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Mass delusions and their consequences

By John Perkins - posted Tuesday, 4 November 2008

"Faith is believin' what you know ain't so", Mark Twain.

All the benefits of modern society, such as increased longevity and prosperity, derive from our technical advancement. These in turn derive from rational inquiry, investigation and innovation. The human mind is thus capable of great feats of ingenuity. Yet both individually and collectively we remain susceptible to superstition, deception and delusion. On the rational level, our brains operate differently from how they do on an emotional level. When not entirely psychotic, this irrationality can be regarded as benign aspect of human nature that is without adverse social consequences. But perhaps it is not.

Mass delusions are commonplace in our society, and always have been. In light of the global financial collapse, we may well reflect upon the chronicles of popular folly depicted in Charles Mackay’s 1841 classic Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. The book shows us that crazes over religious scruples, desires for military glory and situations where “sober nations have all at once become desperate gamblers” have been with us for a long time. The problem is, the consequences can now be so much worse.


The great global financial crash of 2008, setting in train a global recession, was the result of a delusion. In the previous decade, in many countries, the ratio of debt to income had more than doubled, as had asset prices. These could not continue to rise indefinitely. Yet the viability of the entire global financial system was dependent on the assumption that they would.

The crisis was due to a household debt bubble, fuelling a housing bubble, fuelling an asset price bubble, fuelling a financial bubble. The delusion, as ever, was that these bubbles would not burst. Yet rational analysis indicated that they would. By mid-2007 this had become a certainty. By then, more than a million housing loans in the US were delinquent or in foreclosure, and this was set to double in 2008. Housing prices were already falling. Yet the market continued to be sustained on denial and wishful thinking. Realists who warned of the danger were dismissed as doomsayers.

The average punter can be excused for the folly, but not the financial wizards. They all were mesmerised by the prospect of windfall gain. Delusions such as these are obviously disastrous. Is there any catalyst for such collective psychological dysfunction? Delusions are different from mere erroneous thinking. They involve a wilful disregard of evidence. Is there anything in our collective psyche that could make us more susceptible to the lures of wishful thinking, playing upon emotional needs, leading to denial and aversion to evidence? Yes, there is. It is religion.

Of course religious believers may become indignant, but hopefully since The God Delusion, they may be becoming a little more accustomed to the suggestion that they are deluded. It is not an insult to their intelligence. In our society, such delusions are systematically nurtured. Religions contradict themselves, each other, and known facts. Belief in religion is therefore irrational, because it involves wilful blindness to these contradictions. In at least some respects, religions inspire persistently held false beliefs. Therefore religions are delusions. They surely cannot help us to distinguish fact from fiction when we need to. In fact, the reverse is probably true.

Many countries have had housing bubbles, but the US bubble was the core problem leading to the global financial collapse. Only in the United States was it inflated to such disastrous proportions that it threatened the entire financial system. Only in America was the bubble hyped up with loose money and sub-prime loans that could not be repaid, with blatant disregard for the inevitable consequences.

America led the way in developing contrivances for the repackaging and reselling of toxic debt. It was irrational American exuberance and misplaced faith in free market ideology on a grand scale. Is there something about the mass psychology of Americans in particular that could make them prone to such misadventure?


America differs from all other developed countries in several respects. Apart from having no universal health system and indulging in exceptionalist sentiment, it entertains religious belief to an excessive extent. These are characteristics more typical of a poor country than a rich one. These characteristics are also symptomatic of an underlying psychological malaise with diabolical consequences - a religion-induced disconnection from reality that infects not only US society and institutions, but US government policy.

While faith-based beliefs are reasonably ubiquitous worldwide, they do not generally impinge on daily life to any great extent. With the exception of the Islamic world, where sharia law reigns supreme, in most countries, religious beliefs do not substantially affect government policy and the national character.

In the United States, particularly under George W Bush, with his daily prayer sessions and Bible readings, this is not the case. While US state institutions remain nominally secular, from the Bush White House down, religion has permeated the thought processes of government and civil society in America in ways that would seem bizarre to the typical Australian or European.

Surveys show that more than 60 per cent of Americans believe that the devil is a real being. A similar proportion reject evolution in favour of creationism. Likewise, more than 60 per cent of Americans believed that Saddam Hussein was responsible for the September 11 attacks. Books on the end of the world, the return of Jesus followed by rapture up to heaven, are best sellers in the US. Can such a propensity for religious beliefs that defy reason affect the capacity for rational thought processes? Can a fantastical world of religious belief affect real world behaviour? Does it matter? There would seem to be considerable evidence that it can and does.

People are generally able to quarantine the less rational aspects of their beliefs from their day to day life choices. One may pray for rain, but not pray that the car will repair itself. However if someone believes they are “chosen” or “called”, and are in a position of power in a society where such beliefs are pervasive, they may not see such distinctions. The invasion of Iraq was instigated by men of apparent great faith. George Bush said that his God told him to invade. While Tony Blair may not have admitted to hearing the Word, he always sought to justify the invasion by the assertion that he “believed he was right”. But he was not right. The invasion was motivated by faith-based intelligence and righteous zeal that was entirely misplaced.

The US-led invasion of Iraq was a religiously inspired debacle of monumental proportions. It was against the will of the United Nations. As a consequence, the rule of law, an essential ingredient for the progress of civilisation, was replaced by the naked assertion of US power. International conventions were discarded and replaced by ad hoc ex-judicial executions, apprehensions, illegal renditions to countries where torture is sanctioned, and imprisonment and torture in Guantanamo Bay. This shameful setback to the advancement of humanity was a high price to pay for actions inspired by irrational religious motivations.

The impending global recession is another monumental debacle for which the Americans must bear prime responsibility. It is no wonder that these things happen when faith, rather than rationality is seen as a virtue. It needs to be recognised that the excessive degree of religious belief in America and elsewhere gives rise to a dysfunctional social and political mentality. The god delusion is pathological. Not only America, but the whole world, has been forced to pay the price.

To effectively deal with the problem of global warming, we cannot afford a religion induced policy miasma such as we have seen. Those who are not victims of such religious delusions need to reach out to fellow citizens. We must assert that there is no evidence that justifies the belief in one religion as opposed to any other. The delusion of religion is neither benign nor beneficial. Ethical values are best determined on the basis of universal principles such as compassion, honesty, freedom and justice. We need to raise consciousness and promote rational cognitions, or suffer the consequences.

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About the Author

Dr John L Perkins is an economist at the National Institute of Economic and Industry Research and a founding member of the Secular Party of Australia.

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