Alistair Darling was reportedly furious when he woke from a rare full night's sleep two weeks ago to hear that while he had been dreaming, Ireland had guaranteed deposits in all its six banks. The chancellor phoned Brian Lenihan, Ireland's finance minister, to ask why he hadn't been told. After a night in which he had rung his cabinet ministers between 1.30am and 2am and squeezed in two hours' sleep before then phoning EU financiers at dawn, Lenihan reportedly explained there had been no time.
We can safely assume that "I didn't want to disturb your beauty sleep" was not part of Lenihan's explanation. It is not jobs, merchant banks or Iceland that have been the first casualties of the economic turmoil; it is sleep. Darling has enjoyed less than most. After last Tuesday's all-nighter with at least 30 Treasury officials, during which he grabbed some sleep between 1.40am and 4.50am, he was in Washington over the weekend to meet the G7 and the IMF, adding jetlag to sleep deprivation when he flew back to attend another banking bailout emergency meeting at the Treasury that ended at 2am yesterday. It is not just politicians who are suffering: Tom Scholar, a senior Treasury civil servant, reportedly managed to fit in only two hours' sleep in a 48-hour period ahead of last week's bailout meeting.
This lack of sleep demonstrates the magnitude of the crisis, and to have people talking about it is useful for politicians as a demonstration of their determination and dedication. Many of the meetings have been held through the night because measures had to be devised, agreed upon and announced in the window between the UK stock market closing and opening, in an attempt to minimise volatility and panic selling. This is a global crisis and the markets never sleep, observers nod sagely. And at the moment, their masters must not either.
Some might grumble that late-night meetings may show inefficient succombing to an old-fashioned macho working culture. But, in this crisis, putting work before sleep is logical, and according to the experts, logic is not something that disappears from the minds of the sleep-deprived. Working on an all-night session, people can still think logically, says Professor Jim Horne, director of the Sleep Research Centre at Loughborough University, but they are unable to sustain more high-level thinking, such as being able to deal with the unexpected, respond creatively and flexibly to new situations and come up with innovative solutions - exactly what you might assume this unprecedented economic turmoil would require. Without any sleep, people are also more likely to unthinkingly comply - hence the all-night meetings of management versus unions of old - and also take risks. "Part of the brain that tells you to be careful is knocked out. That may be why casinos stay open all night. People's ability to perceive risk is ignored," he says.
Everyone knows that if we don't get enough sleep we make mistakes. More people are killed on Britain's roads through sleep-related accidents than alcohol-related accidents. Tired people make tragic mistakes. The Chernobyl nuclear accident, the space shuttle Challenger disaster, the Exxon Valdez oil spill and the Selby rail crash have all been attributed to human errors in which sleep deprivation played a part.
Scientific experiments have shown that sleep- deprived drivers underestimate their degree of sleepiness - believing they are more awake than they actually are when put in a stimulating situation. In this way, says Colin Espie, director of the University of Glasgow Sleep Centre, our judgment is clouded and we overestimate our ability to get things done. Sleep-deprived people may believe they are working effectively because they feel they are putting in so much effort, but in reality they are putting more effort in precisely because they are sleep-deprived and their brains are not functioning so effectively. As Espie points out, working on an all-nighter decreases efficiency not just through sleep deprivation but by forcing us to be awake at a time when our bodies are shutting down and our circadian rhythms (or body clock) are telling us we should be asleep.
From the late-night sessions in the House of Commons to Winston Churchill's five hours a night - topped up with a daily nap - there is a long tradition of sleeplessness in politics. Margaret Thatcher famously claimed to thrive on four hours a night. Gordon Brown does much the same even when not beset by a global slump. The No 10 press officer gave the irritable response of the sleep-deprived to my inquiries - clearly seeing sleep as a frivolous matter - but insiders say the prime minister goes to bed around 11.30pm on a normal night and rises to begin firing off emails around 4.30am. It is said he finds this the most productive time of the day, not least because he is not usually disturbed by officials. (If he was to sleep in any longer he would in any case still get woken up before 6am, which is when his two-year-old son, Fraser, currently rises in the Brown household.)
This may not be a recipe for catastrophically impaired decision-making and is at least better than staying up all night. "If Gordon Brown is doing that he is a very sensible man," says Horne. "If his officials are up all night they are more likely to be making mistakes."
The notion of a solid eight hours' sleep a night is a relatively recent western construct and before the 19th century there is evidence that we slept in two short shifts, divided by a period of wakeful thinking time around 1am. Horne gives short shrift to the idea that 24/7 capitalism is suffering a crisis of sleeplessness and we are all getting less than we used to: the working classes got far less in the Victorian era of 14-hour days and sharing beds in overcrowded and noisy conditions, he argues. The notion that we all need a solid eight hours' sleep is also simplistic: children and young people need more; many older people need less, and sleep requirements are often a personal thing.
But the 21st-century response to lack of sleep is often to seek to master it with technology - propping ourselves up with artificial stimulants such as coffee or exercise, which only defer the need for sleep. One banker embroiled in the crisis meetings says he has been staying awake with weak tea. But caffeine is not fuel for the mind. Nor, for the record, is the karahi lamb and aloo gobi personally ordered by Darling from his favourite curry house during last week's epic bailout meeting.
"The ability of coffee to overcome those more subtle effects of a lack of sleep is limited," says Horne. "There is no substitute for sleep." Unlike physical muscles, the brain cannot be refreshed and recharged through rest; it requires sleep and Horne's research shows that without at least four hours' sleep, the frontal area of the brain that looks after those complex executive functions such as responding creatively to unexpected circumstances is unable to function effectively.
"Daytime meetings would seem to be advisable for dealing with international crises," says Colin Espie. Failing that, politicians should at least be trying to catch up on their sleep with a power nap: even 30 minutes can make a difference, and naps are particularly effective because they can recharge the brain with the most useful kind of deep sleep we only usually experience for a portion of an ordinary night. Unfortunately, Churchill apart, napping in the office tends to be frowned upon and is still seen as an admission weakness.
"We're very familiar with the public health message - eat well, exercise, everything in moderation - and we seem to have forgotten that sleep is the primary factor that delivers quality of life. It's the one thing you can't do without," says Espie. "The danger is we treat sleep as a commodity that you spend when you like, but it doesn't work that way. We're not in charge of it."
As Espie explains, sleep deprivation is often defined by its consequences. But maybe it's too hopeful to think the current turmoil and our apparent inability to control it could all be sorted out with a good night's kip.
• This article was amended on Wednesday 24 December 2008 to correct the homophone; "Without any sleep, people are also more likely to unthinkingly comply - hence the all-night meetings of management verses unions of old - and also take risks".