Paul Crosthwaite sits global economics on the analysand's couch
|Horror or fascination? A banker looks on.|
But why the national fuss? How did critical theory find its way into the Sunday supplements? It seems the article, published in a recent academic journal, offers some rather controversial insights into motivations for the crash.
Crosthwaite argues that the actions of the bankers in high-pressure working environments seem to obey a kind of perverse logic. Using the work of Sigmund Freud, Crosthwaite applies theories of desire and the 'death drive' to the unconscious motivations of the bankers. In a working atmosphere defined by large stakes and huge potential losses, he argues that rational objectivity loses focus to self-destructive thrills and a movement toward personal and societal collapse - an idea that will be familiar to readers of Don DeLillo or J. G. Ballard.
At the heart of the article is a call toward greater regulation, asserting that 'financial policymakers must recognise that investor psychology is far more complex than their models have allowed up to now [...] They need to take much greater account of psychological factors such as emotion and desire, which affect how market actors behave in profound ways.'
The Telegraph offers an outline of Crosthwaite's suggestion:
With a theory that will alarm Business Secretary Vince Cable, Dr Paul Crosthwaite of Cardiff University has argued that bankers and other investors took on excessive risks not just to make money but for the "desire" and "exhilaration" of destruction.You can read Crosthwaite's article for yourself in the current issue of Angelaki:
'For its participants and speculators alike, the crash is not simply an object of fear or anxiety, or even of mere fascination, but also of an inchoate but urgent desire,' Dr Crosthwaite wrote in an article published in Angelaki: Journal of the Theoretical Humanities.
'In Blood on the Trading Floor: Waste, Sacrifice and Death in Financial Crises', Dr Crosthwaite claims his anthropological study of investors and traders found evidence of an element of masochistic satisfaction in running up losses.
He maintains that the crisis was the modern equivalent to the traditional Native American practice of "potlatch", a ritual ceremony in which the chiefs of rival tribes competed to destroy ever greater quantities of their own possessions as an expression of power and importance.
But in one fillip for the Business Secretary, Dr Crosthwaite says his research strengthens the case for tighter City regulation. It's human nature: the bankers could do it again. [Read More]
In this essay, I range between popular fiction narratives of financial turmoil, psychoanalysis, and some highly heterodox strands of twentieth-century economic thought in order to piece together a theory of financial catastrophe that the prevailing paradigm in the discipline of economics cannot so much as contemplate: that for its participants and spectators alike, the crash is not simply an object of fear or anxiety, or even of mere fascination, but also of an inchoate but urgent desire.In addition, you can listen to Crosthwaite discussing his research in more detail at the Cardiff University website.
Contemporary financial markets betray, in tension with their manifest urge towards profit and growth, a countervailing tendency – which is simultaneously structural and libidinal – towards waste, expenditure, and consumption: a 'death drive' that culminates in the mingled despair and euphoria of the crash. [Read More]