The Culture of Self-Deception

''MY DEAR FELLOW citizens,'' Vaclav Havel said in his inaugural address as Czech president, ''for 40 years on this day you heard from my predecessors the same thing in a number of variations: how our country is flourishing, how many millions of tons of steel we produce, how happy we all are, how we trust our government, and what prospects lie ahead of us. I assume you did not propose me for this office so that I, too, should lie to you.''

That was 1990. It seems a quaint time, back when public lying was defined as one of the key differences between the Soviet empire and America. Public lying is now revealed as endemic to what capitalism has become in the United States, with Havel's summary of the Stalinist deceptions reading like a standard CEO report to shareholders. This discovery of a basic dishonesty in the heart of ''free enterprise'' can shock us into moral maturity.

The worst effect of the Cold War on the American mind was the bipolar thinking it encouraged. We allowed ourselves to believe that the world could be divided between the essentially virtuous and the radically evil. We operated for a generation on the assumption that human beings behind the Iron Curtain were in the grip of Satan, while those of us in the West were entrusted ''here on earth,'' as John Kennedy put it in his inaugural, with God's own work. Thus, we defined Kremlin intentions as imperialist expansionism, while our own global reach aimed only at ''containment.'' That we spent the bulk of our treasure and the best of our intellectual effort preparing to blow up the world seemed, in the moral alchemy of deterrence, an act of high virtue. Not trusting Soviet signatures on treaties or imagining the mundane good will of Russian people, we were certain that the totalitarian enemy could be brought down only by eventual world violence. Simplistic moral thinking is always apocalyptic.

We knew, meanwhile, that we and our leaders were capable of lying, but in the American narrative, public deceptions - Watergate - have been counted as exceptions which proved the rule of American innocence. Jimmy Carter, in running for office on the slogan ''I will never lie to you,'' made explicit what we expect from presidents - and from everyone in authority. And was the self-anointed nation ever more itself than in feeling morally superior to the disgraced Bill Clinton?

But the main moral failure of CEOs - and US presidents - does not consist in the conscious venality of thinking one thing while saying another. The disorder is deeper than that, for it is far more likely that such leaders are convinced of the false justifications they offer. That the justifications are profoundly self-serving, of course, is part of why the leaders are convinced. When George W. Bush recently broke America's promise on the ABM treaty, that did not make us a nation of liars, he told us, but of realists. And, incidentally, his sole-power agenda was advanced.

The pattern is wide. Executives who want only to put the numbers ''in a better light'' end by cooking the books. Politicians who harmlessly aim to tell voters what they want to hear wind up having no core grasp of what is true. Religious leaders who maintain the appearance of virtue as an absolute value lose the capacity to recognize their own fallibility. But in all of this, such figures are behaving only like members of the human species, for the tendency toward grievous self-deception is universal.

Thus, lifetime partners can go years without realizing they have no intimacy. The overweight can fool themselves about their health problem. Drinkers can deny what their lives have become. Compulsive workers can enslave themselves to a false dream of success. Life-wrecking depression can pass itself off as selfless worry. Greed can seem like ambition. The pursuit of happiness is killing us. The most damaging lies are the ones we tell ourselves.

Today's nationwide rude awakening understandably prompts broad outrage at deceptive leaders, but that must not be our only response. During the Cold War we exempted ourselves from the kind of moral scrutiny that could have prevented the spreading of this poison cloud. The lies of business (Madison Avenue), of government (the Missile Gap), of culture (Forever Young), and of religion (God Bless America) were built into our system, but we could not see them as lies because of the split in our thinking. In this time of ethical reckoning, will we again smugly divide the world between the good and the evil?

Yes, we can insist on a purging of public lies - a true reform. But we repeat a major blunder if we conclude that the problem of self-serving deception belongs to someone else. ''When I talk about the contaminated moral atmosphere,'' Havel presumed to tell his fellow citizens, ''I mean all of us.''