The Comment Factory

I’m not an economist and I do not usually start anything with an opening line about financial fluctuations. But I have been struck these past months by the scale of the talk concerning our apparent mass doom. The British population and possibly much of the world outside is heading for catastrophe; an economic conflagration that has been consuming the world since the somewhat rosy age of mid-2007.

It is almost impossible not to be affected by the rampant gloom and lugubrious nature of the current state of the economy — its forecasted trajectory (down in flames) is paraded as happy truth. I often listen to the talk and diatribes that circulate around me, to clients, friends and associates. The words ‘terrible’, ‘dire’ and ‘unprecedented’ are omnipresent.

Large-scale crises always have a profound effect on the mood of the nation. This is often through a combination of simultaneously-occurring psychological phenomena. Not least of these is fear and uncertainty. Yet, contemporary events have shown that this fear and uncertainty often now outstrips the crisis itself.

Two major instances of this in recent times support such a conclusion. Is it too extreme to see parallels between the threat of terrorism and the present financial crisis? Both seem to revolve around fear, a fear of how individuals perceive the future. In the case of the former it was clandestine terrorist cells, Saddam’s supposed threat or a dangerous new weapon that could be used in this country. While in the case of the latter it is the predictions of a deep recession or that there will be three million out of work by March. Both are real, I have no doubt, and both are unique in their effect on the British population. In turn, both also present unique challenges in the way in which that population must respond. However, it would seem that both issues generate far more panic and fear than can realistically be justified given the evidence at hand.

Recently, the BBC ran a news piece stating that the psychological effects of the economic downturn were unprecedented. That people who had not seen any direct economic impact were still extremely worried about the possibility of it. Now this is not to say that their worry is misplaced; many who may have thought their jobs were secure at Christmas might be clearing their desks this Friday afternoon. But the issue here is the inflated sensitivity to the idea that disaster is just around the corner, despite facts to the contrary.

The fear of terrorism, as individuals like Adam Curtis have shown, presents the same exaggerated sensitivity. Terrorism, while being a threat, was and is nowhere near the omnipresent danger, the ‘knife-edge’ society that the level of panic seemed to suggest. It is always worth repeating that we have only suffered one major terrorist attack by Islamic fundamentalists since 2001. Terrible though this was, it is weak justification for the level of fear that still pervades British society.

But why in both instances was this the case? Why was more being made of these threats than was actually warranted? These questions are not easy to answer. Certainly concerning terrorism, the apparent threat has been used to legitimize an increase in the power of government and the police in our lives — ID cards, SOCPA (Serious Organised Crime and Police Act), and the recently defeated 42 days without trial legislation being obvious examples.

However, with the economic downturn and the level of psychological impact on the British public the answer is not so clear-cut. There is no doubt that the government and Gordon Brown use their position and experience to maintain that they are the right people to save the banks (and possibly the world). Party politics has been snapping back and forth, feeding on the uncertainty that either continued Labour meddling or Tory inaction would spell even greater disaster.

The British are also known to enjoy having something to complain about. The recession allows the satisfaction of such a national trait to its fullest capacity. There is nothing better than a whinge and whine at an economy and a country that has generally gone to the dogs.

Yet I think the answer lies elsewhere in this case.

It sometimes becomes difficult to differentiate between what the mass of the population believes and what the media reports. When something that may affect just a small proportion of the population is broadcast through information channels that are consumed by the population as a whole, it is not in the end just that initial proportion that is affected. Just like the threat of terrorism, the economic crisis or at least the exaggerated psychological awareness of it, has spread unimpeded throughout the media, regularly fuelled by experts and business professionals. This often reaches a level where its validity for all of us is discussed as truth. We should look no further than to what is perennially in our newspapers, on our screens, and coming to us over the internet, as a cause for this unprecedented impact on the nation’s psyche.

Now I’m not saying that there isn’t a crisis – I am no recession-denier. The loss of 2500 jobs at Corus on Monday highlights this only too clearly. But I do genuinely believe that how I feel about the current crisis is not down to how it has directly affected me or the people around me; that is, it is not an assessment based on evidence, rather it is an assessment based on (often mis)perception, wanton speculation and inference. It is an assessment based on the supposed sagacity of multiple media channels. And from what the BBC report suggested, I am not alone in being affected in this manner.