Another book that I read on my trip is Voodoo Histories: The Role of the Conspiracy Theory in Shaping Modern History by David Aaronovitch. It looks at a number of conspiracy theories from around the start of the 20th Century up to the present time. Some of them have had deadly consequences (e.g. the myths surrounding the protocols of Zion which led pretty much directly to the holocaust), while others have been a bit more benign. In all cases, Aaronovitch makes a fairly convincing case for the premise that conspiracy theories are often the result of people who are not achieving the political or social outcomes that they want, and who use the idea of a conspiracy as an explanation for their failure.
Since an important part of innovating is getting your new ideas to spread, looking at how bad ideas spread can be useful. In this case, the bad ideas are spreading because they provide some level of comfort to people (even though they are usually expressed hysterically). In the case of the economy, bad ideas that spread are probably best characterised as fads. There’s no good reason for them to spread, and often they replicate for reasons that are unrelated to their features or benefits. A lot of firms try to find the next fad, but in the long run, it seems to me that it is better to try to build success by providing a solid product or service, rather than simply through letting people feel like they belong. Now that the fad part of their lifespan has passed, it looks like if you really like Crocs because of their features, you better buy more pairs soon, just to use a recent example of a bad idea that spread widely!