If the issue is narcissism, the problem is clinical. All you need is a few hundred hours on the couch to cure your pathological narcissism.Or, maybe not. Often, talking to a blank screen will simply enhance your narcissism, but that, after all, is the risk you take.
When Brooks talks of overconfidence and conceit, he defines the issue in ethical terms. The cure is to build character, to develop humility, and to learn to distinguish confidence from arrogance.
And that is just the beginning of the good points Brooks makes in his column, "The Fatal Conceit." Link here.
We are all prone to bouts of conceit. We all fall prey to an occasional episode of overconfidence. At best reality or its representatives will work to disabuse us of our overweening feeling of infallibility.
Problems arise when reality seems to be feeding your hubris. You think that you are the greatest; crowds gather to tell you that you are the greatest; you become wildly successful and end up thinking that your compensation confirms your self-judgment.
So it was on Wall Street, until last year. As Brooks writes: "Up until recently, people in the financial world bathed in the warm glow of their own self-approval." To say nothing of their bonuses and the public adulation and envy that accompanied them.
And then the system failed. Left to its own devices, the market would have corrected itself. But the people in charge decided that the cost in human suffering would have been too high. Thus, the government stepped in to stop the hemorrhage.
Perhaps the consequence was unintended, but, as Brooks explains, the intervention shifted the epicenter of American overconfidence from Wall Street to Washington. "Since the masters of finance have been exposed as idiots, the masters of government have concluded (somewhat illogically) that they must be really smart."
Somewhat illogically, indeed. The crisis did not prove that the bankers, brokers, and traders were idiots. It proved that they were suffering from overconfidence.
Government officials and politicians, however, attributed it to idiocy and decided that the situation had vindicated their life choices. With Wall Streeters running hat-in-hand to Washington, the politicians and bureaucrats felt that they had triumphed. They were not about to lose the opportunity to restore what they considered the proper order of things.
Government overconfidence is not the same as its Wall Street cousin. They are more philosopher kings than Masters of the Universe. They want to control the markets, not to use them to get rich.
Brooks describes government officials in these terms: "... highly rational Olympians ... attempt to stand above problems and solve them in finely tuned and impartial manner. In moments of government overconfidence, officials come to see society not as a dynamic and complex organism, but as a machine, which can be rebuilt. In such moments governance and engineering can merge into one."
I would add that these officials see markets as machines that express the worst about human beings. They insist on the need to regulate and control the markets, but what they are really trying to do is to force people to live by their own idea of justice.
Within such a moral context inexperience with the workings of the markets comes to be counted as a virtue. People who have never dirtied their hands with a derivative trade come to believe that they are morally superior to those who are slaves to the unhealthy passions that the market expresses.
People who chose to make careers of government service can hardly have been pleased to see their old friends, people who often were of equal or lesser intelligence, making vast fortunes on Wall Street while they toiled away in obscurity and worried about paying tuition. To them the financial crisis was sweet vindication.
Brooks is implying, correctly, that government officials believe that they are introducing justice into a world that runs on greed and that fosters vice.
As an example of government overconfidence, Brooks notes the recent dicta of pay czar Kenneth Feinberg. Feinberg was tasked with determining the proper pay scale for executives of the largest companies that had been bailed out by the government.
Brooks notes that no sensate individual believes that the financial crisis can be solved by limiting executive pay. The gesture has a populist appeal; it feels good to punish someone, even we are shooting ourselves in our proverbial feet by doing so.
(For more extended analysis of the executive compensation issue, see the posts by Nobel laureate Gary Becker and Judge Richard Posner here.)
Surely, the gesture gives the competitors of these companies a significant advantage. And, ironically, by making the bailed out companies less able to attract talent, the government has made it more unlikely that it will ever receive the money it has given them.
But shouldn't the fallen Masters of the Universe receive some punishment? Perhaps so, but why do we imagine that the only fit punishment must involve government-administered justice.
After all, the echoes of the crash of fallen reputations have been reverberating around Wall Street for a year now. And many former Masters of the Universe lost a considerable amount of their wealth.
I would not claim that the damages have been meted out fairly. But what would make anyone imagine that when government gets involved in the marketplace, fairness ensues. Even today's compensation limits do not effect all of those who helped cause the crisis. Most of them are long gone from their executive aeries.
For those who still value them, markets offer a superior wisdom because they represent collective knowledge and action. They cannot be controlled by an individual who believes that he is so smart and so moral that he can produce an outcome that is more just than that of the market.
Those who think they can are merely exercising their resentment muscled and creating what Brooks calls a "fatal conceit."
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