other group has a subordinate status but a better grasp of what is possible because they have real life experience. The subordinate group warn that what their superiors want is not practical but are ignored and overruled. Alternatively the subordinate group are unable to warn their superiors because to do so involves challenging higher authority. The subordinates do their best and there is a disaster.

UK government preparations for Brexit provides many examples.

Scapegoating and paranoia

A society entering a period of crisis is rarely led by clear sighted, stable and cautious people. The reverse is more likely. A society in turmoil is likely to be led by people with simplistic promises and then blame narratives when things go wrong, that channel discontent against victims who cannot fight back.

When the super-wealthy people fund and support right wing fanatics, the consequences are serious. In a democracy each of us have one vote but the rich are far better resourced, better connected into the corridors of power, better able to lobby and pull strings. They can get journalists to argue their point of view. If these people feel in any way threatened, which is inevitable when the 85 richest people on the planet own as much as 3.5 billion poor people, they may use some of their money to finance newspapers, media and politicians with paranoid messages that seek to turn the growing tide of anger and frustration away from themselves and back onto scapegoats – including onto displaced, dislocated and vulnerable people like refugees. This includes onto groups traditionally targeted by the far right, including Muslims and Jews.

It is very handy for stabilising an unequal society for frustration to be focused on groups to hate. But it creates an upside down view of the crisis and directs attention away from positive solutions.

A recent article by Nafeez Ahmed points out that this ampification of the paranoia and hatred of the rich against scapegoat communities has convinced people that the big threat in the USA is Muslims, even though paranoid white racists are 4 times more likely to gun down strangers with black skin in an epidemic of mass murders and hate crimes, mainly be white racists. Ahmed describes academic research which shows how anti Muslim tweets by Donald Trump have been correlated with hate crimes against Muslims. He also describes how, following Katie Hopkins, Trump has endorsed 4 proto fascist politicians around the world, namely Brazilian president Jair Bolsonaro, Italian interior minister Matteo Salvini, Hungarian prime minister Viktor Orban, and leader of the Polish Law and Justice party (PiS) Jaroslaw Kaczynski.

Exploiting vulnerability, creating insecurity as a tool of power

A crisis does not just make millions of people poor – it makes thousands rich and creates an army of functionaries of parasitic power structures – like the liars from the security services who get taken on eagerly as experts by the corporate media, or like those who find meaning in their life persecuting people on their way down – the moral wretches who police and staff the remnants of the social security systems which exist to make the life of destitute and vulnerable people a misery.
According to cybernetics theorist the late Stafford Beer, the purpose of a system is what it does – this being so people who serve what remains of the social security systems find that their purpose in life is to make people stressed, frightened and insecure. It is to make sure that vulnerable people are tied up with unachievable and completely futile tasks like looking for paid jobs when there are none. Above all they must be made to feel that they are to blame for their insecurity, that they are failures – not that the managers and politicians have failed comprehensively to understand what has gone wrong and what can be done about it.

As it becomes more difficult to make ends meet and to manage the life style packages of a collapsing consumer society, the people who are struggling most have their problems added to with demands that they look for unavailable work, that they move out of accommodation with spare bedrooms into smaller places, even if such places are unavailable, or finding seriously ill people fit for work and taking away support when they are dying. For a brief period after world war two social security was genuinely seen as a safety net to help people whose life style packages were under strain by lack of resources. Now it is a vehicle to persecute them and make their personal crises worse.

Why does this happen? Because for the elite it is important that everyone else is insecure. You can see that in the economic policy that insists that a certain level of unemployment is necessary for the economy. According to policy thug, Austrian economist Friederic Hayek, without a “reservoir” of unemployed workers managers lose their ability to discipline workers. “In the absence of a free reservoir discipline cannot be maintained without corporal punishment, as with slave labour” (F A Hayek, The Road to Serfdom, Chapter 9, University of Chicago Press, 1994 p 139)

A society that requires most people are insecure is not going to provide any support for people coping with the distress, disorientation and confusion that is going to be created by the limits to growth – but it is going to try to make money from managing them in its own uniquely cruel way.

For this type of person the crises at the limits to growth will bring out the calculated ruthlessness of “disaster capitalism” – taking opportunities to sell drugs (legal and illegal), making money in security, in law and order careers, using the opportunities to persecute society’s victims, making money in surveillance systems, riot control equipment, prison building and arms sales, carpet bagging and buying up fire sale assets.

In conclusion – a new politics focused on basic needs to guarantee security and safety for all is needed to stabilise community mental health

To repeat a point made earlier. These are common features of how power structures operate. Power structures have been operating like this for centuries. It is what elite actors do and is how they survive despite regularly making mistakes, failing and dishonestly turning criticism away from themselves onto others. All these things will happen as the global economy tips over the cliff edge because it was always thus.

Realism dictates that non-elite actors must take these things into account and not over estimate their own power to influence things by promoting futile pre-conceived panaceas that are supposed to solve all problems for all time. Because of the way that the system and elites work, non-elite communities must look to their own resources and their own initiatives as far as possible in horizontal mutual aid initiatives. Unfortunately we cannot assume much help from the authorities. This will only come if and when mutual aid and self organisation grows in influence.

The future at the limits to growth is one of more crises and disasters occurring with greater frequency and greater severity while the resources to respond to the disasters and re-develop afterwards will be shrinking. While the period of economic growth was one in which those lucky enough to participate were able to fight for an increasing share in an expanding consumption economy.

The period of contraction following will be different. The politics will now be about seeking protection from increasing risks and uncertainties. The status of economic policy is already falling compared to a rising priority for public health and risk reduction. This trend will continue and will logically mean that politics will increasingly focus on safety for all, including basic minimum provision, more than increasing incomes. A part of this changing emphasis will be on community mental health rather than on happy shoppers. To the extent that informed communities are successful in helping each other it will help community mental health. Automatically providing minimum basics of food and shelter as a human right as well as helping people retrain and re-orientate to construct new futures will be vital to stabilising people psychologically.

In world war two, the experience of organising food rationing at the local level in the UK was very positive. Communities had a much closer relationship with local farmers and it was necessary to not only support people growing their own vegetables, but to also support them to learn about nutrition, learn to cook and use domestic resources more economically. In the end they were actually healthier.

If and when the state intervenes on the side of communities it will ideally again be to provide for basic needs through basic income and basic services to complement community self help and mutual aid. However state aid of this sort is not likely immediately – because that is not how elites work. To stay in power they prefer to create insecurity among ordinary people not security – so communities must help each other until their self organisation has the power to influence and drive the creation of more helpful policies as a result of pressure from below.

A politics of security and safety will need to be fostered at local community level through mutual aid activities at first, because little can be expected from the elite that has not yet understood and adapted to changing times. The elite will still be recklessly seeking a programme for expansion, exploiting the vulnerabilities of disrupted communities, over-using depleted resources for personal and not public priorities, looting the state by contracts given for the benefit of crony networks and risking more damage to the environment.

Counterposed to toxic elite priorities, a new politics of environmental protection, energy and resource saving, public health and community mental health is needed. The idea will be that everyone’s basic needs will be met and this protection will have important mental health benefits.

Brian Davey
28th August 2020

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