Financial Crises and Narcissism

Thu, Dec 29, 2011 - 8:45am

As we approach the end of 2011 there is much to consider. The capitalist world is suffering a series of financial crises. Many nations are hopelessly in debt, including the United States; currencies are losing value; businesses are going under or struggling; the European financial system is crumbling before our eyes, and many experts think the worst is yet to come. The politicians in Europe and America have not faced up to the crisis. Current policies appear to resemble a series of delaying actions. Looking back on the first decade of the twentieth century we may ask ourselves whether these economic troubles are related to moral and cultural failings.

Most everyone over fifty years of age realizes that society has changed dramatically during the past fifty years. Technological change has been the least of it, though technology has made its contribution. But more fundamentally, our common attitude to life and its meaning has gone through an almost total revolution. Rising narcissism (tracked by scientists like Jean Twenge and W. Keith Campell) shows that we live in the Age of Entitlement. To quote from Twenge and Campbell’s book, The Narcissism Epidemic, narcissism entails “a very positive and inflated view of self. Narcissists believe they are better than others, lack emotionally warm and caring relationships, constantly seek attention, and treasure material wealth and physical appearance.”

It turns out that narcissism is nothing new. There was an outbreak of narcissism in ancient Greece during the second century B.C. In those days, people wanted to enjoy their lives. They did not want the responsibility of raising children. We are told by the historian Polybius that all of Greece suffered “a dearth of children … owing to which the cities were denuded of inhabitants….” This also triggered “a failure of productivity.” Polybius explained that “this evil grew upon us rapidly, and without attracting attention, by our men becoming perverted to a passion for show and money and the pleasures of an idle life, and accordingly either not marrying at all, or, if they did marry, refusing to rear the children that were born, or at most one or two out of a great number….”

Sound familiar? Notice the similarity between the narcissism described by Twenge and Campbell, with its emphasis on material wealth and physical appearance, and Polybius’ description of people perverted by “a passion for show and money and the pleasures of an idle life….” What were the causes of the narcissist epidemic in ancient Greece? Was hedonism spread by philosophers? Was it the result of the wrong kind of education? We know from Polybius that the Greeks of his time had ceased to believe in the punishments of the gods; therefore, he said, Greek officials were no longer honest. Public funds were regularly embezzled. People no longer sought divine favor or goodness. All that remained was self-gratification. Through an epidemic of self-seeking, ancient Greece was economically and (over a period of sixty years) militarily destroyed. America may be following this same path.

“The United States is currently suffering from an epidemic of narcissism,” wrote Twenge and Campbell. “Understanding the narcissism epidemic is important because its long-term consequences are destructive to society.” As the authors explain, narcissism is a psycho-cultural affliction which goes to the heart of today’s financial crisis. For what is today’s indebtedness except an indication of the present sense of entitlement (without regard to future costs). One of the symptoms of narcissism most relevant to financial markets is gross overconfidence. According to Twenge and Campbell, “The mortgage meltdown that led to the financial crisis of 2008 was caused, in part, by the narcissistic overconfidence of homebuyers who claimed they could afford houses too expensive for them and greedy lenders who were willing to take big risks with other people’s money.”

Is there a cure for America’s narcissism? History suggests that narcissism cannot survive for long. A narcissistic culture is bound to follow a suicidal course. In the last analysis, catastrophe promises to wipe out an errant culture, making way for something new – either through violent revolution or through subjugation by foreign powers. This prognosis is not a comforting one, though it is grounded in history and science.

About the Author

jrnyquist [at] aol [dot] com ()