Next month brings a poignant anniversary. It will be 40 years since Donald Crowhurst, a competent and inventive young electronics engineer, set out as one of the contenders for The Sunday Times Golden Globe award for the first singlehanded sailor to go round the world non-stop. Much has been written about his strange and tragic voyage, and a fine documentary - Deep Water - has retold the story to a new generation.

In brief, the boat was ill-prepared (not entirely by his fault), and the deadline looming. Crowhurst was tied into a rashly trumpet-blowing publicity machine, and worse, signed a financial deal that could have lost his wife and young children their home if he failed. After struggling at sea with the boat's many defects, by Christmas he came to a fateful decision. He would send false position reports to his avid press agent, keeping a second logbook with the real ones. Rather than face the Great Capes and circle the Southern Ocean he would “jill” around in the South Atlantic (no picnic either) and then join the tail end of the race, as a late finisher whose logs would not be examined by judges.

From this point his morale and sanity crumbled; he went on sending derring-do accounts of record daily runs and imaginary storms; in March, with structural problems, he even went ashore briefly in Argentina. The deep tragedy is that by then he was so mired in deception and mental confusion that he did not simply call home. He went back to sea. When he sent his later message saying “on course Cape Horn” he was on the wrong side of it. Robin Knox-Johnston, the eventual winner, had lost radio communication by then but was round the Horn and heading for home. In April Crowhurst realised that as far as anyone knew his hoax positions put him in the lead; celebrations were planned and his press agent fed ecstatic exaggeration to the papers.

Crowhurst went on sending cheerful messages until on July 1, 1969, leaving his false and true logbooks and a terrifying diary of his mental decline, he stepped or fell from the boat and drowned. He had been 243 days alone. The last page of his crazy diary reads: “I am what I am and I see the nature of my offence...It is finished - it is finished - IT IS THE MERCY.” Those last four words are carved into a rail at the National Maritime Museum as an artwork by Tacita Dean; for a period they ironically overlooked the winning boat, Suhaili. Knox-Johnston gave the whole of his prize money to Crowhurst's family, and in the small world of singlehanded sailors I do not think one voice has ever been raised in condemnation of Donald Crowhurst; his family maintained a sorrowful dignity and privacy, only lately co-operating with the film.

Times Archive, 1970: Corvo of the high seas

James Morris on the strange voyage of Donald Crowhurst

• Mystery of lone sailor's records

In our own family one resonance of this story is that his name - without disrespect - became a verb, and the injunction “No Crowhursting!” has meant a ban on sending home unreliably cheerful messages when things are going wrong; whether on school trips or adult adventures and separations. My daughter Rose used it in her first novel, Days of Judy B, in which a lifestyle columnist prattles in print about her fabulous single-girl existence while really having a nervous breakdown in squalid solitude. When my husband crossed the Atlantic alone the ban on Crowhursting remained in force. It led to some epically gloomy e-mails in my inbox, but also gave the three of us the chance to send cheer-up messages and, at one point, to say there would be no shame in diverting to the Azores and giving up. Poor Mrs Crowhurst never had that option.

The principle is that if you're losing faith and wondering what to do, it is generally better to find a confidant and say so. It is, I suppose, the opposite of that trite song in The King and I where the governess insists that the answer is always to whistle a happy tune and pretend all is well.

You see why this is on my mind in these turbulent times. Quite apart from all those terrible tales of men who take their lives after failing to reveal to their wives that ruin is imminent, or women who dare not admit the extent of their credit card debt, we have suffered an international outbreak of business and political Crowhursting. Bankers, financiers and travel companies have feasted and smiled and expressed mad confidence; politicians talk up war successes and refuse to cut their losses; crime figures and immigration forecasts are massaged into cheerfulness. The 2012 Olympic budget was clearly devised by Mr Micawber before his conversion, and the attempted European Constitution dismissed as a “tidying-up exercise”. Contumely is always poured on “doomsayers” and “negativity”.

It is corrosive, this smiley deception. A few white lies may be constructive in buoying business confidence: we have no figures on companies which come very, very close to disaster but bluff their way out of it. But politicians should be honest, and individuals should never have been encouraged to pretend to others and themselves that house prices always go up and interest rates don't, or that designer shoes and handbags are an investment and debt no problem.

I am not advocating universal pessimism. But when a boat is visibly struggling and you're hardly out of Biscay, it is best to admit the fact to those who need to know, and with their help to find another ending to the voyage. After all, recovering self-image and public respect after failure is possible: to take another nautical example, the remarkable Pete Goss saw his giant catamaran disintegrate in the Atlantic after being launched by the Queen herself. He dealt gracefully with the fallout, led trips to the North Pole and next month sets off for Australia in a reproduction 19th-century fishing boat: 20,000 fans came to see Spirit of Mystery launched. Crowhurst, too, was gifted and brave; he needn't have bluffed.

But the lesson is not always learnt. Crowhursting is epidemic. Rather than level with the public and work out a sensible plan, in a media-crazy age business and government prefer to insist that all is well.

“Heading for Cape Horn, all sails flying!” they cry. “The party is united! The Olympics will come in on budget! Public services can easily cope with mass immigration! There'll be no problem paying off the PFI debts! Schools get better every day! The news from Afghanistan is heartening!”

What do you mean, it's leaking?

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