Confidence, Fear, and a Propensity to Gamble
My latest book, Gambling on War: Confidence, Fear, and The Tragedy of The First World War  will be published by Cambridge University Press.

The book is a product of my teaching and research dealing with war and economics in the first half of the 20th century.  There is a huge library of articles and books trying to explain the first world war.  In 2014 I began work on a book that would provide what I call a “cliometric narrative” of the war and its aftermath.  The central thesis of the book is that Carl Clausewitz was right when he called war the ultimate gamble.  But Clausewitz, whose book On War was published in 1832, could not explain why states exhibited a strong propensity to gamble on war in the years leading up to the crisis of 1914.  My answer to this question suggests that the willingness to fight risky wars was a combination of overconfidence on the part of politicians and leaders combined with a fear that if they did nothing in the face of a crisis the result would be disastrous.
On Why We Have Financial Crises:

"No one was responsible for the great Wall Street Crash.  No one engineered the speculation that preceded it.  Both were the product of the free choice and decision of hundreds of thousands of individuals.  The latter were not led to the slaughter.  They were impelled to do it by the seminal lunacy which has always seized people who are seized in turn with the notion they can become very rich."

John Kenneth Galbraith, The Great Crash
On Why People Start Wars:

"Mortals made these decisions. They made them in fear and in trembling, but they made them nonetheless.  In most cases, the decision makers were not evil people bent on destruction but were frightened and entrapped by self-delusion. They based their policies on fears, not facts, and were singularly devoid of empathy. Misperception, rather than conscious evil design, appears to have been the leading villain in the drama."

John Stoessinger,  Why People Start Wars

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