Animal Spirits, Part 2

When last we looked, our greatest economists were out in the woods beating their drums in a vain attempt to revive our animal spirits. (See my post of January 30.)

They want us all to buy and invest, the better to forestall the movement toward deflation and depression. Their theory says that we are not doing so because we have become traumatized into economic inactivity. Their solution: we need to get in touch with our animal spirits.

As I said, I am not sure why, beyond their love of Keynes, they need to evoke animal spirits. When animals are threatened, they can choose between fighting, fleeing, or playing dead.

By assuming that our animal spirits will provoke the right kinds of actions, Keynes and Co. has confused the issue. Evoking animal spirits does not tell us what we should do.

There is no reason to believe that animal spirits are more likely to tell us to run out to Walmart than to lounge around the house in pajamas.

Besides, when trauma victims follow their urges, they most often act in ways that make the problem worse.

Last Friday the Wall Street Journal ran op-ed by Peter Berkowitz that cogently corrects the argument from "animal spirits." Link here.

According to Berkowitz, we are having trouble dealing with the crisis because our political culture has become a breeding ground for immoderate passions, to the detriment of free and rational decision-making.

We are so overwhelmed by passions, so caught up in myths... that we are simply not thinking straight any more.

As Berkowitz put it, a large segment of our political culture glorifies the irrational and makes intense emotion the gauge of truth. Such a culture can only hinder our ability to make rational choices and to do the right thing.

The intemperate passions, as Berkowitz sees it, involve the deranged hatred that certain segments of the population visited on George Bush, and the irrational exuberance these same people are now showing for Barack Obama.

It is as though a clan were sacrificing a person who has been scapegoated as the cause of all ill, and then worshipping another figure as a tutelary animal spirit, a totem.

This is primitivism run wild. Unfortunately, as Berkowitz shows, our media gurus and educators have been teaching us that the stronger our emotions, the closer we are to the truth.

As Berkowitz puts it, they have taught us that "hatred and euphoria reflect political wisdom."

If the way out of the crisis requires rational thought and free choice, then we should not be encouraged to see large segments of the population transformed into cult followers who think that their excessive passion makes them enlightened.

Grand passions may inhibit actions, but they most often incite people to do the wrong thing. Especially when they tell people to obey their urges.

Overcoming trauma, as Berkowitz suggests, means learning how to exercise freedom. If a trauma victim allows the trauma to define what he can or cannot do, whom he can or cannot see, where he can or cannot go, then the trauma has limited his freedom.

To exit that mindset the victim must decide to take actions that run counter to what his emotions and his urges are telling him. And he must trust his rational faculty enough to act accordingly.

A culture that is based on emotional excess prevents us from acting rationally and freely because it promotes magical thinking and tells us that we should trust animal spirits.

When people believe that they have eliminated the scapegoat that has caused them pain and have found a redeemer who will deliver them from evil, they will think that they have done all they need to do. Now they just need to sit back and await redemption.

Deprived of their reason and their freedom, they can only hope that the animal spirits will carry them away.