The Americans learned a harsh lesson during the Great Depression of the 1930s, a time when the Federal Reserve was remarkably transparent with the general public. It was a noble practice, rooted in the principles of classical capitalism, which held that markets would inevitably regain balance without intervention—a concept that existed only in theoretical textbooks. The central bank used to share every development in the monetary system with the public on a daily basis, even announcing upcoming decisions, believing that people had the right to know. And they were right.
However, this naive approach only deepened the crisis, as individuals, fearing for their savings and assets, reacted unpredictably. Each time the government announced a monetary reform plan, it only made matters worse.
After several other crises in federal and central banks around the world over the years, the 1970s witnessed the emergence of the ‘Misperception Theory’, which, in essence, relies on misleading the public regarding the Federal Reserve’s monetary plans—without, of course, harming their interests—all in the name of prioritising the greater good. For instance, if the bank intended to issue or withdraw treasury bonds, it would first circulate rumours suggesting the opposite, aiming either to increase demand when selling or to boost supply when buying, benefiting the national economy in both cases.
This strategic secrecy—keeping the public in a state of partial misunderstanding—became a common practice in the United States and many other countries. After all, it is widely accepted that only a select few truly understand economics.
In the current crisis, the World Bank has praised Egypt’s monetary system, describing it as the most resilient in facing and overcoming economic turmoil. This, it claimed, was due to Egypt’s past practices, which were not far from the principles of the Misperception Theory. Yet, ironically, the same World Bank had consistently criticised these very policies, advocating instead for liberalisation and transparency as conditions for economic reform—reform that relied on borrowing from these major international institutions, all of which have since been exposed as failures.
But was the Central Bank of Egypt truly following this theory? Or any theory at all—one that deliberately concealed information, clarified monetary policies, or resisted full economic liberalisation for the sake of the greater good? Or was it simply incapable—lacking the economic expertise, the qualified human resources, and the advanced technological infrastructure needed to manage such a highly dynamic system within the global economy?
It seems more likely that it was simply unable to. Perhaps, too, this secrecy was part of a broader political system that upheld the principle of ‘Do not disclose, do not explain, just implement’—like any other government institution.
Yet the crisis has proven that Egypt is, indeed, ‘protected’—even in its insistence on mistakes. The day has come when its errors are now seen as wisdom, earning praise in an era where, economically speaking, no one can tell right from wrong.
This article is originally published by AlBorsa in Arabic and later AI-translated by South Push.