The Financial Crisis: Exploring the Tensions Between Imagination and Authority in a Post-Industrial World

In the following paper I take up the issue of the psychodynamics of the financial crisis. I argue that we have reached a state of economic development where creativity is a productive force, and the imagination is the human activity that propels creativity. The market I suggest has become the projective screen for our imaginative capacities. But at the same time the market itself creates systemic risks that require the exercise of authority and the subordination of imagination to rules and regulations. The result is a tension between imagination and authority. When poorly managed this tension leads to crises. The paper is divided into eight sections. In the first I argue that the financial crisis was less the result of imprudent decisions and more the result of what are called systemic risks. In the second, I link the idea of systemic risk to what we call within the system-psychodynamics tradition, the group as a whole and the problem of authority. In the third, I suggest that markets are attractive to the mind, not because they are rational, but because we project onto them our capacity to imagine. I suggest this is so because increasingly imagination has become a productive force in the economy.