Flimsy Sanity: If You're so smart, Why Ain't You Rich?

Flimsy Sanity

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. - Friedrich Nietzsche

Monday, January 03, 2011

If You're so smart, Why Ain't You Rich?

From a Short History of Financial Euphoria by John Kenneth Galbraith:
Contributing to and supporting this euphoria are two factors little noted in our time or in past times. First is the extreme brevity of the financial memory. In consequence, financial disaster is quickly forgotten...when the same or closely similar circumstances occur again, sometimes in only a few years, they are hailed by a new, often youthful and always supremely self-c`onfident generation as a brilliantly innovative discovery...The second factor contributing to speculative euphoria and programmed collapse is the specious association of money and intelligence...In all free enterprise (once called capitalist) attitudes there is a strong tendency to believe that the more money, either as income or assets, of which an individual is possessed or with which he is associated, the deeper and more compelling his economic and social perception, the more astute and penetrating his mental processes...In practice, the individual or individuals at the top of these institutions are often there because, as happens regularly in great organizations, theirs was mentally the most predictable and, in consequence, bureaucratically the least inimical of the contending talent. He she, or they are then endowed with the authority that encourages acquiescence from their subordinated and applause from their acolytes and that excludes adverse opinion or criticism. They are admirably protected in what may be a serious commitment to error.


  • At 5:01 PM, Anonymous R J Adams said…

    And Galbraith was one of few economists who knew what he was talking about. Dissect any big company and its failings will stem from bad management. The workforce is never the cause of a company going bad. Bad management plagues the world today because the old idea of 'working up from the shop floor' has been long abandoned in favor of academic qualification. Kids out of university tell men and women with forty years experience how to do their jobs.
    Its almost laughable how the monetarist policies of Friedman, Thatcher, Reagan, rapidly revert to Keynesian principles whenever there's a crisis in the financial industry.

  • At 8:55 AM, Anonymous Anonymous said…

    Not questioning authority is what gives us pograms and holocausts.


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