Lofgren goes on to say that Silicon Valley is a node of the Deep State too, and that despite the
protestations of its chieftains against NSA spying, it's a vital part of the Deep State's apparatus.
More:
When all you know is the people who surround you in your professional class bubble and your social
circles, you can think the whole world agrees with you, or should. It's probably not a coincidence
that the American media elite live, work, and socialize in New York and Washington, the two cities
that were attacked on 9/11, and whose elites - political, military, financial - were so genuinely
traumatized by the events.
Anyway, that's just a small part of it, about how the elite media manufacture consent. Here's
a final quote, one from
the Moyers interview with Lofgren:
This can't last. We'd better hope it can't last. And we'd better hope it unwinds peacefully.
oregonstate.edu
Groupthink occurs when a homogenous highly cohesive group is so concerned with maintaining unanimity
that they fail to evaluate all their alternatives and options. Groupthink members see themselves
as part of an in-group working against an outgroup opposed to their goals. You can tell if a group
suffers from groupthink if it:
- overestimates its invulnerability or high moral stance,
- collectively rationalizes the decisions it makes,
- demonizes or stereotypes outgroups and their leaders,
- has a culture of uniformity where individuals censor themselves and others so that the facade
of group unanimty is maintained, and
- contains members who take it upon themselves to protect the group leader by keeping information,
theirs or other group members', from the leader.
Groups engaged in groupthink tend to make faulty decisions when compared to the decisions that
could have been reached using a fair, open, and rational decision-making process. Groupthinking
groups tend to:
- fail to adequately determine their objectives and alternatives,
- fail to adequately assess the risks associated with the group's decision,
- fail to cycle through discarded alternatives to reexamine their worth after a majority of
the group discarded the alternative,
- not seek expert advice,
- select and use only information that supports their position and conclusions, and
- does not make contigency plans in case their decision and resulting actions fail.
Group leaders can prevent groupthink by:
- encouraging members to raise objections and concerns;
- refraining from stating their preferences at the onset of the group's activities;
- allowing the group to be independently evaluated by a separate group with a different leader;
- splitting the group into sub-groups, each with different chairpersons, to separately generate
alternatives, then bringing the sub-groups together to hammer out differences;
- allowing group members to get feedback on the group's decisions from their own constitutents;
- seeking input from experts outside the group;
- assigning one or more members to play the role of the devil's advocate;
- requiring the group to develop multiple scenarios of events upon which they are acting,
and contingencies for each scenario; and
- calling a meeting after a decision consensus is reached in which all group members are expected
to critically review the decision before final approval is given.
karoli
Pundits assume they're right because most pundits agree. They're wrong.
Sunday morning, Candy Crowley
carried the torch for "politics as usual" on her show. Using talking points provided by Governor
Christie's office, Crowley proceeded to try and paint Mayor Dawn Zimmer as somehow naive about how
politics works.
"Why are you here now?" Crowley asked. "We have seen you say in a tweet that you're so glad
Chris Christie is our governor. So, can you square that for me? Because coming at this point,
what the Chris Christie office says, this is just politics."
Meet the Press went the same way, with David Gregory carrying water while interviewing
factually challenged Rudy "911" Giuliani.
Otherwise, viewers were left with the impression that quid pro quo politics which includes holding
up federal funds for disaster relief to citizens is considered "politics as usual."
The danger of groupthink, writ large right there. Why didn't pundits challenge that claim rather
than echoing it?
My theory goes two ways. First, they don't challenge it because they're invested in having Christie
rehabilitated in time for 2016. That's certainly a possibility.
But I think the second reason is probably more likely. When a group of people -- journalists
or otherwise -- become desensitized to things ordinary people find abhorrent, they stop being objective.
I don't know very many people who would willingly agree that leveraging disaster relief funds in
exchange for preferred zoning is simply the business of political gladhanding.
It is as if we should simply accept that which our gut rejects because the pundits say so, and
the more they say it, the more we're compelled to believe it.
Compare with terrorism losses per year and amount of funds devoted to fighting terrorism: "Perhaps
more significantly, the 13.7% increase in hit-and-run deaths over that three-year period occurred while
traffic deaths overall were falling 4.5%, from 33,883 in 2009 to 32,367 in 2011."
November 10, 2013 |
usatoday.com
Hit-and-run crashes are increasing in many major cities, and hit-and-run fatalities are rising
nationally as legislators in several states look to toughen laws to address this troubling "plague."
These crashes have reached such epidemic proportions in Los Angeles that, during one recent year,
nearly half of all collisions in the city involved a driver who fled the scene.
Crash data from the National Highway Traffic Safety Administration show that the number of fatal
hit-and-run crashes is trending upward, from 1,274 in 2009, to 1,393 in 2010, to 1,449 in 2011,
the most recent year for which statistics were available.
Perhaps more significantly, the 13.7% increase in hit-and-run deaths over that three-year period
occurred while traffic deaths overall were falling 4.5%, from 33,883 in 2009 to 32,367 in 2011.
"The problem is bigger than I think most people are aware," says Peter Kissinger, president and
CEO of the AAA Foundation for Traffic Safety.
The foundation's analysis of hit-and-run crashes found that about one in five of all pedestrian
fatalities are hit-and-runs, and 60% of hit-and-run fatalities have pedestrians as victims, he says.
"Alcohol is a major, major part of the problem, from the driver's perspective, especially. The main
thing we can do as a society to sort of combat this problem is to simply be more alert as pedestrians,"
Kissinger says.
"People find themselves in these situations, and what do you do?" says Sara Solnick, chairwoman
of the Department of Economics at the University of Vermont, who has studied hit-and-run crashes.
"Drivers are more likely to run if they feel there is a reason to do so. They're more likely to
have high blood-alcohol content, or they're driving without a license, or they're very young drivers."
In a recent high-profile hit-and-run case, a 22-year-old Ohio man confessed in an online video
that went viral to killing a man in a drunken-driving crash in June. Matthew Cordle of Dublin, was
sentenced last month to 6½ years in prison for aggravated vehicular homicide and DUI in a wrong-way
interstate crash that killed Vincent Canzani, 61.
Los Angeles has been ground zero for hit-and-run crashes. LA Weekly reported that there
were 20,000 such incidents in the city each year, with 4,000 resulting in injuries or death. In
2009, the newspaper reported, 48% of the city's crashes were hit-and-run, compared with 11% nationally.
"There is a values problem," says California Assemblyman Mike Gatto, a Democrat from the Los
Angeles area who introduced a bill that extended the statute of limitations for hit-and-run offenses
from three to six years. The bill was signed into law last month and takes effect July 1.
"I had been reading the stories that Los Angeles had this just absolute plague ... of hit-and-run
accidents," Gatto says. "It really comes down to folks being left for dead on the side of the road
by the person who is in a best position to call 911. When it comes down to it, the legislature speaks
for society's values. Unless we did something, we were failing from a values standpoint."
Following the LA Weekly story, Los Angeles Police Chief Charlie Beck released a report
that maintained that the city's hit-and-run crash rate compared favorably with other major cities,
such as New York, Chicago and Houston.
Around the USA, the rise in hit-and-run crashes is leading to tougher laws in some of the states
with the highest rates of resulting deaths.
- In Texas, legislators moved to close a loophole that police officers said encouraged intoxicated
drivers involved in crashes to flee the scene. Before Sept. 1, the maximum penalty for failing
to render aid was just half that for causing a drunken-driving crash death. The penalty for
leaving the scene of a crash was raised from a third-degree felony, with a maximum 10-year prison
term, to a second-degree felony, punishable by up to 20 years in prison - same as for intoxicated
manslaughter.
- In Florida, where the State Patrol says there were nearly 70,000 hit-and-run crashes in
2012 and three of every five road fatalities were pedestrians struck by hit-run drivers, legislators
are considering a bill that would impose a mandatory sentence of at least three years on hit-and-run
drivers. The sentence would be seven years if someone is seriously injured and 10 years in fatal
crashes.
- In 2012, Arizona enacted a law requiring that any driver who leaves the scene of a crash
resulting in serious injury automatically has their license suspended for five years. If there's
a death, the automatic suspension is 10 years, not including time in jail.
- Also last year, Colorado enacted a law that made a hit-and-run crash with serious bodily
injury a Class 4 felony, which carries the same penalty as driving while drunk.
Is all Western media completely corrupt due to being owned by a few oligarchs? How it can be that
joining the trade block, which dictate pretty humiliating the term of joining mean "independent future".
Also how a "failed state", almost bankrupt nation can be independent? Something is wrong with Chicago
Tribune ;-)
Chicago Tribune,
editorial: "The European Union needs to sweeten its trade deal to counter Putin's promised short-term
payoff. It also needs to get across how unification with a wealthy, 500-million-strong trade bloc
is a far superior option to what Putin is offering a nation that has to reboot its economy. The
West offers Ukraine something Putin can't: an independent future."
Pierre Briançon,
Reuters: "Putin's handout doesn't solve the country's fundamental economic problems, and
it increases the risk that the end of the Yanukovich era won't be peaceful. ... Buying Ukrainian
bonds at market rates hardly qualifies as help - at current yields, it could even pass for theft.
It is risky, but not necessarily costly, to hold a small part of the reserve fund in Ukrainian bonds.
And the gas price 'concession' only brings the price down to a little below what the rest of Europe
pays."
Bloomberg,
editorial: "Ukrainians have braved both the cold and the riot police for the last three weeks
in Kiev to protest Yanukovych's rule. That suggests they understand that greater integration with
Europe ... has more to offer them than Russia's bear hug."
Writing in the same iconoclastic spirit he brought to Voltaire's Bastards: The Dictatorship of
Reason in the West, Canadian writer Saul offers a damning indictment of what he terms corporatism,
today's dominant ideology. While the corporatist state maintains a veneer of democracy, it squelches
opposition to dominant corporate interests by controlling elected officials through lobbying and
by using propaganda and rhetoric to obscure facts and deter communication among citizens.
Corporatism, asserts Saul, creates conformists who behave like cogs in organizational hierarchies,
not responsible citizens. Moreover, today's managerial-technocratic elite, while glorifying
free markets, technology, computers and globalization, is, in Saul's opinion, narrowly self-serving
and unable to cope with economic stagnation.
His prescriptions include eliminating private-sector financing from electoral politics, renewing
citizen participation in public affairs, massive creation of public-service jobs and a humanist
education to replace narrow specialization. His erudite, often profound analysis challenges conservatives
and liberals alike with its sweeping critique of Western culture, society and economic organization.
LeeBoy (Pine Bluff, Arkansas)
A coup d'etat in slow motion?, August 12, 2005
A key premise of the book is that a life worth living, the so-called examined life,
the fully aware life cannot take place without individuals in the society being fully conscious
- or without seeking the kind of self-knowledge that readily can be translated into action.
Saul maintains that we have a "new religion," the blind pursuit of self-interest.
It is led by an ideology of "corporatism," which has deformed the American ideal of a life worth
living into one devoid of a concept of the common public good. Through it, one of America's
most noble ideas, that of "rugged individualism" has been sullied, distorted and transformed
into an ideology of selfishness; an ideology that has so manipulated our reality that our the
language and knowledge, usually placed in the service of actions and designed to improve our
way of life, has become useless.
The corporate compartmentalization of, and distortion of public knowledge,
and the accompanying enforced conformity has so confused us and has so muted our voices that
knowledge no longer has any effect on our consciousness nor on our actions. Individual
selfishness as "modeled" by corporate self-interest has hi-jacked Western civilization as we
have come to know it.
The book describes how corporatism has accomplished this feat: It has used its
own ideology of self-interest (and the promise of certainty that all ideologies promote) to
render us passive and conformist in areas that matter and non-conformist in those that do not.
This new pseudo or false individualism has the effect of immobilizing and disarming our civilization
intellectually and thus renders it unconscious.
The most important way it does this is by denying and undermining the legitimacy
of the individual as the primary unit and defender of, as well as the center of gravity of the
public good. The public good becomes deformed by, and subordinate to, and equated with the
narrow pursuit of corporate self-interests, as most often defined by the pursuit of profits
and associated corporate perks. The hedonistic model of the corporate life is projected on to
society writ large as the only life worth living.
The impetus for placing corporate interests (and the corporate model of our humanity)
at center stage in the drama of Western Civilization, seems to have come about through the misconception
that rugged individualism, democracy and our current understanding of the public good were once
defined by, depend on, and proceed directly from, the pursuit of economic interests. This is
a misconception because in actual fact exactly the reverse is true: It was notions of the public
good as defined by democracy and individualism that gave rise to economic interests, and not
the other way around.
Moreover, economic models have been so spectacularly wrong and unsuccessful, that
they could not have survived without an ideology that renders the public unconscious. Saul suggests
that even the best economic models amount to little more than passive tinkering. The fact that
we have come to rely on them -- even though we know they are seriously flawed and have little
or no basis in reality -- is compelling evidence of our lack of memory and thus, of our lack
of collective consciousness.
According to the author, it is the proper use of knowledge and memory that
renders us conscious (and thus by extension, also renders us human). The misuse of knowledge
and memory through corporate and technological, manipulation, specialization and compartmentalization
is just a deeper form of collective denial.
Said differently, (corporate generated) specialization creates its own illusions.
When knowledge actually becomes confused and is sufficiently narrowed, compartmentalization
promotes the illusion that knowledge is multiplied when in fact it has shrunken. It leaves the
impression that more rather than less knowledge is being created. It promotes the illusion that
truth is only what the specialist can measure; that "managing is doing," (and more importantly
that a managerial class is important and necessary). Finally, it creates the illusion that the
ideology, which promotes corporatism, produces certainty (the main job of any ideology).
These illusions all have facilitated the corporate takeover of what would otherwise
be seen as, the public interest. By doing so, the legitimacy of the individual as the center
of gravity of the public good is crowded out, undermined and denied.
Thus the management elite, (with their suitcases full of money to buy off our elected
representatives) like a cancer, is let loose on society. It lives within its own insulated cocoon
creating an artificially interiorized sense of its own importance, wellbeing and its own distorted
vision of civilization as a whole. Insulated from within, the management elite is free to grow
without bounds, without accountability, and in complete disregard for the reality "out there,"
and always only to satisfy and service its own selfish needs. Truth is not in the world "out
there" but is in what the professionals can measure and whatever is reported to these insulated
elites. The deeper the insulated managerial class retreats into its own interiorized illusions
of reality, the more confused language becomes and the less likely knowledge can be translated
into actions that will effect the wider reality, and thus the public good.
In its pursuit to deny the legitimacy of the public good and to replace it with
corporate econometric models of reality, Saul has traced the history of this process and gives
many examples of how it works: through media propaganda, films, ads, music, sports and style-and
always through insinuations of what is considered proper thought and ways of behaving.
One of the better examples he gives is how unemployment keeps getting redefined
downward with no relation to the reality of the labor market but mostly to suit the needs of
the neo-cons (the courtiers of the corporate elites). Or how, even as companies are losing money
and are laying-off large numbers of ordinary workers, the salaries and incentive packages of
the managerial elites continue to rise - often even until the very day the companies actually
go bust.
Another example given is how through the process of globalization, that by the
year 2020 the U.S. will be fully reduced to a Third World country. We are told that our future
standard of living will depend entirely on globalization. Here globalization (like its companion
concept, productivity) is a synonym for pegging workers' wage rates to the lowest wages available
worldwide. It is never mentioned in such discussions that the salaries and incentive packages
of the managerial elites will actually rise significantly as this "mother of all least common
denominators economic formulas" is being applied to the lower end of the economic class scale.
Taken to its logical conclusion, the salary of U.S. workers will equal those of Chinese peasants
by 2020; and the corporate elites all will be filthy rich like Sam Walton. This "Wal-Martization"
of America is already well in train.
Why are we so susceptible to being manipulated by corporate generated ideology
and power? Saul gives an answer: We have an addictive weakness for large illusions that
are tied to power and that can simplify our worldview by promising emotional certainty. The
examples he gives are none other than the great religions themselves, and their spin-offs of
Marxism, fascism and most of the autocratic governments of the past, including Hitler's Third
Reich.
The roads to serfdom, or to fascism or communism (or pick your own ism) all intersect at
the same ideology reference points: they begin as enforced social and political orthodoxy and
conformity: first fashion and style; then the social enforcement of ways of thinking; and then
patriotism is made into a religious-like requirement; after which rights and free speech are
suppressed in the name of national security or loyalty to the state. One-by-one laws are suspended
and then arbitrary arrests and disappearances begin; and finally the country is rendered completely
passive and unconscious - compressed into a pseudo-patriotic religious trance.
In the modern era, this progression is by now all too familiar: It leads directly to the
de-legitimatization of the citizen as the primary defender of the public good. This just as
inevitably leads to handing over power to those whose self-interests are larger than their dedication
to the preservation of the public good or even to the preservation and defense of the state
itself.
The citizen then ceases to be able to determine what is, and is not real. He becomes immobilized
like a child, unable to judge what is in his own best interests -- let alone what is in the
best interest of the public good or the state. He is then forced to sing for his dinner and
to dance to the corporate tune for any sense of wellbeing or self-worth. The "public good" becomes
completely subordinate to the "corporate good."
What Saul admonishes us about is already imminently clear: that the kind of society we have
is determined by where the true source of legitimacy lies. Today legitimacy in America -- that
is its power, organization, and influence -- lies not in the vote and in stylized but impotent
public citizen participation, but in the hands of the lobbyists, the technocrats, and the anti-democratic
and anti-patriotic corporate vampires.
Saul did not need to tell us that all the serious decisions are now made in the back rooms
without consulting the people. The best "the people" can hope for (and indeed what they yearn
for) is that the decisions made over their heads will at least retain a semblance of emotional
ideological purity.
While the corporate robber barons sneak out the back door to their off-shore tax havens (with
the nations valuables in tow), the public good has been distorted and transformed into little
more than "What I have" or into bumper sticker sized emotionalisms: the advancement of creative
design and the right to post the Ten Commandments on the court house steps, abortion and gun
rights, anti-Affirmative Action, states rights, etc. Because of its lack of consciousness, Americans
have lost the ability to conceptualize a common good larger than their own immediate individual
narrowly defined self-interests.
How do we get out of this coup d'etat in slow motion? Saul's answer is that we must change
the dynamics of the process but he gives few specifics on how this can be done. This a great
and very sobering read. Five stars.
Joyce (Bonham, Texas)
Makes the complex understandable, November 29, 2012
Saul has unusual skill in making complex entanglements understandable, colorful, and often humorous.
His satire is biting. His irony is satisfying. His writing is dense with fresh insights about
difficult subjects, so reading him is challenging at times but worth the effort. In this book,
Saul explores how the dictatorship of reason unbalanced by other human qualities (common sense,
ethics, intuition, creativity, memory) leads to the rational but antidemocratic structures of
corporatism. He lays out the historical roots of corporatist doctrines (going back to Plato)
and how they are so woven into our social fabric that they threaten the practice of democracy.
He notes how our civilization is blinded to its true character by sentiment and ideology and
argues that while Fascism was defeated in World War II, its corporatist doctrines are powerfully
influencing our society today.
For Saul, one central aspect of the corporatist doctrine is its hijacking of the term
"individualism," defining it as self-absorption or selfishness. Both Left and Right positions
are based upon that definition. The Left agrees with the Right that individualism is selfishness,
only it wants individual rights to be equally distributed and more fair. Whereas Saul talks
about individualism thus:
"Rights are a protection from society. But only by fulfilling their obligations to society
can the individual give meaning to that protection. . . Real individualism then is the
obligation to act as a citizen."
And further:
"The very essence of corporatism is minding your own business. And the very essence of
individualism is the refusal to mind your own business. This is not a particularly pleasant
or easy style of life. It is not profitable, efficient, competitive or rewarded. It often
consists of being persistently annoying to others as well as being stubborn and repetitive."
And further still:
"Criticism is perhaps the citizen's primary weapon in the exercise of her legitimacy.
That is why, in this corporatist society, conformism, loyalty, and silence are so admired
and rewarded."
Saul discusses the role that four economic pillars play in either accentuating or reducing
our unconscious state as citizens: (1) the marketplace, (2) technology, (3) globalization, and
(4) money markets.
Here is my summary of his lessons on these four.
- The danger of using the marketplace as our guide is that we are limiting ourselves to
the narrow and short-term interests of exclusion. If we wish to lead society we must calculate
inclusive costs.
- Business schools (following the "scientific management" Frederick Taylor brought to
Harvard) treat men and women as mechanisms to be managed along with machines. And we are
lining up students behind machines, educating them in isolation when what is really needed
is to show them how they can function together in society.
- Trade cannot in and of itself solve societal problems. The main effect of globalization
has been to shift the tax burden from large corporations onto the middle class. Adam Smith's
repeated admonition has been ignored. It is: high wages are essential to growth and prosperity.
- Money is not a value in itself. Money in money markets is not available for taxation,
and it doesn't really exist. It is pure speculation. We must see what is truly of value
to society and reward those things.
This is only a bit of the clarity Saul's book gives us as citizens about what we are dealing
with, empowering us with weaponry to overcome the Fascistic creation of corporatism.
Christopher (Seattle, Washington, USA)
A roundhouse shot at corporatist, group-think American life, March 19, 2002
"Are we truly living in a corporatist society that uses democracy as little more than a pressure
release valve?"
Not satisfied with hurtling the literary hand-grenade of the 1990's, "Voltaire's Bastards",
into the midst of our oblivious Western society, John Ralston Saul has now equipped his metaphorical
sniper rifle, and in his crosshairs is the 'deviant class' which has destabilized our American
dream. In "The Unconscious Civilization", Saul targets `corporatist' groups, the special interests
(both economic and social) which have lulled citizens into replacing their own thoughts with
those of factions who magically (and absurdly) claim to represent their beliefs and dreams.
"One of the difficulties faced by citizens today is making sense of what is presented
as material for public debate, but is actually no more than the formalized propaganda of
interest groups. It is very rare now in public debate to hear from someone who is not
the official voice of an organization."
Characteristic of Saul's previous work, "The Unconscious Civilization" is a firm, wind-knocking
shot to the gut. But luckily for you, your opponent is also teaching you how to fight. Hear
him shout: `Stand up, slothful citizen. Your constitution is failing.'
"The statistics of our crisis are clear and unforgiving. Yet they pass us by--in newspapers,
on television, in conversations--as if they were not reality. Or rather, as if we were unable
to convert knowledge into action."
Do you feel protected by the Internet, by the millions of voices which you feel will conglomerate
to represent you? So how's it working for you so far? Sure we have information, but what the
hell good is it doing for the spirit of our nation?
"Knowledge is more effectively used today to justify wrong being done than to prevent
it. This raises an important question about the role of freedom of speech. We have a great
deal of it. But if it has little practical effect on reality, then it is not really freedom
of speech. Without utility, speech is just decorative."
In this work, Saul scopes out the corporatist mindset, the coalescence of many minds into
one body with only one voice (corpus from Latin, meaning body), which has invaded business,
politics, and civil society alike. The result is chilling, for when we rise to speak, we find
our individual words have different meanings to each of these bodies. As a consequence, we are
learning to speak less.
"In a corporatist society there is no serious need for traditional censorship or burning,
although there are regular cases. It is as if our language itself is responsible for our
inability to identify and act upon reality."
We may be blind to the corporatist processes, but we should be able to fairly see their results.
In politics: 38% voter turnout rates, lowest political convention viewership, the quashing of
third-party voices; in business: the plastering of disclaimers, sloganeering, and that opaque
wall of business-speak between every salesman and their customer; in civil society: the inability
to progress in conversation without soundbites, and the number of people who flat-out don't
want to talk to you.
This partition of words has not obstructed John Ralston Saul, though. An advocate of "aggressive
common sense", Saul portrays himself correctly as a classic liberal, defender and klaxon for
the citizen, neither champion nor foe of the marketplace.
"The market does not lead, balance, or encourage democracy. However, properly regulated
it is the most effective way to conduct business."
"Every important characteristic of both individualism and democracy has preceded the
key economic events of our millennium. What's more, it was these characteristics that made
most of the economic events possible, not vice-versa."
John Ralston Saul's work consists of five chapters loosely based off a series of 1995 lectures
at the University of Toronto. Like "Voltaire's Bastards", Saul here is discursive and entertaining;
each chapter is a new dive into an invigorating Arctic lake of realization. Chapter One, "The
Great Leap Backwards" launches the assault. The remaining chapters focus on reconstruction...
their titles: "From Propaganda to Language", "From Corporatism to Democracy", "From Managers
and Speculators to Growth", "From Ideology Towards Equilibrium".
Moderately mistitled (resulting in a one-point demerit in the overall review score),
a more appropriate title for this book would have been "The Corporatist Civilization".
A true attack on the `unconscious' among us would have been welcome, though Saul does meander
briefly into this realm, with a few sections that fit cozily into the overall thesis:
"Perhaps the difficulty with the psychoanalytic movement is that from the beginning it
has sent out a contradictory message: Learn to know yourself--your unconscious, the greater
unconscious. This will help you to deal with reality. On the other hand, you are in the
grip of great primeval forces--unknown and unseen--and even if you do know and see them,
it is they who must dominate."
One-quarter the size of "Voltaire's Bastards", Saul this time out initiates a concise attack:
on utopias, ideology, technocracy, demagoguery, and group mentality... all of which direct the
individual to replace their view of the world with that of an `official spokesman', eerily reversing
the vector of our society towards a fascist state. An insightful read; terse, but somewhat condensed
and abstract at places. The trade-offs are more than acceptable, though. Steel yourself for
a barrage of Truth.
seydlitz89
Lacks The Big Picture, July 3, 2000
John Ralston Saul is considered one of the great humanist essayists of this time. That is
true but he is also very much a man of our times, with both the advantages and disadvantages
of the current Weltanschauung. I bought this book after having read some rather rave reviews
and had high expectations. I can't say that I have got anything from this book that I didn't
already have or suspect. He's reinforced some of my opinions without adding to my empherical
knowledge to back them. The concept of the individual, individualism if you will, is dominant
today, representing a narrow and superficial deformation of the Western idea. Market Capitalism
does not guarantee democracy; you can have poor democracies and prosperous dictatorships.
Today we are in an unconscious process of masochistic suicide destroying the very substance
of our public institutions, institutions which were the products of decades of thought and democratic
debate, all in the pursuit of making things more `effective', more `business-like'. . .
So according to Saul, and on target IMHO, but what does this all mean? What can we draw from
these intermediate conclusions?
He then goes on to describe the crisis that grips the West, which he dates from 1973. Bureaucratic
thinking and rationalization continue to manipulate our perceptions, dominate and drive our
existence, controlled by what he describes as `Corporatism'. He states,
"the corporatist movement was born in the nineteenth century as an alternative to democracy.
It proposed the legitimacy of groups over that of the individual citizen." Pp16-17
Napoleon, Hegel and Bismarck helped the process along by emphasizing rule by elites and adherence
to the state. This was all only a lead up to the great
"new all-powerful clockmaker god - the marketplace - and his archangel, technology. Trade
is the marketplace's miraculous cure for all that ails us. . . I would suggest that
Marxism, fascism and the marketplace strongly resemble each other. They are all corporatist,
managerial and hooked on technology as their own particular golden calf." Pp19-20
...Weber warned of the dangers of bureaucracy, of how capitalism mated with ever increasing
rationalization and technological innovation would become a very difficult beast to control.
He also warned against the subversion of democratic institutions by powerful non-democratic
groups with oligarchic tendencies. Saul's view on the triumph of rationalism is also, by the
way, influenced by Weber. So instead of damning Weber he should be thanking him. Here we see
the tendency so common among US (and Canadian) intellectuals today of putting the blame for
their perceived crisis on foreign thinkers (usually German or French) who have some how lead
the well-intentioned, but all too trusting North Americans astray. Alan Bloom, on the right,
was guilty of the same thing in his The Closing of the American Mind. In all, this tendency
represents a mixing up of cause and effect. If you want to look for a foreign culpret, how about
the English Utilitarians who put morally accepted self-interest and quest for profit in the
service of individual gain above anything else? An attitude that has since then been enthusisatically
and uncritically accepted by the mass of American intellectuals.
What is Saul's solution? Persistent public commitment by the citizenry can turn the tables
on corporatism. But how, given the power that Saul says the elites have to manipulate and
control all the spheres of our existence? What of their ability to define "freedom" in
wholly consumerist terms, making it a mere matter of material choice? As long as the US Constitution
allows for majority rule, the public will have the last say, but how to mobilize the public,
how to educate them as to defending their best interests when the reigns of mass communication
are in the hands of the corporatists? How do we make the interests of society take priority
over the interests of profit? The moral dilemma in all this is ignored by Saul who distrusts
anyone who even mentions it. Unable to follow Nietzsche's lead he stumbles. Nietzsche, alas
a foreigner, was also primarily a moralist. Morals are important since they shape the way that
we adjust to the struggle for our very existence in an ever more competitive world. While a
sense of the spiritual is necessary, the vast bulk of our actions, the reality we must deal
with in our every day lives, is economic due to the pervasive market system which is the very
air we breathe. It is therefore very much man-made, synthetic, something that has been grafted
onto society, not a component of it. Morals are as necessary now as when we lived in small farming
communities, since it is by working together, by accepting each others' strengths and weaknesses,
by learning to control our own impulses and irrational drives and by accepting the inate worth
of each person that we insure not only our own but the survival of our species in the coming
hard winter. A, "myth-building" exercise you say, but is it any more a myth than that of "the
Market corrects itself and all we need do is trust in it"?
Since the end of the 18th Century we in the West have lost almost every remnant of our pre-Capitalist
past. We have forgotten our entire community or social or human-to-human history, we are unable
to recall when an action did not infer some sort of self-benefit. We fail to see that the so-called
Third World is as we were two hundred years ago. It is not a question of scientific or technological
or commercial progress, in the most human sense, but of the maturing and decay of an ideological-based
social system.
Saul's main drawback is that he lacks the in-depth knowledge of the numerous disciplines
necessary for this very complex subject. That and `distance' since he approaches the problem
with far too many preconceptions. A much better book in a related subject is Karl Polanyi's
The Great Transformation. His history of the market economy provides much of the background
necessary to illuminate our current situation. Few if any thinkers today have the breadth of
knowledge to provide the big picture of our current post-modern situation. Men like Max Weber,
who had a encyclopedic knowledge of several wide fields of study no longer walk the earth. Still
a much more refined, yet wide view which would include a fuller understanding of social economics,
history, political science, sociology, theology and philosophy is necessary in order to get
a grip on the tendencies which are slowly eating away our society and threaten to turn us all
into what Max Weber described as "a culture of specialists without spirit, sensualists without
heart".
Herbert L Calhoun
Wake up and Smell the Oil Wal-Mart Shoppers, August 10, 2005
If the doubling, in less than a year, of the price of oil for no discernable reason
(with no end in sight), and with absolutely no reaction from us or our government is not evidence
that something is terribly wrong with our collective mind. Then surely an order of magnitude
increase in the cost of medical care and prescription drugs, and the quintupling of our health
insurance (for those of us who have any), should be.
Or, one might have imagined that the juxtaposition of soaring corporate profits
(in these very same areas) with an effective reduction in "actual wages" everywhere else, would
also have shaken us from our deep collective slumber?
Or maybe the fact that we have been led into yet another war for no defensible
reasons and without either an exit strategy or a fighting plan -- a war whose justifications
and rationale keeps changing with each increased attack from the terrorists as our national
debt continues to soar -- would have shaken us out of our passivity.
While our government's response to the needs of the "rank-and-file" is increasingly
non-existent, or completely ineffectual, and the "managerial class" continues to rob us blind
as they laugh all the way to the bank; we are obsessed with the risk of breast implants, abortion
rights, hanging the Ten Commandments in the public square, reality shows (that are anything
but real), Janet Jackson's wardrobe malfunction, and how to continue to win at the game of "Democrats
and Republicans (or liberals and conservatives, or Blacks versus Whites, or males versus females,
or pick your own senseless emotional dichotomy)."
But the very best evidence yet of our lack of consciousness and proof that our
society is being thrown under the bus while we watch in horror with our eyes wide open, is when
the most devastating critique of our own slothfulness is also the sanest, most compassionate
and most eloquent.
Saul in this trenchant sanity check of the society that leads the Western World realizes
that the time for vitriol and shouting has long since passed. That is why with eloquence, understated
passion and with measured but devastating logic and reason (that quality he so distrusts), he
has issued a broadside at the foundation stone of what ails our society most: Rampant and immoral
Corporatism.
And even though in the end, his prescription for how we are to extricate ourselves from this
dilemma is unconvincing, he has laid the necessary groundwork for serious thinking to begin.
If "the people" in Western Democracies are ever to regain control of their minds, and then eventually
their societies; Saul's ideas in this small volume must inevitably be contended with.
A Customer
Saul is a modern secular prophet!, March 28, 1999
You can add the name John Ralston Saul to those of Noam Chomsky, Ivan Illich, Franz
Fanon (and who else?) on your list of the key late 20th century 'global conspiracy theorists'
- people who are visionary seers/prophets who have unorthodox views and make outrageous pronouncements
on this and that, but with whom you have to broadly agree. Because they operate outside the
conventions of fixed ideologies, they're able to see the broader picture, and see more deeply
into the nature of things.
The Unconscious Civilization - the 1995 Massey Lectures - was written in an oral style by
Canadian freelance intellectual, essayist and novelist John Ralston Saul.
His thesis is disarmingly simple: in the long line of history's totalitarianisms, we
can now add undemocratic 'corporatism'.
Our society, he argues, is only superficially based on the individual and democracy.
Luck of retirement funds force you to believe in scams. Beware this trap " free cheese is available
only in a mousetrap". Same for investments that bring dramatically more then safe "inflation plus 2%"
return available from TIPs. Actually there is something troubling about the level of
gullibility and groupthink
demonstrated in the article below: "And so were more and
more people in Lexington, including doctors, lawyers and accountants..."
Yahoo/Associated Press
In this Feb. 28, 2013 photo, Sarah Chavez, center, sits with her son Bidal, right, and daughter
Sarahi, front, at her home in Lexington, N.C. Desperate to raise money for their …more
6-year-old daughter's cancer treatments last summer, friends told Jose and Sarah Chavez
of a way to quickly turn their meager savings into a small fortune. But what the Chavez family and
many others didn't know was that state and federal regulators for months had received complaints
that ZeekRewards was a scam.
LEXINGTON, N.C. (AP) - In the hardware store on South Main Street, the owner pulled Caron Myers
aside to tell her about the best thing to happen in years to this once-thriving furniture and textile
town.
Did she hear about the online company ZeekRewards? For a small investment, she could make a fortune.
He had invested. So had his grandsons. And so were more and more people
in Lexington, including doctors, lawyers and accountants.
Skeptical at first, Myers drove a few blocks to the company's one-story, red-brick office and
spotted a line of people circling the building. She was sold, and plunked down several thousand
dollars. But months later, Myers, like hundreds of thousands of others, discovered the truth: ZeekRewards
was a scam.
"I was duped," Meyer said. "We trusted this man. The community is still in shock."
Authorities say owner Paul Burks was the mastermind of a $600 million Ponzi scheme - one of the
biggest in U.S. history - that attracted 1 million investors, including nearly 50,000 in North Carolina.
Many were recruited by friends and family in Lexington, a quintessential small town where neighbors
look out for each other.
But what investors didn't know was that regulators had received nearly a dozen complaints about
ZeekRewards and the related site Zeekler.com, but failed to take action for months,
leaving the company free to recruit tens of thousands of new victims.
The Securities and Exchange Commission, which closed the operation Aug. 17, said Burks was selling
securities without a license. The Ponzi scheme was using money from
new investors to pay the earlier ones.
Burks has agreed to pay a $4 million penalty and cooperate with a federal court-appointed receiver
trying to recover hundreds of millions of dollars.
Investigators say Burks, a former nursing home magician, siphoned millions for his personal use.
But he has not been charged.
In his first public comments, Burks told The Associated Press he couldn't discuss details because
of lawsuits by victims trying to recoup money.
"Everything will come out in time," said Burks, 66, standing in the doorway of his home.
Asked if he had anything to say to victims, he shook his head.
"I never told anyone to invest more money than they could afford," Burks snapped. "I didn't tell
them to do that. Never."
He said if they lost money, "it's their fault. Not mine. Don't blame me."
But Cal Cunningham, a former prosecutor representing investors in a lawsuit, slammed Burks -
and regulators for taking so long to act.
"It's why we need a full hearing on what happened in a court of law - whether that be our civil
case or a criminal proceeding. A lot of people were hurt," he said.
____
Burks started Zeekler in early 2010 as an online penny auction site. His business experience
included nearly four decades in multilevel marketing programs - such as Amway - including failed
attempts to launch similar businesses of his own.
In penny auctions, consumers compete to pay pennies on the dollar for name brand products such
as iPads. Each bid costs as much as $1, so participating can become expensive and the sites can
earn nice profits when multiple users bid against each other.
In January 2011, he incorporated aspects of multilevel marketing
into the business when he launched ZeekRewards. The program offered a share of the
penny auction's profits to people who invested money, promoted the company on other websites and
recruited other participants. Under a complicated formula, investors were issued "profit points"
that grew every day.
Investments were capped at $10,000, but people could invest on behalf of their spouses, children
or other relatives. Some mortgaged homes to raise their investment.
At first, ZeekRewards complied when investors sought to cash out. And that became the best ad
of all: happy investors with their checks in Facebook photos.
People who didn't trust the mail traveled long distances to drop off checks at the cramped office
building where security guards allowed only seven inside at a time. Employees collected money and
wrote out receipts at the office cluttered with dozens of plastic mail bins stuffed with check-filled
envelopes. To withdraw money, investors filed an online request - or called - and then had to wait
for a check.
By the end of 2011, it seemed like everybody in Lexington was talking
about ZeekRewards. Many saw it as a way to make extra cash to pay bills or help family.
"No one was in it to get rich," said Mary Bell, a 75-year-old seamstress from Lexington who scraped
together money to invest.
Sarah Chavez wanted extra money for her daughter's frequent hospital visits for leukemia. Her
husband worked in a factory, and they invested $7,000.
"It's hard to believe in something like that. But everyone told us it was a sure thing," she
said.
Burks mostly kept to himself, and few locals knew anything about the quiet, balding man with
thick glasses.
In the 1980s and early 1990s, the Shreveport, La., native toured nursing homes in the South as
a magician with country singer David Houston. Burks moved to Lexington in the early 1990s because
his wife was from the area. In 2000, Burks ran for the state House as a Libertarian, but he collected
only 330 votes. Then he became a local celebrity. Most afternoons, he ate lunch at the same downtown
restaurant with an entourage of managers. Conference calls with investors were posted on YouTube.
He produced glossy brochures touting the company.
"In addition to the mind-blowing savings, you can create more wealth than you have ever thought
possible with ZeekRewards' geometrically progressive matric compensation plan," the brochure said.
Burks also hired some of the industry's top attorneys and analysts
to promote his company.
The publicity paid off. When the Association of Network Marketing
Professionals held its annual convention in March 2012, it called ZeekRewards the model of legal
compliance.
___
But behind the scenes, there were troubling signs, according to documents, company emails and
consumer complaints reviewed by the AP.
In early June, the state of Montana gave ZeekRewards the boot. Montana
requires multilevel marketing companies to register. But ZeekRewards didn't submit
any paperwork - even after warnings, said Luke Hamilton, a spokesman for the attorney general's
office.
"We started getting a lot of complaints," he said.
In August, a North Carolina employees' credit union warned customers
not to invest in ZeekRewards because it was a "fraudulent company."
But regulators received complaints long before then.
In a Nov. 23, 2011, complaint filed with the North Carolina Attorney General's office, Wayne
Tidderington of Florida called ZeekRewards an "illegal" Ponzi scheme. He said a relative had invested
$8,000 and the company guaranteed a return of 125 percent every 90 days.
The attorney general's office can ask a judge to shut down a business because of deceptive trade
practices. But it forwarded Tidderington's complaint to the secretary of state's office because
it looked like it might involve securities. The secretary of state's
office, however, declined to take action because it didn't believe it had the jurisdiction, spokeswoman
Liz Proctor said.
The complaint died.
"I put it all together," Tidderington told the AP. "I gave them the roadmap. I said, 'Here's
a snake. Here's the gun. Here's the bullets. Shoot the snake.' But they ignored me."
Over the next seven months, the attorney general's office received nearly a dozen more complaints.
But it wasn't until July 6 that it issued an order giving Burks until the end of the month to
turn over all Zeek-related documents. He missed that deadline.
Kevin Anderson, senior deputy attorney general for consumer protection, insisted his agency correctly
handled the case, saying his office receives thousands of complaints a year.
"We have to have more concrete evidence than a couple of consumer complaints before we go to
court," he said.
The SEC received similar complaints during the same period, but the agency didn't begin its investigation
until the summer.
SEC spokeswoman Christine D'Amico declined to comment on the investigation, except to say the
agency took action "as soon as we believed we had sufficient evidence to obtain an emergency court
order to halt the fraud."
___
Months later, people in Lexington are wondering what's next.
Kenneth Bell, the court-appointed receiver, said ZeekRewards may
have taken in $800 million. So far, he's recovered $312 million. Hundreds of millions
were paid out to investors. Just how much is missing? He doesn't know.
Myers said the community is still recovering - but the wounds are deep. People are wondering
why investigators didn't act more quickly and why no one, including Burks, has been charged.
"There are thousands and thousands of victims who might not have lost a penny had the government
intervened more quickly," she said.
"If you follow issues like Too-Big-To-Fail or Wall Street corruption long enough, you realize
that the reason things don't get done about them by our government has very little to do with
ideology or even politics, in the way most of us understand politics.
Instead, it's a bizarre, almost tribal mentality that rules our
capital city – a kind of groupthink that makes extreme
myopia and a willingness to ignore the tribe's ostensible connection to the people who elected
them a condition for social advancement within."
Matt Taibbi, Neil Barofsky's Adventure in Groupthink
Personally I think this is the corrosive influence of the credibility trap, the amorality of careerism,
and of course, an ambivalence towards white collar corruption as the inherent entitlement of privilege.
There seems to have been a shift in perspective amongst the new ruling class from noblesse oblige
to droit du seigneur. This is what Robert Johnson calls 'the audacious
oligarchy.'
While it is recovering much of this sudden, five minute loss even now, with spot back to 1680 already,
the hit on the gold market in the New York trade this morning was fairly blatant.
Perhaps it was just some innocent who had the desire to drop a boatload of contracts into a quiet
market, and knock the price down while maximizing their selling loss. Or another 'fat finger'
mishap, which seem to happen quite a bit around option expiration for example.
Or perhaps it was some wiseguy trader who looked at the market, having some advantageous insight
into the order books, and decided to 'run the stops.'
Thank God the US has the CFTC, whose job it is to look at this sort of thing and to tell us whether
it was legitimate, or not.
And we should hear back about this, perhaps as early as January, 2017. And maybe even sooner on
this one:
24 Tonnes of Paper Gold Dumped at Market
But it is nice to see that the CFTC is doing something. They are
asking the court to overturn the $30 million fine on the Amaranth trader who was caught manipulating
the natural gas market, because another regulator did their job for them.
What conditions or combination of antecedent variables cause a four-star general, war hero, former
chairman of the Joint Chiefs of Staff and secretary of state with a popularity rating that could
win him the presidency to promote and defend publicly a course of action about which he has "serious
misgivings?" (Powell, 2006). High stress? Low self-esteem? The individual in question is, of course,
none other than former Secretary of State Colin Powell. The course of action is the invasion of
Iraq on March 23, 2003, otherwise known as Operation Iraqi Freedom. The conditions or combination
of antecedent variables being considered are proposed in the theory by Irving Janis known as groupthink.
Specifically, this paper asks: Was the Bush administration's decision to invade Iraq in 2003 the
result of groupthink? It focuses on the five principal foreign policy actors George W. Bush, Richard
Cheney, Donald Rumsfeld, Colin Powell and Condoleezza Rice during the sixteen-month period between
September 11, 2001 and March 23, 2003. In particular, it considers to what extent each of the individual
actors led in the decision-making process, and to what extent each followed.
According to Janis, groupthink is a mode of decision making by a cohesive group lacking a tradition
of impartial leadership and norms requiring methodical procedures. Driven by a false sense of unanimity,
invulnerability, and self-righteousness, the group ignores policy options and makes faulty decisions
without sufficiently considering potential outcomes (Janis, 1972). To put it more simply, specific
factors within groups lead to poor decision-making, which in turn lead to policy failure. Janis
suggests that decisions grounded in groupthink can be disastrous. In four case studies of U.S. foreign
policy decisions, Janis found that when groupthink was apparent the policies failed, and when it
was not apparent the policies were successful.[1]
Janis offers as a caveat, however, that good quality decision-making does not always lead to successful
policy outcomes (Janis, 1972).
Janis suggests that groupthink is most likely to occur when certain antecedent conditions exist.
These conditions include group cohesiveness, insulation of the decision-making group, lack of tradition
of impartial leadership, lack of norms requiring methodical procedures, homogeneity of members'
social background and ideology, high stress from external threats with low hope of a better solution
than the leader's, and low self-esteem temporarily induced by either recent failure, excessive difficulties
on current decision-making tasks, or moral dilemmas. While Janis does not attribute groupthink to
any of these antecedent conditions per se, he suggests that the conditions do tend to allow for
certain symptoms to develop. The symptoms include an overestimation of the group (the illusion of
invulnerability and a belief in the inherent morality of the group), closed mindedness (collective
rationalization and stereotyping of out-groups), and pressure towards uniformity (self-censorship,
illusion of unanimity, direct pressure on dissenters and self-appointed mindguards).
J. David Singer (1961, 78-80) suggests that there are three functions of an analytical model:
description, explanation, and prediction. When describing a phenomenon, the goal is to "present
as complete and undistorted a picture as is possible." When explaining a phenomenon, which is the
primary purpose of theory according to Singer, the goal is to offer a valid and parsimonious explanation
of the causal mechanism. It is important that valid explanation be given priority over accurate
description if the two are in conflict. Finally, an analytical model should provide for some level
of reliable prediction. Singer insists that the most important decision any researcher makes is
in matching the research with the proper level of analysis, whether systemic or sub-systemic. The
contribution this case study makes is that it analyzes the internal dynamics of the top decision-makers
in arguably one of the most dynamic periods in American foreign policy. This study concludes that
the groupthink model is valuable in its ability to help us describe the decision-making process,
explain the actions of the Bush administration, and predict whether groupthink will be a potential
problem in future administrations.
The paper begins by briefly discussing the relevant literature. Then it addresses those antecedent
conditions present in the George W. Bush administration between September 11, 2001 and March 23,
2003. Finally, it examines the symptoms of groupthink and identifies which appear to be present
and which do not.
Group Insulation Group insulation is the first structural condition in Janis's groupthink model.
Group insulation refers to "insulation of the decision-making group from the judgments of qualified
associates, who, as outsiders, are not permitted to know about the new policies under discussion
until after a final decision has been made" (Janis, 1972, 197). This particular antecedent condition
was undeniably present in the Bush administration between September 11, 2001 and March 23, 2003.
As former Nixon aide John W. Dean wrote, "George W. Bush and Richard B. Cheney have created the
most secretive presidency of my lifetime. Their secrecy is far worse than during Watergate" (quoted
in Wittkopf and Jones, 2008, 329). The administration secretly planned and prepared for war without
disclosing it to the general public. Planning began in November of 2001 and included upgrading airfields
in various Gulf countries, moving supplies to the region and the construction of necessary facilities.
By April 2002, the planning and preparation for war was also being hidden from Congress. Bush had
instructed General Tommy Franks not to make financial requests through Washington. "Anything you
need, you'll have." The money would no longer be appropriated through congress. By the end of July
2002, Bush had approved more than thirty projects totaling over $700 million. Congress had no knowledge
or involvement (Woodward, 2004, 122). In December of 2002, Bush and Rumsfeld agreed to start secretly
deploying troops into the theatre so as not to attract the attention of the press or the rest of
the world. The first deployment order went out on December 6, 2002 and deployments continued every
two weeks or so thereafter. Troops were given less than a week's notice at times. In January 2003,
the Bush administration arranged for much of its humanitarian relief to be disguised as general
contributions to conceal its war planning from the NGO recipients. Yet, when asked about Iraq, Bush's
favorite response was "I have no war plans on my desk." At one point or another after the planning
began, nearly every member of the administration publicly denied any plans to go to war with Iraq
(Woodward, 2004, 129).
Lack of Tradition of Impartial Leadership This is the second structural variable. According to
Janis, this condition prevails in groups whose leader disregards "organizational tradition" and
instead pursues his or her own "preferred policies" (Janis, 1983, 249). Again, one would be hard-pressed
to find a better example of this particular antecedent variable since President Richard Nixon. Even
though each of the four major foreign policy players enjoyed direct access to the president, they
worked "for a man who doesn't tolerate being upstaged" (Woodward, 2004). Bush relied heavily on
Rice to inform him of various policy options, and then he made the final decisions. Former Treasury
Secretary Paul O'Neill puts it eloquently. Speaking of Rice he states: "She doesn't drive to consensus.
Rather she drives toward clarity. Then he [Bush] decides what the consensus is" (Burke, 2005, 236).
On the morning of September 11, 2001, when President Bush was informed of the attacks, he decided
on his own, right then and there that the nation was going to war: "I made up my mind at that moment
that we were going to war" (Renshon, 2008, 393). The Bush II administration began with a foreign
policy based on realism and selective engagement. Bush advocated selective engagement early on,
while Cheney, Rice and Rumsfeld were all realists in the early days of the administration (Purdum,
2003). Rice summarized the administration's position in a concise article that clearly prioritized
"national interest" over "humanitarian interests." Rice asserted that "the Clinton administration
has often been so anxious to find multilateral solutions to problems that it has signed agreements
that are not in America's interest." Rice specifically noted treaties such as the Kyoto Protocol
and the Comprehensive Test ban Treaty as "instructive." The Bush II administration would focus on
"power politics, great powers and power balances." It would have no need of the recent foreign policy
tradition of multilateralism (Rice, 2000, 47-8). The Bush administration also broke with its own
realist policies to pursue a neoconservative agenda of Wilsonian-style nation-building. In his 2000
presidential campaign, Bush "scorned 'nation-building' as a woolly-headed ambition that risked diluting
America's priorities and diverting its military into insoluble conflicts around the world" (Purdum,
2003, 11). Yet by August 2002, "the tone of the Bush administration's rhetoric changed sharply."
Republican realists were deeply concerned with the administration's break with the realist tradition.
Individuals such as Scowcroft and Baker spoke out in disagreement with the administration. They
saw Powell as their only remaining ally inside the inner circle. Scowcroft warned that a war with
Iraq "could turn the whole region into a cauldron." Retired General Anthony Zinni was present when
Cheney gave a speech in Nashville on August 26, 2002. As he listened to the vice president state
that "there is no doubt that Saddam Hussein now has weapons of mass destruction," Zinni "nearly
fell off his chair." Zinni "had seen nothing to support Cheney's certitude" (Ricks, 2006, 46-7,
49-50). Still, in spite of nearly universal opposition, President Bush ordered the invasion of Iraq.
He argued that the United States had to intervene in Iraq in order to prevent terrorists from training
in Iraq, to prevent terrorists from obtaining and using weapons of mass destruction against America,
and to bring democracy and freedom to the Iraqi people (The White House, 2003). The most important
break with organizational tradition came with the Bush administration's push toward the "imperial
presidency." This transition was marked by a myriad of developments including the passage of the
Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act) otherwise known as the Patriot Act (The White House, 2006).
The passage of the Patriot Act both reflected and contributed to a significant shift in the balance
of power away from Congress and in favor of the executive office. The USA PATRIOT Act was passed
by Congress within weeks and signed by President Bush on October 26, 2001, just fifteen days after
the attacks. While the reach of this act is unprecedented, overriding some 48 state laws regarding
civil liberties, the USA PATRIOT Act was just one of many developments that significantly increased
the power of the executive office. The Bush administration's shift to the "imperial presidency"
has been marked by a number of developments from an intensification of secrecy to the rejection
of international treaties requiring Senate ratification to the doctrine of preventive war giving
the president the power to unilaterally decide to go to war.[10] While a complete enumeration of
these developments is beyond the scope of this paper, the administration's strong push to empower
the presidency demonstrates a major break with organizational tradition. But which actor emerges
as the clear leader in this administration, if any? Regarding decisions concerning military intervention,
a major pillar of the Bush administration's foreign policy, "the President generally defers to the
Vice-President on all these issues" (Hersh, 2008, 378). Cheney "harbored a deep sense of unfinished
business about Iraq." The vice president was in favor of what George Schultz coined "hot preemption"
(Woodward, 2004, 9, 129). As mentioned earlier in this paper, it was Cheney that worked so arduously
to empower the executive branch. Yet Cheney was clearly chosen by Bush to serve his preferences,
and not the other way around. Wolfowitz had been the preeminent neoconservative in the group. He
earned his PhD in political science from the University of Chicago, "a cradle of what came to be
called neo-conservative thinking on foreign policy and a hotbed of the anti-détente school during
the Cold War." Wolfowitz was a strong advocate for toppling Saddam, seeing Iraq as a threat as early
as 1979. After September 11, 2001 he argued that there was a "10 to 50 percent chance that the Iraqi
leader had been involved in the 9/11 attacks" (Purdum, 2003, 10, 13). Given the core of the Bush
administration was carefully and methodically assembled by Bush himself, he emerges as the primary
leader in the administration; a leader who proved well-equipped to manage the talents and Washington
contacts possessed by his inner circle. In the post-9/11 world, with the return of the "imperial
presidency" as represented by the passage of the USA PATRIOT Act and a host of other developments,
a lack of traditional leadership is almost a given. When one then considers the Bush administration's
clear break with recent foreign policy tradition, a lack of tradition of impartial leadership remains
the only viable option. This antecedent condition was definitely present.
Lack of Norms Requiring Methodical Procedures "According to the groupthink hypothesis, members
of any small cohesive group tend to maintain esprit de corps by unconsciously developing a number
of shared illusions and related norms that interfere with critical thinking and reality testing"
(Janis 1972, 36). In other words, policy determines intelligence, not the other way around. This
antecedent condition was also present without a doubt. A widely known account regarding the decision
to invade Iraq is CIA Director George Tenet's alleged conversation with Pentagon advisor Richard
Perle at the White House on (or around) September 12, 2001.[11] In a now famous interview with CBS
60 Minutes in 2007, George Tenet told his side of the story. According to Tenet, Perle told him:
"Iraq has got to pay a price for what happened yesterday, they bear responsibility." But Tenet explicitly
denied the existence of any intelligence connecting Saddam Hussein to al Qaeda: "We could never
verify that there was any Iraqi... complicity with al Qaeda for 9/11 or any operational act against
America. Period." Yet the Bush administration publicly linked Saddam Hussein to al Qaeda in an effort
to blame 9/11 on Iraq. Tenet also denied the existence of any explicit evidence that supported Iraq's
supposed possession of weapons of mass destruction. Tenet insists that he consistently reported
that in the intelligence community's judgment "Iraq will not have a nuclear weapon until the year
2007, 2009." As for chemical and biological weapons, the intelligence community believed Saddam
had the capacity to produce them, but they had no knowledge that Saddam possessed them.[12] Still
the Bush administration heavily justified the war in Iraq based on the alleged existence of such
intelligence. In fact, Colin Powell reported to the United Nations, "Our conservative estimate is
that Iraq today has a stockpile of between 100 and 500 tons of chemical weapons agent." What is
even more incriminating for Tenet than for Powell, is that Tenet was present at the briefing. Furthermore,
despite the fact that the CIA denied the existence of any intelligence supporting Saddam Hussein's
attempts to obtain uranium from Africa, even demanding the allegation be removed from two previous
presidential speeches, President Bush made the allegation anyway in his 2003 State of the Union
Address (60 Minutes, 2007). According to Pillar (2008, 238-9), the Bush administration reversed
the methodical procedures, instead of using intelligence to drive policy, it used "policy to drive
intelligence." Still worse, Pillar states that the "Bush administration deviated from the professional
standard... in aggressively using intelligence to win public support for its decision to go to war."
Pillar points out that the administration's "cherry-picking" of intelligence to support its agenda
completely disregarded the intelligence community's recommendations and judgments. Why would the
Bush administration proceed in this direction? As previously discussed, the administration is alleged
to have been planning and preparing for war with Iraq since as early as November 2001. Hoffman (2006,
1-2) argues that Cheney and Rumsfeld were "enraged" by the Clinton administration's failure to act
unilaterally and proclaim U.S. hegemony. He writes, "When George W. Bush came to power, September
11 provided what seemed an unchallengeable opportunity for a drastic change in strategy and in diplomacy."
This development, of course, begs the question: "Just how far back did their desire to invade Iraq
extend?" On September 12, 2001, Rumsfeld suggested to the war cabinet that the attacks presented
"an 'opportunity' to launch against Iraq." Cheney favored the idea, but suggested the administration
wait for fear the United States would lose its "rightful place as good guy" (Woodward, 2004, 25).[13]
Lobe (2002) offers a little history lesson regarding the emergence of the policy of unilateralism
as it predates George W. Bush, but clearly pinpointing the implementation of it during the Bush
administration's first term. Lobe described the appearance of a certain document that had been leaked
to the New York Times in the spring of 1992. That document, written by Paul Wolfowitz and Irve Lewis
Libby (who at the time worked at the Pentagon under Dick Cheney), was the draft Defense Policy Guidance
(DPG). The draft DPG called for American unilateralism, military hegemony and a policy of preemption.
Lobe wrote that the draft DPG was described by one U.S. senator as "literally a Pax Americana."
Lobe himself states that the draft DPG was "essentially a vision of a world dominated by the unilateral
use of US military power." Its intended goal was to "prevent the rise of any possible challenger
for the foreseeable future." This sounds strikingly familiar. [14] Obviously, quite a bit had changed
between the spring of 1992 (when the draft DPG was first leaked) and September 11, 2001. The controversy
caused by the leaked draft DPG led then-National Security Adviser Brent Scowcroft and Secretary
of State James Baker to insist that "the final DPG was toned down to the point of unrecognizability."
By September 11, 2001, Cheney had risen to vice president, Wolfowitz to deputy defense secretary,
and Libby to Cheney's chief of staff. In its first year in office, the Bush administration "engineered
what former UN ambassador Richard Holbrooke recently described as a 'radical break with 55 years
of bipartisan tradition' in US foreign policy making" (Lobe, 2002).
That's exactly what F. S. Michaels explores in Monoculture: How One Story Is Changing Everything
- a provocative investigation of the dominant story of our time and how it's shaping six key areas
of our lives: our work, our relationships with others and the natural world, our education, our
physical and mental health, our communities, and our creativity.
The governing pattern a culture obeys is a master story– one narrative in society that takes
over the others, shrinking diversity and forming a monoculture. When you're inside a master
story at a particular time in history, you tend to accept its definition of reality. You unconsciously
believe and act on certain things, and disbelieve and fail to act on other things. That's the
power of the monoculture; it's able to direct us without us knowing too much about it." ~ F.
S. Michaels
During the Middle Ages, the dominant monoculture was one of religion and superstition. When Galileo
challenged the Catholic Church's geocentricity with his heliocentric model of the universe, he was
accused of heresy and punished accordingly, but he did spark the drawn of the next monoculture,
which reached a tipping point in the seventeenth century as humanity came to believe the world was
fully knowable and discoverable through science, machines and mathematics - the scientific monoculture
was born.
Ours, Micheals demonstrates, is a monoculture shaped by economic values and assumptions, and
it shapes everything from the obvious things (our consumer habits, the music we listen to, the clothes
we wear) to the less obvious and more uncomfortable to relinquish the belief of autonomy over (our
relationships, our religion, our appreciation of art).
A monoculture doesn't mean that everyone believes exactly the same thing or acts in exactly the
same way, but that we end up sharing key beliefs and assumptions that direct our lives. Because
a monoculture is mostly left unarticulated until it has been displaced years later, we learn its
boundaries by trial and error. We somehow come to know how the mater story goes, though no one tells
us exactly what the story is or what its rules are. We develop a strong sense of what's expected
of us at work, in our families and communities - even if we sometimes choose not to meet those expectations.
We usually don't ask ourselves where those expectations came from in the first place. They just
exist - or they do until we find ourselves wishing things were different somehow, though we can't
say exactly what we would change, or how." ~ F. S. Michaels Neither a dreary observation of all
the ways in which our economic monoculture has thwarted our ability to live life fully and authentically
nor a blindly optimistic sticking-it-to-the-man kumbaya, Michaels offers a smart and realistic guide
to first recognizing the monoculture and the challenges of transcending its limitations, then considering
ways in which we, as sentient and autonomous individuals, can move past its confines to live a more
authentic life within a broader spectrum of human values.
August 15, 2011 |
FT.com
As the IMF knows only too well, groupthink played a key role in policymakers' inability to
spot the risk of a major financial crisis. Could it be that globalisation contributed to this rise
of groupthink? Central Bank of Ireland governor Patrick Honohan thinks so.
Since the era of David Ricardo, most –
though
not all – economists have extolled the virtues of global trade.
Mr Honohan's comments are far from a damning critique. But the central bank governor points
out that globalisation can "turbo charge" booms and busts in small open economies such as Ireland's.
Why?
The governor makes the oft-heard point that globalisation leads countries to rely too heavily
on producing only a handful of goods. He then claims – rather more unusually – that this hollowing
out occurs not only in productive capacity, but also in economic policy.
I will also touch on another, not unrelated, globalization-related theme, namely the tendency
for globalized economies to be structurally incomplete or "hollowed-out" both in productive
capacity (concentration on a limited range of economic sectors), and in the repertoire
of macro-fiscal and prudential policy tools (as reliance is increasingly placed
on (i) external markets for components or factors of production and on (ii) external institutions
and analyses for the design and in some cases delivery of policy.) This
tendency can feed the turbocharger and restrict the capacity for policy response to
emerging problems.
Ireland's accession to the eurozone was, he says, very much a case in point.
As Ireland joined the monetary union in 1999, its status among the most globalized economies
in the world was confirmed. In the following years, its finances would be submerged
in those of the euro area – with international flows often not even being separately measured
and assessed as attention focused on the euro area as a whole. The idea that much of macro policy
had been largely outsourced to the European Central Bank took hold in policy circles.
A sizable fragmentation of policy thereby occurred: domestic policymakers no longer took full
ownership of macro issues. Finance Minister McCreevy's stated views about fiscal
policy ("when I have it I spend it") disavowed any stabilization role for fiscal policy.
Ouch. Low interest rates, imported from Europe, fed the boom – as did profligate credit from
abroad and a lack of exchange-rate risk – and Ireland ended up with
"a world-beating construction and property price bubble".
At the same time as McCreevy's finance ministry had abdicated responsibility for macro-fiscal
policy, the financial regulator was embracing the global trend towards light-touch regulation.
International convergence of economic and regulatory policies towards liberalization
and light-touch, unfortunately embraced also by Ireland, and ridiculously easy
availability of credit from abroad (eventually helped by the removal of exchange rate risk across
the euro area) were key factors in the international environment that masked the vulnerabilities
associated with the emergence of evident imbalances in the trend towards a construction monoculture:
extreme house price inflation, a skewed revenue base for the Government accounts and a seemingly
inexorable erosion of wage competitiveness.
Mr Honohan's argument that globalisation led to a hollowing out of
domestic policymaking, with groupthink replacing it, is compelling.
In contrast, early indications are that what counts as macro-prudential policy will differ from
country to country. Some emerging markets have
labelled capital controls – which stem the tide of financial globalisation – as macroprudential.
Are we seeing a backlash against the phenomenon that Ireland's governor describes?
Valissa:
"Remarkably virtually everyone in developed countries desperately tries to believe that they
are immune to indoctrination. They think they think for themselves and readily know the difference
between truth and falsity, fantasy and reality, superstition and science, fact and fiction.
Technologically sophisticated cultures are conditioned to accept belief systems, behaviors,
and values that would have been rejected out of hand by their stone-age predecessors. Primitives
would instantly sense the obvious threats to survival and adjustment, or simple nonsense, inherent
in many of the treasured beliefs of modern society." – Wilson Bryan Key
The Authoritarian Worldview
According to scholars who have studied the phenomenon, an authoritarian worldview is characterized
by the following ideas (each is illustrated with a position popular in at least some quarters of
the Orthodox community.)
The world is made up of "Us" and "Them."
The fractionalization of Orthodox groups creates smaller and more particularistic in-groups that
place all other Jews in the out-group category. Freud referred to this type of phenomenon as "the
narcissism of small differences."
Although the existence of multiple groups may superficially appear to represent diversity, in
fact each group is authoritarian, requiring more and more conformity in order to fit in and carry
its particular label. For example, Frumster, a dating website, asks its members to self-describe
by choosing one of seven categories for Orthodox, four for the Orthodox-Conservative continuum,
and one for everyone else.
"We" are good, and "They" are bad.
Many Orthodox people argue that we are a holy people-but non-Jews and their culture are at the
root of most of the evil in the world; the rest is attributed to the rebellion of Conservative and
Reform Jews.
We need to get them before they get us!
This is a defensive posture that perceives threats everywhere and leads to intolerance, hatred,
and even violence. Furthermore, this stance leads to the interpretation of any action that we don't
like as anti-Semitism.
The ends justify the means.
Since "our" values are right and true, we are justified in doing whatever we need to maintain
our power and position. Financial fraud is accepted among some Ultra-Orthodox Rabbis, if they believe
it is to the advantage of a worthy cause of theirs.
It is fine to have punitive attitudes toward the weak.
Authoritarians disdain those who are weak or of lesser status. Choosing conversion as an arena
in which to exert power reflects this attitude-prospective converts are very low status; they are
weak and vulnerable. Sexual exploitation of prospective converts and of children are crimes that
demonstrate this attitude-they are two of the most vulnerable and powerless groups. Additionally,
failure to resolve the institutional oppression of agunot reflects institutional indifference to
these most powerless women.
Subservience toward authority is vital.
Authoritarians disdain those they view as below themselves and are very submissive toward those
they see as being strong and above themselves. Rabbis in the Hareidi or Hassidic hierarchy defer
to those with more (perceived) power-even if it means backtracking from a position that they had
taken-even a public one-and they often claim that they had been "deceived" into taking the original
position.
The Rabbinical Council of America's capitulation to the Israeli Rabbanut regarding conversion
procedure and personnel credentialing is another sorry example. Despite widespread acknowledgment
of the Rabbanut's deficiencies of integrity, competence, and reliability, the perceived power of
the Rabbanut was sufficient reason for the RCA to overturn centuries of the Diaspora tradition of
local rabbinical autonomy and leadership.
Groupthink
Authoritarianism and the abuse of power by rabbinic leaders are not the only sources of behavior
and thought control in the Orthodox community. Groupthink exerts an additional set of pressures
to conform to an increasingly narrow, exclusionist view of what it means to be a Torah committed
Jew, and is perhaps even more nefarious since it arises from within the community membership. For
those who are unfamiliar with the term, groupthink is a type of thinking that occurs in cohesive
groups, where the desire to remain a member of the group and to maintain consensus, overrides critical
thinking and leads to faulty group decisions. Irving Janis, who researched historical fiascos created
by groupthink, defined it as "A mode of thinking that people engage in when they are deeply involved
in a cohesive in-group, when the members' strivings for unanimity override their motivation to realistically
appraise alternative courses of action." While group cohesion provides the foundation needed for
groupthink to develop, Janis has suggested that insular, homogeneous groups that have directive
leaders and that experience stress from external threats are particularly vulnerable to groupthink.
We suggest that these are attributes of current Orthodox Judaism, and that our community displays
all of the symptoms of groupthink described by Janis and his colleagues. The symptoms are listed
below, followed by real-life examples from within the Orthodox community.
Symptoms of groupthink
- Illusions of invulnerability create excessive optimism and encourage risk-taking.
Example:
There is a widespread belief that social problems such as substance abuse, spousal or child
abuse, and addictive gambling are less prevalent in the Orthodox community than elsewhere, even
when there are no reliable statistics, or that the statistics indicate otherwise. When a scientific
study by Rachel Yehuda, Ph.D., Michelle Friedman, M.D., Talli Y. Rosenbaum, P.T., Ellen Labinsky,
Ph.D., and James Schmeidler, Ph.D., published in the American Journal of Psychiatry, found that
the Orthodox women in their sample were sexually abused at about the same rates as other women,
Avi Shafran, representative of Agudath Israel, sprang into action, claiming not only that the
survey was biased, but also that "the Torah-observant population is greatly underrepresented
in the realms of societal ills like rape, AIDS, prostitution and marital infidelity that affect
their less repressed neighbors," while simultaneously admitting that he has no statistics to
back up his claim. He just knows.
Other leaders within the Orthodox community dismissed the results of the survey by saying
that "approximately 40 percent of the respondents were ba'alei teshuva, and therefore, their
experiences are irrelevant to those raised in Orthodox homes."
- The group rationalizes warnings that might challenge the group's assumptions.
Example:
Consider the following explanation of the outrage over Rav Eliezer Melamed's endorsement of
soldiers' refusal to obey orders to attack Jews: "Secular zionists, who by and large built Israel
are accused of trying to dismantle Israel, because their motives for creating the State was
not based in Torah. Only Torah Jews imbued with a nationalist impulse stand in their way. Those
who built it-right and left-have been trying to dismantle it for well over a decade and a half-and
only Torah Jews imbued with a nationalist impulse stand in their way."
Another example: Yitzhak Kakun, editor-in-chief of the Shas weekly Yom Le'Yom claimed that
the arrests of members of the Syrian Jewish community of New Jersey and Brooklyn, on suspicion
of money laundering was an anti-Semitic plot cooked up by the FBI.
- There is unquestioned belief in the morality of the group, causing members to ignore
the consequences of their actions.
Example:
In offering an explanation of why leading Hareidi religious figures (and others) allowed Leib
Tropper and EJF to control conversions, Rabbi Steven Pruzansky wrote that "Gedolei Torah-and
most rabbis-are incapable of recognizing true evil and hypocrisy. Call it the 'Yitzchak Avinu
and Esav Syndrome.' I have been in the presence of Gedolim, and they live on a plane of purity
and saintliness where such incidents-while theoretically possible; after all, the Tanakh is
filled with stories of the foibles of great people-are not considered practical possibilities.
Most never encounter salaciousness, degradation, and the dark side of man." (Pruzansky blog,
Dec 23, 2009)
Another example of this willfully amoral mindlessness is the increasingly frequent reference
to "Daas Torah is hefekh daas Baalei Batim," (Lay understanding is the opposite of Torah wisdom),
a phrase that insulates rabbis ("Gedolim") from criticism and replaces serious, respectful dialogue
with contempt for anyone else's perspective. (For a sensitive treatment of this issue, see Rabbi
Yossi Ginzberg's December 29, 2009 post on the blog, "Emes Ve-Emunah.")
- The group promotes stereotyping of those who are opposed to the group as weak, evil,
biased, spiteful, disfigured, impotent, or stupid.
Examples:
Consider the following quotations:
"The Conservatives begin the process with a desired result in mind (abolishing the mehitza,
permitting cohanim to marry divorcees, counting women in the minyan, etc.) They are quite adept
at manipulating the halakha to achieve that result, twisting and turning the words of our sages
until they are "saying" what the Conservatives want them to say." (Pruzansky blog, Dec 4, 2009)
"The feminist movement ravaged the American family." (Pruzansky blog, Nov 29, 2009)
As another example, When Nofrat Frankel and the "women of the wall" attempted to read from
a Sefer Torah in the women's section at the Western Wall, they were accused of doing it solely
for political purposes, and of "inverting every relevant fact in order to make [their] argument"
(Yaakov Menken, "The right to disrupt your prayers" Cross currents, November 30, 2009). Commented
one of the readers of this column: "Getting arrested for wearing a tallit makes this woman a
martyr for egalitarian rights and for civil rights. This gives the small group of non-Orthodox
Jews in Israel a way to be noticed. Otherwise, they are totally ignored."
A common theme is to accuse others of nefarious motives, even when they have stated benign
or benevolent ones. How exactly is it that the in-group members know the motives of others so
much better than the others know their own motives? Or are they accusing them of deception and
trickery?
- Direct pressure (aka peer pressure) is used to conform placed on any member who questions
the group, couched in terms of "disloyalty."
Example:
Rabbi Norman Eisenstein announced that no judge on a conversion court would be accepted if he
believed the universe was more than 5,770 years old.
- The group self-censors ideas that deviate from the apparent group consensus.
Example:
For a clear and compelling example of this, think of the number of people who you know who have
altered their publicly expressed opinions or behavior (or asked family members to change theirs)
in order to not threaten the matchmaking options of their children. In cases we know personally,
a young man was denied permission to go to college because of the danger it posed to his sisters'
marriage opportunities, while middle-aged couples have stopped going to the movies (although
they will watch the same films at home, in private) for the sake of their children's potential
"shiddukhim."
- Illusions of unanimity among group members is promoted; silence is viewed as agreement.
Example:
Everyone might disagree, but everyone thinks that everyone else agrees:
You conform to a certain dress code in order to fit into the group-"I don't think there is anything
wrong with wearing pants...but..."
8. The group has self-appointed mind guards, who shield the group from dissenting information.
These can be group leaders who guide the flock and weed out dissenters, and who cultivate a
negative attitude about talking to outsiders. These are often Hareidi journalists and columnists.
Example:
Forbidding Hareidim to use the internet, Rav Yisrael Hager, the son of the Vishnitzer Rebbe,
called on the community to refrain from buying tefilin and mezuzoth from anyone connected to
Hareidi websites. The Rav's comments came at the start of the Shovavim period (the period that
begins with the reading of Parashat Shemot and ends with Parashat Mishpatim), a time that the
Kabbalists teach is auspicious for repentance. The Rav added that children from families with
internet connections should not be accepted to schools, and that rabbis and teachers who do
not conform to this policy should not be employed as teachers.
Overall, groupthink encourages overestimation of the group's power and morality, closed-mindedness,
and pressures toward uniformity, and leads to defective decision-making. Although some of these
examples are from the Hareidi rather than the Centrist/Modern Orthodox community, not all are.
The symptoms of groupthink are increasingly observable in C/MO groups as well. If we don't want
critical decisions facing the Jewish community to be defective, we need to be more vigilant
about preventing, or disrupting groupthink.
Preventing Groupthink
The best way to prevent or disrupt groupthink is to eliminate or avoid the conditions under which
it occurs. Although it is not likely that we can remove the external threats to the continued existence
of the Jewish people, we can address the three others:
- Directive leadership
- Isolation of the group from outside sources of information and analysis
- Homogeneity of members ideology and social background
1. Directive leadership is a "command-and-tell," military-style leadership, which is helpful in
critical situations of imminent threat, but has been identified as a chief cause of defective group
process and poor outcome for decision-making in groups. A good leader is capable of a variety of
leadership styles, adjusting the style to suit the situation.
2. & 3. That openness to outside sources of information and analysis helps counteract the groupthink
tendency is self-evident, but the advantages of diverse groups may need some explanation. The advantages
of diversity are not just our ideological bent-there is a good deal of research on the advantages
(and disadvantages, to be honest) of diverse groups in terms of organizational functioning:
Diverse groups tend to be more creative and are better at problem-solving than are homogenous
groups. When groups include people with different types of education and experience, they have a
richer deliberation about the best course of action. Diversity helps an organization become more
adaptable and flexible in responding to a rapidly changing world, while attracting and retaining
its best members. Diversity, though, does increase turnover within the group, making it less socially
integrated than groups of people who are all alike. Nevertheless, suspicion and hostility toward
diverse opinion and demographics cause long-term harm to the group.
Conclusion and Recommendations
Recently, a number of young, educated, sincerely religious Israeli couples decided to reject
the Rabbanut system entirely and make independent wedding plans. They arranged their own halakhically
correct marriages and were willing to be officially considered common-law husband and wife rather
than participate with that disreputable institution. Will this become a trend? Let us hope there
is still time for it to serve as an illustrative warning. This is what happens when leadership fails:
the best and most capable will not stand for it.
Religious authority in Judaism is meant to be a force for affirmative growth, to help us on our
way toward becoming a "nation of priests" and a "light unto the nations." Authoritarianism won't
get us there.
Just as we accept that we are subject to invisible physical influences, such as gravity or bacteria,
we need to understand at a deep level-both individual and communal, lay and clergy-the workings
of psychological forces on our reasoning and judgment, opinions and behavior. We need to foster
the humility to recognize our vulnerability to the easy temptations of authoritarianism and the
pitfalls of groupthink. Since these forces operate outside our awareness, we recommend the following
changes in organizational structure and process to help keep them at bay:
- Intentional organizational self-reflection. Self-reflection, or heshbon hanefesh,
is a religious obligation for individuals and is a recommendation whenever national calamity
strikes. The Orthodox, religious Zionist community undertook such self-reflection following
the assassination of Yitzchak Rabin and, at least for a while, the community made changes. Today,
the parade of scandals in the religious community is a calamity that calls for self-reflection,
particularly for religious and lay leadership. As a first step, independent professional consultation
should be engaged on a regular basis to meet with leadership for the express purpose of examining
their thinking process and power relationships.
- Transparency and lay oversight. Since any individual or group with power, left unchecked,
will tend to tip, however unintentionally, toward policies of self-interest, it is essential
to be able to examine rabbinical decisions against standards of logic, fairness, and consequences
for community concerns. This in no way threatens their halakhic expertise and authority. Rather,
it refines and extends it.
- Make a conscious, declared decision to incorporate diversity as a hedge against the inroads
of fundamentalism. For too long now, the Modern Orthodox/Centrist rabbinical leadership
has been busy looking over its right shoulder, defensive about its authenticity in the face
of attacks from the religious right. Nevertheless, we continue to affirm the value of secular
study, while acknowledging that at times it may present a religious challenge; we accept the
risk, based on our beliefs. Similarly, while it is true that diversity in organizations entails
some risk, it is a better choice than paranoia, black-and-white thinking, and hypocrisy, which
are characteristic of authoritarian organizations.
For Further Reading:
Altemeyer, Bob. The Authoritarian Specter. Cambridge, MA: Harvard University Press, 1996.
Holzer, Rabbi David. The Rav: Thinking Aloud. New York: Holzer Publishing, 2009.
Janis, Irving Lester. Groupthink. Psychological Studies of Policy Decisions and Fiascoes. Boston:
Houghton Mifflin, 1982.
Lammers, Joris, Stapel, Diederik A. and Galinsky, Adam. "Power Increases Hypocrisy: Moralizing in
Reasoning, Immunity and Behavior." Psychological Science (in press).
One of the most original and provocative books of the past decade is "Disciplined Minds" by Jeff
Schmidt (Rowman & Littlefield). "A critical look at salaried professionals," says the cover, "and
the soul-battering system that shapes their lives." Its theme is postmodern America, but also applies
to Britain, where the corporate state has bred a new class of Americanized manager to run the private
and public sectors: the banks, the main parties, corporations, important committees, the BBC.
Professionals are said to be meritorious and non-ideological. Yet, in spite of their education,
writes Schmidt, they think less independently than non-professionals. They use corporate jargon
- "model," "performance," "targets," "strategic oversight." In "Disciplined Minds," Schmidt argues
that what makes the modern professional is not technical knowledge,
but "ideological discipline." Those in higher education and the media do "political
work," but in a way, that is not seen as political. Listen to a senior BBC person sincerely describe
the nirvana of neutrality to which he or she has risen. "Taking sides" is anathema; and yet the
modern professional knows never to challenge the "built-in ideology of the status quo." What matters
is the "right attitude."
A key to training professionals is what Schmidt calls "assignable curiosity." Children are naturally
curious, but along the way to becoming a professional they learn that curiosity is a series of tasks
assigned by others. On entering training, students are optimistic and idealistic. On leaving, they
are "pressured and troubled" because they realize that "the primary
goal for many is getting compensated sufficiently for sidelining their original goals."
I have met many young people, especially budding journalists, who would recognize themselves in
this description. For no matter how indirect its effect, the primary influence of professional managers
is the extreme political cult of money worship and inequality known as neoliberalism.
... ... ...
This was the final act of corporate coup d'état, now disguised by a specious debate about "cuts"
and a "national deficit." The most humane premises of British life are to be eliminated. The "value"
of the cuts is said to be £83 billion, almost exactly the amount of tax legally avoided by the banks
and corporations. That the British public continues to give the banks an additional annual subsidy
of £100 billion in free insurance and guarantees - a figure that would fund the entire National
Health Service - is suppressed.
So, too, is the absurdity of the very notion of "cuts." When Britain was officially bankrupt
following the Second World War, there was full employment and some of its greatest public institutions,
such as the Health Service, were built. Yet, "cuts" are managed by those who say they oppose them
and manufacture consent for their wider acceptance. This is the role of the Labour Party's professional
managers.
In "1984," George Orwell describes a totalitarian state that employs "newspeak" to enforce its
aims. Rather than merely suppressing statements that endanger the ruling party, newspeak constricts
the language itself, making dangerous ideas impossible to formulate. This proves
to work far better than post-hoc crackdowns on radical speech, inspiring one state functionary,
Syme, to exude, "It's a beautiful thing, the destruction of words."
With that in mind, I'd like to explore a problem I see in the current economic debate. The path
before the nation in general, and the federal government in particular, is usually framed as a choice
between "quantitative easing" and "austerity," and even those who oppose the action represented
by the former phrase, and support the course represented by the latter, tend to use these terms
as if they truly described the two paths that might be taken.
But of course they don't.
"Quantitative easing" is, linguistically speaking, quite new. The original Japanese expression
for "quantitative easing" ryoteki kinyu kanwa was minted in the mid-1990s, and became official Japanese
monetary policy after Toshihiko Fukui was appointed governor in February 2003. It did not pass into
American parlance until roughly 2005, but in a mere six years, it's a linguistic bestseller - a
Google search for "quantitative easing" garners over a million hits.
It's easy to see why the term was pushed vigorously by the forces that support the action it
represents. Evolutionary psychology asserts that humans have two basic
drives - accumulating resources and minimizing effort. Throughout human history,
anyone who could gather real resources without expending much time or energy had a huge survival
advantage. "Quantitative easing," has, then, a hugely positive emotional valence, as it embraces
the two things humans prize most - quantity and ease.
Of course, in reality, "quantitative easing" offers no such thing. It creates no real resources
whatsoever, and whatever "ease" it might provide will be more than counterbalanced by painful side-
and aftereffects.
An alternative phrase that policy critics sometimes advance - "money printing" - is, ironically,
almost as attractive. The reason is that "money" has multiple meanings, and in the popular mind
is conflated with possessions that can be purchased with currency. In other words, at a fundamental
level, "money printing" sounds like a pretty good idea - the creation of a real resource with little
effort. Sign me up!
So let's be clear. The most accurate description for the action described by "quantitative easing"
is actually "fiat creation." Here, the type of money being created is specified - a fiat currency,
untethered to any real resource, with no more intrinsic worth than the paper (or electrons) that
constitute it. And "creation" reveals the voluntary bringing-into-being of this intrinsically valueless
commodity. Using these words makes it clear that there is no imaginary constraint at which the fiat
strains in search of "easing," instead, human beings make choices and perform actions to create
it.
The fact that the average American has no idea what fiat is, is no excuse for those who do understand
it failing to employ the phrase often in writing and speaking. If it is used enough, even Americans
can learn a new word.
So use it, please.
Next is the term, "austerity," which is used, in government-budget discussions, to describe spending
cutbacks necessary to balance tax inflows to spending outflows. The first-listed synonyms for this
term are "harshness," "strictness" and "ascetisim," all of which have a strong negative emotional
valence. Absent from these synonyms are any positive results that might come from actions described
as austere; the entirety of the word's meaning is unrelieved by any awareness that austerity might
have a benefit.
So again, let's be clear. The most accurate description for the set of measures described as
"austerity" is expressed by the phrase "living within our means." This expression aligns with the
average person's understanding that he or she must personally balance revenue inflows and outflows
- even people who don't do this are usually painfully aware that they should. "Living within our
means" then, has a positive valence that is hard to over-state - immediately, intuitively, it just
makes sense.
Reframing the choices before us from a battle between "quantitative easing" and "austerity" to
one between "fiat creation" and "living within our means" is a necessary first step to making the
right choices as a culture. If we can't even properly state the problem, we'll never arrive at a
solution.
WestVillageIdiot:
Our attempts to limit language can be summed up as "political
correctness". There is nothng more advantageous to the beasts in power than political
correctness. The words most used to enforce political correctness are "racist", "bigot", "chauvinist",
"discrimination", etc. These titles are often hoisted on people that are bringing up very sound
and rational criticisms of the behavior of TPTB. Criticize Mr. Obama and watch how long it takes
somebody to call you a racist. Criticize Frau Clinton and watch how long it takes somebody to
call you a chauvinist. Criticize illegal immigration and watch how long it takes somebody to
call you a bigot or a racist.
PC is definitely one of the favorite, and most powerful, tools of the Thought Police in America.
Once they have deemed something "offensive" you can guarantee that something is being said that
contains common sense and challenges their stupidity and destruction.
Fighting anybody that attempts to enforce Political Correctness is a blow for freedom and
a blow being struck against the Thought Police. Call a spade a spade and I will call it Doubleplusgood.
Paul Bogdanich:
The basic problem is the use or abuse of language to hide the true nature of the stimulus
and easing and the appalling ignorance of the electorate which makes it all possible. As the
later will never change as I see it the problem is with the current policies specifically that
they are designed to operate from the top down. Big mistake. No recognition whatsoever that
the elites have had a failure. So in the current form all current policies are is a gift from
the government elites to the failed private elites. The results can be clearly seen seen in
the eite economy while everyone anywhere else is left to twist.
The problem is, as it has always been, the mumbers. 10 million elties and dedicated minions
and 300 million elses. Sooner or later though it won't matter what you call it or how you define
or redefine the words, the stark realities will be too strong to be ingnored and some hyperbolic
politician will create new language to frame the problem his way. We've got Hoover now so the
only remaining question is do we get Hoover again, Hitler, Hanity (but I repeat myself), Roosevelt
or Robespierre.
Could be any one with another Hoover the odds on favorite. Dozens of committed elitists to
choose from in both parties. Obama is but one. However, sooner or later as the elites keep failing
and the bills keep mounting things will have to change. Maybe for the better, maybe not.
February 11, 2011
We study a model where investment decisions are based on investors' information about the
unknown and endogenous return of the investment. The information of investors consists of endogenously
determined messages sold by financial analysts who have access to both public and private information
on the return of the investment. We assume that the return of the investment is correlated with
the aggregate investment. This results into a beauty contest among analysts (or a "conformism"
effect). In equilibrium, analysts sell all the information they have to all the investors. A
striking result is that there are sometimes multiple equilibria. There are equilibria where
the beauty contest is exacerbated. Because of the correlation across analysts' information sources,
not all the information available in the economy is transmitted to investors.
And the authors of the paper further conclude: "Analysts exert "collective manipulation."
You got that? Good. Now please explain it to me.
Source:
Conformism and Public News
Gabriel Desgranges and Céline Rochon
IMF Working Paper, February 2011
http://www.imf.org/external/pubs/cat/longres.aspx?sk=24635
Barry Ritholtz:
If you want more details:
We develop a model where investors make investment decisions based on information bought
from financial analysts about the return of the investment. The model consists of two building
blocks: (i) Analysts determining messages (to be sold to investors) based on their public
and private information; (ii) a game between informed investors making investment decisions.
An investor's information consists of the messages bought from analysts.
A crucial assumption in this model is that the unknown and endogenous return of the investment
is correlated with the aggregate investment. This assumption drives the key mechanism at
work in our model: this correlation generates a beauty contest among analysts. Indeed, analysts
sell to investors information on the return of the investment. The aggregate investment,
which is endogenous, depends on investors' information, namely the messages sent by analysts.
Consequently, to predict the return on the investment, an analyst needs to guess current
investors' information that correspond to the messages of the other analysts.
Financial analysts hold information in the form of two signals, one privately observed,
and one commonly observed by all the analysts. These signals are unknown to the investors,
to illustrate the fact that information takes time to be processed and only the analysts
possess the expertise to process it. The private signal of an analyst corresponds to its
privileged information and his estimation of the impact, on the return, of the information
that are commonly observed but whose interpretations differ across analysts. The public
signal represents the information that is commonly observed by all analysts and identically
interpreted by all analysts."
You may now return to your previously scheduled Friday . .
DeDude:
I got it. They are full of sh!t but they are covering it up in nice sounding words. They
hope that you are so insecure that you think the reason you don't understand it is that you
are not as smart as they are. Now they want you to hand over your money since they are obviously
smarter than you and better able to handle investments. Those sons of Madoff.
Niskyboy:
Academics with inferior minds cloak their ignorance with mutli-syllabic words so that 1)
others will think them highly intelligent; and 2) so that they can never be proven wrong, because
the words have imprecise meanings and you can't definitively pin down what they're saying.
This is how professors in economics departments win tenure and get to keep their jobs for
life, no? My best guess is that what they're saying here is that the analyst consensus fed to
the public is a load of crap, yet the investing public continues to eat it up. Now why didn't
I think of such an original thought! If I did, I might label it, let's see, oh yeah - the sell
side.
Source:
Red State>
A friend writes: "What do you do when presented with a chart such as the one above?"
My answer was simply that it depended upon who is showing you the chart:
• If it comes from a hard core partisan, you laugh at the flaws in their wetware and say
nothing. Recognize they are not capable of comprehending logic or objective reality, and can
only respond to emotional narratives.
• If they are a student, or anyone genuinely interested in markets, economics, or probabilistic
analysis, you ask, in your best Socratic method, the questions below.
• If they are an investor, you simply take their money.
Sports fans, Partisans - anyone emotionally invested in any specific outcome - lose the ability
to objectively judge reality. Studies have shown that their brains appear to have a form of damage
similar to aphasiacs. But there is no physical damage, it is merely inherent flaws built into the
wetware.
To investors, this is a devastating problem, one that eventually will become terribly expensive
if they do not learn how to compensate for it. The psychological term for this is selective perception.
I love tracking down examples of this at work, as it reminds me how we are all wired in a way that
is filled with cognitive flaws. Investing enlightenment only is possible once you objectively recognize
and learn to work around the inherent flaws in your wetware.
This chart - which is hysterically funny to anyone who can objectively review economic data -
reveals pretty much nothing about either politics or unemployment. But it reveals everything about
the cognitive errors of the person who drafted it.
Let's return to our student, or anyone genuinely interested in this data: See if your wetware
can answer these questions. Once you have done that, go back and review the chart again:
1) Is this time period unique or typical? Do other eras share a similar relationship between
the two variables?
2) Is there a causal relationship between the two variables? Asked another way, does the
House Majority significantly impact employment, or is this merely a classic example of correlation
without causation?
3) What other factors might impact employment more significantly than House Majority?
4) Is there a similar relationship between White House and Unemployment? How about the Senate
and Unemployment?What do these relationships reveal about the original two variables?
5) Why such a small sample? We have been tracking unemployment for many decades, along with
House majorities - What does using the complete data set reveal?
6) What about other employment related data? How do wages, long term unemployment, job mobility,
and labor force participation rate compare to House Majority? What about GDP, balance of trade,
inflation, deficits, etc?
7) What other ways are there to consider the data? Does a peak-to-peak or a trough-to-trough
measure of unemployment change the outcome of the relationship between variables?
8) What about other time periods? Does the relationship in the chart hold true for periods
of 5, 10, 20, 25 or 30 year periods?
In my business, I cannot allow my personal political preferences to interfere with my ability
to form a coherent and objective view of reality. Whatever the business of the person who createdthis
chart is, objectively reality does not matter much.
I only hope they are active participants in the stock market . . .
Expat :
If you are interested in selective perception and the way the brain gets rewired by beliefs
(upbringing, indoctrination, brainwashing, etc.), you should read Evil Genes by Barbara Oakley.
She presents some interesting insights into cognitive bias, effectively explaining in greater
depth what you refer to when talking about arguing with sports fans and partisans.
Since I stopped trading (where I was dreadful at avoiding getting married to positions and
generally sat on them far too long), I have become much more objective. Now that I teach this
crap to biz school students, I find myself telling them every day "question everything, especially
yourself, and when you think you are no longer objective, get out…you can then be objective
and get back in if you want."
I think the most interesting graph is one showing how unemployment, deficits, illegal foreign
wars, and general skulduggerey have faired under either party. I think we'll find that both
parties are equally corrupt, evil, greedy, and incompetent.
Mark E Hoffer:
November 6th, 2010 at 5:45 pm
http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=Evil+Genes+by+Barbara+Oakley+
Barbara Oakley, PhD, a 'female Indiana Jones,' is one of the few women to hold a doctorate
in systems engineering. She chronicled her adventures on Soviet fishing boats in the Bering
Sea in Hair of the Dog: Tales from Aboard a Russian Trawler. She also served as a radio operator
in Antarctica and rose from private to captain in the U.S. Army. Now an associate professor
of engineering at Oakland University in Michigan, Oakley is a recent vice president of the IEEE
Engineering in Medicine and Biology Society.
Her work has appeared in publications ranging from The New York Times to the IEEE Transactions
on Nanobioscience.
" http://www.goodreads.com/author/show/669905.Barbara_Oakley
QOTD: "Disobedience, in the eyes of anyone who has read history, is man's original virtue.
It is through disobedience and rebellion that progress has been made." -Oscar Wilde
The cult of "Positive Thinking" is just one example of a typical groupthink mentality.
Ignorance is not "happiness". Groupthink is not "positive" thinking.
Chances are you've read Napoleon Hill's classics, Think & Grow Rich and Success Through
Positive Mental Attitude, coauthored with insurance mogel Clement Stone. I did way back when
I was at Morgan Stanley in the 1970s. Today, the cult of "Positive Thinking" is very much alive.
Look in the business & finance shelves in Barnes and Noble. Still, in the wake of Wall Street's
2008 meltdown, many began questioning the magic of "PMA" as they saw their 401(k)s flatline.
It'll take more than PMA, mantras, affirmations and a pep talk from the "God Wants You To Be
Rich" crowd to rebuild your retirement nestegg. And it'll take a lot longer than you hope because
there's a "new normal" for the American mind as well as the lower market expectations Pimco's Bill
Gross sees ahead. And it's not about increasing your optimism level. The meltdown and bailouts left
us with enormous anger, frustration, skepticism and mass distrust of virtually everything, including
the Think & Grow Rich mantra: "Whatever the mind can conceive, it can achieve."
Barbara Ehrenreich, the author of Nickel and Dimed, a 2000 bestseller, captures this new
mindset in her diagnosis of America's troubled psyche. Macho male readers may prefer reading the
new books detailing Wall Street's collapse in blow-by-blow real-time TV-style dramas, like Sorkin's
Too Big To Fail. But if you want the psychological "new normal," step into Ehrenreich's office
where you'll dig deep and discover what's really going on in America's collective brain. Read Ehrenreich's
Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America.
Yes, "Positive Thinking" & "Happiness" Are Undermining America!
She pokes huge holes in the myth of positive thinking and its "new age" siblings - optimism,
self-esteem, positive psychology and the new "science of happiness" - that are undermining America
with false promises of an entitlement of prosperty. In
BusinessWeek Michelle Conlin focused on Ehrenreich's warning to future whistle-blowers in
the chapter on "how positive thinking destroyed the economy." Listen:
"In pre-subprime America, delivering the news that we were all burning down the house was
a career-ender. Nowhere was this more true than on Wall Street. One such martyr to the cause
of financial realism, Ehrenreich writes, was Mike Gelband, who ran the real estate division
of Lehman Brothers. Gelband warned Lehman CEO Dick Fuld about the real estate bubble in 2006.
'Fuld promptly fired the misfit, and two years later, Lehman went bankrupt'." Hmmm, isn't that
about the time Paulson left as Goldman's boss to become Treasury Secretary, later Bloomberg
News revealed that Paulson did warn the White House staff of a possible meltdown, still
they stayed in denial till it was too late.
Today we know Paulson and Fuld are just bit players in America's broader 'positive thinking'
drama, which far more pervasive than the guys at the top of Corporate Amercia and Wall Street. It
also infected home builders, realtors, mortgage brokers and millions of homebuyers were all hypnotized,
in denial about the risks of defaulting on mortgage payments in event of a down market.
Other critics are equally blunt. Writing in the
New York
Times Hanna Rosin says "I have waited my whole life for someone to write a book like
Bright-Sided. When I was a young child, my family moved to the United States from Israel, where
churlishness is a point of pride. As I walked around wearing what I considered a neutral expression,
strangers would often shout, 'What's the matter, honey? Smile!' as if visible cheerfulness were
some kind of requirement for citizenship," adding that "America's can-do optimism has hardened into
a suffocating culture of positivity that bears little relation to genuine hope or happiness."
She hesitated to go as far as Ehrenreich who saw a larger conspiracy
using positive thinking as "just another way for the conservative, corporate culture to wring the
most out of its workers." Others were not so reluctant:
"We're always being told that looking on the bright side is good for us, but now we see that
it's a great way to brush off poverty, disease, and unemployment, to rationalize an order where
all the rewards go to those on top," warns Thomas Frank, Wall Street Journal columnist
and author of The Wrecking Crew: How Conservatives Rule.
"The people who are sick or jobless - why, they just aren't thinking positively. They have no
one to blame but themselves," a mindset that echoes the ideologt of many conservatives, religious
fundamentalists and hard-core capitalists today.
Read Bright-Sided, it is a perfect psychological counterpoint to typical dramas like
When Giants Fall, Bad Money, Panic and Bailout Nation. You'll get a shrink's eye view
deep into America's collective brain. And by jarring you out of denial, it'll protect you from the
new bubble/bust cycle already blowing.
Groupthink is alive and thriving in Washington, D.C., argues Bacevich, who's convinced that America's
mightily militaristic and endlessly idealistic approach to the rest of the world is costing the
country dearly. Boiling down his argument to the simplest terms: the world would get along just
fine without this overarmed global policeman, and more important, the United States would fare far
better at home if it weren't squandering so many of its gifts abroad.
What's the Big Deal?
The Pentagon, a nearly three-quarter-trillion-dollar agency, is the largest industrial organization
on the planet. And it's armed to the gills. Washington's best and brightest minds-in Bacevich's
estimate, the "elected and appointed officials, corporate executives and corporate lobbyists, admirals
and generals, functionaries staffing the national security apparatus, media personalities, and policy
intellectuals," who are all deriving "profit, power, and privilege" from the status quo-have not
only failed you and me, they are steadily running the country into ruin. Though at times he makes
his argument with the wrong tools, Bacevich's chief concern-that we're misusing our military-couldn't
be more important.
Organizations, whether it be a club or a profession or a department,
too often over time develop a sort of intellectual inertia, a bureaucratic mindset that tends to
perpetuate and validate a certain view of the world amongst its members, particularly if they share
other elements in background and world view.
This works to its advantage when they are right, and when the scope of the tasks which they must
address are limited to largely operational concerns, without significant risk in the classic sense
of the term.
But when the situation becomes different, the environment changes, this organizational mindset
not only stifles innovation and adaptation, it can literally reach out and strangle it, well beyond
its members, using the entrenched power of its tenure. We see this tendency clearly in organizations
that have enjoyed long periods of organizational growth under the leadership of strong personalities,
such as the FBI under Hoover, and the Federal Reserve under Greenspan.
We can see this same tendency on a micro level in our daily life on chatboards, in clubs, in
our company departments, in civic organizations. It is a tribalistic instinct, that urges the adoption
of a consensus view, often influenced and promoted by articulate and single minded individuals,
which then musters and focuses the energy and vitality of the group in the execution of its mission.
When it is right, it brings success. But when it goes wrong, when it feeds on itself, becomes
defensive and inwardly focused, when perpetuation of the group view overtakes all other considerations,
when tribal loyalty and sameness is valued over results, it leads to a cult like behaviour, inbred
thinking, that may be inimical to the best intentions of the group, and the sort of behavioural
anomalies which we have seen in the tragedies of Watergate, the latter stage Hoover FBI, and even
Jonestown.
Economics is in the grips of such a period in its development. One of the primary causes of this
problem has been the rise of a few well funded think tanks, universities, and of course the Federal
Reserve, that have become powerful influencers, and guardians, dogmatisers of the status quo. The
petty sniping among the schools notwithstanding, the current debate of stimulus versus austerity
serves to show how anemic, how self referential, how predictable the discussion has become.
The US politicians and economists are doing the same things over and over, expecting a different
outcome. For the past twenty years the world has been lurching forward in a series of increasingly
destructive asset bubbles, supported by the corruption of thought, and the transfer of wealth from
the many to the few, as a direct result of fiscal and monetary policy fomented by relatively small
number of powerful people, the monied interests. At some point this will change, and the grip of
the status quo will be broken. How much energy will be released, and in what directions, only time
can tell.
Janet Yellen: "...has had thirty six opportunities to vote on monetary policy
at the FOMC, and she has voted 'aye,' yes, thirty six times. Thirty six for thirty six. Has
the Fed been right thirty six consecutive times? No. A well credentialed, consensus hugging
economist straight out of the Fed HR department. She is ideal from the point of view of the
Fed bureaucracy. She will make not one ripple."Peter Diamond and Sarah Bloom Raskin:
"Diamond is a formidable academic, and Raskin is a formidable regulator, but neither is a formidable
thinker about the nature of money, or about the history of money, or about how the Fed
might paradoxically make things worse by doing what it does, trying to make things better, which
I think is the great question. These are people who I think are unlikely to propose novel solutions
to our fundamental monetary dilemma which is that the US dollar is a faith based currency of
no intrinsic value that is manipulated by the Fed, and the consequences of the manipulation
are often quite distinct, different from what was intended. That's the problem."
The classic paper on the last of those strategies is from
Lord, Ross and Lepper in 1979: they took two groups of people, one in favour of the death penalty,
the other against it, and then presented each with a piece of scientific evidence that supported
their pre-existing view, and a piece that challenged it; murder rates went up or down, for example,
after the abolition of capital punishment in a state.
The results were as you might imagine. Each group found extensive methodological holes in the
evidence they disagreed with, but ignored the very same holes in the evidence that reinforced their
views.
Some people go even further than this when presented with unwelcome data, and decide that science
itself is broken. Politicians will cheerfully explain that the scientific method simply cannot be
used to determine the outcomes of a drugs policy. Alternative therapists will explain that their
pill is special, among all pills, and you simply cannot find out if it works by using a trial.
Special Report
Amid the Gulf crisis, Wall St touted BP stock Reuters
GROUP THINK
Others say the failure of even one analyst at a major firm to grasp the potential
risks and advise clients to dump the stock reflects the profession's overall group-think tendencies.
"For sell-side analysts, the incentive is to remain toward the center of the pack. If
they are going to be wrong, they have got to be in good company," said Michael MacPhee,
at investment manager Baillie Gifford.
As the shares headed toward almost half their pre-disaster level, most analysts issued
more cautious notes, with Goldman, Natixis, S&P equity research and Charles Stanley,
cutting their ratings to neutral or hold from buy.
By June 16, BP was rated a buy by 16 analysts, outperform by eight, a hold
by another 8 with only one sell, according to data on Reuters Knowledge. That
was the date, of course, when BP agreed to fund a $20 billion escrow account and suspend its
dividends for the year.
With the price around half what it was before the spill, analysts might have a stronger argument
that BP was a buy in mid-June, though that will be of little comfort to anybody who followed
the advice to buy a month ago.
H/T
Reformed Broker
Bloomberg
The split over BP between U.K. and U.S. investors extends to analysts. The U.K. stock has 26
"buy" recommendations, while 12 analysts recommend holding the stock and two say to sell. In
contrast, almost as many U.S. analysts advise against purchasing the stock as buying it. The
ADRs have seven "buy" recommendations, five "holds" and one "sell."
And when a guy like Chanos is
shorting Exxon widely viewed as the goldstandart in the industry you have to wonder even more....
"A nation locked in "free market" groupthink wakes up to the consequences of the latter but has
no memory of how it got here"
Mickey Marzick in Akron, Ohio:
June 29, 2010 at 9:14 amDid you really expect more? Did anyone? Why?
Isn't it a bit of a paradox that after 30 years of less government and less regulation that
suddenly "WE" now look to the federal government to deliver US from our own folly? Then when
the "feds" seem unable to deliver – Katrina, "wars" in Iraq and Afghanistan, financial reform,
and now BP in the Gulf – it only confirms our suspicions that the federal government is both
incompetent and corrupt, lacking the fundamental expertise to do anything. It simply isn't there,
a mere shadow relegated to the sidelines by conscious design.
Government is the problem, not the solution. Anyone old enough to remember that line? Anyone
still believe it?
Isn't this what less government and less regulation mean when taken to their logical conclusion?
"Starving the beast" isn't just about tax revenue but a systematic
approach to dismantling the federal government and reducing it to the role of a "night watchman"
– and one not even paid "minimum wage". So is it really a surprise when he's found sleeping
on the job or partying with the burglars giving them the keys to the building? Perhaps even
more naïve is the belief that many of the same "parties" responsible for this particular financial
debacle are somehow going to "reform" the shadow banking system in a way that precludes it from
cratering the system first time around. Is this the way a limited government with competing
factions amidst a separation of powers and checks and balances functions, especially after 30
years of less government and less government that facilitated the emergence and growth of the
shadow banking system?
A nation locked in "free market" groupthink wakes up to the consequences
of the latter but has no memory of how it got here. Please wave your magic wand,
Mr. Obama, and deliver us from our sins – INTERVENE and fix it! Because come this November I'm
going to vote for less government and less regulation again…
"Underwriting is a big factor," Rosenthal said. "There's always going to be pressure on sell-side
analysts to be more optimistic."
GROUP THINK
That's not to say the reforms have had no impact at all. Analysts are more likely to issue "sell"
recommendations on stocks they cover than before the regulatory changes which largely took effect
in 2002. Ten years ago, fewer than 1 percent of all ratings were "sell," but since then "sell" ratings
have climbed as high as 11 percent in 2003 and stand at 6 percent so far in 2010, according to Thomson
Reuters data.
The botched BP calls point to a reluctance on the part of analysts
to challenge companies. Among other things, they may worry about jeopardizing their
access to top executives. "It's one of the classic drivers of the analyst business -- access to
management," said Boston College professor Amy Hutton, who has studied conflicts in the industry.
Such entry can come in handy. On June 10, for example, Credit Suisse revealed to clients in a
research note that BP estimated the cost of capping the well and cleaning up the damages at just
$3 billion to $6 billion, a figure that had not been released to the public. The note was based
on information directly provided to the bank at a breakfast meeting with BP's chief of staff, Steve
Westwall.
Others say the failure of even one analyst at a major firm to grasp
the potential risks and advise clients to dump the stock reflects the profession's overall group-think
tendencies. "For sell-side analysts, the incentive is to remain toward the center
of the pack. If they are going to be wrong, they have got to be in good company," said Michael MacPhee,
at investment manager Baillie Gifford.
Of course, wrong-way Wall Street calls are more than just an academic problem. They cost real
people real money. David Dugdale, European
equities specialist with investment manager MFC Global, said his firm was among those
who took analysts' advice and bought BP stock shortly after the initial share price drop, only to
sell down the stake later after further falls. "I didn't see any note saying sell BP, so looking
at it objectively, the sell side got it wrong," he said.
Analysts protest that such 20/20 hindsight can often be unflattering. The Deepwater Horizon situation,
they say, was unprecedented and almost impossible to predict. "From the outset of this tragic accident
and environmental catastrophe, regaining control of the leaking oil well has proved more difficult
than initially thought and estimates relating to the amount of oil leaking have been increased several
times," said Tony Shepard at Charles Stanley.
Eventually, the risks became more apparent even to Wall Street. Shepard's cutting his BP rating
to "hold" from "buy" was the first of a rash of downgrades in June, after the stock had already
fallen 34 percent. As the shares headed toward almost half their pre-disaster level, most analysts
issued more cautious notes, with Goldman, Natixis, S&P equity research and Charles Stanley, cutting
their ratings to neutral or hold from buy.
By June 16, BP was rated a buy by 16 analysts, outperform by eight, a hold by another 8 with
only one sell, according to data on Reuters Knowledge. That was the date, of course, when BP agreed
to fund a $20 billion escrow account and suspend its dividends for the year.
With the price around half what it was before the spill, analysts might have a stronger argument
that BP was a buy in mid-June, though that will be of little comfort to anybody who followed the
advice to buy a month ago.
Important point of monetary incentives for groupthink in large corporations: " think part of the
answer, for both toxic assets and toxic oil, has to do with a kind of groupthink that can take over
among the smart folks who are supposed to be evaluating these risks." Status quo bias.
Where otherwise smart people feel they have more to lose to sticking their
neck out than just following the status quo.
In some ways the Gulf of Mexico oil spill seems like a replay of the subprime lending disaster.
Clever technological innovations blew up in a mess that nobody knew how to control, wreaking devastation
on those innocently standing by. The actors and the scenes have changed, but you can't shake the
feeling you've been through this nightmare before.
Ken Rogoff
sees the parallels this way:
The accelerating speed of innovation seems to be outstripping government regulators' capacity
to deal with risks, much less anticipate them.
The parallels between the oil spill and the recent financial crisis are all too painful:
the promise of innovation, unfathomable complexity, and lack of transparency (scientists estimate
that we know only a very small fraction of what goes on at the oceans' depths.) Wealthy and
politically powerful lobbies put enormous pressure on even the most robust governance structures....
The oil technology story, like the one for exotic financial instruments, was very compelling
and seductive. Oil executives bragged that they could drill a couple of kilometers down, then
a kilometer across, and hit their target within a few meters.
This rings true to me. New financial instruments and new technologies for extracting oil require
changes in regulatory oversight. And this is the kind of adaptation that established bureaucracies
often find impossible to implement.
Ed Dolan thinks the common element is gambling with other people's money:
Executive compensation plans that emphasize short-term bonuses, include golden parachutes,
and lack clawback provisions are one example. Not only top executives face such incentives--
mid-level traders, engineers, and analysts may also take risks in the hope of bonuses or promotions,
with the expectation that the worst that can happen in case of catastrophe is that they lose
their jobs. Stockholders may condone such risk taking because they are protected by limited
liability.
Both the Gulf oil spill and the financial crisis had their origins in negatively skewed risks.
Investigators in the Gulf disaster are looking at whether BP and its contractors underplayed
downside risks when they made technical choices, ignored warning signs, and neglected preparations
for dealing with a worst-case spill. In the financial crisis, negatively skewed risks involved
excessive leverage, manipulation of ratings, design of complex securities, and several other
factors.
I agree with Ed that intra-organizational incentives contributed to the problem in both cases,
and that government policy allowed the firms that created the problems to pass some of the costs
on to others in many details of the financial debacle. But I am less persuaded that limited liability
explains BP's decisions at the corporate level. The company's market value has declined by over
$75 billion since April. Here was an entity with more than just skin in the game and looking more
than just flayed at the moment. And yet, the company opted not to invest $500,000 in a secondary
acoustic shut-off switch, which is essentially required in Norway and Brazil, and which Royal
Dutch Shell and France's Total SA sometimes use even when not required. BP's backup plans B, C,
and D all seemed to come out of the playbook for dealing with the
1979 Ixtoc disaster-- none of them worked that well there, either. So why did the company take
such risks?
I think part of the answer, for both toxic assets and toxic oil, has to do with a kind of groupthink
that can take over among the smart folks who are supposed to be evaluating these risks. It's so
hard to be the one raising the possibility that real estate prices could decline nationally by 25%
when it's never happened before and all the guys who say it won't are making money hand over fist.
And this interacts with the forces mentioned above. When the probability of spectacular failure
appears remote, and moreover it hasn't happened yet, it's hard to set up incentives, whether you're
talking about a corporation or a regulatory body, in which the person who makes sure that the risks
stay contained is the person who gets rewarded. When everyone around you starts thinking that nothing
can go wrong, it's hard for you not to do the same. It can become awfully lonely in those environments
to try to be the voice of prudence.
And yet, prudent judgment is the thing I most desperately wish decision-makers had more of in
these times of dazzling new technological capabilities.
Selected Comments
David Pearson:
If "smart folks" are prone to group think that blinds them to risk, then what does that say
about the Fed? Clearly, they succumbed to some of the same group think that afflicted all financial
engineers during both the stock and mortgage bubbles. They searched went shopping for analytical
models that justified the bubbles ("productivity" in the case of stocks, "savings glut" and
"great moderation" in the case of mortgages). And they largely shut
out opposing views. Reading the transcripts for 2004, one gets the sense that
FOMC members would put up mild resistance against the Chairman's
pet views, only to finally give in using self-deprecating humor, as if it were a debate over
where to go for lunch with a strong-willed colleague.
It seems to me that since the two bubbles, a fringe group -- now larger but still fringe
-- believes that aggressive monetary policy in the hands of the Fed is a recipe for large "oil
spills". Consensus economists, in contrast, seem reluctant to hold the Fed accountable for its
actions. Witness that Tim Geithner gets little blowback for studying derivatives markets for
years as head of the NY Fed before concluding that the risks they posed were acceptable. That
was his job, and he failed, just as the BP engineer in charge of the shut-off valve system failed.
"Whocouldhaveknown?" seems to be an unacceptable defense for BP, but an entirely acceptable
one for the Fed.
Michael Krause
Richard Thaler talks about this in his almost 20 yr old book "The Winner's Curse." Status
quo bias. Where otherwise smart people feel they have more to lose
to sticking their neck out than just following the status quo.
The solution is to create an isolated and well incentivized group of engineers to act as
risk managers.
Maybe we should work aggressively to make these 'auditors' be a part of the regulatory side
instead, and again, properly incentivize them to think outside the box the next time big oil
or big bank starts doing something.
Maybe a decent way to do this is implement privatized, but publicly funded regulators who
receive 'awards' (funded from public dollars) upon staying on top of technological innovation
from private industry. Make regulation a competitive business, where the most aggressive policy/research
gets rewarded the most.
Steven Kopits
I think these events tend to share certain common traits:
- haste
- inexperience
- misinterpretation of data
- failure to listen to subordinates' concerns
- mindset
- a three standard deviation event
- equipment failure
Of these, only mindset and a three standard deviation event apply to the Fed or subprime
mortgages. There was plenty of time for the Fed, and plenty of data. In addition, the Fed and
the subprime markets were characterized by principal-agent problems. Investment bankers are
interested in and paid to consummate a transaction. As a matter of incentives, they don't really
care what happens afterwards. Similarly, the Fed didn't want to spoil the housing party, so
they failed to act, but they had plenty of information to do so at senior levels.
For BP, the situation was different. The BP manager on the rig, according to press reports,
was under pressure to make progress on an overdue well. I have read that he was primarily a
land driller, but I don't know if that's true. Certainly, he appears to have failed to listen
to the top TransOcean man on the rig. I'm sure he didn't take the risk seriously (TransOcean
did), possibly because there hadn't been a serious rig incident in decades--a mindset problem.
Moreover, he--and the rest of us in the industry--placed great faith in the blow out preventer,
which failed.
Finally, this is one nasty, nasty well. To quote one worker who survived the blast:
"I've seen a lot of gas coming up from different wells, and the
highest I've seen in my 11 years is 1,500 units. This well was gave us 3,000. I've never been
on a well with that high gas coming out of the mud. That was kind of letting
me know this well was something to be reckoned with." (Peak Oil News, June 9) I have every expectation
this will prove to be a three-standard deviation event (and I wouldn't be surprised, ironically,
if it proves to be one of the most prolific wells in Gulf).
So those are the factors. I personally don't see a regulatory failure, as there was with,
say, the oversight of AIG. Overseeing a drilling operation would be a bit like overseeing a
brain surgeon during an operation. You sure you want to second guess him when the clock is ticking
at $25k an hour and the patient is on the table?
A better comparison, to my mind, is the KLM/PanAm crash at Tenerife Airport in 1977 and still
the worst air disaster ever. (
http://en.wikipedia.org/wiki/Tenerife_airport_disaster
) What many don't know is that the stage was set by a bombing at the main airport in Las Palmas,
which diverted the incoming aircraft to Tenerife. The KLM and PanAm aircraft weren't even supposed
to be there. The disaster was caused by KLM's top training pilot, who had to take off because
his allowable flight window was about to expire. He misheard the tower, ignored the co-pilot,
and took off on a foggy runway. The accident was ultimately caused by a confluence of factors,
not least of which were safety regulations limiting flying time.
From comments: "the first observation about Boards's of Directors is that directors are there only
because they subscribe to the groupthink of the corporate culture. "... "Groupthink doesn't handicap
an otherwise effective system. Corporate governance is groupthink, if not
worse, in the US."
In the great consensus of the past twenty years, government regulation was unnecessary because
the free market provided better tools for constraining private companies. One force was the market,
idealized by Alan Greenspan, who believed that counterparties could even police effectively against
fraud. The other force was shareholders, who would punish managers for acting contrary to their
interests. The market would prevent companies from abusing their customers, while corporate governance
would prevent them from abusing their shareholders.
For those who still believe in the latter,
McClatchy has a good (though infuriating) article on what went wrong on Moody's, the bond rating
agency that, we
previously learned, responded to warnings about the toxic assets it was rating by . . . firing
the people making the warnings. In the words of an executive on a Moody's risk committee:
"My question the whole time has been, 'Where the hell has the board been?' I would have expected,
sitting where I was, that I would have got a lot more calls from the board. I got none of that."
Another Moody's executive added, "There was no (corporate) governance at the firm whatsoever.
I met the board, I presented to them, and it was just baffling that these guys were there. They
were just so out of touch."
The story that Kevin Hall tells about Moody's has been told many times before. Board members
often serve at the pleasure of the CEO, who controls who receives the perks of board membership.
The result is often, but not always, boards that rubber-stamp the decisions of the CEO and his or
her inner circle. Court precedents make it difficult to hold board members personally liable for
anything, and companies buy liability insurance for their board members just in case. As Lynn Turner,
former chief accountant of the SEC, said to McClatchy, "I personally think until law enforcement
agencies start holding these boards accountable, . . . you're probably not going to get a lot of
change."
This is why I am skeptical of proposals to, for example, increase the number of independent board
members. There's nothing wrong with it, but I think it betrays a certain amount of naivete over
what independent board members actually do.
Selected Comments
JerryJ:
If you spent your life in the corporate world, the first observation
about Boards's of Directors is that directors are there only because they subscribe to the groupthink
of the corporate culture. Even if that is not true from time to time, new boards
over time inculcate their groupthink into the corporation. This is particularly the case when
the Chairman is a powerful dominating leader. He wants " yes people". Congressional factions
hire people in their bailiwick that are " yes people". The phenomenon is natural. What better
comparatives than the Board of GM dominated by Alfred Sloane and forever afterwards in a decadent
manner. The same is demonstrably true of the FBI under Hoover with decadence ever after. Another
major example was the supply and logistics arm of the US Army before and during WWII. Look at
AIG under Greenberg and the aftermath.
Look at the angst at the GM board when Ross Perot was a director. Had Perot been able to
dictate the GM Board to his desires we would now be talking about the GM of Perot and decline
ever afterwards. The great leader exhausts and groups without great leaders are exhausted.
At some point, the groupthink malaise must turn very active , as with political coups and
such, to energize a group to be dominant enough to have other groups join the pecking order
at lower level. There seems to be times when their are too many challengers lower down to disturb
the dominant group. So the group either capitulates and joins or is defeated . The defeated
then wither away.
bmeisen:
Groupthink doesn't handicap an otherwise effective system. Corporate
governance is groupthink, if not worse, in the US. It's possible to do CG differently
– through regulation. German law dictates the composition of many AG oversight boards: in some
cases capital and labor split the seats evenly, in others an impartial member is included.
Management is typically not present in threatening numbers. CEOs cultivate relationships
with labor because they need the support of labor representatives on the oversight board. The
Betriebsrat, or workers' council, is another matter.
The Chair of the Betriebsrat is often one of the representatives of labor in the oversight
board.
Obama has been repeatedly praised for his soaring rhetoric, and I simply do not get it. It's pretty
easy to sound grand if you aren't dispensing ideas that challenge the status quo. We are supposed
to take his way-too-little-too-late finger shaking at the banksters seriously. By contrast, consider
this section of FDR's first inaugural
address:
….the rulers of the exchange of mankind's goods have failed, through their own stubbornness
and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous
money changers stand indicted in the court of public opinion, rejected by the hearts and minds
of men.
True they have tried, but their efforts have been cast in the pattern of an outworn tradition.
Faced by failure of credit they have proposed only the lending of more money. Stripped of the
lure of profit by which to induce our people to follow their false leadership, they have resorted
to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation
of self-seekers. They have no vision, and when there is no vision the people perish.
The money changers have fled from their high seats in the temple of our civilization. We
may now restore that temple to the ancient truths. The measure of the restoration lies in the
extent to which we apply social values more noble than mere monetary profit.
Happiness lies not in the mere possession of money; it lies in the joy of achievement, in
the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten
in the mad chase of evanescent profits. These dark days will be worth all they cost us if they
teach us that our true destiny is not to be ministered unto but to minister to ourselves and
to our fellow men.
Recognition of the falsity of material wealth as the standard of success goes hand in hand
with the abandonment of the false belief that public office and high political position are
to be valued only by the standards of pride of place and personal profit; and there must be
an end to a conduct in banking and in business which too often has given to a sacred trust the
likeness of callous and selfish wrongdoing.
sherparick1:
Ah the internet! It allows me to discover so many folks who have obtained the ability to
read minds.
Yves and so many here claim that Obama has "betrayed" the platform he ran on. Again, go back
and read that platform. He was the right on to Clinton and the other Democrats on health care
and economic policy, as Paul Krugman points out. He comes from Hyde Park and is an adjunct law
professor on the same faculty and Law and Economics gurus, Judges Richard Posner and Frank Easterbrook.
Yes, he at time used some populist rhetoric, but nothing about Obama was populist, in fact anti-populist.
He won because used his anti-Iraq war from the beginning stance as his creed with the long time
anti-war wing of the Democratic party which was anti-Clinton; he captured the New Democratic/Neoliberal
faction of upper middle and upper class Democrats who, while very pro-choice and socially liberal,
had internalized neo-classical economics (market good/government bad aka as New Deal bad & archaic/tax
cuts and deregulation good) a faction that had been pioneered as reliable core vote by Gary
Hart, Paul Tsongas, and Phil Bradley in earlier Democratic primary contests, and added to that
the alleigance of Black voters intoxicated at the idea of a Black nominee, or mirable dictu,
a Black American President. And it is and was a miracle that I for one will always regard as
one of the great achievements in American history, no matter his other failures.
Is Obama still captured by the Rubin clique? Yes, but of course so would almost any Democrat.
Even Paul Krugman was speaking highly of the achievements of Bill Clinton's economic team as
late as December 2007. Also, Obama in a sense has took over at a earlier stage than FDR did.
Again, I would recommend reading Schlesinger's "The Crisis of the Old Order," the first volume
of his "The Age of Roosevelt" to see how FDR's views changed from 1930 through 1933 as the Depression
deepened. The FDR who came to power in March 1933 held very different views than the man had
in March of 1931. Further, the great reforms, such as the SEC and Glass-Stegall, did not occur
until 1934 and 1935.
Finally, you all seem to have an idea of Presidential omnipotence on domestic policy that
does not exist. One needs 218 votes to pass a law in the House and with the way Senate is currently
run, at least for liberal proposals, 60 votes in the Senate. 41 senators from states representing
just 12% of the population can block legislation. Please tell me gentle souls how you would
get your 218 House votes and 60 Senate votes for all your reform proposals.
Geithner, Summers, and Bernanke are not so much corrupt as they are prisoners of the groupthink
of the last 30 years. As the young graduate student who signs himself "Thorstein Veblen" and
runs the FireLarrySummersNow.com, Larry, probably because of family dynamics (uncles Ken Arrow
and Paul Samuelson being the greatest liberal, Keynsian economists of the post WWII prosperity),
essentially shares the same views as Greg Mankiw, as taught to them
both by Martin Feldstein. Feldstein was Chairman of Reagan's counsel of economic
advisors and Mankiw held the same position for George Bush (and was followed by Ben Bernanke
after he left – I think we have a theme here). I once had hopes that Summers had discovered
the errors of his way back in 2008, but that hope is now crushed.
Why did Obama choose them? Well, because he himself is a Harvard man and a member of the
elite, he shares a lot of the groupthink of the last 30 years. He has not ("yet")
disenthralled himself from the tired dogmas of the past, particularly the dogmas of "freshwater"
economics. If his Presidency is still going to succeed, he will have to disenthrall himself.
Ultimately, I think he is a smart enough politician that he will.
Manshu from OneMint has written this intriguing
guest post about an aspect of social psychology called "groupthink". Sounds like another term for
"herd mentality". While there are many applications of this concept, it appears to have some interesting
implications for the world of investing.
What Your Investment Club Should Watch Out For
If you're in an investment club or are involved in group investing of some sort, you may want
to be aware of this phenomenon called "groupthink".
Irving Janis coined the term – groupthink, which is a concept referring to how smart and intelligent
people, when formed into groups, sometimes make horrendous decisions. Here's how Irving Janis describes
this concept:
"I use the term groupthink as a quick and easy way to refer to the mode of thinking that
persons engage in when concurrence seeking becomes so dominant in a cohesive group that it tends
to override the realistic appraisal of alternative courses of action. Groupthink is a term of
the same order as the words in the newspeak vocabulary George Orwell used in his dismaying world
of 1984. In that context groupthink takes on an invidious connotation. Exactly such a connotation
is intended, since the term refers to the deterioration in mental efficiency, reality testing
and moral judgments as a result of group pressures."
While groupthink is a concept that was used to describe closed groups headed by a leader, I believe
there's some peer pressure involved here; I see it also applying to people who aren't necessarily
in a closed group, but who share the same income group, job profile, and so forth.
Don't Let Groupthink Cramp Your Investment Style
Irving laid out 8 symptoms of groupthink. They seem to account for the behavior
of people during wild market swings and
business cycles, don't you think?
Image by Design G Productions.
1. Invulnerability
Illusions of invulnerability create excessive optimism and encourage risk taking. Group members
may believe that nothing can go wrong and may therefore ignore dangers that stare them in the face.
A friend who bought real estate funds at the peak, only to see their value go down by over 80%,
told me that during the euphoria of the real estate boom, no one ever spoke or thought about things
that could go wrong. Nobody seemed concerned about
investment risk; there was much less concern about having to
manage risk. So, in a situation where no one ever talks about anything negative, it is easy
to get into a cocoon and feel that good times will continue to roll forever.
2. Rationalization
Collective rationalization and consensus seeking are hallmarks of groupthink. Again, during
the boom, there were countless occasions when I heard about how things were different this time:
that home values could never decline so dramatically, or that the
dot com bubble is really an exception to how
market cycles work. Well, we now know that things are no different this time.
3. Morality
Unquestioned belief in the morality of the group causes members to ignore the consequences of
their actions. According to Irving, victims of groupthink ignore the moral or ethical consequences
of their decisions. They often don't talk about the consequences, or they may actually ignore the
consequences, especially when everyone else around them does the same thing. I watched a show about
the
subprime mortgage crisis the other day. It depicted and interviewed lenders who knowingly participated
in subprime lending practices, and who allowed their offices to conduct behaviors that were clearly
detrimental to consumers who went to them for assistance. These lenders enabled unqualified
homebuyers to purchase homes they could not afford. While some felt morally conflicted
about these policies, they still felt that it was easier to ignore the problem and to go with their
company's position on the situation rather than to question what was going on (well, their jobs
were at stake).
4. Stereotypes
Stereotyping those who are opposed to the group as weak, evil, biased, spiteful, disfigured,
impotent, or stupid. Victims of groupthink hold stereotyped views of the people of the opposing
camp. Certain situations can foster an "Us vs Them" mentality. Think about those investors who turned
more aggressive as the boom escalated. Day traders, highly leveraged investors or anyone who went
on margin were at one point making tons of money during the market peak. Everyone else envied their
position. Of course, these days we can only be thankful that we've missed those "opportunities"
and have somehow avoided the dicey predicament many of these "gutsy" investors find themselves in
today. But check out some of the stereotyping that goes on among stock market investors: Are market
timers foolish or crazy? Are buy and holders patsies for staying put even while their retirement
funds evaporated?
5. Pressure
Direct pressure to conform is applied to any "disloyal" member who questions the group. Pressure
is one of those contrarian indicators I use to get a feel for the market. When everyone - and I
mean everyone, including your neighbors, family, friends, coworkers or random people you meet on
the street - are encouraging you to engage in the same activity (e.g. buy certain investments),
it's an indication that something will probably go wrong very soon. During the peak I received
a lot of advice on buying stocks and houses - advice that I felt I didn't need at the time.
I found it very difficult to explain to people why I wasn't in a buying mood: I'd say "the market
is peaking, I'm not buying". And they'd counter: "it can still go higher". Or they'd tell me "what,
are you nuts?"
6. Self Censorship
There's a self censorship of ideas that deviate from the apparent group consensus. A system
may become vulnerable to losing its checks and balances once it begins working a little too well.
Sometimes things are progressing so well that people begin ignoring the flaws in the set up or process;
eventually, people block any misgivings, questions and concerns they have and decide to
"join in" and become part of the process. They jump on the bandwagon and think to themselves
"if you can't beat them, join them".
7. Unanimity
Illusions of unanimity exist among group members, when silence is viewed as agreement. As
market bubbles grow, there were experts in the private and public sectors who kept silent about
how things were unfolding. Hardly an objection was heard, and those who dared counter the majority
were scoffed at. Does this mean that those "in the know" who said nothing about the elephant in
the room could be construed as unanimous in supporting the shenanigans occurring in the real estate
and credit industries?
8. Mindguards
Mindguards are self-appointed members who shield the group from dissenting information. Irving
wrote about committees headed by a leader, but also referred to mindguards as people who prevented
opposing points of view from reaching the leader. Can you think of real life mindguards who've played
big roles in orchestrating certain events in our history?
These symptoms serve as good pointers the next time we find ourselves in extraordinary
market cycles and situations. When everyone is in a hurry to buy or sell houses, stocks or gold,
there could be ample reason to be skeptical.
Thanks again to Manshu for this insightful article. Please consider visiting
One Mint and subscribing to One Mint's
RSS feed here.
The crowd mentality is maybe not rational.
Well, let's put that differently. It's not optimal. It's what it is. You have to cope with people.
Now, if all the people had gone to the Wharton School and become very sophisticated that doesn't
mean the society in which they lived and operated would be incapable of having a business cycle
or bubbles. They're self generating.
Are animal spirits kind of mass groupthink ?
TO UNDERSTAND HOW economies work and how we can manage them and prosper, we must pay attention
to the thought patterns that animate people's ideas and feelings, their animal spirits. We
will never really understand important economic events unless we confront the fact that their causes
are largely mental in nature.
It is unfortunate that most economists and business writers apparently do not seem to appreciate
this and thus often fall back on the most tortured and artificial interpretations of economic events.
They assume that variations in individual feelings, impressions, and passions do not matter in the
aggregate and that economic events are driven by inscrutable technical factors or erratic government
action. In fact, as we shall discover in this book, the origins of these events are quite familiar
and are found in our own everyday thinking. We started work on this book in the spring of 2003.
In the intervening years the world economy has moved in directions that can be understood only in
terms of animal spirits. It has taken a rollercoaster ride. First there was the ascent. And then,
about a year ago, the fall began. But oddly, unlike a trip at a normal amusement park, it was not
until the economy began to fall that the passengers realized that they had embarked on a wild ride.
And, abetted by this obliviousness, the management of this amusement park paid no heed to setting
limits on how high the passengers should go. Nor did it provide for safety equipment to limit the
speed, or the extent, of the subsequent fall.
What had people been thinking? Why did they not notice until real events-the collapse of banks,
the loss of jobs, mortgage foreclosures- were already upon us? There is a simple answer. The public,
the government, and most economists had been reassured by an economic theory that said that we were
safe. It was all OK. Nothing dangerous could happen. But that theory was deficient. It had ignored
the importance of ideas in the conduct of the economy. It had ignored the role of animal spirits.
And it had also ignored the fact that people could be unaware of having boarded a rollercoaster.
What Have People Been Thinking?
Traditional economics teaches the benefits of free markets. This belief has taken hold not just
in the bastions of capitalism, such as the United States and Great Britain, but throughout the world,
even in countries with more established socialist traditions, such as China, India, and Russia.
According to traditional economics, free market capitalism will be essentially perfect and stable.
There is little, if any, need for government interference. On the contrary, the only risk of major
depression today, or in the future, comes from government intervention.
This line of reasoning goes back to Adam Smith. The basis for the idea that the economy is essentially
stable lies in a thought experiment which asks: What do free, perfect markets imply? The answer:
If people rationally pursue their own economic interests in such markets, they will exhaust all
mutually beneficial opportunities to produce goods and exchange with one another. Such exhaustion
of opportunities for mutually beneficial trade results in full employment. Workers who are reasonable
in their wage demands-those who will accept a wage that is less than what they add to production-will
be employed. Why? If such a worker were unemployed, a mutually beneficial trade could be arranged.
An employer could hire this worker at the wage she requires and still have some spare extra output
for a larger profit. Of course some workers will be unemployed. But they will be unable to find
work only because they are engaged in a temporary search for a job or because they insist on pay
that is unreasonably high-greater than what they add to production. Such unemployment is voluntary.
There is a sense in which this theory about the economy's stability is remarkably successful.
For example, it explains why most people who seek work are employed most of the time-even in the
troughs of severe depressions. It may not explain, for example, why 25% of the U.S. labor force
was unemployed in 1933 at the height of the Great Depression, but it does explain why, even then,
75% of the workers who sought jobs were employed. They were engaging in the mutually beneficial
production and trade predicted by Adam Smith.
So, even at its worst, this theory deserves high marks-at least by the criterion of a schoolboy
we once overheard at a restaurant. He was complaining about the C he had received on a spelling
test-despite the fact that 70% of his answers were correct. Furthermore the theory does so well
even in its worst prediction in two hundred years. Most of the time-as now, when the U.S. unemployment
rate is still 6.7% (although rising)-it predicts remarkably accurately.
Consider yet again the Great Depression. Few people ask why employment was as high
as 75% in 1933. Instead the common question is why 25% of the labor force was unemployed.
To our mind macroeconomics concerns departures from full employment. Failure to be at such full
employment must then result from a departure from the classical model of Adam Smith.
We do believe, like most of our colleagues, that Adam Smith was basically right regarding why
so many people are employed. We are also willing to believe, with some qualifications, that he was
essentially correct about the economic advantages of capitalism. But we think that his theory fails
to describe why there is so much variation in the economy. It does not explain why the economy takes
rollercoaster rides. And the takeaway message from Adam Smith-that there is little, or no, need
for government intervention-is also unwarranted.1
Animal Spirits
The thought experiment of Adam Smith correctly takes into account the fact that people rationally
pursue their economic interests. Of course they do. But this thought experiment fails to take into
account the extent to which people are also guided by noneconomic motivations. And it fails to take
into account the extent to which they are irrational or misguided. It ignores the animal spirits.
In contrast, John Maynard Keynes sought to explain departures from full employment, and he emphasized
the importance of animal spirits. He stressed their fundamental role in businessmen's calculations.
"Our basis of knowledge for estimating the yield ten years hence of a railway, a copper mine, a
textile factory, the goodwill of a patent medicine, an Atlantic liner, a building in the City of
London amounts to little and sometimes to nothing," he wrote. If people are so uncertain, how
are decisions made? They "can only be taken as a result of animal spirits."
They are the result of "a spontaneous urge to action." They are not,
as rational economic theory would dictate, "the outcome of a weighted average of quantitative benefits
multiplied by quantitative probabilities."2
In the original use of the term, in its ancient and medieval Latin form spiritus animalis,
the word animal means "of the mind" or "animating." It refers to a basic mental energy
and life force.3 But in modern economics animal spirits has acquired a somewhat
different meaning; it is now an economic term, referring to a restless and inconsistent element
in the economy. It refers to our peculiar relationship with ambiguity or uncertainty. Sometimes
we are paralyzed by it. Yet at other times it refreshes and energizes us, overcoming our fears and
indecisions.
Just as families sometimes cohere and at other times argue, are sometimes happy and at other
times depressed, are sometimes successful and at other times in disarray, so too do whole economies
go through good and bad times. The social fabric changes. Our level of trust in one another varies.
And our willingness to undertake effort and engage in self-sacrifice is by no means constant.
The idea that economic crises, like the current financial and housing crisis, are mainly caused
by changing thought patterns goes against standard economic thinking. But the current crisis bears
witness to the role of such changes in thinking. It was caused precisely by our changing confidence,
temptations, envy, resentment, and illusions-and especially by changing stories about the nature
of the economy. These intangibles were the reason why people paid small fortunes for houses in cornfields;
why others financed those purchases; why the Dow Jones average peaked above 14,000 and a little
more than a year later fell below 7,500; why the U.S. unemployment rate has risen by 2.5 percentage
points in the past twenty-four months, with the end of this rise not yet in sight; why Bear Stearns,
one of the world's leading investment banks, was only (and barely) saved by a Federal Reserve bailout,
and why later in the year Lehman Brothers collapsed outright; why a large fraction of the world's
banks are underfunded; and why, as we write, some of them are still tottering on the brink, even
after a bailout, and may yet be the next to go. And we know not what is yet to come.
Macroeconomics with and without Animal Spirits
Of course there is a rich body of macroeconomics that explains why there are fluctuations in
the economy. Indeed that is what the macroeconomics textbooks are all about. We will give just two
examples. In the post–World War II period, economists felt that they could explain deviations from
full employment by a single type of animal spirit: that workers dislike money wage cuts, and that
employers are therefore reluctant to make them.4 This tradition then morphed into a slightly
more sophisticated explanation for why wages are slow to change. It explains fluctuations in employment
arising from shifts in demand as due to the fact that wages and prices are not all set simultaneously.
This concept in macroeconomics is known as "staggered contracts."5 The macro textbooks
are full of many other departures from the simple thought experiment of Adam Smith, in which there
is always a meeting of minds and contracts are negotiated between rational people motivated purely
by economic interests.6
And that leads us to the philosophical difference between this book and standard economics texts.
This book is derived from a different view of how economics should be described. The economics of
the textbooks seeks to minimize as much as possible departures from pure economic motivation and
from rationality. There is a good reason for doing so-and each of us has spent a good portion of
his life writing in this tradition. The economics of Adam Smith is well understood. Explanations
in terms of small deviations from Smith's ideal system are thus clear, because they are posed within
a framework that is already very well understood. But that does not mean that these small
deviations from Smith's system describe how the economy really works.
Our book marks a break with this tradition. In our view economic theory should be derived not
from the minimal deviations from the system of Adam Smith but rather from the deviations that actually
do occur and that can be observed. Insofar as animal spirits exist in the everyday economy, a description
of how the economy really works must consider those animal spirits. That is the aim of this book.
In producing such a description, we think that we can explain how the economy works. This is
a subject of permanent interest. But, writing as we are in the winter of 2008–9, this book also
describes how we got into the current mess-and what we need to do to get out of it.
How the Economy Really Works and the Role of Animal Spirits
Part One of this book will describe five different aspects of animal spirits and how they affect
economic decisions-confidence, fairness, corruption and antisocial behavior, money illusion,
and stories:
- The cornerstone of our theory is confidence and the feedback mechanisms between it
and the economy that amplify disturbances.
- The setting of wages and prices depends largely on concerns about fairness.
- We acknowledge the temptation toward corrupt and antisocial behavior and their role
in the economy.
- Money illusion is another cornerstone of our theory. The public is confused by inflation
or deflation and does not reason through its effects.
- Finally, our sense of reality, of who we are and what we are doing, is intertwined with
the story of our lives and of the lives of others. The aggregate of such stories is a
national or international story, which itself plays an important role in the economy.
Part Two of this book describes how these five animal spirits affect economic decisions, demonstrating
how they play a crucial role in answering eight questions:
- Why do economies fall into depression?
- Why do central bankers have power over the economy, insofar as they do?
- Why are there people who can't find a job?
- Why is there a tradeoff between inflation and unemployment in the long run?
- Why is saving for the future so arbitrary?
- Why are financial prices and corporate investments so volatile?
- Why do real estate markets go through cycles?
- Why does poverty persist for generations among disadvantaged minorities?
We see that animal spirits provide an easy answer to each of these questions. We also see that,
correspondingly, none of these questions can be answered if people are viewed as having only economic
motivations which they pursue rationally-that is, if the economy is seen as operating according
to the invisible hand of Adam Smith.
Each of these eight questions is fundamental. They would occur to anyone with a natural curiosity
regarding the economy. In providing natural, satisfactory answers to all of them, our theory of
animal spirits describes how the economy works.
In answering these questions, in telling how the economy really works, we accomplish what existing
economic theory has not. We provide a theory that explains fully and naturally how the U.S. economy,
and indeed the world economy, has fallen into the current crisis. And- of perhaps even greater interest-such
a theory then allows us to understand what needs to be done to extricate ourselves from the crisis.
(We present our analysis and recommendations in the postscript to Chapter 7, the chapter dealing
with the powers of the Federal Reserve.)
Groupthink ad a curse of the presidency... "George
W. Bush lived in a bubble, partly of his own making, that walled off
creative dissent or even, in some cases, common sense."
Smart decisions don't grow in a vacuum. The most successful presidents recognize the fact and
encourage debate-and even rivalry-between their advisers. They do their best to consider the options
fully. All the same, it's harder than many people might imagine for our national leaders to keep
the field of opinions from turning into a monoculture.
It's the curse of the modern presidency. Our chief executives need to make an active, aggressive
effort to reach beyond their immediate circle of advisers, to demand fresh thinking and avoid the
sycophancy that comes with the
Oval Office.
Otherwise, they'll only hear what they want to hear-or what their aides tell them. To judge from
"War of Necessity, War of Choice," Richard N. Haass's new book on presidential decision-making with
regard to Iraq,
George W. Bush lived in a bubble, partly
of his own making, that walled off creative dissent or even, in some cases, common sense.
Mindful of his predecessor,
Barack Obama
seems to be trying harder to make sure he hears all sides. On the night of April 27, for instance,
the president invited to the White House some of his administration's sharpest critics on the economy,
including New York Times columnist Paul Krugman and Columbia University economist Joseph Stiglitz.
Over a roast-beef dinner, Obama listened and questioned while Krugman and Stiglitz, both Nobel Prize
winners, pushed for more aggressive government intervention in the banking system.
That sort of outreach is admirable-but it would be a mistake to make too much of it. A couple
of hours of conversation is no substitute for methodical inquiry and debate. At present,
Obama's economic advice is closely controlled by his chief economic adviser, Larry Summers, who
acts as a kind of gatekeeper, determining what Obama sees and hears-and what he does not. Paul Volcker,
the wise old hand who ran the Federal Reserve in the 1980s and whipped inflation, chairs an advisory
panel that does not appear to do much advising. "Our ruling intelligentsia in economics runs the
spectrum from A to A-minus," says a member of the Congressional Oversight Panel on the banking bailout,
who requested anonymity when speaking about the administration. "These guys all talk to each other,
and they all say the same thing."The most successful presidents encourage
debate and even rivalry between their advisers. FDR played his aides against each
other. This produced some chaotic results in dealing with the Depression but worked reasonably well
during World War II. Some presidents only pretend to encourage dissent. During Vietnam, LBJ used
State Department adviser George Ball as his in-house dove-more to placate critics than to listen
to his advice.
... all paper flows to him through an elaborate staffing process. He, like all presidents, is the
captive of a system that has been designed for efficiency but is inevitably isolating. It
will take more than a few dinner parties to avoid the fate of presidents who lost touch with reality.
EDY COLBERT 1,446,000
CNNHN GRACE 1,336,000
CNN KING 1,292,000
MSNBC MADDOW 1,149,000
CNN COOPER 1,021,000
Leadership is first and foremost is the ability to identify and neutralize or confront misguided
groupthink...
Webb's commitment to this unpopular project demonstrates how false that excuse-making is -- just
as it was proven false by Russ Feingold's singular, lonely, October, 2001 vote against the Patriot
Act and Feingold's subsequent, early opposition to the then-popular Bush's assault on civil liberties,
despite his representing the purple state of Wisconsin. Political leaders have the ability to
change public opinion by engaging in leadership and persuasive advocacy.
Any cowardly politician can take only those positions that reside safely
within the majoritiarian consensus. Actual leaders, by definition, confront majoritarian views when
they are misguided and seek to change them, and politicians have far more ability to affect and
change public opinion than they want the public to believe they have.
The political class wants people to see them as helpless captives to immutable political realities
so that they have a permanent, all-purpose excuse for whatever they do, so that they are always
able to justify their position by appealing to so-called "political realities." But that excuse
is grounded in a fundamentally false view of what political leaders are actually capable of doing
in terms of shifting public opinion, as NYU Journalism Professor
Jay Rosen explained when I interviewed him about his theories of how political consensus is
maintained and manipulated:
GG: One of the points you make is that it's not just journalists who define
what these spheres [of consensus, legitimate debate and deviance] encompass. You argue that
politicians, political actors can change what's included in these spheres based on the
positions that they take. And in some sense, you could even say that that's kind of
what leadership is -- not just articulating what already is within the realm of consensus, which
anyone can do, but taking ideas that are marginalized or within the sphere of deviance and bringing
them into the sphere of legitimacy. How does that process work? How do political actors change
those spheres?
JR: Well, that's exactly what leadership is. And I think
it's crippling sometimes to our own sense of efficacy in politics and media, if we assume that
the media has all of the power to frame the debate and decide what consensus is, and consign
things to deviant status. That's not really true. That's true under conditions of political
immobilization, leadership default, a rage for normalcy, but in ordinary political life,
leaders, by talking about things, make them legitimate. Parties, by pushing for things,
make them part of the sphere of debate. Important and visible people can question consensus,
and all of a sudden expand it. These spheres are malleable; if the conversation of
democracy is alive and if you make your leaders talk about things, it becomes valid
to talk about them.
And I really do think there's a self-victimization that sometimes goes on, but to go back
to the beginning of your question, there's something else going on, which is the ability to
infect us with notions of what's realistic is one of the most potent powers press and political
elites have. Whenever we make that kind of decision -- "well it's pragmatic, let's be
realistic" -- what we're really doing is we're speculating about other Americans, our fellow
citizens, and what they're likely to accept or what works on them or what stimuli they respond
to. And that way of seeing other Americans, fellow citizens, is in fact something the media
has taught us; that is one of the deepest lessons we've learned from the media even if we are
skeptics of the MSM.
And one of the things I see on the left that really bothers me is the ease with which people
skeptical of the media will talk about what the masses believe and how the masses will be led
and moved in this way that shows me that the mass media tutors them on how to see their
fellow citizens. And here the Internet again has at least some potential, because we
don't have to guess what those other Americans think. We can encounter them ourselves, and thereby
reshape our sense of what they think. I think every time people make that judgment about
what's realistic, what they're really doing is they're imagining what the rest of the country
would accept, and how other people think, and they get those ideas from the media.
We've been trained how we talk about our political leaders primarily by a media that worships
political cynicism and can only understand the world through political game-playing. Thus, so many
Americans have been taught to believe not only that politicians shouldn't have the obligation of
leadership imposed on them -- i.e., to persuade the public of what is right -- but that it's
actually smart and wise of them to avoid positions they believe in when doing so
is politically risky.
People love now to assume the role of super-sophisticated political consultant rather than a
citizen demanding actions from their representatives. Due to the prism of gamesmanship through which
political pundits understand and discuss politics, many citizens have learned to talk about their
political leaders as though they're political strategists advising their clients as to the politically
shrewd steps that should be taken ("this law is awful and unjust and he was being craven by voting
for it, but he was absolutely right to vote for it because the public wouldn't understand if he
opposed it"), rather than as citizens demanding that their public servants do the right thing ("this
law is awful and unjust and, for that reason alone, he should oppose it and show
leadership by making the case to the public as to why it's awful and unjust").
It may be unrealistic to expect most politicians in most circumstances to do what Jim Webb is
doing here (or what Russ Feingold did during Bush's first term). My
guess is that Webb, having succeeded in numerous other endeavors outside of politics, is not desperate
to cling to his political office, and he has thus calculated that he'd rather have six years in
the Senate doing things he thinks are meaningful than stay there forever on the condition that he
cowardly renounce any actual beliefs. It's probably true that most career politicians, possessed
of few other talents or interests, are highly unlikely to think that way.
But the fact that cowardly actions from political leaders are inevitable is no reason to excuse
or, worse, justify and even advocate that cowardice. In fact, the more citizens are willing to excuse
and even urge political cowardice in the name of "realism" or "pragmatism" ("he was smart to take
this bad, unjust position because Americans are too stupid or primitive for him to do otherwise
and he needs to be re-elected"), the more common that behavior will be. Politicians and their various
advisers, consultants and enablers will make all the excuses they can for why politicians do what
they do and insist that public opinion constrains them to do otherwise. That excuse-making is their
role, not the role of citizens. What ought to be demanded of political officials by citizens is
precisely the type of leadership Webb is exhibiting here.
Economic groupthink is the most dangerous groupthink. "In sum, Tim Geithner is a gigantic fool,
the IMF the gun that can't shoot straight, Alan Greenspan a bungler. The big US banks were run by the
greedy and the hopeless, the Australian banks by counterhopping clerks. It's a world of many villains.
And only one hero."
When Barack Obama announced his champion to rescue the world from economic ruin, it was the first
time most Americans had ever heard the name Tim Geithner.
The initial impression was good. The stockmarket surged and the pundits swooned. "Exactly a decade
ago, he was Uncle Sam's golden-boy emissary sent into the stormy centre of what was then the world's
worst financial crisis [the Asian crisis]," reported The New York Post.
The paper gushed: "Just 36 at the time, he'd been raised in Asia and knew the culture so intimately
he scored successes and won confidences that other diplomats couldn't match. Geithner earned widespread
plaudits for pulling together quarrelling Asian finance ministers into a $US200 billion rescue of
their economies."
"A fantastic choice," said a Bank of Tokyo-Mitsubishi analyst, Chris Rupkey, as the Dow rose
by nearly 6 per cent. Even one of Obama's political rivals, the hard-bitten Republican senator Richard
Shelby, agreed Geithner was "up to the challenge".
If anyone in the US media had thought to ask a former Australian prime minister for his assessment,
they would have heard a different view. And they would not have been so surprised at Geithner's
performance since.
In a speech to a closed gathering at the Lowy Institute in Sydney on Thursday, Paul Keating gave
a starkly different account of Geithner's record in handling the Asian crisis: "Tim Geithner was
the Treasury line officer who wrote the IMF [International Monetary Fund] program for Indonesia
in 1997-98, which was to apply current account solutions to a capital account crisis."
In other words, Geithner fundamentally misdiagnosed the problem. And his misdiagnosis led to
a dreadfully wrong prescription.
Geithner thought Asia's problem was the same as the ones that had shattered Latin America in
the 1980s and Mexico in 1994, a classic current account crisis. In this kind of crisis, the central
cause is that the government has run impossibly big debts.
The solution? The IMF, the Washington-based emergency lender of last resort, will make loans
to keep the country solvent, but on condition the government hacks back its spending. The cure addresses
the ailment.
But the Asian crisis was completely different. The Asian governments that went to the IMF for
emergency loans - Thailand, South Korea and Indonesia - all had sound public finances.
The problem was not government debt. It was great tsunamis of hot money in the private capital
markets. When the wave rushed out, it left a credit drought behind.
But Geithner, through his influence on the IMF, imposed the same cure the IMF had imposed on
Latin America and Mexico. It was the wrong cure. Indeed, it only aggravated the problem.
Keating continued: "Soeharto's government delivered 21 years of 7 per cent compound growth. It
takes a gigantic fool to mess that up. But the IMF messed it up. The end result was the biggest
fall in GDP in the 20th century. That dubious distinction went to Indonesia. And, of course, Soeharto
lost power."
Exactly who was the "gigantic fool"? It was, obviously, the man who wrote the program, Geithner,
although Keating is prepared to put the then managing director of the IMF, the Frenchman Michel
Camdessus, in the same category.
Worse, Keating argued, Geithner's misjudgment had done terminal damage to the credibility of
the IMF, with seismic geoeconomic consequences: "The IMF is the gun that can't shoot straight. They've
been making a mess of things for the last 20-odd years, and the greatest mess they made was in east
Asia in 1997-98, so much so that no east Asian state will put its head in the IMF noose."
China, in particular, drew hard conclusions from the IMF's mishandling of the Asian crisis. It
decided that it would never allow itself to be dependent on the IMF, or the US, or the West generally,
for its international solvency. Instead, it would build the biggest war chest the world had ever
seen.
Keating continued: "This has all been noted inside the State Council of China and by the Politburo.
And it's one of the reasons, perhaps the principal reason, why convertibility of the renminbi remains
off the agenda for China, and it's why through a series of exchange-rate interventions each day
that they've built these massive reserves.
"These reserves are so large at $US2 trillion as to equal $US2000 for every Chinese person, and
when your consider that the average income of Chinese people is $US4000 to $US5000, it's 50 per
cent of their annual income. It's a huge thing for a developing country to not spend its wealth
on its own development."
Is this some flight of Keatingesque fancy? The former deputy governor of the Reserve Bank of
Australia, Stephen Grenville, doesn't think so: "After the Asian crisis, the countries of east Asia
decided that they would never go to the IMF again. The IMF is taboo in east Asia. Look at the evidence.
The revealed preference of the region is that no one has gone to the IMF since, even when they needed
the money."
And Asian capitals know that they have no real influence over the IMF - while European governments
enjoy 40 per cent of the voting power on the IMF, Japan, China and the rest of east Asia put together
have only about 16 per cent. This is an artefact of the immediate postwar power structure, when
the IMF was set up.
Keating urges that the fund should be decapitated, with control passing to the governments of
the Group of 20 countries whose leaders are to meet in London on April 2. The summit, which is to
include China, India and Indonesia as well as Australia, is meeting to consider solutions to the
global crisis.
As for The New York Post's claim that Geithner was the hero who cajoled those quarrelsome
Asians into agreeing to a $US200 billion rescue, the key fact burned into the minds of Asian elites
is that the US was deaf to requests for funds. Washington did not contribute a cent of its own money
to any of the emergency packages. Japan and Australia were the only nations that made loans to all
three of the stricken Asian countries.
Keating went on to argue that, by frightening the Chinese into building
their vast $US2 trillion foreign reserves, Geithner was responsible for the build-up of tremendous
imbalance in the world financial system. This imbalance, in turn, according to Keating, contributed
to the global financial crisis which has since devastated the world economy.
China invested most of its reserves in US debt markets. Keating again: "So we have this massive
recycling of funds into the system by [the former US Federal Reserve chairman Alan] Greenspan's
monetary policy so even if you are greedy Dick Fuld [the former head of the collapsed investment
bank Lehman Brothers] or you are hopeless Charles Prince at Citibank, you're being told there's
an endless supply of money at a low interest rate and no inflation. So of course the system geared
up to spend it.
"That is the fundamental cause of the problem - the imbalance is the fundamental cause."
If Keating's opinion of Geithner had circulated in the US, the Americans would not have been
so surprised and disappointed with their new Treasury Secretary. They quickly learned that he had
failed to pay $43,000 in taxes owing.
Then, when he announced his much-anticipated plan to rescue the US banking system, share prices
slumped by 4 per cent immediately and a new round of weakness in the financial sector began. The
pundits turned savagely against him: "So much for the saviour-based economy," wrote Maureen Dowd
of The New York Times. Senator Shelby changed his mind: "Aggravating economic problems by
contributing to marketplace uncertainty about what steps the Government will take - is that what
this is?" he fumed.
US bank stocks weakened so much that nationalisation seems to be the only remaining option to
put them quickly out of their misery.
Australia's banks, by contrast, are strong, said Keating, because of his decision as Treasurer
to create the "Four Pillars" policy. This requires that the four big banks remain separate, barred
from taking each other over. This prevented them "cannibalising each other", in Keating's words.
As protected species, they had no need to mount risky takeovers to bulk themselves up defensively.
Their strength certainly wasn't due to the brilliance of their managers, whom Keating described
as "counterhopping clerks" who had managed to work their way up the bank hierarchies. A further
source of the soundness of the Australian banks, he said, was that they had learned well the lessons
of risky speculative lending as a result of "the recession we truly did have to have".
In sum, Tim Geithner is a gigantic fool, the IMF the gun that can't shoot straight, Alan Greenspan
a bungler. The big US banks were run by the greedy and the hopeless, the Australian banks by counterhopping
clerks. It's a world of many villains. And only one hero.
Interesting interrelation of groupthink and idealization, kind of group idealization...
Putting The Culture On The Couch: 'The Savior Projection' Onto Politicians Running For High
Office
We all do it when we are first in love: idealize 'the other,' seeing them as
both 'the I and the Thou'… not keeping much of a personal self, but somehow merging with an over-idealized
vision of beauty and perfection we project onto this other soul…
That flush of enormous feeling, in actually, upon investigation, appears to be an unrealistic
image, as though from a slide projector…an image projected over the loved one, an image that contains
all of one's hopes and dreams, and yes, one's own unrealized gifts… all this projected you might
say, onto the wall, hoping someone will walk by who fits its outlines exactly….
Thus, the loved one not only shines with their own gifts, but takes on double, triple, quadruple
sheen…. for they are carrying an odd optical illusion that comes from a projection of magnitude…
all this can be caused by us unconsciously dreaming 'Wondrous Perfection' aloud, and draping
it over another person… and then,
expecting them to live up to the unlivable (for humans) divine projection.
Many a politician, by virtue of righteously appealing to our dearest just dreams during
a campaign for election, rouses the sleeping dreamer, the somnambulistic idealist in many of us.
This is good in one way, bringing people back to life. But also, by so doing, such a politician
also has to be prepared to suddenly find him or herself engulfed by the huge archetypes of Supreme
Helper, Savior, or Hope of the World.
The man becomes Mountain, thereby. The woman becomes Wonder, thereby… Or else, Demon personified,
because a wholly negative projection works similarly … negative projection can be filled with the
bent iron nails and broken glass of our own foibles and errors that we resist admitting…. to ourselves
about ourselves… and so instead, we aim them outwardly, finding in others grave omissions, grievous
commissions, and so on.
But, most often, at first, before overly-negative projections occur, come overly-positive ones.
The politicians (and sometimes those who are their side-men and side-women) reach beyond simple
persona into the heart of dreams people have been carrying for a long time.
This is one way politicians, thereby, inadvertently, create many portals for projection of the
Divine onto themselves. It is usually not solicited, but is a side effect of rousing people's hopes
and ambitions. Yet the politician is a mere mortal. No mortal can fulfill the projection of Divinity
without in some way being reduced to scrap by the trying.
To remain innately kind and steady in the midst of such flurries of projected mirror shine, can
be tough… the ego can become unbalanced by being overly thrilled by the adulation, but the soul
is not…. the soul insists on holding its own shape, holding steady to one's own greater mind, despite
all the shimmy-shiny that is waved before it.
In the creative life which shares at least two walls with spirit, there are challenges to hold
to the soul and not sell out to ego alone or/and to what everyone else wants us to be … for them.
It's a feat to remain compassionate and visionary when one cannot give everything that every
person desires, cannot fix everything in the world that is in dire need, but one hopes to, dreams
it, wants it, is dedicated lifelong to mending the world.
It's a feat to remain visionary when everyday somewhere in the world, no matter what the best
persons do to mediate, grave losses continue to pile up, even as gains are made elsewhere. It's
a feat to hold to one's own mortal shape and do the ordinary most often and the extraordinary as
often as possible, to be fair and honest about oneself, one's view of the world… while under continual
duress to transform all things.
Projection of the Savior, or Great Hope of the World, is powerful. We have seen its deleterious
effects in both the great leaders and also the great dictators of the world. We can see how, in
the inexperienced and naive, that all can throw a politician off their heart game… and instead,
dump them into a flashy, showy inflation that is about ego alone, about 'looking and sounding good
in order to win only,' in order to shock . shake. transmute the world in a way that will make 'the
world' take notice.
But then, one's life is no longer about following the difficult directives of spirit and soul…
and the politician often falters then, more scornful, even rageful, irritable then, and thus more
prone to not watching over the process, the acolytes, the employees, the adulants, and more prone
to errors of judgment and speech.
A politician resisting profound public projection and the undertows that go with it, knows when
he or she is speaking according to the vision he or she dedicatedly carries, versus allowing themselves
to lose their shape and try to fit the empty but golden carapace some overly-adorational groups
have fashioned for them to inhabit… again, via a stunning projection the politician can never live
up to.
The odd thing is, projection of the Divine is often incremental, and the politicians who receive
this glossy projection are often not aware they are trying on its gilded clothing more and more
as time goes on. That is until, as it was said in ancient Greece, 'Whom the Gods once loved, they
now seek to destroy.'
Hero-making projections in our presidential elections are bound to unwind and fall into an entropy,
as all 'too shiny' projections must.
Remember, when we are first in love and think the other has no weaknesses, no icky habits, no
part of themselves that is not just love personified? But, as time goes on, we see the person full
and whole… and imperfect. Maybe we are disappointed and move on, ever wanting to project 'perfect
person-hood' onto someone, anyone… but most often that perfect someone will never be found… for
it's an archetype one is enamored with, not a flesh and blood real human being who scratches and
sneezes and sings sweetly sometimes.
But, maybe instead, we say, the true gold is so valuable in this person we care for, that even
though there is an appreciable amount of untransformed lead in them–and us– too, that we will still
care deeply, and we will remain close, joining our quests in life to theirs.
That's when, as they say in our culture, 'the honeymoon is over.' But, what is left once the
projection is shattered, is what is truly real. The real gold, as well as the real 'not-yet-golden.'
The real deal.
Then, one might say, a durable love begins, a finely tuned love of not only of delight, but also
of intense devotion. Based on what is real, rather than on what has suddenly jumped up out of thin
air via a fantasmagoric projection.
The more shiny a projection was to begin with, the more unrealistically divine, the more it will
begin to eventually lose its luster. And we are now, I believe, seeing the webbed feet rather than
the shiny-shine of various candidates as time goes on in this election cycle.
The idea is not to scorn what/ who one once was madly in projective love with, but rather to
face the touching reality about all of us: There is no perfect swan. There is no soul on earth who
is not human at every level. Each has bodily functions to take care of every day. Each has urges
and drives and instincts and oddities, weirdnesses and wildness.
Perhaps the real wonder, given all those ticks and tocks we all carry, is that we all do as well
as we do on earth. That's the real miracle, I think.
Yet, in this home stretch of the elections, we are in the denouement at the moment, I think,
given all the ankle-biting and slam-booking going on on all sides by some…. the projections are
being dismantled left and right….but whatever is left after all politicians running for office are
finally at rest, in private, with those they trust, those who are conscious of these matters, will
throw the too tall golden crowns in the corner, only taking them out for ceremonial occasions, perhaps…
for there is hardly anything more destructive that will or can ruin a potentially great leader
than nurturing a hubris within oneself, one that rises higher and higher to match the more and more
unrealistic projections he or she is receiving.
To allow hubris to rise to meet projection, is doom.
But also, to continue to project Hope of the World and Savior over every potential leader, is
also doom. A leader cannot fit themselves to Divine projection without destroying others…. as well
as, ultimately, themselves. All suffer then. All.
In any case, whatever was golden in a politician to begin with, will not tarnish as time goes
on. That remains treasure. The question however, will ever be, how inhibitory or obstructive will
what is still dead gray lead in the politician's insight, mapping abilities, endurance, and strategic
chess-like thinking, continue to be an issue, when/if he or she wins control and leadership of this
beautiful America and her people?
Was not Reaganomics/"Bush ownership society" the greatest experiment in groupthink ever ?
There is a surprisingly interesting article at Money Magazine on why so many so-called experts utterly
missed the market crash, credit crisis, and housing collapse.
Its an interview with Philip Tetlock who is (with no small amount of irony), an expert on experts.
He is a professor of organizational behavior at the University of California-Berkeley's Haas Business
School, and has been studying experts for 25 years.
"But you shouldn't simply write all gurus off. Tetlock's research found that one kind of
expert turns out consistently more accurate forecasts than others. Understanding what makes
them better can help you make more reliable predictions in your own life. Tetlock explained
it all to Money's former managing editor, Eric Schurenberg, in a recent interview. . . .
What makes some forecasters better than others?
The most important factor was not how much education or experience the experts had but how
they thought. You know the famous line that [philosopher] Isaiah Berlin borrowed from a Greek
poet, "The fox knows many things, but the hedgehog knows one big thing"?
The better forecasters were like Berlin's foxes: self-critical,
eclectic thinkers who were willing to update their beliefs when faced with contrary evidence,
were doubtful of grand schemes and were rather modest about their predictive ability.
The less successful forecasters were like hedgehogs: They tended to have one big,
beautiful idea that they loved to stretch, sometimes to the breaking point. They tended to be
articulate and very persuasive as to why their idea explained everything. The media often love
hedgehogs.
How do you know whether a talking head is a fox or a hedgehog?
Count how often they press the brakes on trains of thought. Foxes often qualify their arguments
with "however" and "perhaps," while hedgehogs build up momentum with "moreover" and "all the
more so." Foxes are not as entertaining as hedgehogs. But enduring a little tedium is worth
it if you want realistic odds on possible futures.
Fascinating stuff.
My own thesis as to their problematic prognostications places a healthy amount of blame on the
conspiracy of optimism.
And on a related note, Dean Baker and I are interviewed in Editor & Publisher magazine on what
Journalists can do when interviewing these experts: What to ask, how to dig beneath the data, how
to not get rolled by the spinmeisters:
Wish list for reporters covering this and future financial crises
Be more skeptical of sources. "You have to play lawyer, ask what is this
person's motivation for saying what they're saying." The best reporting on the automobile industry's
true financial predicament was at an upstart Detroit Web site that supplies unvarnished automotive
reviews and editorials about the industry, The Truth About Cars. "They understood the business
and its challenges; they were railing for several years against the unsustainable nature of
the capital structure of the Big 3," he says.
Question data, constantly. Last March, for example, The Wall Street Journal
ran a story saying the vast inventory of foreclosed homes was starting to bring people back
into the housing market, and cited figures from the National Association of Realtors showing
a jump in sales in February of 2.9% from the month before. But he points out that in every year
home sales are lowest in January, so changes from January to February are measuring seasonal
differences, not actual improvements in house sales. The tendency to overemphasize the most
recent data point in a monthly series is called the "recency" effect. "It is a foolish way to
ignore the trend and give greater emphasis to today," he notes.
Give good context. The struggle to control the narrative of how the housing
crisis and ensuing financial meltdown occurred is in full swing, exemplified by Karl Rove's
op-ed in the Wall Street Journal in January that fingered Fannie Mae and Freddie Mac as among
"the principal culprits of the housing crisis." But he and others point out that the two government-sponsored
enterprises, though they became too large and overleveraged, had nothing to do with the explosion
of high-risk lending that took place between 2002 and 2007.
Both articles are thought provoking and worth exploring . . .
Sources:
Why the experts missed the crash
Eric Schurenberg
Money Magazine, February 18, 2009: 4:10 PM ET
http://money.cnn.com/2009/02/17/pf/experts_Tetlock.moneymag/index.htm
Expert Tips on Covering the Financial Crisis
Barbara Bedway
Editor & Publisher, February 18, 2009 12:01 AM ET
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003942139
Comments
- tryflyfishing Says:
February 19th, 2009 at 1:01 pm
My father -a journalist- told me to start with "Why is this bastard lying to me?" It would
help if journalists started this way today.
- Transor Z Says:
February 19th, 2009 at 10:19 am
How to spot a fox:
1. They probably aren't on TV, and if they are
2. The glib a-hole talking head interviewer is impatient and dismissive because the fox is
taking too long/not following the standard TV interview formulas/not charismatic/too thoughtful
and nuanced for the glib a-hole to understand. IMO most TV personalities
are "hedgehogs" that attack foxes. "The medium is the message."
There's actually a term for this phenomenon: Sociology of Knowledge. See
http://en.wikipedia.org/wiki/Sociology_of_knowledge
It's a study of how society prioritizes which "experts" to listen to and arrives at consensus
reality.
- ottovbvs Says:
February 19th, 2009 at 10:25 am
Most "experts" missed the signs because they had a vested interest
in missing them. Now of course all the "experts" including the ones here are
swinging too far in the other direction.
Yes we've got a rough year, profits will be in the tank, a big bank or two could get nationalized,
unemployment will go to around 9%, negative growth probably for this and the next two or three
quarters, but reports of the death of the US economy are being somewhat overstated.
Basically we're faced with a couple of year when the US economy is going to be operating
below optimum (not overheated) capacity. I accepted that long ago and adjusted accordingly.
All this running around forecasting jumps in protectionism, massive deflation, massive inflation
(I've heard both predictions here) etc etc is somewhat overwrought.
This is the attitude of people like Doug Kass and Uncle Warren and it's mine.
- danm Says:
February 19th, 2009 at 8:05 am
The less successful forecasters were like hedgehogs: They tended to have one big, beautiful
idea that they loved to stretch, sometimes to the breaking point. They tended to be articulate
and very persuasive as to why their idea explained everything. The media often love hedgehogs.
-–
It's much easier to be articulate when explaining a single big idea than when trying to explain
the effects of multiple non-linear ideas.
I've often been told that to convince the masses you've got to stick to MAX three ideas.
With the multitude of signs popping up to warn us but the expert rehashing the same 2 or 3 positive
ones, it's no wonder most did not see this coming!
Dori said it best: "Just keep swimming, just keep swimming, just keep swimming…"
- dead hobo Says:
February 19th, 2009 at 8:22 am
Being a little more serious now, I have learned that most people have something valuable
to say. They can be famous, infamous, ordinary, or hermits. All are also capable of saying things
of monumental stupidity. The secret is being able to listen, and do it on more than one level.
The listener has to privately ask himself "What is this person
really saying?" A lot of messages will be coming out simultaneously. The challenge
is to put all of them together into one story, then decide if you are learning something new
or wasting some time. To listen well, you have to draw on outside information to see how what
you hearing fits in? Also, you have to be smart enough to know there are unknowns and unknowables,
and either work within those limitations or file what you heard away for future reference in
another context elsewhere.
Let's not even start on "are you talking to an expert, or just someone who is anointed or
popular". Or maybe just a psychopath who wants something from you and you were unlucky enough
to maintain eye contact for too long.
- Steve Barry Says:
February 19th, 2009 at 9:11 am
The experts missed the crash, because since the early 80s, we were all on the same train
of optimism…led there by Reagan at first, then Greenspan ran with it by fixing the system using
monetary policy. If you weren't a optimist, you were looked down on and more importantly, missed
the big party or even worse, made very poor. I was in the lead car of the optimism train…then
the Internet bubble crashed. I was shocked and made it my life's work never to be fooled like
that again. I became the ultimate realist…unfortunately right now that makes me an uber-bear.
Most experts though were still drinking the even more powerful kool-aid in 2006-7 and thus of
course could not see the track was out and the train derailed.
- H Salmon Says:
February 19th, 2009 at 12:16 pm
I learned critical thinking in an early career (one Barry shares). Then moved to Corporate
America and found it completely discouraged. Those who engaged in it were feared/forced out
as "hedgehogs" (we had another word) tried to spin whatever the leader wanted as great strategy.
No surprise to me that so many companies are struggling - managing for short-term #s, executive
bonuses, office politicians, and a revolving door as those executives leveraged short term success
to jump ship for better opportunities just spells eventual disaster.
It's now hard for me to invest in equities as I am always suspicious. Makes we want to only
invest in companies that I control.
I am hoping that we are entering a new age of more critical analysis, but we certainly are
not in Washington. Bloomberg had a great interview with Michael Porter where he nailed it -
Washington just completely lacks any strategic thinking. Anyway, it is wonderful to have sites
like TBP where you can hear from true thinkers and entertain different views.
Groupthink correlated with arrogance ?! Humility might have a value for fighting groupthink...
And the risk of lack of knowledge is real. Summers is close-minded. That trait was part of his undoing
as Harvard president. From the Financial Times, "Out
of His League":
"He himself is not widely educated," said Judith Ryan, a professor of German literature. I met
Ryan, a 63-year-old Australian who speaks with a mid-Atlantic drawl, in her office near Harvard
Square. On her walls were pictures of Rilke and Kafka, watching as Ryan ate a late, rushed lunch
of yoghurt and Starbucks coffee. She attended the faculty meeting in University Hall on February
7 and was one of the academics who stepped up to the microphone to criticise Summers."He
is a brilliant economist but not really very curious about how other disciplines function and
what is at stake today in those disciplines," she said. Ryan regularly sat in on tenure meetings
with Summers. "He really tends to translate things into economic models and he would start to
talk about his impressions of the field. Our visitors were astonished. He would ask the meaning
of words that I thought were part of most people's vocabulary." "Syntax" was one example, she
said....
Ryan also expressed misgivings shared by some of the other professors I spoke to about the
pro-science direction Summers was taking the university. "He had a very present-day notion of
the aims of education," she said with a shrug. "He didn't see the point of studying ancient
Greece."
I have long believed that one of the most valuable traits for people in general, and leaders in
particular, is to understand the limits of their knowledge, and to seek out sources and individuals
who can help fill those gaps. Summers (and perhaps Geithner, if the Summers imprinting has taken)
is of the reverse inclination: he thinks that what he knows has universal relevance. Scary.
Comments
cj7 said...
Yves,Your simple phrase:
"I have long believed that one of the most valuable traits for people in general, and leaders
in particular, is to understand the limits of their knowledge"
strikingly points to what is wrong in the world today. Good leaders can always tell when they
are dealing with someone who exceeds their own knowledge on a particular subject, and this is indeed
a very valuable trait. The problem with Western society today is that people are generally promoted
exactly to their level of incompetence, which Geithner for some reason overshot by several levels.
The problem with this commonality is that we now see many people in positions of power
throughout the corporate and political world that fail to see their own limitations and thus make
decisions based on some combination of ignorance, arrogance, or a need to satisfy others.
Humility throughout the course of human civilization has been considered one of the greatest
virtues, yet sadly modern day Wall St. and Washington have construed this noble characteristic as
a weakness.
1 (1) 33 -- European Journal of Social Theory
UNIVERSITY OF AMSTERDAM
This essay explores the theoretical implications of Freud's notion of `the narcissism
of minor differences' - the idea that it is precisely the minor differences between people
who are otherwise alike that form the basis of feelings of strangeness and
hostility between them. A comparative survey shows that minor differences underlie a
wide range of conflicts: from relatively benign forms of campanilismo to bloody
civil wars. Freud's tentative statements link up with the insights of Simmel, Durkheim,
Lévi-Strauss, Dumont, Elias, and Girard.
Especially helpful is what Bourdieu writes in Distinction: social identity
lies in difference, and difference is asserted against what is closest, which represents
the greatest threat. An outline of a general theory of power and violence should
include consideration of the narcissism of minor differences, also because its counterpart
- hierarchy and great differences - makes for relative stability and peace.
Whatever false god you decide to worship, no less money, it will ultimately destroy you. We worship
the god of money at the altar of the federal reserve discount window :-).
Yes, another Fed slot is soon to be filled, with another Goldman Sachs alum.
I never bought into the conspiracy that Goldman is taking over the financial
world, but the lack of diversity of thought and the risk of groupthink is increasingly
becoming a concern . . .
Matt Yglesias notes that left-of-center commentary has been notably more pessimistic on the state
of the economy than right-of-center commentary. He offers three hypotheses (left-wing positions
are psychologically correlated to pessimism, pessimism was correct, lefties wanted Bush to fail),
all of which played a part. If you're interested in this subject, though, I'd recommend reading
Larry Bartels' paper "It
Feels Like We're Thinking: The Rationalizing Voter and Electoral Democracy."
In it, Bartels and coauthor Christopher Achens examine simple factual questions for evidence
of partisan interpretation bias. Their first example comes from the 1996 National Election Survey,
which asked whether the budget deficit had increased or decreased during Clinton's first term. The
correct answer what that it had decreased. By 90 percent. But they found that only one-third of
the public recognized that the deficit had decreased at all. Republicans found the question especially
tricky: More than half thought the deficit had increased.
The next question asked whether the economy had improved or worsened during Clinton's term. During
this period, GDP grew quickly, unemployment dropped, and wages rose. By any measure, the economy
had improved. But only one-third of Republicans agreed with that statement. And Republicans, unsurprisingly,
were twice as likely as Democrats to say that it had worsened.
Bartels and Achen go further, however, and break their results out by the voters' political information
level. What they found was startling: The more an individual voter knew, the more they self-deceived.
"Among the least well-informed respondents, neither objective reality nor partisan bias seems to
have provided much structure to perceptions of the budget deficit," they dryly note. "Uninformed
Republicans and Democrats were slightly, and about equally, more likely to say that the deficit
had increased than that it had decreased." But travel up the information scale, and the situation
dims. Partisan bias exerts its pull. Objective reality does not.
The thing to notice there isn't even how accurate the perceptions are. It's how different they
are. The economy had improved. Democrats, who had no trouble aligning the economic improvement with
their favored candidate, saw that easily. Republicans, who felt tension between the candidate they
loathed and the economic news, tended to be much more tepid. Indeed, at the top of the information
scale, Republican perceptions of the economy nosedive, presumably because they had enough information
to construct a mental model of how the economy was actually doing badly (trade deficit, China, etc).
And this is not a partisan point: If if George W. Bush had been in office during that period, the
lines almost certainly would have reversed, but the distance between them would not. This is part
of what makes political persuasion so difficult. Partisans don't simply disagree on the merits of
candidates. They disagree on the shape of the underlying reality. And more information, because
we tend to sort our information to strengthen our biases, aids our personal deceptions rather than
correcting them.
Posted by Ezra Klein on January 7, 2009 12:26 PM |
Permalink
COMMENTS
Having read the "Authoritarians" pdf book, and seen some other work along related lines, I'd
guess that this phenomenon is much more heavily a Republican phenomenon than a Democrat phenomenon,
although certainly members of both parties are subject to it to some extent.
Note both these examples are ones where reality has a liberal bias.
Posted by: john | January 7, 2009 1:11 PM
Failure of the US 9and not only US) economists to see the signs of coming credit crunch is probably
the top example of groupthink in recent history. It looks like society can lose large part of its self-preservation
capability dur tothis mechanism... This question echoes similar questions about the run-up to the Iraq
war, and the errors of the "foreign policy establishment".
Why did Economists, as a group, miss the warning signs of
housing, credit and market crisis?
I don't mean individuals - several professional Economists got it right; Academics like Nouriel
Roubini of NYU and Robert Shiller of Yale, as well as a few Wall Streeters, such as David Rosenberg
of Merrill Lynch and Paul Kasriel of Northern Trust. Too many bloggers to name also got it right.
Meanwhile, the vast majority of professional economists, strategists and analysts - the "Herd" -
totally missed it.
One explanation comes from
Dean Baker, who channels Keynes, and says "incentives in the economics
profession, just as in finance, strongly encourage a lack of original thinking."
(That's a variation of Keynes: "Worldly wisdom teaches that it is better for reputation to fail
conventionally than to succeed unconventionally").
Paul Krugman
wondered if it was a fear of going "against bubble denier Alan Greenspan."
I find all these explanations wanting - and quite frankly, too generous by half.
My explanation is there were systemic failures in economics as a
discipline, at least as it is employed in the real world. Note that these are not
theoretical critiques (i.e., Keynesians versus Monetarists), but rather, these are
broader inquiries as to why so many working economists were so utterly clueless about all of the
red flags for so long. The inherent biases of working on Wall Street go along to explain why
those economists were so awful - but I have less of an explanation as to why so many academic
economists were so blind. Perhaps it is the profession itself.
As far as Central Bankers were concerned, they too missed the warning signs - but there were
several
notable
exceptions to this to, including the
Bank of England's concerns about a credit crunch and a collapse in asset prices.
Ideas? I have a few. Here are my top 10 indictments as to why professional economists missed
the crises until it was too late:
1. An inherent upward bias is built into ALL Wall Street research - including economic
research;
2. Ideological rigidity prevented creative thinking;
3. Non-critical acceptance of official data from BEA, BLS, Commerce led to only a passing
familiarity with reality;
4. Institutional rejection of negative analyses remains endemic;
5. Traditional (non-behavioral) economic analysis seems to have difficulty with human irrationality;
6. Political Bias; (Right wing during GOP Presidencies; Left Wing during DEM Presidencies);
7. Corporate bias - Stock option compensation - skewed views too optimistic;
8. "Timing" is very different from Analysis;
9. Factoring in excessive leverage and liquidity is exceedingly difficult from a traditional
economic perspective (Derivatives especially);
10. Herding instinct is powerful;
Economics as a discipline does not seem to be particularly introspective. In my opinion, the
sooner the profession develops some self doubt, recognizes its own failings and shortcomings, the
faster they will be able to recognize the failing constructs of the profession and fix them. The
Efficient Market Hypothesis, homo economicus, the deification of markets, all need an open
public review and a good thrashing.
There were many professions that did not distinguish themselves in the lead up to the housing
boom and bust, financial bust, the credit crisis, and the recession. Economics is near the very
top of that list.
Previously:
The
Mystery of the Awful Economists
Barry Ritholtz
RealMoney.com, 3/2/2005 3:42 PM EST
http://www.thestreet.com/p/_rms/rmoney/barryritholtz/10211333.html
(Free version at
Investors Insight)
Sources:
Bubble blindness
NYT December 23, 2008, 5:16 PM
http://krugman.blogs.nytimes.com/2008/12/23/bubble-blindness/
APPLY ECONOMICS TO ECONOMISTS
Ezra Klein
The American Prospect, December 23, 2008 11:26 AM
http://www.prospect.org/csnc/blogs/ezraklein_archive?month=12&year=2008&base_name=apply_economics_to_economists
Previously:
Mystery of the Awful Economists, part II (April 8th, 2005)
http://www.ritholtz.com/blog/2005/04/mystery-of-the-awful-economists-part-2/
Mystery of the Awful Economists (Part III) (April 13th, 2005)
http://www.ritholtz.com/blog/2005/04/mystery-of-the-awful-economists-part-iii/
More Sources:
'City faces meltdown if debt crisis hits'
Edmund Conway, Economics Editor
UK Telegraph, 12 Jul 2006
http://www.telegraph.co.uk/finance/2943149/'City-faces-meltdown-if-debt-crisis-hits'.html
Merrill's
Rosenberg Inspired by Farrell in Foreseeing Crash
Carlos Torres
Bloomberg, Dec. 30 2008
http://www.bloomberg.com/apps/news?pid=20601109&sid=a8KK_pGpxqL4&
The Doomsayers
Who Got It Right
More Bad News in Store for 2009? Last Year's Cassandras Are Still Gloomy
JEFF D. OPDYKE
WSJ, JANUARY 2, 2009
http://online.wsj.com/article/SB123086035502948067.html
PERMALINK
15 Responses to "Why Economists Missed the Crises"
-
WaltFrench Says:
January 5th, 2009 at 8:03 am
My recent favorite paper was about the S&L crisis of the early 80s. Came out in 1993, after
the facts had been collected, bailout money wasted and careers shattered. Insightful, but hardly
the sort of stuff of journalism. I think blogging leads us to believe that hair-trigger response
is always more useful than in-depth research, the dimensions of which aren't always obvious.
For that matter, certainly the blogosphere, the MSM and Washington, DC, are all scrambling
to understand What To Do. Not that Who/What Was To Blame isn't a useful question, but the disorder
of the latter, and the presumptive benefit from getting it righter than wronger, seems an order
of magnitude more important.
Finally, you are a victim of the same sort of selectivity biases that you rail against in
economists. In February of 2003, 450 economists, including 10 of our surviving Nobel laureates,
signed a full-page ad in the NYT that blasted the direction of the Bush tax-n-spend tax policy.
While that ad hardly could have been expected to forecast a full-blown recession 5 years later,
it DID predict a raft of problems such as weak employment, an exacerbated trade deficit, a weakening
of the not-top of the income distribution, and a Federal deficit that would require expanded
borrowing, all of which (a) came to pass, and (b) created a "who cares" environment by politicians
and MOTUs.
I think more of the problem sits with a society as a whole, which has been willing to believe
in lies that make the Tooth Fairy story look rock-solid. I.e., "we have met the enemy and he
is us."
-
Douglas Watts
Says:
January 5th, 2009 at 8:11 am
I would add:
1. Ingrained belief that all economic growth is inherently good.
2. Failure to identify, recognize and include externalities.
3. Failure to consider law of unintended consequences.
4. Failure to ask at every juncture, why?
The rampant overdevelopment of the past decade reminds me of all those cars from the 1950s
with those monstrous fins. Nobody asked for those giant fins. They just appeared. And then they
got bigger. And bigger. And bigger. Until massive amounts of car real estate and steel and chrome
was consumed to make giant fins a little bit bigger than the last set of fins.
And then they disappeared.
-
mlomker Says:
January 5th, 2009 at 8:15 am
My favorite is the article from over the weekend, "Why don't policymakers respond to rising
markets?" It seems that very few economists consider a bubble to be a problem. There's no doubt
that the general public isn't going to complain but don't policymakers have a responsibility
that goes beyond giving people what they (think) want?
-
jonhendry Says:
January 5th, 2009 at 8:21 am
This question echoes similar questions about the run-up to the war, and the errors of the
"foreign policy establishment".
-
Jonathryn Says:
January 5th, 2009 at 8:40 am
Try "In with the In Crowd."
Most economists on Wall Street and in Academia are baby boomers, a generation notable for
its groupthink and ostracism of members who stray from "conventional wisdom." Note also the
curious effect in journalism: there are no old faces, and no young faces, just baby boomers.
All thinking the same thing: Nobody could have seen this coming!
-
Maseratij Says:
January 5th, 2009 at 8:52 am
HHeh…. He said defecate…….That's funny
Not a spammer, just a reader trying to make a joke. Perhaps everyone was a little too serious
about themselves as well.
>>"The Efficient Market Hypothesis, homo economicus, the deification of markets, all need
an open public review and a good thrashing."<<
They may be explanations but the reasons are always the same. It is just unusual when a group
of people offend a majority of the Seven Sins. Greed, Pride, Gluttony, Envy, Wrath, Lust, and
Sloth. http://tinyurl.com/7rvzp
-
harold hecuba Says:
January 5th, 2009 at 8:56 am
hey watts,
WELL SAID!!!
pravin… one of the reasons for the rapidity of the collapse was the stock markets denial
for quite some time that there were any problems at all. remember oct 2007 the stock market
was hitting ALL TIME HIGHS and the credit markets were in freefall. hell the stock market and
shills believed everything was contained after BSC and the collapse of the auction rate security
market. i still hold the belief that the stock market is no where near pricing in all the horrible
news which continues to deteriorate.
-
Mike in Nola Says:
January 5th, 2009 at 9:00 am
I agree with Keynes. America as a whole follows that principle.
Those who are skeptical of the comfortable present make almost everyone else uncomfortable
and are shunned or derided. Look at Taleb, Roubini, etc. who were labelled cranks. Many cannot
deal with that treatment emotionally. Others who were skeptics and didn't already have a tenured
position or "f-u" money like Taleb, would probably be concerned about promotion if they didn't
go with the flow. An example of what academics might fear is the story of Mandelbrot told by
Taleb: he was set for a nice job somewhere, but the offer was yanked by George Shulz because
he held unconventional beliefs.
-
Schuler2 Says:
January 5th, 2009 at 9:06 am
From my perspective at a Fortune 100 is many of the cheerleaders do not want capitulation
and have a upward bias in all situations as that is linked to incentives, reputations and positions
of power.
I think the BP stated an interesting observation along the following "those that denied the
recession, now state we have been in the recession for a year and now are at the bottom and
recovering". Bias such as groupthink from the previous comment and initial thread is a failure
of rational driven discourse at the macro level to drive a better outcome on an macro basis.
Taking a walk in a small town and observing what people are doing in conjunction with quantitative
research is a combination many policy makers and economists can incorporate into the conclusion
process to balance relative empirical cheerleaders with a dose of old fashion common sense.
If you see a long line at the employment office, perhaps checking out the U-6 rate via BLS makes
sense to see the Big Picture - no pun intended.
-
danm Says:
January 5th, 2009 at 9:18 am
11. Navel gazing or specialization.
I find that most people who work long hours have limited knowledge of things happening outside
their sphere of influence. How can you understand what is happening in the economy if all you
are doing is reading economics books, Fed data, the Economist and shopping in expensive stores
or staying in expensive hotels and boating?
Most economist don't know enough in other disciplines to be good economists.
-
Lars39 Says:
January 5th, 2009 at 9:18 am
OK, but my question is: will the "government" get the fix right? Will a bailout of everyone
(banks, insurance, cars, states, etc.) help or hurt in the long run? What is the plan anyway,
aside from throwing money around?
-
MAL Says:
January 5th, 2009 at 9:21 am
I use to make up stories for a living: I worked at the Federal Reserve Board in Washington,
DC.
At the Fed we had a preconceived "story" about the economy, and
I would analyze economic data to make it fit the story. Or in our research we
had no clear idea what the data "should" say, so we analyzed the data, but if the results were
counter intuitive, we would make up a safe consensus view story to fit it. I thought, "if I
am going to be a story-teller, I should get a PhD in philosophy." Nothing against philosophy,
as it is one of my passions, and I studied it as an undergrad.
The problem with economics as a discipline is that many economists think it is a science,
but it is not. The field is way to quantitative, and many use quantitative models to do their
thinking. These models are too rigid and the underlying assumptions [not always] rest on rationality.
Furthermore, the positive research bias leads "professional" economists to massage the data
using econometric techniques until there is statistical significance. Sometimes it is useful
to know that the dog does not bark.
-
AmenRa Says:
January 5th, 2009 at 9:39 am
As Pravin said the Austrian school of thought recognized this would happen. Two quotes from
Mises' "Human Action":
What is needed for a sound expansion of production is additional
capital goods, not money or fiduciary media. The credit
boom is built on the sands of banknotes and deposits. It must
collapse. Human Action, p. 559; p. 561
If the credit expansion is not stopped in time, the boom
turns into the crack-up boom; the flight into real values begins,
and the whole monetary system founders. Human Action, p. 559; p. 562
-
Dan Duncan Says:
January 5th, 2009 at 9:42 am
Why did economists, asa group, miss the credit crisis?
Because in the run up…to the dizzying heights of "Flip that House" and DOW 15,000, etc.,
etc….all arguments highlighting the insanity were met with, "Yeah, but it's different this time".
The reasons given for it being "different this time" just happened to make the person offereing
those reasons sound pretty damn intelligent.
Greenspan was the perfect in this role of intellectual prophet. Listen to his turgid, opaque
"analysis". As an economist, you either "got it" or you didn't. Too many economic lemings did
not want to come across as being an intellectual lightweight…so all of us had to suffer through
the nonsensical bullshit as if it made sense. "At the end of the day, the proliferation of nondeterminant
economic models and innovative financial structuring mechanisms has resulted in an unprecedented
dispersion of risk across uncorrelated asset classes…" BLAH, BLAH, BLAH….
The beauty of it all is that no clear thinking economist could honestly even disagree with
the above-because it has no structural coherence.
"Sir, our model was created be a team of theoretical mathmeticians from MIT. This is cutting
edge stuff! You, unfortunately are a dull, rusty blade. Back to Community College for you!"
It's no coincidence that the rogue economists who did call the crisis were contrarian thinkers
who take a certain intellectual pride in going against the grain. Unfortunately for many of
these economists-there's a certain validity to the notion that they too often play the role
of contrarian for the sake of being contrarian…and in the case of someone like Roubini, it's
too easy for his critics to simply say "There goes Nouriel again. Always has to be the Devil's
Advocate." [And there's some truth to this---as over the long haul, Roubini has been far from
perfect in his prognostications.]
Economists just try too damn hard. Too many are physicist wannabes. Economics is not a science,
and should not be treated as such. Any prediction given by an economist should be treated with
the same weight as one given by an astrologer (sorry to all you astrologers out there). Economics
departments should be permanantly removed from science departments and be made part of the Accounting
Department at all schools. Upon graduation, in addition to their diplomas, economists should
be given a simple Radio Shack Tandy calculator. The Dean, upon shaking their hands, should give
each one of them 4 pencils along with the following advice: "Here stuff these in your shirt
pocket. Get ready for a social scene filled with actuaries and accountants. Your down time will
be filled with creating dynamic avatars in the 2nd Life Virtual World. Enjoy the Revenge of
the Nerds (1-8)….Oh yeah, I almost forgot-Realize this: The opposite sex is not part of your
future."
In
his book of the same name, status anxiety is defined by author Alain de Botton as a worry "that
we are in danger of failing to conform to the ideals of success laid down by our society and that
we may as a result be stripped of dignity and respect."
Status anxiety loomed large in the housing boom for people who did sensible things. They looked
askance at their used Hondas, humble dwellings, conservative fixed-rate mortgages, and budget hotels
at Disneyworld, and, finding them deficient amid the neighbors' BMWs, McMansions, and forays to
France, tried in vain to suppress a
creeping apprehension
that they had gotten something terribly wrong.
(Now they realize the neighbors did it by surfing a tsunami of debt, but it brings them little
comfort, since their jobs and home values are in jeopardy thanks to the follies of the foolish and
greedy.)
Beware of Schemers
In addition, it was status anxiety that propelled smart people to hand over enormous sums of
money to Bernard Madoff without paying adequate attention to what he was doing with it.
"What strikes one about the investors in the Ponzi scheme is desperation -- and not necessarily
desperation to become rich, but to earn status, honor, and esteem," Botton wrote me in an email.
"If our position on the ladder is a matter of such concern, it is because how we feel about ourselves
depends to an unfortunate degree on what others think of us.
"Except in societies where status is fixed at birth, our position on the ladder hangs upon what
we achieve -- and success is uncertain," he continues. "And from failure will flow humiliation:
a corroding awareness that we have failed to convince the world of our value and are henceforth
condemned to consider the successful with bitterness and ourselves with shame. That's where Madoff
came in: he promised an instant and painless release from these status anxieties."
Wired for Stature
Our appetite for status derives from a physiological drive that played a useful role in survival,
according to evolutionary biologists. The higher the status, the larger the share of pie an animal
got in competitive situations. Thus it survived better, lived longer, and left more living offspring,
preserving its genes in the population. Our biology evolved to make us keenly attuned to status.
"Animals higher up in the hierarchy have less stress -- lower cortisol and adrenaline levels
-- and higher levels of hormones associated with feeling good, like serotonin," says Denise Cummins,
an author who studies the evolution of cognition and teaches psychology at the University of Illinois
in Urbana-Champaign. "This has been shown among humans as well. You're wired for status -- your
whole neurology and endocrine system are tuned to what your relative status is.
"Even small changes in status -- someone snubs you -- will cause a response in the endocrine
system," she adds. "High-status individuals have priority of access to resources, and in a market-based
economy that means money. You have a lot of money, you have power."
Bad for Your Health
Thus when one experiences a sudden, Madoffian-sized loss of status, the upshot is neurological
and hormonal fireworks.
"Large, precipitous changes in status can have massive effects," says Cummins, including cardiovascular
stress, immune system dysfunction, and a shift in the way the body metabolizes sugar and stores
fat. "What your body is saying, 'My God, I'm never going to reproduce, I'm not going to be alive
and leave living offspring' -- because that's what status means in a truly Darwinian world."
But that primal sense of alarm lingers in the modern world -- exacerbated by our belief in meritocracy,
suggests Botton.
Meritocracies Have Their Downside
Since the mid-18th century, Western governments have sought "to create a hierarchy based on actual
ability, replacing posh, chinless halfwits with the meritorious," Botton wrote in an email. "This
meritocratic ideal has brought opportunity to millions. Gifted and intelligent individuals who for
centuries were held down within an immobile, caste-like hierarchy are now free to express their
talents on a more or less level playing field."
Alas, the dark side of meritocracy is that if we believe individuals
are exclusively responsible for their triumphs (and we hold financial success at the pinnacle of
esteem), then individuals are ineluctably accountable for their failures -- and economic collapse
(with its corresponding plummet in status) is equally deserved.
"Financial failure has become associated with a sense of shame that the peasant of old, denied
all chances in life, had also thankfully been spared," Botton notes.
The Company You Keep
Is there any hope of defeating status anxiety in a species biologically primed to chase rank?
Start by changing your reference group, advises Cummins: "It's relative status that hits you
the hardest. If you are the hedge fund manager and your business went under and all the buddies
you meet at cocktail parties are doing OK, that's going to hit you a lot harder than if go to a
cocktail party and everyone is in the same boat."
Another possibility: Unemployed hedge fund managers and investment bankers, among others, are
turning to evangelical churches for relief. Botton thinks that's not such a bad idea.
"Christian moralists have long understood that to reassure the anxious it may be best to emphasize
we will die, everyone we love will vanish, and all our achievements and even our names will be stamped
into the ground," he wrote in an email. "To consider our petty status-worries from the perspective
of a thousand years hence is to be granted a rare, tranquillizing glimpse of our own insignificance."
The Biggest Monkey Doesn't Always Win
Another escape from status anxiety might be found in taking bold risks based on your passions,
rather than continue to pursue
a job in which you display expertise but no joy.
"The paradox of success is that all those who have done well have tended to ignore questions
of status for many years in order to pursue a passion," Botton argues. "In other words, seeking
status directly is as futile as seeking happiness directly. Status should be the byproduct of a
job well done rather than a goal in itself."
Or rather than avoid status anxiety, one might simply pursue new routes to the top of the hierarchy.
One proven strategy: Network like crazy. "In a lot species, neither size nor aggression correlates
with status -- it's more about social intelligence," Cummins says.
When two primates fight, each side will call for help, and the monkey with the biggest posse
wins, she explains. "The literature shows quite clearly the individuals who come to help in situations
like that are individuals that you groomed in the past, shared food with in the past, or engaged
in some kind of helping behavior with in the past," Cummins says. "This forms strong coalitions,
then reciprocation happens. If you do that enough, what happens is you can secure a nice, strong,
stable position in the hierarchy."
Comfort in the Dark
Finally, if someone calls you, wretched with status anxiety, don't try to cheer them up with
rosy bromides.
"One of the most consoling things one can hear anyone say is that everything is absolutely dreadful,"
explains Botton. "Something like this sentence from the Roman philosopher Seneca: 'What need is
there to weep over parts of life? The whole of it calls for tears.' Or else this from the 19th century
German Arthur Schopenhauer: 'Today it is bad and daily it will get worse -- until the worst of all
happens.' Or this from the French 18th century thinker Chamfort: 'A man must swallow a toad every
morning if he's to be sure of not meeting with anything more disgusting in the day ahead.'
"These thoughts make us feel better because they perform that most valuable of all services:
they tell us we're not alone with our darkest feelings."
Comments
larster Says:
December 12th, 2008 at 12:09 pm
One of the big contributors that led to this bull market in incompetence
is the concept of "team building". All major orgs in the '80s emphasized team building which resulted
in managers surrounding themselves with an echo chamber.
One need only look to the White House for an example of this. How many people on Wall St knew
we were headed for disaster but did not speak up for being branded as "not a team player". On the
top mgt side a large bonus structure put the golden handcuffs on the disidents.
Look at the Army and the Shinseki incident. Does anyone think that he was the only general to
understand the need for more troops to maintain order after the war? Everyone sat on their hands
dreaming of that cushy job w/ a defense contractor, as we bumbled and stumbled into a mess.
We need to develop some game changers but the "system" does not breed them.
Can some prejudices and phobia be considered as examples of groupthink ?
One of the most pervasive findings in social science, although it is seldom codified this way,
is how suggestible people are. Numerous studies in behavioral
economics have found that the same underlying bet elicits very different take-up rates when framed
as a wager versus as insurance. Even worse, humans are susceptible to obviously exogenous influence.
One oft-repeated test that yields consistent results is to ask a group in a classroom setting
to (among other things) to write their best estimate of the number of countries in the world. To
show how to fill out the form, the leader spins a wheel of fortune, and takes the chosen number,
(say 550) and uses it to illustrate how to record the estimate. Invariably, high results on the
wheel of fortune, clearly an arbitrary figure, lead to markedly higher average estimates on the
form.
The question du jour is why does the US have such a phobia regarding nationalization. Per the
lead-in, I suspect it has a great deal more to do with social conditioning than a case-by-case assessment
of possible gains and losses.
While the initial (correct) reflex is that undue government interference in a well-functioning
private sector is not a good idea, the industries in question (financial services and automobiles)
have top players that are now abject failures on taxpayer life support. These companies have been
exempted from market discipline (aka bankruptcy) thanks to state intervention.
The very fact that they operated with minimal government oversight, drove themselves to the verge
of bankruptcy, and managed to make themselves so essential that they cannot be permitted to collapse
says they cannot be left in their former hands (incumbent management is either colossal incompetent,
amazingly corrupt and scheming, or both).
But unlike the UK, and Sweden during its early 1990s crisis (widely touted as best practice)
which were both ready to assume control of banks that wrecked themselves, the US continues to rationalize,
nay, promote, the worst of all possible worlds: socialization of losses, the bozo management teams
still largely (often entirely, as in the case of Citigroup) intact, inadequate to no supervision
(where are the board seats?) and no upside participation, not even much explanation of what they
intend to do with the dough (well, now great theater is being made of the auto industry, because
it is easy to pick on guys from the grubby Midwest, but the banking crowd, which did far more damage
and has gotten much bigger handouts and no unpleasant questions).
I saw a simpleminded but compelling explanation for this phenomenon: Europeans consume more government
services than Americans do, and are pretty happy with it (they think we are barbarians for having
private health care and, among other things, little state support of the arts). Why? They are reported
to be better at it than we are. They deliver government services efficiently (relatively speaking,
and healthcare provides some proof) and because they do a good job, the citizenry is willing to
deploy tax dollars to these ends.
That is a long-winded way of saying that government inefficiency and incompetence is not a given,
as is often depicted in the US. The demonization of government service has probably discouraged
able people from seeking public sector jobs. Even so, some areas still get high marks (the FDIC).
And the continued disparagement of government serves as cover for those who want subsidies and rescues
but hope to avoid the demands that should properly go with them.
This New York Times article deals with the Obama team's reluctance †o be seen as "nationalizing".
I see. So we would rather pander to the bankrupt ideology that helped create this mess, let the
perps continue to get undeserved princely pay, and stick the hapless sop taxpayer with the guaranteed-to-be-rotten
fruit of this exercise rather than demonstrate leadership and reframe the issues. The hesitation
to demand even modest quid pro quos is beyond belief. No private sector negotiator would ever accept
such a deal.
Is this "Change We Can Believe In?" Looks like the same old crap to me, with better salesmen
in charge.
The golden rule is that he who provides the gold, makes the rules. Time to get over prostrating
before the private sector when it has abjectly screwed up.
It looks like so called "war on terror" is a mirage and might be a potent example of groupthink.
Simon Jenkins apparently thinks so...
As the sociologist Ulrich Beck has written, "properly exploited, a novel
risk is always an elixir to an ailing leader". By declaring a threat so awful as
to be intolerable, a politician can limit the liberties of a free society in the name of risk-aversion.
Musharraf utters hardly a sentence that does not contain the word terror. Pivotally close to the
base from which 9/11 was apparently launched, his dictatorship has been indulged by London and Washington
for a full seven years. This week Gordon Brown hailed him as a "key ally on terrorism", enabling
him to take comfort in sacking his judiciary and curbing his media.
Had the war on terror been used only as a metaphor for better policing,
like rhetorical "wars" on drugs, poverty and street crime, it might have passed muster.
Bush and Musharraf have found the military metaphor too potent to resist and duly carried it into
literal effect. The result has been a disaster for their countries, and incidentally for themselves.
The west's Afghan adventure is now devoid of coherent strategy. Soldiers are dying, the opium
trade is booming and aid lies undistributed. Command and control of the war against the Taliban
is slipping from the most bizarre western occupying force since the fourth Crusade to a tight cabal
around the Afghan ruler, Hamid Karzai, who is fighting to retain a remnant of authority in his own
capital.
Karzai's exasperation with the west has led him to refuse the services as "coordinator" of the
former Liberal Democrat leader, Paddy Ashdown. The latter may have cut a dash in the subsidy swamp
of Sarajevo, but in Afghanistan he would have been a boy on a man's errand. Karzai knows well that
his fate lies not with the patronising platitudes of western proconsuls but in the hard graft of
provincial warlords, drug gangsters and Taliban go-betweens.
These go-betweens have had their status massively boosted by the war on terror. Bush's demand
in 2001 that Musharraf "join the war" sent Pakistani forces into the border territories, breaking
old treaties and driving the Pashtun tribes into the eager arms of Taliban leaders. This undoubtedly
saved Osama bin Laden's skin from the fury of the northern Tajiks, committed to avenge his murder
of their leader, Ahmed Shah Massoud.
Musharraf, at America's bidding and with $10bn of American money, has done what even his craziest
predecessors avoided, and recklessly set the Pashtun on the warpath - increasingly in thrall to
a revived al-Qaida. The result is a plague of suicide bombings and killings in the heartland of
his benighted state. From the law courts of America to the mosques of west London and the mountains
of the Hindu Kush, the war on terror has been lethally and predictably counter-productive. It embodies
the new stupidity in international affairs.
Nobody disputes that there are killer cells at large in the world, most of them proclaiming various
Islamist creeds. It is the job of intelligence agencies and the police to catch as many as they
can. After a hesitant start, they appear to be quite good at it. Some bombs will get through but
they will not be deterred by draconian laws, any more than by machine gun-toting policemen in Downing
Street and Heathrow. Robust societies can handle this admittedly intermittent threat. Only weak
ones will capitulate to it.
The menace of these killers lies not in their firepower but in their capacity to distort the
judgment and commitment to freedom of politicians too cowardly to bear on their shoulders the burden
of risk. In two weeks' time, the fragile democracy of Pakistan will defy the bombers and hold an
election prior, it is hoped, to some version of democratic rule. Such communities will defy a probable
burst of terror bombs only if their leaders stop setting "terrorists" on a pedestal and using language
that exaggerates their capacity, as Bush puts it, "to oppose the advance of freedom".
It is leaders, not bombers, who have the power to balk the advance of freedom. Already those
leaders have used the war on terror to introduce the Patriot Act, Guantánamo Bay and a $1.5 trillion
war in Iraq. In Pakistan they have used it as an excuse for emergency rule, the imprisonment of
senior judges, and the provocation of unprecedented insurgency in the north-west frontier territories.
In Britain leaders have used the war as an excuse for 42-day detention without trial, the world's
most intrusive surveillance state, and not one but two contested military occupations of foreign
soil.
This so-called war on terror has filled the pockets of those profiting from it. It has killed
thousands, immiserated millions and infringed the liberty of hundreds of millions. The only rough
justice it has delivered is to ruin the careers of those who propagated it. Tony Blair was driven
to early resignation. Bush has been humiliated and Musharraf's wretched rule brought close to an
overdue end. It may be an ill wind that blows no good, but it is hardly enough.
bulliedacademics.blogspot.com
In other words, the problem is that the personal risks were entirely asymmetric. Raising concerns
about the bubble could jeopardize one's career, while ignoring the bubble carried no such risk.
Robert Shiller has an
interesting
discussion of how Alan Greenspan and almost the whole economics profession managed to overlook
the $8 trillion housing bubble. Shiller attributed the failure in large part to "groupthink," the
fact that no one wants to be standing out from the consensus within the group. According to Shiller,
this sort of social pressure forced many of those who had concerns about the dangers of a bubble
to tone down their concerns or to just keep them to themselves.
While there is undoubtedly some truth to this assessment, it only presents part of the picture.
Challenging the consensus by raising concerns about the housing bubble would have posed serious
risks to the careers of those within institutions like the Fed or in the economics profession more
generally. On the other hand, completely missing the largest housing bubble in the history of the
world carries no consequences for those whose job it was to recognize such risks to the economy.
In other words, the problem is that the personal risks were entirely
asymmetric. Raising concerns about the bubble could jeopardize one's career, while ignoring the
bubble carried no such risk. Under such circumstances, economists would expect that
economists would opt to ignore the bubble.
The remedy that economists would recommend for other workers is to
fire those who failed at their job. This would make the risks more symmetric. That
way, in the future economists would have incentive to seriously consider arguments about financial
bubbles and other dangers to the economy and not just unquestioningly accept the views of their
bosses.
Unfortunately, it is unlikely that any economists in government, business, or academia will suffer
any serious career consequences for failing to have done their job and warned of the bubble. Economists
have enough political power so that they are not held accountable for their performance in the same
way as dishwashers or custodians.
--Dean Baker
Posted at
10:32 PM |
Comments (4)
===
The way to get ahead in the economics profession is to write or say things that make influential
people look good, and not speak the unattractive truth about who or what is wrong. Conform or be
cast out.
[subdivisions][1]
[1]:http://www.youtube.com/watch?v=2aH3qoQIqig
Posted by: sd | November 2, 2008 9:26 AM
==
If Dean had been in a position of major responsibility such as head of the Fed in 1996 or in
2002, and had taken action to burst the stock-market or real-estate bubbles or forstall the excessive
expansion, he would probably have been fired (or at least not reappointed in the case of Fed Chairman).
The general opinion would have been that he killed prosperity by ill-considered action. This may
have been good for the economy, but people like Dean are in short supply and would soon be shut
out from public office (as in fact they already are).
As I have argued before, discretionary action by authorities to puncture
bubbles is not likely to happen. It seems that the only way to break out of the cycle
is to rein in by legislation those aspects of financial industries, etc. that lead to overexpansion.
The New Deal actually attempted to do this and was successful in many respects, but instead of carrying
on this work, economists and politicians were seduced by the false promises of "new" free-market
economics. Deregulation and reliance on the Fed to fix the system go hand-in-hand in the paradigm
which has failed.
Posted by: skeptonomist | November 2, 2008 10:40 AM
===
But Dean, you yourself just wrote that challenging the consensus would have posed serious risks
to most economists' careers. And that's because most of them work within institutions controlled
by people in whose interests it was to create the bubble, and who will not suffer from the debacle
that has been the result. Economists are held accountable for their
performance -- their performance in supporting the status quo.
If the housing bubble had been stopped in its tracks by economists warning of its effects, huge
bonus and commission losses would have resulted in the banking world. Loathsome regulations would
have been imposed on the financial system. The people adversely affected would have shown their
displeasure with reduced contributions to the universities and think tanks employing those economists.
Had they failed to fire or discipline those rogue economists, the presidents
and board members of those institutions would have felt the wrath of the thwarted.
And they'd have been criticized even from the left, which would have been incensed that they
were discouraging a mortgage lending system that was allowing so many people to become home-owners
-- and, since we know that real estate only goes up, we'd be denying those people the chance to
partake in the only surefire investment, veritably dooming them to a life of penury.
And since all the losses will be covered by various forms of government insurance, financed by
government borrowing, no one will lose money in the end, right?
Posted by: jm | November 1, 2008 11:38 PM
===
ALAN GREENSPAN, the former
Federal Reserve chairman, acknowledged in a Congressional hearing last month that he had made
an "error" in assuming that the markets would properly regulate themselves, and added that he had
no idea a financial disaster was in the making. What's more, he said the Fed's own computer models
and economic experts simply "did not forecast" the current
financial crisis.
Mr. Greenspan's comments may have left the impression that no one in the world could have predicted
the crisis. Yet it is clear that well before home prices started falling in 2006, lots of people
were worried about the housing boom and its potential for creating economic disaster. It's just
that the Fed did not take them very seriously.
For example, I clearly remember a taxi driver in Miami explaining
to me years ago that the housing bubble there was getting crazy. With all the construction under
way, which he pointed out as we drove along, he said that there would surely be a glut in the market
and, eventually, a disaster.
But why weren't the experts at the Fed saying such things? And why didn't a consensus of economists
at universities and other institutions warn that a crisis was on the way?
The field of social psychology provides a possible answer. In his classic 1972 book, "Groupthink,"
Irving L. Janis, the Yale psychologist, explained how panels of experts could make colossal mistakes.
People on these panels, he said, are forever worrying about their personal relevance and effectiveness,
and feel that if they deviate too far from the consensus, they will not be given a serious role.
They self-censor personal doubts about the emerging group consensus if they cannot express these
doubts in a formal way that conforms with apparent assumptions held by the group.
Members of the Fed staff were issuing some warnings. But Mr. Greenspan was right: the warnings
were not predictions. They tended to be technical in nature, did not offer a scenario of crashing
home prices and economic confidence, and tended to come late in the housing boom.
A search of the Federal Reserve Board's working paper series reveals a few papers that touch
on the bubble. For example, a
2004
paper by Joshua Gallin, a Fed economist, concluded: "Indeed, one might be tempted to cite the
currently low level of the rent-price ratio as a sign that we are in a house-price 'bubble.'" But
the paper did not endorse this view, saying that "several important caveats argue against such a
strong conclusion and in favor of further research."
One of Mr. Greenspan's fellow board members, Edward M. Gramlich, urgently
warned about the inadequate regulation of subprime mortgages.
But judging at least from his 2007 book, "Subprime Mortgages," he did not warn about a housing bubble,
let alone that its bursting would have any systemic consequences.
From my own experience on expert panels, I know firsthand the pressures
that people - might I say mavericks? - may feel when questioning the group consensus.
I was connected with the Federal Reserve System as a member the economic advisory panel of the
Federal Reserve Bank of New York from 1990 until 2004, when the New York bank's new president,
Timothy F. Geithner, arrived. That panel advises the president of the New York bank, who, in
turn, is vice chairman of the Federal Open Market Committee, which sets interest rates. In my position
on the panel, I felt the need to use restraint. While I warned about the bubbles I believed were
developing in the stock and housing markets, I did so very gently, and
felt vulnerable expressing such quirky views. Deviating too far from consensus leaves one feeling
potentially ostracized from the group, with the risk that one may be terminated.
Reading some of Mr. Geithner's speeches from around that time shows that he was concerned about
systemic risks but concluded that the financial system was getting "stronger" and more "resilient."
He was worried about the unsustainability of a low savings rate, government deficit and current
account deficit, none of which caused our current crisis.
In 2005, in the second edition of my book "Irrational Exuberance," I stated clearly that a catastrophic
collapse of the housing and stock markets could be on its way. I wrote that "significant further
rises in these markets could lead, eventually, to even more significant declines," and that this
might "result in a substantial increase in the rate of
personal bankruptcies, which could lead to a secondary string of bankruptcies of financial institutions
as well," and said that this could result in "another, possibly worldwide, recession."
I distinctly remember that, while writing this, I feared criticism
for gratuitous alarmism. And indeed, such criticism came.
I gave talks in 2005 at both the Office of the
Comptroller of the Currency and at the
Federal Deposit Insurance Corporation, in which I argued that we were in the middle of a dangerous
housing bubble. I urged these mortgage regulators to impose suitability requirements on mortgage
lenders, to assure that the loans were appropriate for the people taking them.
The reaction to this suggestion was roughly this: yes, some staff members had expressed such
concerns, and yes, officials knew about the possibility that there was a bubble, but
they weren't taking any of us seriously.
I BASED my predictions largely on the recently developed field of behavioral economics, which
posits that psychology matters for economic events. Behavioral economists are still regarded as
a fringe group by many mainstream economists. Support from fellow behavioral economists was important
in my daring to talk about speculative bubbles.
Speculative bubbles are caused by contagious excitement about investment
prospects. I find that in casual conversation, many of my mainstream economist friends
tell me that they are aware of such excitement, too. But very few will talk about it professionally.
Why do professional economists always seem to find that concerns
with bubbles are overblown or unsubstantiated? I have wondered about this for years,
and still do not quite have an answer. It must have something to do with the tool kit given to economists
(as opposed to psychologists) and perhaps even with the self-selection of those attracted to the
technical, mathematical field of economics. Economists aren't generally trained in psychology, and
so want to divert the subject of discussion to things they understand well. They pride themselves
on being rational. The notion that people are making huge errors in judgment is not appealing.
In addition, it seems that concerns about professional stature may blind us to the possibility
that we are witnessing a market bubble. We all want to associate ourselves with dignified people
and dignified ideas. Speculative bubbles, and those who study them, have been deemed undignified.
In short, Mr. Janis's insights seem right on the mark. People compete
for stature, and the ideas often just tag along. Presidential campaigns are no different.
Candidates cannot try interesting and controversial new ideas during a campaign whose main purpose
is to establish that the candidate has the stature to be president. Unless Mr. Greenspan was exceptionally
insightful about social psychology, he may not have perceived that experts around him could have
been subject to the same traps.
Robert J. Shiller is professor of economics and finance at Yale and co-founder and chief economist
of MacroMarkets LLC.
Was it Groupthink?:
Challenging the Crowd in Whispers, Not Shouts, by Robert Shiller, Economic View, NY Times:
Alan Greenspan ... acknowledged in a Congressional hearing last month that he had ... no idea
a financial disaster was in the making. What's more, he said the Fed's own computer models and
economic experts simply "did not forecast" the current financial crisis.
Mr. Greenspan's comments may have left the impression that no one in the world could have
predicted the crisis. Yet it is clear that well before home prices started falling in 2006,
lots of people were worried... It's just that the Fed did not take them very seriously.
For example, I clearly remember a taxi driver in Miami explaining to me years ago that the
housing bubble there was getting crazy..., he said that there would surely be a glut in the
market and, eventually, a disaster.
But why weren't the experts at the Fed saying such things? And why didn't a consensus of
economists at universities and other institutions warn that a crisis was on the way?
The field of social psychology provides a possible answer. In his classic 1972 book, "Groupthink,"
Irving L. Janis, the Yale psychologist, explained how ... experts ... on ... panels ... are
forever worrying about their personal relevance and effectiveness, and feel that if they deviate
too far from the consensus, they will not be given a serious role. They self-censor personal
doubts about the emerging group consensus...
From my own experience on expert panels, I know firsthand the pressures that people - might
I say mavericks? - may feel when questioning the group consensus.
I was ... a member the economic advisory panel of the Federal Reserve Bank of New York from
1990 until 2004... While I warned about the bubbles I believed were developing in the stock
and housing markets, I did so very gently, and felt vulnerable expressing such quirky views.
Deviating too far from consensus leaves one feeling potentially ostracized from the group, with
the risk that one may be terminated. ...
In 2005, in the second edition of my book "Irrational Exuberance," I stated clearly that
a catastrophic collapse of the housing and stock markets could be on its way. ... I distinctly
remember that, while writing this, I feared criticism for gratuitous alarmism. And indeed, such
criticism came.
I gave talks in 2005 at both the Office of the Comptroller of the Currency and at the Federal
Deposit Insurance Corporation, in which I argued that we were in the middle of a dangerous housing
bubble. I urged these mortgage regulators to impose suitability requirements on mortgage lenders...
The reaction ... was roughly this: yes, some staff members had expressed such concerns, and
yes, officials knew about the possibility that there was a bubble, but they weren't taking any
of us seriously. ...
Why do professional economists always seem to find that concerns with bubbles are overblown
or unsubstantiated? I have wondered about this for years... It must have something to do with
the tool kit given to economists (as opposed to psychologists) and perhaps even with the self-selection
of those attracted to the technical, mathematical field of economics. Economists aren't generally
trained in psychology... They pride themselves on being rational. The notion that people are
making huge errors in judgment is not appealing.
In addition, it seems that concerns about professional stature may blind us... We all want
to associate ourselves with dignified people and dignified ideas. Speculative bubbles, and those
who study them, have been deemed undignified. In short, Mr. Janis's insights seem right on the
mark. People compete for stature, and the ideas often just tag along. ...
I think there's some truth to this.
I'm intrigued when a commentator gives high praise to a work by someone who comes from a political
vantage different from his own. I get even more interested when another take on the same piece seems
straight out of Rashomon, a radically different account with only a few facts in common.
The opus in question is a new book,
Network Power: The Social Dynamics of Globalization, by David Singh Grewal. It caught the attention
of Christopher Caldwell of the Weekly Standard (who also writes regularly for the Financial Times),
who gave it high marks, and Tyler Cowen, who was singularly unimpressed.
I have to say that although I have never mentioned him in this blog, I very much like Caldwell,
and therefore am prejudiced in his favor. He often has a fresh perspective (which is hard in and
of itself to pull off), is fair minded and well reasoned, and even when I don't agree with him,
I have to give him credit for making a good case.
We'll get to the balance of Caldwell's article on the book in due course, but I want to give
his description of what it's about versus Cowen's so you can see how they come from parallel universes.
First,
Caldwell
in the Financial Times:
At the heart of globalisation is a basic, and politically explosive, mystery; globalisation
proceeds through the breaking down of boundaries, the unfolding of diversity and freedom of
choice – so why is it experienced by so many people as a constriction, an oppression and a loss
of freedom? In a brilliant and subtle book*, a Harvard graduate student has solved this mystery
– even if he has not solved the problem. David Singh Grewal believes the answer lies in something
called "network power". Networks are the means by which globalisation proceeds. All networks
have standards embedded in them. In theory we can choose among the standards and become more
free. In practice, Mr Grewal shows, our choices tend to narrow over time, so that standards
are imposed on us.Here is how it works. Networks tend to grow. As time passes, one of the
most attractive things about a network will be simply that a large number of people have already
chosen it. This is network power. Once a network reaches "critical mass", Mr Grewal says, the
incentives to join it can become irresistible. Certainly some standards are intrinsically better
than others. "But as the network power of a standard grows," Mr Grewal writes, "the intrinsic
reasons why it should be adopted become less important relative to the extrinsic benefits of
co-ordination that the standard can provide." People defect from alternative networks. Eventually
those alternatives disappear altogether. The choice of networks becomes a Hobson's choice. You
remain free to choose your network, but the distinction between choosing to join a network and
being forced to join one is less evident.
Mr Grewal sees such a "merger of reason and force" in many areas, economic and non-economic
– from the Windows operating system to the ISO 9000 standard of industrial control to Britain's
adoption of the metric system. Since English has become the first global lingua franca, many
non-native speakers have freely chosen to speak it. But, for someone who wants to participate
in the global economy – which is to say, the economy – to what extent is this really a choice?
Cowen is guardedly positive about the book. Yet (if you believe Caldwell's account),
Cowen picked up on what appears to be a secondary thread as the focus of his comments:
Indeed, while this convergence in ways of thinking and living may extend to influence cultural
forms like music or food, it need not necessarily do so. It is striking that in this moment
of global integration producing massive convergence in economic, linguistic, and institutional
standards, we should be so worried about restaurant chains and pop music, neglecting much
more significant issues. Famously, Sigmund Freud argued that nationalist rivalries between
neighboring countries reflected the "narcissism of minor differences," a pathological focus
on relatively trivial distinctions driven by the desire to keep at bay an anxiety-provoking
recognition of fundamental sameness.
That is from David Singh Grewal's Network Power: The Social Dynamics of Globalization, one of
the most interesting books on cultural globalization in recent years. He uses the ideas of social
networks and peer effects to argue that widespread cultural convergence is occurring, most of
all in ways of life. Here is the book's home page.There is much wrong in the central thesis.
"Ways of thinking" may be less diverse across countries (France is more like Germany than it
used to be) but ways of thinking are now much more diverse within countries and in fact within
the world as a whole. What's so special about having diversity distributed according to geographic
or political criteria? ...
Nor is he capable of simply coming out and saying that lots of countries in the world *ought*
to be doing more to emulate Anglo-American ways of thinking.
The following claim is also questionable:
To reshape or reduce the power that the social structures we create have over us, we can
only summon the organized power of politics. The large-scale voluntarism of sociability,
by contrast, has always delivered the most varied and elaborate forms of individual subjugation.
Cranky Tyler is about to come out of his shell, so maybe it is time to end this post. It's still
a book worth reading and thinking about.
These may not be bad observations, but it appears that Cowen has mischaracterized what Grewal's
main thrust is. Cowen appears to have been set off by the mention of socio-cultural issues, which
seems a comparatively minor aspect of Caldwell's reading (as in, having to conduct business in English,
a second language for most of the world's population, requires years of effort to attain reasonable
competence and is a bloody nuisance, but given our world's Tower of Babel, any lingua franca will
inconvenience many. But I don't see American cultural influence stemming from that but from the
fact that the film industry was born in Hollywood and still has a considerable scale advantage).
Guess this means we all have to read the book to see who got it right.
Grewal indirectly gives support to one of
Dani Rodrik's notions, that globalization presents a trilemma. You can have any two of democracy,
national sovereignty and global economic integration, but you cannot have all three at once. The
notion of network power is a detailed working through of how networks, which are both a force for
and an element of international economic integration, are at odds with local/national power structures
(e.g., the
EU's ongoing battles to get Microsoft to comply with its anti-trust rules).
From the balance of Caldwell's article:
Networks, Mr Grewal believes, can impinge on our political autonomy, channelling it into situations
where dissent is possible but pointless. Although people enter them freely, networks, like political
systems, can bias outcomes. A new order can be camouflaged as a broadening of options. Networks
vary along three dimensions, Mr Grewal thinks: "compatibility" (with other networks); "availability"
(openness); and "malleability". They tend to be open and compatible in the early stages, and
open and incompatible in the later ones.The transition from the General Agreement on Tariffs
and Trade to the World Trade Organisation in the mid-1990s demonstrates this process, Mr Grewal
believes. The logic of the WTO's core principle of non-discrimination among trade partners gives
the body and authority that goes far beyond regulating trade, into areas of domestic policy
that were protected by sovereignty under Gatt. Mr Grewal does not deny that there are intrinsic
efficiencies to a transparent and uniform trading standard. But he believes that most countries
join the WTO for the extrinsic benefits of participating in the network, and find the standard
the network upholds intrinsically undesirable.
Mr Grewal nails his own anti-capitalist colours firmly to the mast. But his political engagements
never outrun his diagnoses. Network Power leans on Marx, Keynes and the Canadian philosopher,
Charles Taylor, to examine the more general problem of "power structures" –
how power can be exercised over people even when no one is visibly
giving orders. But he avoids attributing network power to "false consciousness"
– the Marxian idea that people are easily fooled out of knowing their own interest. Indeed,
he grants that most standards are the product of consent, although of a funny kind. "One of
the interesting things about globalisation is the extent to which people consent to structures
that are consciously and explicitly viewed as undesirable."
This is a patient and powerful argument. The book's concepts are presented with such extreme
theoretical clarity that all readers, even those who do not share Grewal's commitment to trammelling
global capitalism, will be able to deploy his insights to other ends. What network-power effects
explain the sudden spread of anti-smoking activism? How was the
US institution of the Social Security number transformed into a financial tracking system?
Is "political correctness" just old-fashioned cant or does it draw a sinister
new force from network power?
Mr Grewal calls for a reassertion of democratic sovereignty to counter the unintended (and
undesired) consequences of network choices. But he admits that the political solutions to network
power are not yet obvious. Networks are transnational, while politics remains national, and
Mr Grewal does not consider global government either feasible or (as far as one can tell) desirable.
What is valuable about this book is its diagnosis, not its prescriptions. It may be the richest
and most hard-headed explanation yet of the relationship between globalisation and diversity.
Clearly the two are closely related. Since there seems to be more variety right in front of
our noses than there was in the world of our parents, we are tempted to think globalisation
has fostered diversity. But this is an optical illusion. Globalisation merely reveals diversity
that was already there. It flushes diversity out from the places it was hidden, much as a hunter
flushes his quarry out of a thicket, and to similar effect.
R.S.: Flogged? What does that word mean?
L.G.: I guess
flogged is what happens in Singapore if you spit on the sidewalk.
So, okay, go ahead and scoop your book some more.
R.S.: I have a publicity manager, and he said I shouldn't talk too much about it.
L.G.: Okay, but why don't you tell me that story at least.
R.S.: Well, that story was that Frank Nothaft claimed that they had considered
price declines as much as 13.5 percent. And I said, "What if it was worse than that?" And he said,
"It's never been worse than that." And then he corrected himself. "Except for the Depression." I
don't remember exactly what I said to that, but plausibly it was something like, "Well, that could
happen again too." So again, I started to sound at that point too academic-something like this isn't
real anymore.
L.G.: Why do you think people just have trouble listening to these things?
R.S.: Well, I can talk as a sociologist-which I'm not trained to do-but
there's a social construction of reality that happens. This is a basic principle of sociology. We
have a "collective consciousness," to quote sociologist Maurice Halbwachs. As far as I know, he
coined the term. And the point is, we talk so much. The human species is incessantly
talking, and this incessant talk reinforces certain memories and facts. And other facts are not
reinforced because no one's talking about them. So they elude our consciousness, and then we can't
remember them. We can't act on them anymore, and so a certain sort of reality-construct forms. It's
also informed by some kind of intuitive thinking. In the case of real estate, people think that
the growing population is inevitable, and that means home-price increases are inevitable. And these
are not economists thinking clearly about what that means. An economist who thinks about that would
say, "Yes, but that doesn't make them a good investment." If everything is priced at the present
value of the cash flow with the same interest rate, then it doesn't matter whether the cash flow
is growing or not, and then everything is equally good as an investment. That's not something that
the general public understands.
L.G.: The people who were getting into subprime mortgage-backed securities presumably
understood all this. They're very sophisticated people. So what was driving them?
R.S.: Some of them were very sophisticated people [laughs], and there was
a failure to communicate and a failure to put all this information together and act on it in a systematic
way. There's a famous book written by Irving Janis, who's a psychologist,
about 30 years ago, called Groupthink. He's a social psychologist, and he points out how even expert
groups can make very colossal errors. He did a number of case studies in the book,
and what tends to happen-suppose you imagine yourself and a group of experts who seem to have converged
on an enlightened opinion which has arguments to support it, and it has prominent influential people
saying that. It can be difficult for someone to stand up in that room
and air what seem to be half-baked or half-formed doubts about it. It can be kind of damaging to
your reputation. And you imagine that they have a reason to dismiss these doubts.
But you don't want to be responsible for bringing it up-especially when they're reaching a decision.
Sometimes they're trying to make an important decision. And at that
time, you would think that people who have doubts should stand up and thrust them to the fore. But,
in fact, they often retreat at that point, because they may just have a sense that they're being
annoying, that they will lose status in the group. If we're close to a decision on
something, and I'd raise doubts, and they're going to go ahead anyway and do it, you might think
that's good-because it could be a disaster, and they'll remember that you had doubts. But the likelihood
is to focus on, instead, "Now I'm kind of the party pooper," you know. "When they're going to implement
this plan, they're not going to turn to me because I was the guy who doubted." Things like that
went through peoples' minds, and they don't air doubts. And when Janis
interviewed people afterward and asked them their memories of the discussion, they would say things
like, "I think we had a very open and fair discussion, and everyone raised their views." That was
their memory of what happened, but they couldn't remember the other arguments. So it wasn't happening-there
was somebody who was expressing doubts, but not effectively. And so I think that's the kind of thing
that happens when there's just a general presumption which becomes repeated everywhere.
L.G.: And do you think that's the sort of dynamic that might've been operating,
not only in quasi-government agencies like Fannie Mae and Freddie Mac, but also in the banks on
Wall Street?
R.S.: Yeah, I mean, it became the idea that risk was just not there.
"Too nice" people serve as a natural feeding ground for
corporate sociopaths.
- Paperback: 288 pages
- Publisher: Grand Central Publishing; Reprint edition (November 1, 2000)
- Language: English
- ISBN-13: 978-0446673860
- Product Dimensions: 7.9 x 5.1 x 0.8 inches
Niceness Mistakes-For Good!, June 11, 2003 By
Ilaxi S. Patel "Editor, kidsfreesouls.com & A... (India) -
See all my reviewsHow oft we create a wave to spell trouble with our own perfections being
true and honest with good faith and intentions? We take on too much not saying what we want and
that's exactly what the book reveals - the niceness mistakes that 'Damage' us! Unconsciously, we
have planted strong messages in the back of our minds and with good intentions by our mentors, follow
the moral code of conducts in life. Be good, be nice, be cool, share and care, don't be selfish,
be reasonable, don't hurt others, help friends, say yes and so on. In real, trying to reach perfection
and taking on too much lead us to exhaustion and sooner or later the ship of our life start sinking.
The author gives an insight to the nine unconscious mistakes we often make daily and helps us correct
them and pulls a person out of frustration and stress.
In not saying what you want and taking on too much, it leads to suppressed anger. Robinson provides
healthy tips to express anger to orchestrate a balanced life. Life itself is like riding a bike
up and down roads that are bumpy, curvy, hilly while juggling bananas, balloons and bowling balls
says Robinson and so this is when you have a fall, life needs balancing
back to pedal and steer with too much/too little, too rational/too emotional, to fast/too slow,
too cautious/too reckless, too strong/too weak, etc. and remain upright empowering to get what you
need and deserve. Irony is, sometimes our niceness betrays us and this book is a
key to understanding our mistakes and bring about a 'change' in us. Robinson makes us a nicer person
making one realise the mistakes, why we make and how to give up.
In doing so, Robinson guides in:
1. Liberating from the bondage of other's expectations
2. Saying no and saving work overloads
3. Telling what we want and analyze what we receive is worth or not
4. Express anger that heal and maintain relationships too.
5. Face irrationality and criticism
6. Tell truth to friends when they fail us
7. Care for others but do no burden own trying to run their lives.
8. In pain and grief, feel competent enough
A change is always welcome even for the nice to be nicer and avoid the mistakes that we keep
making out of the blue. Our good intentions turn out to be damn-in-way for others who often misunderstand
or shrug off not appreciating your worth as human being. This book is indeed a gem collection for
every person who has learned to live being 'Nice' and remain being so without being emotionally
hung up sometimes. Good Pick!
Former title was better., April 8, 2007
By
Geoffrey J. Barnes "CyberBronco" (Miami, FL United States)
The former title of this book was Good Intentions. From the information I gathered in the first
few pages it was first published in 1997. I am not sure if that refers to the first publication
under the current title or the previous one. I say that because the text feels more dated than just
10 years old.
I bought this book at Borders. The title caught my eye and a scan of the first few lines of each
chapter confirmed I would like this book. As someone who is always accused of being too nice a guy
and winding up burned more than once by relationships and employers, I thought I was on to something!
Unfortunately I feel burned again by being naive enough to buy this book. There are those reading
this that will say I should have done my homework first before making a purchase. Well, I'm sorry
but I am not one of those jerks who sits in Barnes and Noble all day, taking up space and breaking
in the backs of books I never intend to purchase. I wish those chairs would run a few megawatts
of electricity through them every 10 minutes to get those creepy people out of the stores. They
never buy anything and they smell bad! When my cell phone rings in the store, they have the nerve
to "Shush" me. Hey people! This is a retail establishment! Buy something or move back into the library!
To give an example of what I am referring to in this book go to page 201, Mistake #8: Rescuing
Others. The first page gives an example of a guy with a nephew who is having trouble staying in
school or keeping a job. This is actually the chapter that made me buy the book. After getting a
few pages into the chapter you realize they are only referring to people who try to rescue addicts
and nothing else. My nephew is not an addict, but he otherwise fits the description in the example.
Too bad this book didn't stick to its original title: Good Intentions. It is a better description
of what is being preached here.
Mistake #7 is called Giving Advice. It tells you to never give advice, and lists several reasons
why you should not. Ironically advice is what this book is based upon. The author is giving all
of us poor "Nice" guys advice.
I believe the author had "good intentions" when he wrote this book. I believe the publisher had
a great money making idea when he re-released this book under its new title.
nebula.deanza.fhda.edu
Budget Cuts Are Not the Only Way Workers Are Forced from Jobs: Workplace Abuse
"The mobbing syndrome is a malicious attempt to force a person out of the workplace
through unjustified accusations, humiliation, general harassment, emotional abuse, and/or
terror. "It is a 'ganging up' by the leader(s) - organization, superior, co-worker, or subordinate
- who rallies others into systematic and frequent 'mob-like' behavior."Because
the organization ignores, condones, or even instigates the behavior, it can be said that the victim,
seemingly helpless against the powerful and many, is indeed 'mobbed.' The result is always injury
- physical or mental distress or illness and social misery and, most often, expulsion from
the workplace."
-Mobbing: Emotional Abuse in the American Workplace, by Davenport, Schwartz, and
Elliott, 1999.
When a budget crisis hits a large institution, certain workers often seem to be treated as though
they are"expendable," and are often the first forced out. But this is not the only manner
in which workers are driven out of the workplace. Mobbing has been recognized for
many years in Europe, and it is also beginning to be identified as a serious workplace problem
in the United States. The authors above go on to say, "Mobbing is an emotional assault.
Through innuendo, rumors, and public discrediting, a hostile environment is created in which
one individual gathers others to willingly, or unwillingly participate in continuous malevolent
actions to force a person out of the workplace.""These actions escalate
into abusive and terrorizing behavior. The victim feels increasingly helpless when the organization
does not put a stop to the behavior or may even plan or condone it... Frequently productivity is
affected... Resignation, termination, or early retirement, the negotiated voluntary or involuntary
expulsion from the workplace, follows. For the victim, death - through illness or
suicide - may be the final chapter in the mobbing story." -ibid
Much of the original research on mobbing was done by Swedish researcher Heinz Leymann
in the 1980's. His findings have been slow in making it to the United States. However a number
of local statutes have been enacted, and publications, conferences, and resources have surfaced
recently in the U.S. For example, Peralta Community College District in Oakland recently established
a regulation outlawing such behavior.
Often mobbing activities are directed at whistleblowers. Brian Martin, in Whistleblowing
and Nonviolencen (Peace and Change, Vol. 24, No. 3, January 1999) describes attacks on
whistleblowers this way:
Whistleblowing, in casual usage, means speaking out from within an organization to expose a social
problem or, more generally, dissenting from dominant views or practices... The most common
experience of whistleblowers is that they are attacked. Instead of their messages being evaluated,
the full power of the organization is turned against the whistleblower. This is commonly
called the shoot-the-messanger syndrome,... The means of suppression are impressive, nonetheless.
They include ostracism by colleagues, petty harassment (including snide remarks, assignment
to trivial tasks and invoking of regulations not normally enforced), spreading of rumors, formal
reprimands, transfer to positions with no work (or too much work), demotion, referral to psychiatrists,
dismissal, and blacklisting.
Whistleblowers often discover that formal channels for complaint or remedy are ineffective or
easily blocked. As Martin explains, "Appeal bodies are part of the wider system of power
and usually seek or reach accommodation with other powerful groups. Hence such bodies are
highly unlikely to support a single individual against elites from a major organization, who usually
have links with elites elsewhere."
Whistleblowers have other resources, according to Martin: "One strategy is based on 'mobilization,'
namely winning supporters by circulating relevant documents, holding meetings and obtaining
media coverage." Howeve, such attempts at mobilization are often met by more severe mobbing
and harassment.
Kenneth Westhues, has identified academic institutions as a primary location for mobbing
attacks:"Ordinarily, colleagues in positions of local power explain the situation in terms
of failings of the targeted professor: bad teaching, too few publications or the wrong kind,
ethical misconduct, shirking of duties, failure to live up to legitimate expectations of
the job... Sometimes, however, the target's failings have little to do with why he or she is
in trouble. The evidence may point to a sharply contrasting explanation: that colleagues and/or
administrators have ganged up on the targeted professor for no good reason, to the point
that collectively shunning, shaming, and tormenting the target bolsters the group's solidarity,
its esprit de corps." - Workplace Mobbing in Academe (2004)
Westhues also tracks the trajectory of mobbing, and its consequences for victims and perpetrators.
Here are more of his comments:
"Mobbing ... is an impassioned, collective campaign by co-workers to exclude, punish, and
humiliate a targeted worker. Initiated most often by a person in a position of power or influence,
mobbing is a desperate urge to crush and eliminate the target. The urge travels through
the workplace like a virus, infecting one person after another. The target comes to
be viewed as absolutely abhorrent, with no redeeming qualities, outside the circle of acceptance
and respectability, deserving only of contempt. As the campaign proceeds, a steadily larger
range of hostile ploys and communications comes to be seen as legitimate.""Not
infrequently, mobbing spelled the end of the target's career, marriage, health, and livelihood.
From a study of circumstances surrounding suicides in Sweden, Leymann estimated that about
twelve percent of people who take their own lives have recently been mobbed at work.... By
Leymann's and others' estimates, between two and five percent of adults are mobbed sometime
during their working lives. The other 95 percent, involved in the process only as observers,
bystanders, or perpetrators (though occasionally also as rescuers or guardians of the target), mostly
deny, gloss over, and forget the mobbing cases in which they took part. That is one
reason it has taken so long for the phenomenon to be identified and researched.
"Workplace mobbing is normally carried out politely, without any violence, and
with ample written documentation. Yet even without the blood, the bloodlust is essentially
the same: contagion and mimicking of unfriendly, hostile acts toward the target; relentless
undermining of the target's self-confidence; group solidarity against one whom all agree
does not belong; and the euphoria of collective attack.
"The worker most vulnerable to being mobbed is an average or high achiever who is personally
invested in a formally secure job, but who nonetheless somehow threatens or puts to shame
co-workers and/or managers. "Ironically, it is in workplaces where workers' rights are formally
protected that the complex and devious incursions on human dignity that constitute mobbing
most commonly occur. Union shops are one example... University faculties are another, on
account of the special protections of tenure and academic freedom professors have...Mobbing
appears to be more common in the professional service sector, where work is complex, goals ambiguous,
best practices debatable, and market discipline far away. Scapegoating is an effective if
temporary means of achieving group solidarity, when it cannot be achieved in a more constructive
way. It is a turning inward, a diversion of energy away from serving nebulous external purposes
toward the deliciously clear, specific goal of ruining a disliked co-worker's life.
Less time, skill, and energy are required to write off a persistent critic as a "difficult professor"
than to rebut the critic's arguments. Chalking up dissent to the dissenter's real or imagined
flaws of character relieves overworked administrators of uncertainty and ambiguity. It lets
them feel good about themselves.
Westhues (and others) point out that the best way to deal with mobbing is to nip it in the
bud. Organizations not able to do this are at least as much at fault as the perpetrators
of the attacks. To stop it requires an open atmosphere at the very beginning: "The basic
priority for constructive resolution of workplace conflict, namely to keep the conversation
going, to let competing positions be expressed and the evidence for them reviewed, to listen
to what opponents say, to respond honestly and respectfully, to try not to silence anyone."
Westhues lists three points for a strong academic institution which has vaccinated itself against
mobbing:
- Protect freedom of speech.
- Keep academic organization loose. A tight ship cannot be a university. It has to be full
of contradiction and brimming with debate in order to fulfill its public purposes.
- Focus attention on these purposes, like educating youth, producing useful knowledge,
and above all seeking truth.
These quotes on mobbing were collected and prepared by Karl Schaffer([email protected],
x8214), as a public service to the DeAnza College community. In addition to the sources
cited above, google "mobbing" or "workplace abuse" for more info.
Posted by Soulskill on Wednesday April 23, @03:39PM
from the competition-is-a-good-thing dept.
An anonymous reader points out a Los Angeles Times report that Sony is planning on making movies
and TV shows
available
for download through the PS3 "as early as this summer." Sony hopes to make use of the roughly
4 million PS3s already sold in the US to compete with similar services such as XBox Live, which
began offering video downloads
over a
year ago.
"One of the service's greatest obstacles may be Sony's own culture. Sony Chairman and Chief
Executive Howard Stringer has been battling a corporate silo mentality in which divisions within
his company work in isolation, undermining new initiatives. The PlayStation group in Foster
City, Calif., has been notoriously aloof. Once, a former executive said, it scuttled plans for
a movie subscription service for the PlayStation Portable even though Sony Pictures had supported
the initiative. What is more, the company, looking to safeguard its film, television and music
holdings, has been an aggressive champion of copyright protection, often, critics suggest, at
the cost of technological innovation."
Depressing: (Score:5,
Insightful)
by gcnaddict (841664) <gcnaddict&gmail,com>
on Tuesday April 22, @07:11PM (#23165232)
Homepage
What's depressing is that a number of the execs complained about the Vista Capable thing too
(Mike Nash being one of them, but there are others who didn't complain in their emails).
The Vista Capable debacle happened the exact same way both the Challenger and Columbia disasters
happened; the only reason those with objections went with the majority decision was due to group
suppression of judgment. Psychological conformity, essentially.
Reply to This
Re:Depressing: (Score:5,
Insightful)
by bhtooefr (649901) <[email protected]>
on Tuesday April 22, @07:29PM (#23165416)
Homepage
Journal
So, in other words, just like how Slashdot works?
Re:Depressing: (Score:4,
Insightful)
by Chris Burke (6130) on
Tuesday April 22, @10:47PM (#23167160)
Homepage
You're kidding, right?
If Slashdot users were designing a product, it would be in development for twenty years
because nobody would ever be able to agree on what the product would actually be, and every
feature discussion would devolve into an endless flamefest between people of diametrically
opposed opinions.
Slashdot "groupthink" is at worst one of high school cliques, where everyone joins their
favorite group and pretends it's the best, but there are dozens of cliques and there's essentially
no downside to being part of an "uncool" clique.
The difference is that at Microsoft there is a Boss Man whose personal opinion is the
Officially Sanctioned Groupthink, and you need to have some serious stones to speak up against
it because it's your job on the line.
What are you risking for going against the "groupthink" here? Some fucking worthless
"karma"? Oh wait, you got modded up, I bet you're real surprised too.
Very questionable arguments. Primitive lebertarian persepective and corresponding bias. See also
[PDF] The Myth of the Rational Voter
The Myth of The Rational Economist, November 3, 2007
Sanford Thier -
See all my reviews
The problem with this book is its basic premise, that our problems are caused by ignorant voters,
is simply nonsense. Caplan fails to notice that the policies that this nation is following are not
those that the voters want.
If it mattered what the voters thought, Gore would be president, American boys would not be dieing
in a pointless war in Iraq, NAFTA would be be canceled, we would get out of the WTO, we would control
illegal immigration, our government would protect the interests of American workers instead of the
interests of multinational corporations that outsource the best American jobs to slave labor countries,
and we would have free quality health care for all Americans. That is what the voters in this country
want.
The point is that we are not in trouble because we are following
the wishes of irrational voters. We are in trouble because we are ignoring the wishes of the voters
and following the policies favored by irrational economists. like him.
"Don't confuse us with the facts!", June 8, 2007 By
Nicole
(Norwalk, CT USA) -
See all my reviews
Many people have noted that democracy seems not to work - policies are implemented that often
are not in the best interest of voters, and when voters are surveyed they routinely lack even the
most basic civic knowledge. The way people have typically answered this problem is to say that voters
are uninformed, and that if they simply had more access to good information, they would use that
information to make better choices. But even so, the tiny informed minority will sway elections
because the uninformed majority will vote at random.
Here, Caplan directly challenges that view by asserting that voters are not simply ignorant but
irrational, and that this is in fact predicted by economic theory. Voting is not like shopping -
it is more like making use of a commons, because the costs of a "bad" vote are borne by the public
at large, and the chance of an individual casting the deciding vote is tiny. Therefore, people will
vote for what makes them feel good without bothering to find out whether it really is good - it
simply doesn't matter. Caplan explores four systematic biases voters hold against good economic
policy - antimarket bias, antiforeign bias, make-work bias, and pessimistic bias. The fact that
systematic bias exists means that the irrational majority does not in fact vote at random, so it's
the irrational voters deciding who wins elections rather than the small, informed, rational minority.
Voters get what they want, it's just that what they want is actually bad for them - and they don't
care!
Caplan makes a persuasive case for viewing the average voter as irrational
rather than simply ignorant, though admittedly I am sympathetic to this idea to begin with.
I wish he had been able to include more recommendations in his conclusion, but this should
be a promising area for further research.
Economists know best?, July 25, 2007
J. Gordon "nonfiction enthusiast" (Rye, NY) -
See all my reviews
This book is a very interesting read, describing a utility-based model of why voters vote as they
do. The author proposes that voters are naturally biased against their own interests. The concept
is that the probability of any one voter changing the result of a vote is vanishingly small, and
therefore each voter votes for what makes them feel better about themselves, even if the policies
go against their own interest and the interests of the economy. For example, voters vote for higher
taxes, large inefficient government programs, and protectionist policies.
For example, a voter might vote for a politician who promises to raise the voter's taxes and
give their money to the poor. The voter figures that the chances that
their individual vote would make the difference between the candidate winning or losing is extremely
small; making the cost of the vote effectively zero. However, the psychic benefit
of the vote is positive.
Where the author fails is in the chapter where he measures the policy leanings of an artificial
"enlightened voter". How he defines an "enlightened voter" is an average voter with the statistical
characteristics of one having a graduate degree in Economics. Based on a sophisticated multivariate-regression-based
analysis, the author determines that an "enlightened voter" would be predicted to view potential
policies more like... an economist! What a surprise!
Caplan asserts that the voting public would support more reasonable
policies if they all had graduate degrees in economics. However, there are plenty of Econ PhD's
who put too much faith in government policies solving apparent market failures.
The book is well worth reading, and makes many good points regarding the reasons why voters vote
for policies that go against their own best interests, and in aggregate against the health of the
overall economy. However, it does not make a convincing case that economists should be running the
show.
Nice humor or satire, if you wish... I especially like: "The chief cause of PADD is the desire to
avoid the very real
pain of cognitive dissonance"
According to a report not yet released, the Council on Science and Public Health of the
American
Medical Association has recommended that a chronic and widespread affliction of Americans be officially
declared a psychiatric disorder. It has been named the Political Attention Deficit Disorder (PADD).
It is recommended that the disorder be included in a widely used mental illness manual created and
published by the
American
Psychiatric Association. The current manual was published in 1994; the next edition is to be completed
in 2012. The benefit to people of an official classification is coverage by
health insurance.
"The symptoms
of PADD are all around us and treating it professionally can do more for our country than any election,"
said Dr. Mable Wank in the report's introduction; she is chairwoman of the Council and a professor
at UCLA.
Here are the Council's main findings on PADD:
Nearly 80 percent of adult
American
citizens are unable to pay sustained attention to issues and
problems
associated with their government. They are unable to accept their responsibility as citizens, including
their obligation to vote, read in-depth articles and
books on political
issues, become active members of politically oriented groups, and initiate discussions on current
events with
friends and
family. "The decades-old decline in voter turnout is a direct result of a national epidemic of PADD,"
said the report.
The chief cause of PADD is the desire to avoid the very real
pain of cognitive
dissonance, the difference between what Americans want to believe about the greatness of their country
and the disturbing
reality that
their government and country are in terrible shape, which is a constant reminder when there is normal,
healthy
political attention. Such
pain suppression,
however, is counterproductive and was found through careful studies at several universities, including
the Harvard Medical College, to correlate with
depression
and anxiety disorders, as well as a heightened level of cynicism and despair. According to the report,
many suicides and possibly many criminal acts result from PADD.
"For the past 25 years, the so-called 'Washington Consensus' – comprising measures aimed at expanding
the role of markets and constraining the role of the state – has dominated economic development policy."
Dear reader, even if your taste runs to the practical rather than the theoretical, I strongly suggest
you read this post from Thomas Palley.
Like it or not, most news reporting and just about all policy discussions in the finance/economics
realm are filtered through a particular frame of reference, namely, neoclassical economics. Palley
points out that the illusion that there are two schools, namely the Chicago "free market" cohort
(which has become the "Washington consensus") versus the more interventionist MIT camp, obscures
the fact that they are subsets of neoclassical thought and that there are other frameworks that
have merit yet have been shunted aside.
Put more simply: it's important to recognize biases, otherwise you have no hope of correcting
for them.
From Palley:
For the past 25 years, the so-called "Washington Consensus" –
comprising measures aimed at expanding the role of markets and constraining the role of the
state – has dominated economic development policy. As John Williamson, who coined
the term, put it in 2002, these measures "are motherhood and apple pie, which is why they commanded
a consensus."
Not anymore. Dani Rodrik, a renowned Harvard University economist, is the latest to challenge
the intellectual foundations of the Washington Consensus in a powerful new book titled One Economics,
Many Recipes: Globalization, Institutions, and Economic Growth. Rodrik's thesis is that though
there is only one economics, there are many recipes for development success.
Rodrik has rendered a major service by stating so openly the claim of "one economics." A
critic who made the same claim that economics allows only one theoretical approach would be
dismissed as paranoid, whereas Rodrik's standing creates an opportunity for a debate that would
not otherwise be possible.
The "many recipes" thesis is that countries develop successfully by following eclectic policies
tailored to specific local conditions rather than by following generic best-practice formulas
designed by economic theorists. This challenges the Washington Consensus, with its one-size-fits-all
formula of privatization, deregulated labor markets, financial liberalization, international
economic integration, and macroeconomic stability based on low inflation.
But, while the many recipes thesis has strong appeal and empirical support, and suggests
a spirit of theoretical pluralism, the claim of "one economics" is misguided, for it implies
that mainstream neoclassical economics is the only true economics.
Part of the difficulty of exposing this narrowness is that there is a family split among
neo-classical economists between those who believe that real-world market economies approximate
perfect competition and those who don't. Believers are identified with the "Chicago School,"
whose leading exponents include Milton Friedman and George Stigler. Non-believers are identified
with the "MIT School" associated with Paul Samuelson. Rodrik is of the MIT School, as are such
household names as Paul Krugman, Joseph Stiglitz, and Larry Summers. This split obscures the
underlying uniformity of thought.
The Chicago School claims that real-world market economies produce roughly efficient (so-called
"Pareto optimal") outcomes on which public policy cannot improve. Thus, any state intervention
in the economy must make someone worse off.
The MIT School, by contrast, argues that real-world economies are afflicted by pervasive
market failures, including imperfect competition and monopoly, externalities associated with
problems like pollution, and an inability to supply public goods such as street lighting or
national defense. Consequently, policy interventions that address market failures – as well
as widespread information imperfections and the non-existence of many needed markets – can make
everyone better off.
None of this is about fairness, which is a separate issue. Indeed, neither the Chicago School
nor the MIT School say that market outcomes are fair, because actual market outcomes depend
on the initial distribution of resources. If that distribution was unfair, current and future
outcomes will be unfair, too.
However, Chicago economists seem to believe that real-world outcomes are acceptably unfair
and, more importantly, that attempts to remedy unfairness are too costly, because tampering
with markets causes economic inefficiency. Moreover, they believe that government intervention
tends to generate its own costly failures because of bureaucratic incompetence and rent-seeking,
whereby private interests try to steer policy to their own advantage.
MIT economists tend to espouse the opposite: fairness is important, the real world is unacceptably
unfair, and government failure can be prevented by good institutional design, including democracy.
These differences reflect the intellectual richness of neo-classical economics, but they
provide no justification for the claim that there is one economics.
On the contrary, heterodox economists like Thorsten Veblen and Joseph Schumpeter long
ago raised many of today's cutting-edge issues in neoclassical economics, including the role
of social norms and the relationship between technological innovation and business cycles.
More importantly, heterodox economics includes core theoretical concepts that are fundamentally
incompatible with neoclassical economics in either of its two contemporary forms. These concepts
result in significantly different explanations of the real world, including income distribution
and the determinants of economic activity and growth. Moreover, they often result in different
policy prescriptions.
The late Robert Heilbronner – one of Schumpeter's most renowned students – viewed economics
as "worldly philosophy." Just as philosophers are divided on the nature of truth and understanding,
economics is divided on the workings of the real world. Paradigms should co-exist in economics,
just as in other social sciences. Yet, in practice, the dominance of the belief in "one economics,"
particularly in North America and Europe, has led increasingly to a narrow and exclusionary
view of the discipline.
This reality is difficult to convey. One reason is that liberal neo-classical economists
like Stiglitz and Krugman share values with heterodox economists, and shared values are easily
conflated with shared analysis. Another reason is that heterodox and MIT School economists also
often agree on policy, even if their reasoning is different. Finally, most people are incredulous
that economists could be so audacious as to enforce one view of economics.
The "many recipes" thesis enriches neo-classical economics' contribution to the development
debate, and many of its policy proposals will find support from heterodox economists. However,
it fails to engage the deep intellectual divisions regarding economic development, trade, and
globalization, because it refuses to admit the legitimacy of such disagreements.
By repeating the claim of "one economics," Rodrik inadvertently
reveals the censorship embedded in contemporary economics. The great challenge
is not to admit that there are many recipes, but rather to create space for other perspectives
on economic analysis and policy.
Copyright Thomas I. Palley
Groupthink occurs when the pressure to conform within a group interferes with that group's analysis
of a problem and causes poor group decision making. Individual creativity, uniqueness, and independent
thinking are lost in the pursuit of group cohesiveness, as are the advantages that can sometimes
be obtained by making a decision as a group-bringing different sources of ideas, knowledge, and
experience together to solve a problem. Psychologist Irving Janis defines groupthink as: "a mode
of thinking people engage in when they are deeply involved in a cohesive in-group, when the members'
striving for unanimity override their motivation to realistically appraise alternative courses of
action. Groupthink refers to a deterioration of mental efficiency, reality testing, and moral judgment
that results from in-group pressures." It can also refer to the tendency of groups to agree with
powerful, intimidating bosses.
The concept of groupthink provides a summary explanation of reasons groups sometimes make poor
decisions. Indeed, groups are supposed to be better than individuals at making complex decisions,
because, through the membership, a variety of differing perspectives are brought to bear. Group
members not only serve to bring new ideas into the discussion but also act as error-correcting mechanisms.
Groups also provide social support, which is especially critical for new ideas. But when new perspectives
are rejected (as in the "not invented here" syndrome), it is hard to correct errors. And if the
social support is geared toward supporting the group's "accepted wisdom," the elements that can
make groups better decision makers than individuals become inverted, and instead make them worse.
Just as groups can work to promote effective thinking/decision making, the same processes which
enhance the group's operation can
backfire and lead to disastrous results.
Ken Lay understandably is among the least admired individuals in America today. Enron Corp.'s
former chief executive officer allegedly oversaw one of the biggest accounting scams in corporate
history, the full repercussions of which are still unknown as each day seems to bring a new twist
to the horrific scandal.
Yet, it would be somewhat comforting if it turns out that Lay conceived and executed the scandal
knowing in advance the repercussions of his actions, much like Frank Gruttadauria, the Cleveland
stockbroker who allegedly bilked old ladies and other clients out of millions of dollars by doctoring
their account statements. Gruttadauria reportedly displayed all the signs of a classic sociopath,
including beguiling charm and feigned empathy for his victims. He apparently acted alone and mysteriously
disappeared before his scheme was discovered, the telltale signs of a classic scam. How neat and
simple it would be to similarly lay Enron's demise at the feet of one person.
But Lay did not act alone -- and that may very well be one of the most disturbing elements of
the Enron debacle. He had the enthusiastic support of a venerable cast of characters, including
some high-priced lawyers, accountants, investment bankers and management consultants. Did Lay systematically
entwine his advisers into a preconceived web of deception? Highly unlikely. Indeed, it's becoming
increasingly clear that financial legerdemain was not unique to Enron; several other companies disclosed
this week that they are delaying or reconsidering their earnings. In what may be another ominous
sign, The Wall Street Journal reported that Moody's Investor Service has quietly sent out letters
to more than 4,000 companies the agency rates asking for more information on their "off-balance-sheet
financial arrangements."
Given the tragic fallout resulting from Enron's collapse, the cacophony of voices clamoring to
bring the scandal's alleged masterminds to justice will no doubt grow louder still in the weeks
ahead. But it is naive to think that culpability rests entirely with Lay, his lieutenants, and some
wayward lawyers and auditors. The tragedy of Enron is that it was caused by what is known as "groupthink."
Truth be told, almost everyone associated with the company contributed in some way to its collapse.
The concept of groupthink was identified and coined by Dr. Irving Janis, a professor of psychology
at the University of California-Berkeley and at Yale University, to explain the faulty decisions
that led to some of our nation's biggest tragedies, including the Bay of Pigs invasion, the escalation
of the Vietnam War, the Watergate break-in and the explosion of the Challenger space shuttle.
Janis defines groupthink as "a mode of thinking where pressure for unanimity overwhelms the members'
motivation to realistically appraise the alternative courses of action. Group pressure leads
to carelessness and poor decisions. This eventually results in irrational thinking and action."
In the case of the Challenger space shuttle, for example, NASA engineers knew about the dangers
of conducting a launch in 36-degree weather but chose to minimize them. The pressures from NASA's
top brass not to further delay the historic mission were just too great.
Enron was fertile ground for groupthink to take hold. The company's macho ethos was to feed Wall
Street's insatiable appetite for spectacular earnings at all costs. This led to the creation of
"killer apps," "new paradigms" and a plethora of esoteric financial instruments that few people
even understood. But given Wall Street's unmitigated support for (and vested interest in) the arcane
products, it hardly mattered. The regulators nodded. Investors cheered. And the media trumpeted
the innovations.
Lay and his management team eventually came to see themselves as true masters of their universe,
replete with the inevitable illusion of invulnerability. The company proudly fostered a Darwinian
atmosphere, in which employees falling into the lower percentiles of performance were summarily
dismissed. In Enron's heyday, it was sheer folly for an employee to question Enron's innovative
management practices, and the few that did either voluntarily resigned or were fired. Enron's accountants
and lawyers no doubt knew that if they didn't go along and bless the company's activities, management
could easily find some other high-priced firms that would. Enron was a cult, and there were
no shortage of takers lining up for the company's sucrative Kool-Aid, oblivious that the sweet drink
would have a very bitter aftertaste.
Groupthink is an enclosed system of thought, a folie, where those engaged cross the boundary
into unreality. Clearly, it leads to defective decision-making, resulting in a low probability of
successful outcome. In the end, at Enron, there was a massive failure to examine and appreciate
the risks taken, along with a failure of contingency planning. The results speak for themselves.
In the wake of Enron, responsible boards of directors should be aggressively investigating whether
groupthink is permeating the companies they oversee. A healthy organization fosters a culture whereby
employees are both empowered and expected to debate and challenge each other and consider alternative
courses of action. A mechanism must be in place where employees can report any perceived irregularities
without fear of retribution. It is incumbent on directors to ensure that the information on which
they base decisions comes from sources other than the CEO and advisors or consultants that are beholden
to the executive. It would be wise to occasionally bring in outside parties to conduct a "reality
check."
At the end of the day, Lay was an inspired -- though highly flawed leader -- working in a company
that lost its way. The policies and actions that caused Enron's downfall were years in the making.
The "horse was out of the barn" and no one, including Lay, could change the adverse course of events
once their world began to unravel. It appears that legions of normally thoughtful people crossed
the boundary into unreality; they all "drank the Kool-Aid," reinforcing one another's view
of reality and entered into a world of their own design and creation. It's likely that the growing
pressures, as problems arose, drove Lay and his senior managers further beyond the boundary of accountability,
and then deluded themselves further into believing that they could get away with their machinations
and schemes.
Unfortunately, we all are victims of their delusion. It will be up to the courts to decide an appropriate
punishment for their misguided ways.
medialens
"Our complex global economy is built upon millions of small, private acts of psychological surrender,
the willingness of people to acquiesce in playing their assigned parts as cogs in the great social
machine that encompasses all other machines. They must shape themselves to the prefabricated identities
that make efficient coordination possible... that capacity for self-enslavement must be broken."
(Theodore Roszak - The Voice Of The Earth)
Heart Murmurs
Few tasks are more challenging than that of attending to our subtle, internal responses to the
world against the deafening roar of what is deemed 'obviously true'. Writing in the 1930s, the anarchist
Rudolf Rocker made the point that the state is not a disinterested spectator on the issue of freedom
of thought. In his classic work, Culture And Nationalism, Rocker wrote:
"The state welcomes only those forms of cultural activity which help it to maintain its power.
It persecutes with implacable hatred any activity which oversteps the limits set by it and calls
its existence into question. It is, therefore, as senseless as it is mendacious to speak of
a 'state culture'; for it is precisely the state which lives in constant warfare with all higher
forms of intellectual culture and always tries to avoid the creative will of culture." (Rocker,
Culture and Nationalism, Michael E. Coughlan, 1978, p.85)
The stakes, Rocker noted, are high:
"If the state does not succeed in guiding the cultural forces within its sphere of power
into courses favourable to its ends, and thus inhibit the growth of higher forms, these very
higher forms will sooner or later destroy the political frame which they rightly regard as a
hindrance." (Rocker, p.83)
If this strikes us as implausible (as it should), it is for a very good reason. It seems incredible
to us that individuals working for the state - in government, education, local government - could
be eagerly working to "reduce all human activity to a single pattern". Are they not human beings
like us? Do they not seek freedom of thought, independence of mind, for their own children?
It is a very reasonable argument and applies equally to the media. Dissident analysts claim,
and in fact demonstrate, that truth is filtered, depleted to a dramatic degree by the corporate
media. But surely the men and women of the press - again, human beings like us - are not eagerly
striving to oppress humanity.
The answer is found in the way the performance of an organisation is shaped by its primary, bottom
line goals. As I have discussed elsewhere, the process is similar to the mechanisms underlying crystal
formation. The near-perfect, symmetrical shapes of snowflakes and other crystalline structures are
no accident but flow from the founding conditions around which the crystals form.
[Jan 31, 2005]
Groupthink and You by Karen De Coster and Brad Edmonds
You see it in daycare centers, and you see it in the public schools, from kindergarten to high school.
Group projects abound, shoving together individuals who have no formal
bonds, yet are banded together for the purpose of collective decision-making.
Universities, both public and private, are not immune to this affliction. In fact,
if you attend a business college today, you'll think it's the newest rage, but it's been the rule
for decades.
Most university programs may not use group projects, but undergraduate and graduate
programs in business are full of them. It is our contention that group projects are criminal in
themselves and should be abolished on moral grounds, in that they function as collectivist indoctrination.
Like government schools, group projects homogenize thought and neuter high achievers.
Individuality is forced out of our kids at an early age. After all, group projects
are often the standard for young children in childcare situations, where the young ones are often
taught that individuals don't do things or go places, groups do. By college age, the
collective cast of mind has only gotten more oppressive. Groupthink is a process of gradualism that
seeks to gently merge the followers into a pack with leaders, the hope being that the leaders will
pull up those who typically reside on the low end of the motivation and achievement scale.
For example, a professor assigns an innocuous academic exercise, such as a term
paper, communications presentation, or marketing proposal. It is turned into a group project by
fiat-the professor segments the class into groups. More often than not, these groups are not even
voluntary. When the students turn in their papers, the professor usually assigns the same grade
to everyone in the group.
Another common stratagem in this setting is to have group members grade one another
and develop useful constructive criticism for fellow teammates. However, this commonly dovetails
into grades by mutual agreement. If one member doesn't go along with this forced "agreement" by
granting the agreed-upon concessions, he is usually excoriated by his fellow groupthinkers for doing
so. This is a pact where honest evaluations take a back seat to easy A's and phony feel-goodism.
Shirking is the most immediate danger within group projects. Usually, the group
members with some semblance of a work ethic labor hard and often to take up the slack from the free
riders. There are other dangers as well. In a case experienced by one of us, for example, a group
member simply cut and pasted text from the Web instead of writing up his share of the research.
Thus, the final version of the paper given to the professor was 20 percent pure plagiarism, unbeknownst
to the rest of the group until it was too late. The slacker got a grade of 98 for the project, as
did the people who actually worked.
In other cases, the shirking of duties simply cannot be overcome. High achievers
are forced to relax their standards and accept being reduced to the lowest common denominator in
the group. This can have a dreadful effect on work ethic and attitudes through the following insidious
lessons instilled by group projects:
Lesson 1: You will learn cooperation, not competition.
Lesson 2: The achiever will be taxed: The reward of his efforts will
go to others, so the low achiever who exerts little effort and contributes almost nothing will
be taken care of by the professor (serving as the government).
Lesson 3: Individualism will not be allowed. The individual with the
best ideas will do what the group decides. If you have an original or daring thought, forget
it. The group will write up a bland sack of platitudes that represents the thinking of its lowest
common denominator.
Lesson 4: Conservatism and caution are the name of the game. Whereas
high achievers constantly strive to better themselves and have the room to operate in a more
daring realm, the low achievers want things quickly and easily as they conform to less strict
standards for excellence. The result is likely to be one of mediocrity.
Lesson 5: Get used to the emotional feel of a collectivist, totalitarian
state. If you are an individualist with a work ethic and a drive to excel, you will be pounded
down until you adopt the debilitating, depressing learned helplessness that socialism produces.
If you are a slacker, however, a free rider with no qualms about living on the purloined toil
of honest people, you can feel relieved, satisfied, secure; if you are a thoroughgoing scumbag,
you can even feel pride in any good grade given you on the backs of your teammates.
Business programs, in forcing group settings upon (previously) ambitious students,
are responding to the demands of the business community. This can be dangerous.
First, the business community isn't always the only entity to ask for the secrets
of success. Successful businessmen such as Ted Turner and Warren Buffett have proven they don't
understand well what makes success possible. They know how to make money in ignorance of the economic
principles that make it possible. This is due in part to the fact that most tycoons have navigated
an ocean of government regulations in making their fortunes, and they mistakenly conclude that the
government therefore had something to do with their success.
Second, and more ominous, business schools are usually the only programs on campus
employing any right-wing (if mildly so) professors. Having the only campus department that makes
extensive, mandatory use of group projects, business programs subject and desensitize their hapless
students to the most realistically socialist experience available at most universities. Administrators
are probably comfortable in the knowledge that the group project experience more than compensates
for professors who occasionally dare to admit publicly that market solutions are better than government
dictates. And students aren't the only ones ruined: after enough years of being commissars, professors
may slowly convert to the leftist mentality as well.
In truth, groupthink has become a chronic problem in universities; it is a consensus-seeking
process that does not allow for the preservation of individuality. It stifles creativity for the
purpose of compromise and agreement. The university-through its group-project mentality-has become
a test lab for socialization skills. The fostering of such rigid cooperation and coerced integration
can be had only at the expense of lesser accomplishment.
Ayn Rand had it right when she said that any collectivist system is necessarily
self-defeating no matter what its specific policies or leaders. After all, if Johnny is in your
group and he can't read or write very well, you'll be getting Johnny's grades.
WASHINGTON - In a 1972 book, 'Victims
of Groupthink: A Psychology Study of Foreign-Policy Decisions and Fiascoes', Irving Janis identified
the Vietnam War and the Bay of Pigs invasion of Cuba as particularly compelling examples of
how very smart people can collectively make very stupid decisions.
In studying the Bay of Pigs, for example, Janis noted that the group around President John Kennedy
made a series of assumptions -- that Cubans would welcome the invasion and rise up against Fidel
Castro and that the U.S. could credibly deny involvement in the invasion, if necessary -- that were
fundamentally deluded.
As in Iraq, many of those assumptions were based largely on the accounts of exiles and defectors,
but the group dynamics involved in decision-making also played a key role in rallying the administration
of the ''best and the brightest'' behind an adventure that proved disastrous, according to Janis.
A great deal more is known about group dynamics within the Bush administration foreign-policy
apparatus today -- as a result of leaks, memoirs, and books, such as Bob Woodward's 'Plan
of Attack' and Jim Mann's 'Rise
of the Vulcans' -- than was known at the time about the Kennedy administration.
And what is known suggests the existence of two major groups -- an ''in-group'' of hawks whose
captain is Vice President Dick Cheney and which has had a decisive influence on Bush himself, and
an ''out-group'' of ''realists'' headed by Secretary of State Colin Powell and his deputy, Richard
Armitage.
While the out-group, which ironically boasts men, including Powell, Armitage, ret. Gens. Anthony
Zinni and Brent Scowcroft, with real war experience, the in-group is dominated by individuals, particularly
Cheney and virtually the entire civilian leadership of the Pentagon, who have none at all.
Hence the moniker ''chickenhawks'', defined as individuals who favor military solutions
to political problems but who themselves avoided military service during wartime. Cheney, who received
five different deferments from the military draft during the Vietnam War, famously told an interviewer
once that he "had other priorities'' in the 1960s than military service.
What also makes the in-group so remarkable is its very small size, the long history it has shared
together, and its close personal relationships.
Pentagon chief Donald Rumsfeld and Cheney, for example, worked together under Richard Nixon and
have been the very best of friends ever since. Their neo-conservative aides and advisers, such as
Deputy Defense Secretary Paul Wolfowitz, former Defense Policy Board (DPB) chairman Richard Perle,
and DPB member Kenneth Adelman, likewise have been close for more than three decades and have personally
mentored other top aides and advisers, such as Cheney's chief of staff, I. Lewis Libby, Defense
Undersecretaries for Policy and Intelligence, Douglas Feith and Stephen Cambone, respectively, and
Weekly Standard editor William Kristol, to name just a few.
The sense of kinship that unites the group is illustrated in part by a dinner hosted by Cheney
shortly after U.S. troops took Baghdad 13 months ago. The guests included Wolfowitz, Libby, and
Adelman; the atmosphere, warm and celebratory as they recounted their defeat of the ''realists.
''Someone mentioned Powell, and there were chuckles around the table'', Woodward noted. And then
''They turned to Rumsfeld, the missing brother'', and told affectionate stories about their past
associations with the crusty Pentagon chief.
When Adelman said he had been surprised U.S. troops had not yet found weapons of mass destruction
(WMD), he was assured by Wolfowitz, ''We'll find them'', and by Cheney, ''It's only been four days
really. We'll find them''.
Students of Groupthink list a number of symptoms of the phenomenon that can lead the group into
disaster, among them:
- believing in the group's inherent morality;
- sharing stereotypes, particularly of the enemy;
- examining few alternative or contingency plans for any action;
- being highly selective in gathering information;
- avoiding expert opinion;
- protecting the group from negative views or information that would contradict their basic
assumptions;
- and - having an illusion of invulnerability.
From what is now known about planning for Iraq, each of these factors obviously played a role,
and they continue to inform U.S. policy not only against perceived enemies, but even against out-groups
in the administration or in Congress. And, because the in-group was so small, many of these characteristics
were unusually pronounced.
The notion that the chickenhawks were morally superior, not just to Saddam Hussein or the ''terrorists''
or ''Ba'athist dead-enders'' whom they've been fighting since the war ended, extended even to the
''realists'', who were denounced in internal battles as ''appeasers'' or worse. As Cheney was recently
quoted as declaring with regard to State Department proposals to engage North Korea, ''We don't
negotiate with evil; we defeat it''.
Middle East experts at the State Department and the Central Intelligence Agency (CIA) were likewise
scorned and excluded from both planning and the immediate aftermath of the invasion, while the creation
in Feith's office of ad hoc intelligence analysis groups that ''stovepiped'' evidence of Iraqi WMD
and ties to Al Qaeda was a classic illustration of selective intelligence gathering that would confirm
pre-existing stereotypes.
Similarly, the total failure to prepare contingency plans to deal with looting, or even with
the emergence of an insurgency against the occupation, displayed a confidence that turned out to
be completely unwarranted. Likewise, former Army chief of staff Gen. Eric Shinseki's prediction
that more than 200,000 troops would be needed to occupy Iraq in order to ensure security had not
only to be rejected in order to protect the group from negative views; it had to be publicly ridiculed
by Wolfowitz as ''wildly off the mark''.
In his latest expose on the prisoner-abuse scandal at Abu Ghraib, New Yorker correspondent Seymour
Hersh noted that Rumsfeld's penchant for ''secrecy and wishful thinking'' -- characteristics that
also apply to Groupthink -- resulted in the Pentagon's failure to do anything about it or about
the many other problems they have encountered.
And whenever Powell or Armitage tried to bring to the attention of the highest levels in the
administration the growing concern about prisoner abuse, according to a source recently cited in
the ''Nelson Report'', an insider Washington newsletter, they were forced to endure from the chickenhawks
what an eyewitness source characterized as ''around-the-table, coarse, vulgar, frat-boy bully remarks
about what these tough guys would do if THEY ever got their hands on prisoners...''
On July 8, Asia Times Online broke the story (Patriotic
pride and fear) of how noted Canadian psychologist Daniel Burston (two PhDs from Canada's
York University and a widely acclaimed author) perceived a broad retreat into "social fantasy systems"
and "socially patterned defects" as explaining much of the Bush administration's decision-making.
He observed for ATol that such flaws bring those involved to "act in ways which - from an outsiders
perspective - look insane". On the following day, July 9, the US Senate Intelligence Committee released
its report on the United States' justification for the Iraq war, claiming an erroneous "groupthink"
was to blame, and coincidentally highlighting the validity of Burston's observations.
Groupthink is defined as "a mode of thinking that people engage in when they are deeply involved
in a cohesive group, when the members' strivings for unanimity override their motivation to realistically
appraise alternative courses of action". In other words, retreat into a "social fantasy system"
allowed "socially patterned defects" to flourish within the group's members.
The Senate Intelligence Committee chairman, Republican Senator Pat Roberts of Kansas, stated
that "it is clear this groupthink also extended to our allies and to the United Nations and several
other nations as well". The July 8 ATol piece provides parallel commentary on this, noting that
"in most cases, destructive impulses are rationalized, ensuring 'at least a few other people or
a whole social group share in the rationalization and thus make it appear to be realistic to the
members of such a group'. In effect, an emotional-support network is formed, providing its individual
members with a mistaken sense of legitimacy."
In an October 2003 article titled "Cheney's hawks hijacking policy", this journalist revealed
that former senior Pentagon staffer Lieutenant-Colonel Karen Kwiatkowski (retired) described "a
subversion of constitutional limits on executive power and a co-optation through deceit of a large
segment of the Congress", adding that "in order to take that first step - Iraq - lies had to be
told to Congress to bring them on board". Planned and deliberate lies were told in order to manipulate
Congress and the American people purposefully, effectively, and criminally, undercutting the very
foundations of US democracy.
Not to be misunderstood, the "groupthink" in question is far from innocent error, and administration
critics charge that the Senate Intelligence Committee reports' attempts to couch blame as mere "fuzzy
thinking" highlight the propaganda efforts ongoing, the groupthink still dominating policy. But
this psychological phenomenon perhaps best translates to a broad failure to appreciate the reality
of circumstance, the nature or implications of actions, the very difference between right and wrong.
And while a hard core of believers/leaders is typically central to such a phenomenon's workings,
their influence radiates broadly outward through their immediate group(s) and those they interface
with.
Coincident with the Intelligence Committee's report, Senator Roberts defended the Iraq war as
justified for humanitarian reasons, though numerous human-rights organizations have condemned the
US record in Iraq, the war crimes that US forces are alleged to have committed there.
Notably, before the Iraq war began, numerous figures had publicly challenged the Bush administration's
prewar assertions. On September 9, 2002, CNN had headlined "Former weapons inspector: Iraq not a
threat", noting, "Former UN weapons inspector Scott Ritter says US military action against Iraq
would be a mistake." And oil-war questions were abundant.
But highlighting the dynamics of what was ongoing, Kwiatkowski had charged that "there was an
extra-governmental network operating outside normal structures and practices, 'a network of political
appointees in key positions who felt they needed to take some action, to make things happen in a
foreign affairs, national security way'. She said Pentagon personnel and the DIA [Defense Intelligence
Agency] were pressured to favorably alter assessments and reports", a hard core of misguided individuals
within the administration of US President George W Bush enjoying "a mistaken sense of legitimacy"
in their efforts, spreading this false and wrongful mindset to many of those they encountered.
While groupthink is undoubtedly to blame for the Iraq war's false premises, the full implications
of the "groupthink" that occurred, as well as that which is ongoing, appear to have yet to emerge.
Highlighting a disturbing reality, Burston had noted parallels between the social psychology
of the present and that of the 1930s.
In a further parallel to the 1930s, on July 9 the conservative Chicago Sun-Times (one of the
United States' top 50 papers) ran a commentary on US fascism, stating that "fascism' is not
an exaggeration", and adding that anyone who doubted this "doesn't know what fascism is".
It went on to note: "Some liberals suggest that the administration is capable of canceling the November
election on the grounds of national security if it looks like Bush would lose. I doubt this." But
on July 11 and 12, news of the administration seeking legal authority for just such an election
postponement - a delay in the November election for national-security reasons - widely broke.
Burston had said he believed the US could be poised "on the verge" of a corporate fascism, and
eminent political scientist Dr Michael Parenti (Yale PhD in political science and author of 18 books)
spoke similarly. And indeed, the slippery slope of "groupthink" in effect provided the basis for
the psycho-dynamics dominating the rise of 1930s fascism, its proponents of a "new order" perceiving
endless lies, propaganda, repression, mass violence, and even mass murder as legitimate means to
what they perceived as their "noble" ends, versus tragic and criminal delusions. Students of history
will note the "groupthink" evidenced in Germany's 1930s mass rallies at Nuremberg, though the realization
of what was then occurring didn't fully emerge until the Nuremberg War Crimes Tribunals of the 1940s.
As discussed in ATol's July 8 article, the process of groupthink then in effect spawns "'socially
patterned defects' that enabled large groups of people to adjust themselves comfortably to a system
that, humanly speaking, is 'fundamentally at odds with our basic existential and human needs'".
Burston then noted that this resulted in "deficiencies, or traits, or attitudes which don't generate
internal conflict when, in fact, they should". He then cited "Nazi mass-murderer Adolf Eichmann
as representing the 'prototypical example' of what the phenomenon of 'socially patterned defects'
can engender", emphasizing that "with one very questionable exception, Eichmann tested normal on
all psychological tests that were administered to him by mental-health experts before his trial".
In discussing questions of contemporary fascism with Asia Times Online, Dr Parenti said, "When
fascism came to power [in the 1930s], what it did was cut back on the public sector, privatize a
lot of state-owned industries, abolish inheritance taxes and other taxes on the rich, abolish corporate
taxes, cut wages, destroy labor unions, and destroy or undermine opposition parties." He described
fascism as simply a tool employed by ruthless power-elites in achieving their ambitions.
He added: "There's a concern that we're [the US] heading towards fascism, or that we're replicating
fascism today."
Parenti saw citizenry being mobilized by "waving the flag in their face, and wrapping the flag
around the leader, and telling them that they're being threatened by one menace or another, from
abroad or within." In a parallel, Bush critics have long charged his administration with precisely
this. Parenti cited Nazi Field Marshal Hermann Goering's similar explanation of popular motivation,
which emerged from the period of the Nuremberg Tribunal.
In a purely American vein, Parenti recalled that former US secretary of state John Foster Dulles
had said: "To get the people to support large military budgets and intervention, you've got to conjure
up a threat, and you've got to make this scenario of 'one nation is a hero, another nation is a
villain'. It's got to be hero versus villain." And the Senate Intelligence report does aid parallels
between Dulles' vision and the Iraq war.
"You fool the people into thinking that you're protecting them, you're watching out for their
interests, and you get them to vote against their own interests," Parenti charged.
Comparing today's United States to the 1930s, Parenti addressed the recent US Supreme Court decision
allowing Vice President Dick Cheney and the Bush administration to refuse public access to the documents
of Cheney's so-called Energy Task Force. Indications exist that oil-war questions were discussed
within this group, a September 2003 Inter Press Service article, "Oil war questions surround Cheney
energy group", addressing such concerns. Parenti strongly emphasized the implications of the court
decision.
"The Supreme Court decision does, in effect, lift the executive power to an unaccountable and
undemocratic status. So you really have no way for Congress or the public to hold these people accountable
for what they're doing. You're, in effect, setting up a cloak of impunity on their actions under
the guise of 'executive privilege' ... so what we're getting here is many of the same things that
the fascists accomplish, while maintaining a democratic veneer," Parenti claimed, adding: "You're
getting enormous tax cuts for the rich - there are now corporations that are making billions of
dollars in profits that are paying no taxes - you're getting the rollback of trade unions through
outsourcing, closing down unionized factories ... you're getting depressed wages, wages aren't keeping
up with inflation; increasing spending in the military sector - this is just exactly what the fascists
did. So you're accomplishing a lot of these same things without having to 'go all the way' and destroy
every little shred of democracy." Parenti then proceeded to draw a firm parallel with the Italian
1930s "corporative state".
"In practice, the big decisions regarding the political economy were made by the industrialists,"
Parenti noted, but prefacing that by saying all groups within the Italian corporative state were
"supposed to" share the decision power. He likened the large Italian industrialists' group to America's
National Association of Manufacturers, saying, "in effect, those were the guys who were really thoroughly
incorporated, and most of the ordinary people were left out in the cold, as subjects of the state".
After a moment, Parenti quickly observed that "the people always get a share of this action,
though. The American people get a share of it, the Italians did ... their share is the taxes and
the blood. They pay the taxes, and they send their sons off."
Notably, with the Nuremberg Tribunals, society long ago determined that those who may commit
criminal acts while influenced by groupthink are nevertheless criminals, and should be judged accordingly.
(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact
[email protected] for information
on our sales and syndication policies.)
The phenomenon that group discipline and dynamics leads to hindrances
for new ideas in groups.
- "Yes! We're all individuals!" "I'm not"
Most broadly, groupthink occurs when a group makes suboptimal decisions
because of process problems or communication problems due to
SocialNormalization.
Most or all of the group members may, privately, realize that the decisions is a poor one but feel
powerless to change it for fear of offending other group members, injuring
SacredCows, or detonating
LandMines.
If everyone takes for granted the group's perceived opinion, the
group will choke itself to death. This can give rise to the
Wiki:AbileneParadox. Usually
when this happens, the group is considered to have an identity all unto itself. Sometimes it gets
fuzzy whether or not the individuals have identities or are even conscious. Sometimes it's fuzzy
whether or not there's even such a thing as an individual.
GroupThink is absolutely not collective intelligence.
In CollectiveIntelligence,
decisions are taken or opinions are set up by a group of people in such a way you can't distinguish
an individual as the "author" of the decision or the opinion. To be achieved, it requires to get
over groupthink. In the situation where groupthinking occur, each individual tend to conform his
opinion to the opinion reached by the group. That often lead to bad choices, as no individual entirely
agrees with what he finds himself ultimately supporting; also, it reduce creativity, as individuals
tend to forget they have other choices than the one displayed by the group.
Contrast
BarnRaising, where
TheIndividual grants
TheCollective influence
over his actions, but not his thoughts. This is much more healthy.
Further reading: Groupthink : Psychological Studies of Policy
Decisions and Fiascoes, by Irving L. Janis
You will often see online people complain about
GroupThink and how it must
be combatted. This is justified by people's general, cynical understanding of groupthink. To quote
an anonymous author on this page:
- Groupthink generally refers to the collective stupidity, or lowest common denominator of
individual intelligence. It is mob rule. To err is human, to really f*ck things up requires
a committee.
However, certain AntiAuthoritarians
use GroupThink as a foil for
their inappropriate behaviour. They rationalize or justify their anti-social and often (psychologically/sociologically)
violent behaviour towards others by saying they are combatting
GroupThink. People not used
to this strategy, and those aware that
GroupThink is an invisible
evil, will be caught by this justification. They will begin to ask themselves whether or not they
are experiencing GroupThink,
and surely FreedomOfSpeech?
is a paramount good? We should, therefore, allow this pesky irritant to annoy us for the sake of
democratic principles.
But that is not exactly how life works. A pesky irritant is undoubtedly confronting and limiting
someone else's rights or freedoms. And more to the point, the person who feels that it is necessary
to be as annoying as possible to all types of people is likely to be very angry for some reasons
that reach well beyond their interaction with the community (under an
AngryCloud from birth).
ControlYourself, but that
also means we EnforceResponsibility.
GroupThink is only a problem
when valid individual voices are squashed due to a collective unwillingness to listen.
It is not GroupThink to police
oneself. It is legitimate to not listen to someone trying to squash your voice. Rather, it
is illegitimate to gain voice through
ManipulativePower.
If there really was a problem with
GroupThink, the best way to
change that is to introduce contravening opinions in a constructive, positive way. The only way
out of GroupThink is to
lead. Creating a fight is only going to reinforce the
GroupThink as it creates a
SeparationOfPositions?.
More to the point, it creates an
UsAndThem situation by making the boundary of the group clear where before it was fuzzy; it
at least signals to the group that the individaul AntiAuthorian?
is outside the group, and thus that person will be perennially excluded.
If you are a victim of such a ploy, just ask the person to lead the group out of the groupthink,
rather than try to fight it. Ask them to be constructive, and positive. Help them with this, as
the real problem may be that they are lacking the social skills necessary to navigate group situations.
For similar manipulative reasons, the term "groupthink" is often used by trolls.
Leadership promotes and manipulates
GroupThink. The only way out
of GroupThink is to
not follow. The simple statement "I dissent" is a better and non-violent way to not follow
compared to the combatative approach of the typical
- Or even more likely, starve itself to death because no one is contributing any ideas.
As far as starving to death goes, I think that's highly unlikely. To start with, OddBalls?
turn up and add a different personality to the mix. This helps prevent ThoughtStagnation?
. Merely by being here, 'posting' something slightly different, I'm affecting others' thoughts and
injecting something a little different, causing people to potentially behave a little differently
than before they encountered me. Likewise, the different people here affect me and how I behave
and this, in turn, filters into the way we all behave with each other. As with anything in life,
there are factors which simply can't -be- factored (yet). For instance, one could argue a certain
WayOfThought?
needs to exist before one would even find oneself in a scenario like wiki. This suggests an IncestuousMindset?
in the first place. However, this is offset by raw, potential growth. --
DominicBurns
---
A pod of whales, communicating at high bandwidth, function as a group incredibly well. They even
work very well with humans with limited communication. We can't speak their language, they have
to learn ours. Perhaps this is why a pod beaches themselves after losing a key member. They cannot
function alone. Neither can we. --
JimScarver
---
People cooperate toward common goals, nothing new there. People form structured groupings to
divide labor, provide for mutual defense, and so on. When it gets to be a problem is when a "group"
is really a mob.
A collection of people who have no intentional common alignment is not a group in the "going
somewhere together" sense. The bigger this collection gets, the narrower the scope of things they
will all agree on. Unfortunately, for whatever reason, the narrower scope doesn't tend toward greater
benefit either for the group of its individuals. It tends to be more destructive.
If you extract the individuals and consult them directly you get a wide range of responses, complete
with nuances. Asked the same questions while surrounded by a group, the answers are usually different.
Try this: Get a group of individuals, and survey them individually on some matter or other. If
you "load" the questions you're going to get "loaded" results, so don't bother. Now, collect all
these individuals together in a room and have them "vote" on the same matters. When we did this
we found consistently that people didn't "vote" along the same lines as their stated individual
preferences.
So, if you want a truer representation of the inclination of a group, ask the individuals *seperately*
and not collectively.
GroupThink is, on the whole,
a bad way to make decisions. You get better vectors if you collect each discrete vector and then
average them, rather than poll a mob and take the resulting apparent vector.
-- GarryHamilton
---
I did some brainstorming on why
GroupThink occurs just based
on my own experience.
- A confident voice claiming to speak the consensus will make individuals think that is the
consensus, even when it is not.
- Fear of being wrong and therefore embarassed in front of the group.
- Fear of retribution, such as being shunned by more powerful members of the group.
- People AvoidConflict,
and they certainly will want to avoid conflict with a group they have GroupAffinity?
for.
- People take sides. You may be inclined to support positions of your group that you disagree
with as long as you agree with most of what they think.
- As professionals (BeProfessional),
we all know how important it is for a group to speak with one voice to the outside even if internally
we vehemently disagree. The
CluetrainManifesto
speaks against this, however.
I think, though, the biggest reason people don't speak up in a group is that they are unsure
of themselves, their status/position within the group, and the veracity of what they would say.
People that HaveCourage?
don't have trouble dissenting in a group, and conversely groups that AlleviateInsecurity?
facilitate more individual contributions. Perhaps groupthink is merely a failure mode of a community
with weak BehavioralNorms?
-- SunirShah
Seems to be a lot about status (continue brainstorming):
- People want to be part of the community, so they adapt. If they feel weak they may fear
to be rediculed. -- Wiki is about taking all opinions seriously, any contribution is welcome.
- People are part of an informal hierarchy. If they feel up to, a different opinion may be
seen as a claim for leadership. One may want to avoid that or test his chances. -- Wiki seems
to be open for that kind of problem. Trolls that split a community, usurpers who want to take
leadership, leaders that feel attacked by opposing opinions.
- Loyal members or obliged members defend the rules and decisions
of their community externally, even if they want to change it internally. This
makes it necessary to be able to make the difference between internal and external! That means
between internal communication (other members, topics) and external communication (guests, visitors)!
-- HelmutLeitner
AMPP: Indoctrination
- Part 1
Next Chapter : Mass Media, Establishment Minions Previous Chapter : Manufacturing Madness Indoctrination
- Part 1 Making Little Monsters Go on to Indoctrination Part 2 - Shoehorning the Public "There are
gaps in our knowledge and we often have no
Are You the Victim
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Test yourself to see if you are a victim of mind control.
Brainwash & Mind Control
Communication Sp 313 in Groups Hints for reading: Forsyth, Ch. 10 Overview, Ch. 10 What is this
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WHAT'S REALLY GOING ON IN HOLLYWOOD! by John W. Cones, Esq. Please wait while this loads Copyright
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John D. Goldhammer
Welcome to our FAQs for Under The Influence: the Destructive Effects of Group Dynamics From here
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Over view of resources on the controversy about influencing people's minds and thoughts.
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The Art of Defiance:
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revision 1.2 11/27/00 - the text and ideas presented at this site may be freely used and reproduced,
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Build Community
Building a community across time and space by using modern collaboration and groupware sofware
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The Temple of Psychic Youth is Hiding Something
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Homepage from Robert Born
Staatsterrorismus und deren Vertuschung durch psychologisch-psychiatrische Repressionsmassnahmen
von deutschen konspirativen Organisationen
Unlocking
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Groupthink Activity Content author: Tim Borchers, Moorhead State University Technical questions:
[email protected] Interested in contributing to this website?
Association for Specialists
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Healthy Relationships
Helping students to analyze the culture of violence that condones abusive behavior is the first
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[last] [home] [content] [end] [search] FORCE, VIOLENCE AND DICTATORSHIP IN THE CLASS STRUGGLE
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Groupthink
[email protected] jacksonville,
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Back in 1972 Irving Janis invented the word "groupthink" to describe what happens when people
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Sects
John Paul Fullerton ([email protected]) Mon, 15 Dec 1997 12:31:20 +0000 Replying to LO16231
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brainwashing & mind control techniques A list of the usual brainwashing/mind control techniques
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As explained on our fabulous homepage, the idea behind Irving Janis's groupthink theory is happening
all the time without individual's being aware of it.
GROUPTHINK/MANAGING AGREEMENT BIC LECTURE
THE GROUP PROCESS: GROUPTHINK AND MANAGING AGREEMENT Assigned Reading: ”Political Communication
in Decision-Making Groups", Michael W. Mansfield, in New Directions in Political Communication:
A Resource Book, edited by David L. Swanson an
Groupthink Quiz
What is Groupthink
Click here to download our PsySR PowerPoint Presentation on Groupthink (8.8 Mb
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Boosters now available! If you were vaccinated
against the 'groupthink virus' over three months ago, you will need to use this
'booster shot'.
What is Groupthink?
Groupthink, a term coined by social psychologist Irving Janis (1972), occurs when a group makes
faulty decisions because group pressures lead to a deterioration of "mental efficiency, reality
testing, and moral judgment" (p. 9). Groups affected by groupthink ignore alternatives and tend
to take irrational actions that dehumanize other groups. A group is especially vulnerable to groupthink
when its members are similar in background, when the group is insulated from outside opinions, and
when there are no clear rules for decision making.
References (also see annotated bibliography of books, articles
and websites below)
Janis, Irving L. (1972). Victims of Groupthink. New York: Houghton Mifflin.
Janis, Irving L. (1982). Groupthink: Psychological Studies of Policy Decisions and Fiascoes.
Second Edition. New York: Houghton Mifflin.
Symptoms of Groupthink
Janis has documented eight symptoms of groupthink:
- Illusion of invulnerability –Creates excessive optimism
that encourages taking extreme risks.
- Collective rationalization – Members discount warnings
and do not reconsider their assumptions.
- Belief in inherent morality – Members believe in the
rightness of their cause and therefore ignore the ethical or moral consequences of their decisions.
- Stereotyped views of out-groups – Negative views of "enemy"
make effective responses to conflict seem unnecessary.
- Direct pressure on dissenters – Members are under pressure
not to express arguments against any of the group's views.
- Self-censorship – Doubts and deviations from the perceived
group consensus are not expressed.
- Illusion of unanimity – The majority view and judgments
are assumed to be unanimous.
- Self-appointed 'mindguards' – Members protect the group
and the leader from information that is problematic or contradictory to the group's cohesiveness,
view, and/or decisions.
When the above symptoms exist in a group that is trying to
make a decision, there is a reasonable chance that groupthink will happen, although it is not necessarily
so. Groupthink occurs when groups are highly cohesive and when they are under considerable pressure
to make a quality decision. When pressures for unanimity seem overwhelming, members are less motivated
to realistically appraise the alternative courses of action available to them. These group pressures
lead to carelessness and irrational thinking since groups experiencing groupthink fail to consider
all alternatives and seek to maintain unanimity. Decisions shaped by groupthink have low probability
of achieving successful outcomes.
Examples of Groupthink: Past and Present
Examples of groupthink "fiascoes" studied by Janis include
US failures to anticipate the attack on Pearl Harbor, the Bay of Pigs invasion, the escalation of
Vietnam war, and the ill-fated hostage rescue in Iran. Current examples of groupthink can be found
in the decisions of the Bush administration and Congress to pursue an invasion of Iraq based on
a policy of "preemptive use of military force against terrorists and rogue nations". The decision
to rush to war in Iraq before a broad-based coalition of allies could be built has placed the US
in an unenviable military situation in Iraq that is costly in terms of military deaths and casualties,
diplomatic standing in the world, and economically.
Groupthink and the News Media
Knowledge is power and we as citizens and as a nation are
becoming less powerful. We face an administration that believes in operating under high levels of
secrecy. The American press, especially the television news media, has let down the American people
and the American people have allowed this to happen. US television news is geared more toward providing
entertainment than information. When one compares the news Americans received about the "war on
terrorism" and "war in Iraq" with the news citizens of other countries received, it is easy to see
why many Americans were eager to launch an attack on Saddam Hussein while most of the world thought
this was not a good idea. The major news networks eagerly voiced almost exclusively the Bush administration's
(questionable) justifications for the attack on Iraq and ignored the voices of millions who knew
that other ways of addressing the issues were still possible. Furthermore, the rapid pace of CNN,
MSNBC, and Fox News opinion programs makes it difficult for viewers to process information in any
depth. Americans need a press that serves as a devil's advocate to alleviate the ongoing groupthink
concerning the war on terrorism and the invasion of Iraq.
Review the following consequences of groupthink and consider
how many of them apply to the Bush administration's handling of the 'war on terrorism' and the issues
related to Iraq and Saddam Hussein:
a) incomplete survey of alternatives
b) incomplete survey of objectives
c) failure to examine risks of preferred choice
d) failure to reappraise initially rejected alternatives
e) poor information search
f) selective bias in processing information at hand
g) failure to work out contingency plans
h) low probability of successful outcome
Remedies for Groupthink
Decision experts have determined that groupthink may be prevented
by adopting some of the following measures:
a) The leader should assign the role of critical evaluator to each member
b) The leader should avoid stating preferences and expectations at the
outset
c) Each member of the group should routinely discuss the groups' deliberations
with a trusted associate and report back to the group on the associate's reactions
d) One or more experts should be invited to each meeting on a staggered
basis. The outside experts should be encouraged to challenge views of the members.
e) At least one articulate and knowledgeable member should be given the
role of devil's advocate (to question assumptions and plans)
f) The leader should make sure that a sizeable block of time is set aside
to survey warning signals from rivals; leader and group construct alternative scenarios of rivals'
intentions.
Annotated Bibliography
Books
Hart, P. (1994). Government: A study of small groups and policy
failure. Baltimore:
The Johns Hopkins University Press
In the first book-length study of groupthink since Janis's work,
Paul 't Hart has provided a rigorous and systematic version of this influential theory which
opens several new avenues for research. Groupthink in government examines the circumstances
most likely to produce or counteract groupthink, and applies the theory to issues such as leadership
style, risk taking, accountability, and prevention. 't Hart's elaborate case study of the Iran-Contra
scandal demonstrates the continuing relevance of the groupthink theory in the examination of
flawed decision making.
Janis, I.L. (1972). Victims of groupthink: A psychological study
of foreign policy
decisions and fiascoes. Boston: Houghton Mifflin Company.
Janis defines groupthink as the psychological drive for consensus
at any cost that suppresses disagreement and prevents the appraisal of alternatives in cohesive
decision-making groups. In this, the first edition, Janis showed how this phenomenon contributed
to some of the major U.S. foreign policy fiascoes of recent decades: the Korean War stalemate,
the escalation of the Vietnam War, the failure to be prepared for the attack on Pearl Harbor,
and the Bay of Pigs blunder. He also examined cases, such as the handling of the Cuban Missile
Crisis and the formulation of the Marshall Plan, where GROUPTHINK was avoided.
Janis, I.L. (1982). Groupthink: A psychological study of policy
decisions and fiascoes.
Boston: Houghton Mifflin Company.
In this edition (2nd), Janis applies his hypothesis
to the Watergate cover-up, portraying in detail how GROUPTHINK helped to put the participants
on a disastrous course and keep them there. In addition, he presents some new ideas on how &
why GROUPTHINK occurs, and offers suggestions for avoiding it.
Kowert, P.A. (2002). Groupthink or deadlock: When do leaders learn
from their
advisors? Albany: Blackwell Publishing.
This book argues that too much advice can lead to policy deadlock
depending on leadership style. The danger of groupthink is now standard fare in leadership training
programs and a widely accepted explanation, among political scientists, for policy-making fiascoes.
Efforts to avoid groupthink, however, can lead to an even more serious problem-deadlock. Groupthink
or Deadlock explores these dual problems in the Eisenhower and Reagan administrations and demonstrates
how both presidents were capable of learning and consequently changing their policies, sometimes
dramatically, but at the same time doing so in characteristically different ways. Kowert points
to the need for leaders to organize their staff in a way that fits their learning and leadership
style and allows them to negotiate a path between groupthink and deadlock.
Journal Articles
Ahlfinger, N. R. & Esser, J. K. (2001). Testing the groupthink model: Effects of
promotional leadership and conformity
predisposition. Social Behavior &
Personality: An International Journal, 29(1),
31-42.
This article discusses two hypotheses that
were derived from groupthink theory and were tested in a laboratory study which included measures
of the full range of symptoms of groupthink, symptoms of a poor decision process, and decision quality.
The hypothesis that groups composed of members who were indisposed to conform would be more likely
to fall victim to groupthink than groups whose members were no predisposed to conform received no
support. It is suggested that groupthink research is hampered by measurement problems.
Esser, J.K. (1998). Alive and well after 25 years: A review of groupthink
research.
Organizational Behavior & Human Decision
Processes, 73(2-3), 116-141.This
article provides a summary of empirical research on groupthink theory. Groupthink research, analyses
of historical cases of poor group decision making are included, and laboratory tests are reviewed.
Results from these two research areas are briefly compared. Theoretical and methodological issues
for future groupthink research is identified and discussed.
Fuller, S.R. & Aldag, R.J. (1998). Organizational Tonypandy: Lessons
from a quarter
century of the groupthink phenonmenon.
Organizational Behavior & Human
Decision Processes, 73(2-3), 163-184.In
this paper, Fuller and Aldag argue that the quarter-century experience with groupthink represents
an unfortunate episode in the history of group problem solving research. There has been remarkably
little empirical support for the groupthink phenomenon, and that the phenomenon rests on arguable
assumptions, that published critiques of groupthink have generally been ignored by groupthink researchers,
and that groupthink is presented as fact in journal articles and textbooks. They see continued advocacy
of groupthink as a form of organizational Tonypandy, in which knowledgeable individuals fail to
"speak out" against widely accepted, but erroneous beliefs. They explore the nature and causes of
the Tonypandy and encourage researchers to cast off the artificial determinism and constraints of
the groupthink model, and instead, seek to inform the general group decision making literature.
Kramer, R.M. (1998). Revisiting the Bay of Pigs and Vietnam decisions
25 years later:
How well has the groupthink hyposthesis
stood the test of time? Organizational
Behavior & Human Decision Processes, 73(2-3), 236-271.This paper explains how in the twenty five
years since the groupthink hypothesis was first formulated, new evidence, including recently declassified
documents, rich oral histories, and informative memoirs by key participants in these fiasco decisions
have become available to scholars. This casts a new light on the decision making process behind
both the Bay of Pigs and Vietnam. Much of the new evidence does not support Janis's original characterization
of these processes. In particular, it suggests that dysfunctional group dynamics stemming from group
members' strivings to maintain group cohesiveness were not as prominent a causal factor in the deliberation
process as Janis argued. Viewed in aggregate, this new evidence suggests that the groupthink hypothesis
overstates the influence of small group dynamics, while understating the role political considerations
played in these decisions.
Hart, P. (1998). Preventing groupthink revisited: Evaluating and
reforming groups in
government. Organizational Behavior
& Human Decision Processes, 73(2-3),
306-326.
This article critically examines Janis's
recommendations for preventing groupthink in high-level policymaking. It puts forward three models
of small group functioning in government, each of which highlights different dimensions of collegial
policymaking and distinct criteria for evaluating group performance. Each model also inspires different
proposals for groupthink prevention and improvement of group performance in general. The article
concludes with an agenda for increasing the policy relevance and practical feasibility of research
on political decision groups.
McCauley, C. (1998). Group dynamics in Janis's Theory of groupthink:
Backward and
forward. Organizational Behavior & Human
Decision Processes, 73(2-3), 142-162.This
paper traces groupthink to its theoretical roots in order to suggest how a broader and a more consistent
use of research in group dynamics can advance understanding of decision-making problems. In particular,
the paper explores and reinterprets the groupthink prediction that poor decision- making is most
likely when group cohesion is based on the personal attractiveness of group members.
Moorhead, G., Neck, C.P. & West, M.S. (1998) The tendency toward defective
decision
making within self-managing teams:
The relevance of groupthink for the 21st
century. Organizational Behavior & Human
Decision Processes, 73(2-3), 327-351.
Groupthink theory has continued relevance
to organizations because of the organizational trend toward self-managing work teams. A typology
is developed linking the key differentiating characteristics of self-managing teams to groupthink
antecedents of group cohesion, structural faults of the organization, and provocative situational
context. Building upon this framework, we more specifically examine variables that will impact the
occurrence of groupthink within self-managing teams. Implications for the prevention of groupthink
in self-managing teams are discussed.
Paulus, P.B. (1998). Developing consensus about groupthink after
all these years.
Organizational Behavior & Human Decision
Processes, 73(2-3), 362-374.
In the context of these papers of this
special issue, the models of groupthink are evaluated. The major focus is on the basis for its impact
and its scientific status. The groupthink perspective is seen as consistent with some other contributions
to the group's literature. Interesting parallels between the groupthink and the brainstorming literature
are noted. It is conclude that many of the issues raised by the groupthink model are worthy of further
examination in a broad-based study of group decision processes.
Peterson, R.S., Owens, R.D., Tetlock, P.E., Fan, E.T. & Martorana,
P. (1998). Group
dynamics in the top management teams: Groupthink,
vigilance, and alternative
models of organizational failure and success. Organizational Behavior &
Human Decision
Processes, 73(2-3), 272-305.
This study explored the heuristic value
of Janis' (1982) groupthink and vigilant decision-making models as explanations of failure and success
in top management team decision making using the Organizational Group Dynamics Q-sort (GDQ). Top
management teams of seven Fortune 500 companies were examined at two historical junctures-one when
the team was successful (defined as satisfying strategic constituencies) and one when the team was
unsuccessful. Results strongly supported the notion that a group's decision-making process is systematically
related to the outcomes experienced by the team. The results illustrate the usefulness of the GDQ
for developing and empirically testing theory in organizational behavior from historical cases.
Raven, B.H. (1998). Groupthink, Bay of Pigs, and Watergate reconsidered.
Organizational Behavior & Human Decision
Processes, 73(2-3), 352-361.
In this paper, Raven argues that group
decisions have often been seen as offering the benefits of collective wisdom, but may also lead
to disastrous consequences. Groupthink then focuses on the negative effects of erroneous group decisions,
the two major examples being the disastrous Bay of Pigs, which then led to the Watergate scandal.
While Janis seems to suggest that groupthink will ultimately lead the group to fail in its ultimate
endeavors, we need to consider the frightening possibility that in the case of the Nixon group,
the group actions came close to being successful.
Schwartz, J. & Wald, M. L. (2003, March 03). Smart people working
collectively can be
dumber than the sum of their brains: "Groupthink"is
30 years old, and still going
strong. NY Times. Retrieved February
20, 2004, from Ebsco database.
This issue came into sharp focus in Houston
in 2003 at the first public hearing of the board investigating the Columbia disaster last month.
Reprinted at:
http://www.mindfully.org/Reform/2003/Smart-People-Dumber9mar03.htm.
Street, M. D. & Anthony, W. P. (1997). A conceptual framework establishing
the
relationship between groupthink and escalating commitment.
Small Group
Research, 28(2),
267-294.This article presents
three propositions designed to demonstrate a theoretical relationship between the groupthink and
escalation commitment models. Proposition that groups exhibiting groupthink characteristics are
more likely to escalate commitment to a losing course of action than are groups not exhibiting groupthink
characteristics.
Turner, M. E. & Pratkanis, A. R. (1998). Twenty-five years of groupthink
theory and
research: Lessons from the evaluation
of a theory. Organizational Behavior &
Human Decision Processes, 73(2-3), 105-115. Retrieved January 20, 2004,
from Ebsco database.
This is from a special issue on theoretical
perspectives of groupthink, a twenty-fifth anniversary appraisal. The article examines the historical
development of the groupthink model of decision-making processes and discusses recent responses
to the body of empirical evidence amassed on the model. The article concludes by articulating general
lessons implied by the evolution of research on the groupthink model.
Whyte, G. (1998). Recasting Janis's groupthink model: The key role
of collective
efficacy in decision fiascoes.
Organizational Behavior & Human Decision
Processes, 73(2-3), 185-209.
This paper advances an explanation for
decision fiascoes that reflects recent theoretical trends and was developed in response to a growing
body of research that has failed to substantiate the groupthink model (Janis, 1982). In this new
framework, the lack of vigilance and preference for risk that characterizes groups contaminated
by groupthink are attributed in large part to perceptions of collective efficacy that unduly exceed
capability. High collective efficacy may also contribute to the negative framing of decisions and
to certain administrative and structural organizational faults. In the making of critical decisions,
these factors induce a preference for risk and a powerful concurrence seeking tendency that, facilitated
by group polarization, crystallize around a decision option that is likely to fail. Implications
for research and some evidence in support of this approach to the groupthink phenomenon are also
discussed.
Web Sites
Groupthink Central:
http://www.groupthinkcentral.blogspot.com/
This website is for groupthink central,
and has the following quote by Walter Reuther. "There is no greater calling
than to serve your fellow men. There is no greater contribution than to help the weak. There is
no greater satisfaction than to have done it well." --
A First Look at Communication Theory:
http://www.afirstlook.com/main.htm
This website is primarily designed as a
companion to communication theory by Em Griffin and the Instructor's Manual by Glen McClish, and
Jacqueline Bacon. This site includes links to resource materials for texts, and a description of
Conversations with communication theorists, a video of the interviews conducted with the authors
of a number of theories featured in the book. Links to theories in the current (5th)
edition can be found, as well as theories in the archives of past editions.
Chapter 18 by Irving Janis, in the book
A First Look at Communication Theory (1997), by Em Griffin
http://www.afirstlook.com/archive/groupthink.cfm?source=archther..
In this chapter, Janis discusses the events
behind the Challenger disaster, as a model of defective decision-making. He describes the mode of
thinking and how people in a cohesive group have a tendency to seek concurrence with others in the
group to finalize their decisions. The chapter outlines the eight symptoms of groupthink, and offers
a critique on avoiding uncritical acceptance of groupthink.
Errors and Accidents: Groupthink
http://www.ess.ntu.ac.uk/miller/error/groupthink.htm#linking.
This BSc Psychology website developed by
Hugh Miller and Bill Farnsworth at the Nottingham Trent University offers chapters on Groupthink
by Irving Janis and others.
Argos Press GROUPTHINK Risk Management and Decision Making
Glossary:
http://www.risk-management.argospress.com/groupt.htm.
This website is a glossary to risk management
and decision making, systems thinking, and situation awareness. This site has a comprehensive glossary
of utility terms and a Peer Tool that can be ordered free online to guide the group towards making
better decisions.
Back to Groupthink Resources
Groupthink
The Challenger space shuttle explosion. The Bay of Pigs invasion.
The Korean War debacle (Janis 1-28). These are examples of situations where group communication
failed. Group communication involves a shared identity among three or more people, a considerable
amount of interaction among these people, and a high level of interdependence between everyone involved
(Trenholm 196-97). It is essential to understand group dynamics for a variety of reasons. Everyone
participates in groups throughout the course of a lifetime, and these groups are often very goal-oriented.
The business community, non-profit organizations, and town governments all use groups to make decisions.
Sometimes a condition known as Groupthink can occur in groups that are extremely task-oriented and
goal-driven. Groupthink is as "a mode of thinking people engage in when cohesiveness is high" (Blumberg
and Golembiewski 134). Groupthink leads to poor decision making and results in a lack of creativity.
Although Groupthink has been studied extensively, many people are unaware of its dynamics and the
consequences that they might induce. This paper was designed to raise awareness about Groupthink
and to provide some suggestions that can help task-oriented groups avoid this condition. To understand
Groupthink it is essential to have a basic familiarity with group communication dynamics. Once this
is accomplished some symptoms of Groupthink will be explored and some solutions will be offered.
Chapter 18
On the morning of January 28, 1986, the space shuttle Challenger blasted off from the
Kennedy Space Center in Florida. Seventy-three seconds later, millions of adults and school children
watched on television as the rocket disintegrated in a fiery explosion, and the capsule plunged
into the Atlantic Ocean. The death of all seven crew members, and particularly teacher Christa McAuliffe,
shocked the nation. For many Americans, the Challenger disaster marked the end of a love
affair with space. As they learned in the months that followed, the tragedy could have been-should
have been-avoided.
President Reagan immediately appointed a select commission to determine the probable cause(s)
of the accident. The panel heard four months of testimony from NASA officials, rocket engineers,
astronauts, and anyone else who might have knowledge about the failed mission. In a five-volume
published report, the presidential commission identified the primary cause of the accident as a
failure in the joint between two stages of the rocket that allowed hot gases to escape during the
''burn." Volatile rocket fuel spewed out when a rubber O-ring failed to seal the joint.
The average citizen could understand the mechanics of the commission's finding. After all, everyone
knows what happens when you pour gasoline on an open flame. What people found difficult to fathom
was why NASA had launched the Challenger when there was good reason to believe the conditions
weren't safe. In addition to the defective seal, the commission also concluded that a highly
flawed decision process was an important contributing cause of the disaster. Communication, as well
as combustion, was responsible for the tragedy.
As the person in charge of the Flight Readiness Review for NASA, Jesse Moore had the ultimate
authority to approve or scrub the shuttle mission. He relied on the assessments of managers
at the Kennedy, Johnson, and Marshall Space Centers, who in turn consulted with engineers from
the companies that designed the Challenger's subsystems. The film Apollo 13 dramatized
the final phase of this ''go/no-go" launch procedure.1 NASA has always taken the position that
''a launch should be canceled if there is any doubt of its safety."2
The day before the launch, Morton Thiokol engineers warned that the flight might be risky.
As the team responsible for the performance of the rocket booster, they worried about the below-freezing
temperature that was forecast for the morning of the launch. The O-ring seals had never been
tested below 53 degrees Fahrenheit, and as Thiokol engineer Roger Boisjoly later testified,
getting the O-rings to seal gaps with the temperature in the 20s was like ''trying to shove
a brick into a crack versus a sponge."3
The O-ring seals had long been classified a critical component on the rocket motor, ''a failure
point-without back-up-that could cause a loss of life or vehicle if the component failed."4
Yet when Thiokol engineers raised the safety issue in a teleconference, NASA personnel discounted
their concerns and urged them to reconsider their recommendation. After an off-line caucus with
company executives, Thiokol engineers reversed their ''no-go" position and announced that their
solid rocket motor was ready to fly. When the Kennedy, Johnson, and Marshall Space Center directors
later certified that the Challenger was flight ready, they never mentioned any concern
about the O-rings. At the top of the flight readiness review chain, Jesse Moore had every reason
to believe that the shuttle was ''A-OK."
Irving Janis, Yale social psychologist, was fascinated with the question of how an acknowledged
group of experts could make such a terrible decision. He was convinced that their grievous error
wasn't an isolated instance limited to NASA decisions, corporate boardrooms, or matters of a
technical nature. He believed he could spot the same group dynamic at work in other tragic decisions.
He was especially interested in White House fiascos-Roosevelt's complacency before Pearl Harbor,
Truman's invasion of North Korea, Kennedy's Bay of Pigs fiasco, Johnson's escalation of the
Vietnam War, Nixon's Watergate break-in, and Reagan's Iran-Contra scandal coverups. If Janis
were alive today he would probably also examine Clinton's approval of the raid on the Branch
Davidian compound in Waco, Texas. Janis didn't regard chief executives or their advisors as
stupid, lazy, or evil. Rather, he saw them as victims of ''groupthink."
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A Concurrence-Seeking Tendency
[The following notes were compiled from a variety of internet sources.]
Irving Janis originally defined groupthink as ''a mode of thinking that people engage
in when they are deeply involved in a cohesive in-group, when the members' strivings for unanimity
override their motivation to realistically appraise alternative courses of action." According to
his definition, groupthink occurs only when cohesiveness is high. It requires that members share
a strong ''we-feeling" of solidarity and desire to maintain relationships within the group at all
costs. When colleagues operate in a groupthink mode, they automatically apply the ''preserve group
harmony" test to every decision they face."
Janis introduced the concept of groupthink through the popular press in 1971. The idea struck
a responsive chord with policy planners who had hastily approved courses of action that just as
quickly turned out to be major blunders. The term groupthink paralleled the ominous expression
doublethink in George Orwell's novel 1984, and it immediately caught on among business
and government leaders as a catch-all term to refer to any ill-conceived group plan. In later extensions
of his theory, Janis emphasized that not all bad decisions are the result of groupthink, and not
all cases of groupthink end up failing.
Janis later proposed a refined conception of groupthink. To begin, there are six conditions that
make the occurrence of groupthink possible. The first of these factors is high group cohesiveness.
Usually cohesiveness leads to the free expression of ideas; however, in groupthink circumstances,
the opposite occurs. Second, the members have an authoritarian-style leader who tends to
argue for "pet" proposals. Thus, we would not expect groupthink to occur in groups that have a tradition
of democratic leadership. Third, the group is often isolated from the "real world"; that
is, the group is not forced to deal with what is happening "out there" beyond the group.
Fourth, the group does not have a definite procedure, or method, for decision making.
Fifth, the members of the group come from similar backgrounds and have similar
viewpoints.
The sixth condition for groupthink follows from Janis and Mann's arousal theory of decision making.
The group is in a complex decision-making situation that causes a significant amount of arousal
in each member, and the members feel that finding an alternative better than the leader's pet proposal
is unrealistic. Under these conditions, "defensive avoidance" will occur, and the group will either
procrastinate or, more likely, adopt the leader's pet proposal. The presence of any one of these
six conditions will not ensure that a cohesive group will suffer from groupthink. The more of these
conditions that exist, however, the more likely it is that groupthink will occur.
Because a close-knit group at the top of an organization is insulated from outside opinions,
Janis suggested breaking up into subgroups that work simultaneously on the same issue. Each subgroup
can draw on the expertise of trusted subordinates who are encouraged to give their advice freely.
Leaders climb to the top by being ''take-charge" people. Unfortunately, the very force of personality
that placed them in authority can have a chilling effect on group candor. Some leaders are able
to lead an impartial discussion without imposing their opinions, but Janis's prescription for open
inquiry is to have the leader periodically leave the group so that members will feel free to express
their personal views.
Since many groups have no set procedures to ensure close scrutiny of favored solutions, Janis
recommended assigning the role of critical evaluator to every member. Instead of representing his
or her own constituency or narrow area of expertise, each participant would take responsibility
for the entire plan. Of course, a leader's request for critical comments is a hollow exercise if
he or she shows irritation or cuts off debate when the group starts to carve up a cherished idea.
If these measures fail, we can spot the presence of groupthink by its observable effects (listed
below).
Symptoms of Groupthink
What are the signs that group loyalty has caused members to slip into a groupthink mentality?
Janis listed eight symptoms that show that concurrence seeking has led the group astray. The first
two stem from overconfidence in the group's prowess. The next pair reflect the tunnel vision members
use to view the problem. The final four are signs of strong conformity pressure within the group.
- Illusion of Invulnerability.
Janis summarizes this
attitude as ''everything is going to work out all right because we are a special group."
Belief in the Inherent Morality of the Group. Under the sway of groupthink, members
automatically assume the rightness of their cause.
Collective Rationalization. This collective rationalization
supported a mindset of ''hear no evil, see no evil, speak no evil." (believe that nothing can be
wrong with their plan even if there is significant evidence to prove otherwise)
Out-group Stereotypes. Typically negatively biased with oversimplification of member
similarities (profiles)
Self-Censorship. group members don't share their ideas with the rest of the group
because of fear of being rejected
Illusion of Unanimity. silence can often be interpreted as acceptance
Direct Pressure on Dissenters. a group member who questions the rightness of the
goals is pressurized by others into concurring/agreeing.
Mindguards. ''Mindguards" protect a leader from assault by troublesome ideas.
Does all this automatically produce a ruinous outcome? Not necessarily. Groups that do everything
wrong may luck out from time to time. There are also many routine occasions when a groupthink mode
is actually helpful because it makes for a speedy and amicable consensus on issues of minor importance.
But according to Janis, when a group confronts a great threat or a grand opportunity, concurrence-seeking
almost always produces an inferior solution.
Most students of group process regard members' mutual attraction to each other as an asset. Marvin
Shaw, a University of Florida psychologist and the author of a leading text in the field, states
this conviction in the form of a general hypothesis that has received widespread research support:
''High-cohesive groups are more effective than low-cohesive groups in achieving their respective
goals." But Janis consistently held that the ''superglue" of solidarity that bonds people together
often causes their mental process to get stuck:
The more amiability and esprit de corps among members of a policy-making in-group, the
greater is the danger that independent critical thinking will be replaced by groupthink.
. . . The social constraint consists of the members' strong wish to preserve the harmony
of the group, which inclines them to avoid creating any discordant arguments or schisms.
Janis was convinced that the concurrence-seeking tendency of close-knit groups can cause them
to make inferior decisions.
Groupthink may result in the following:
- The group limits the number of alternative courses that it considers. Usually such a group
examines only two options.
- The group fails to seriously discuss its goals and objectives.
- The group fails to critically examine the favored course of action. The members do not criticize,
even in the face of obvious problems.
- The members do not reach outside the immediate group for relevant information.
- The group has a selective bias in reactions to information that does come from outside.
The members pay close attention to facts and opinions that are consistent with their favored
course of action and ignore facts and opinions that are inconsistent with their choice.
- After rejecting a possible course of action, the group never reconsiders the action's strengths
and weaknesses.
- The group fails to consider contingency plans in case of problems with implementation of
the course of action the members choose.
Avoiding the worst of Groupthink
Janis offers recommendations to avoid bad group decisions.
- The leader can refuse to state which course of action he/she prefers until late in the decision-making
process.
- Appoint group members to roles which evaluate group processes and contributions of other
members (e.g., Devil's Advocates).
- Challenge the data - assess its significance and reliability. In discussion, focus fully
on areas of doubt and uncertainty - be tenacious in challenging tethered assumptions and presenting
the fullest possible information.
- Group leaders need to solicit and receive feedback/criticism from others re- his/her judgments.
This feedback and examination process needs to seen as a contributor to quality and not a gripe
or complaint mechanism. The potential for holding grudges and punishment of "critics" must be
avoided.
- Consult with informed people outside the group and invite them to meetings. The outside
people may add information and challenge the group's ideas/assumptions.
- Set aside time to rehash earlier decisions, thus avoiding "premature closure.". This provides
chances to consider any new objections to the decisions that the group members might have.
- Help the group to take regular time-out breaks to give individuals room to re-think, re-formulate,
gather further data and re-present. Sub-groups can do more detailed work for re-presentation.
Group cohesion as a problem-analysis and solution development unit is assisted as difficult
tasks are decomposed and alternatives properly synthesized.
- Have the group continue searching for warning signs even after the chosen course of action
has begun to be implemented.
Two further phenomena, "risky shift" and "cautious shift" and may also be seen.
A. With Risky shift , the decision group becomes more radical and willing to take a risk.
The decision makes as a group gamble more than an individual often would when making the same
decision.
B. With Cautious shift - the group shifts to being more conservative than solo individuals
would usually be.
Risky Shift
Risky shift or cautious shift behaviors in a group may undermine good decision making and group
members need to be sensitive to such processes and their implications.
We normally think that committee decisions are usually slow and cautious where think that bland
consensus compromises result yet we be frustrated by slow, rule bound, bureaucratic processes involved.
However committees can often be bolder and more adventurous decisions than single members acting
alone. Why?
- Some risk takers are more powerful and persuasive in a group situation.
- Member responsibility is diffused as there is a degree of anonymity (a corporate veil) in
the group. The group is responsible for decisions and risky decisions carry less of a burden
for individuals.
- The converse also applies, a group can be overly cautious.
- A group can polarize into cautious and risk-taking opposites.
- As with groupthink, the group may not rationally and systematically process decisions based
on full information and all member views.
Group behavior research into 'choice shifts or group polarization' offers more insight into some
of group processes which may be enacted. When deciding between dilemmas involving different levels
of risk, groups sometimes assume riskier positions than those held by individuals prior to joining
the group. When reaching consensus "the group" did not average individual judgments but 'shifted'
to greater risk but not always. Sometimes there was no shift or sometimes the group demonstrated
greater caution.
When, in a group, individuals make social comparisons and adjust prior positions relative to
the group majority view.
- In group discussion, information and arguments may favor a 'majority view'. The individual
is exposed and, conforming, may shift to the emerging polar position of the majority.
- Individuals face a choice of being members (in) or marginalized (out). To be accepted they
need to anticipate the group's perspective and this may move them further towards 'the norm'
and the group average leans to more to the extreme or polarized position.
- In a group social diffusion of responsibility may be evident - those who are less dominant
may not press their point of view as they are able to hide behind 'cabinet responsibility'.
Diffusion of Responsibility
The story of a woman who was murdered in 1964 just outside her New York home is often told to
illustrate the cautious and risky shift phenomena. She fought the murderer off but he latter returned
and attacked her again over a 30 minute period. She screamed for help but nobody responded or called
the police even though her cries were heard by many. Did everyone assume that someone else was taking
action? The burden of responsibility was diffused ..... by the assumption that "somebody was doing
something about the screams ".
Social diffusion of responsibility reflects a belief that the presence of other people in a situation
makes one less personally responsible for the events that occur in that situation.
In terms of risky shift, the individual is less included to challenge the tethered assumptions
of the majority position - but instead may find it more comfortable to hide within a 'majority'
view. Thus the 'risky shift' or 'cautious shift' group decision may prevail. The individual - post
decision - can always state in private, 'Well, I really felt that too big a risk was being taken,
but everyone wanted to move in that direction'.
Scapegoating
The term scapegoating comes from the ancient Hebrew tradition in which, on the Day of Atonement,
the Rabbi would confess the sins of the community over the head of a goat. The goat would then be
released into the desert, carrying the sins of the community away with it.
Similarly, one way to view many acts of discrimination is to see them as examples of displaced
aggression. According to frustration aggression theory, frustration leads to an aggressive
impulse directed towards reducing that frustration. However, often it is impossible to aggress against
the source of the frustration or even to accurately identify a target. In many instances, the aggression
will shift to convenient scapegoats, which are often members of other groups (e.g., minority groups)
or people with little power to retaliate (e.g., kick the dog).
Historical examples of scapegoating include Hitler's successful campaign to blame most of Germany's
problems on European Jews. The benefits of scapegoating include:
- Deflection of negative attention and punishment.
- Avoidance of confronting the complexities of the real problems.
- Avoidance of the social and financial expenses involved in confronting powerful groups (e.g.,
veterans or senior citizens) and interests (e.g., large corporations).
Society
Groupthink :
Two Party System
as Polyarchy :
Corruption of Regulators :
Bureaucracies :
Understanding Micromanagers
and Control Freaks : Toxic Managers :
Harvard Mafia :
Diplomatic Communication
: Surviving a Bad Performance
Review : Insufficient Retirement Funds as
Immanent Problem of Neoliberal Regime : PseudoScience :
Who Rules America :
Neoliberalism
: The Iron
Law of Oligarchy :
Libertarian Philosophy
Quotes
War and Peace
: Skeptical
Finance : John
Kenneth Galbraith :Talleyrand :
Oscar Wilde :
Otto Von Bismarck :
Keynes :
George Carlin :
Skeptics :
Propaganda : SE
quotes : Language Design and Programming Quotes :
Random IT-related quotes :
Somerset Maugham :
Marcus Aurelius :
Kurt Vonnegut :
Eric Hoffer :
Winston Churchill :
Napoleon Bonaparte :
Ambrose Bierce :
Bernard Shaw :
Mark Twain Quotes
Bulletin:
Vol 25, No.12 (December, 2013) Rational Fools vs. Efficient Crooks The efficient
markets hypothesis :
Political Skeptic Bulletin, 2013 :
Unemployment Bulletin, 2010 :
Vol 23, No.10
(October, 2011) An observation about corporate security departments :
Slightly Skeptical Euromaydan Chronicles, June 2014 :
Greenspan legacy bulletin, 2008 :
Vol 25, No.10 (October, 2013) Cryptolocker Trojan
(Win32/Crilock.A) :
Vol 25, No.08 (August, 2013) Cloud providers
as intelligence collection hubs :
Financial Humor Bulletin, 2010 :
Inequality Bulletin, 2009 :
Financial Humor Bulletin, 2008 :
Copyleft Problems
Bulletin, 2004 :
Financial Humor Bulletin, 2011 :
Energy Bulletin, 2010 :
Malware Protection Bulletin, 2010 : Vol 26,
No.1 (January, 2013) Object-Oriented Cult :
Political Skeptic Bulletin, 2011 :
Vol 23, No.11 (November, 2011) Softpanorama classification
of sysadmin horror stories : Vol 25, No.05
(May, 2013) Corporate bullshit as a communication method :
Vol 25, No.06 (June, 2013) A Note on the Relationship of Brooks Law and Conway Law
History:
Fifty glorious years (1950-2000):
the triumph of the US computer engineering :
Donald Knuth : TAoCP
and its Influence of Computer Science : Richard Stallman
: Linus Torvalds :
Larry Wall :
John K. Ousterhout :
CTSS : Multix OS Unix
History : Unix shell history :
VI editor :
History of pipes concept :
Solaris : MS DOS
: Programming Languages History :
PL/1 : Simula 67 :
C :
History of GCC development :
Scripting Languages :
Perl history :
OS History : Mail :
DNS : SSH
: CPU Instruction Sets :
SPARC systems 1987-2006 :
Norton Commander :
Norton Utilities :
Norton Ghost :
Frontpage history :
Malware Defense History :
GNU Screen :
OSS early history
Classic books:
The Peter
Principle : Parkinson
Law : 1984 :
The Mythical Man-Month :
How to Solve It by George Polya :
The Art of Computer Programming :
The Elements of Programming Style :
The Unix Hater’s Handbook :
The Jargon file :
The True Believer :
Programming Pearls :
The Good Soldier Svejk :
The Power Elite
Most popular humor pages:
Manifest of the Softpanorama IT Slacker Society :
Ten Commandments
of the IT Slackers Society : Computer Humor Collection
: BSD Logo Story :
The Cuckoo's Egg :
IT Slang : C++ Humor
: ARE YOU A BBS ADDICT? :
The Perl Purity Test :
Object oriented programmers of all nations
: Financial Humor :
Financial Humor Bulletin,
2008 : Financial
Humor Bulletin, 2010 : The Most Comprehensive Collection of Editor-related
Humor : Programming Language Humor :
Goldman Sachs related humor :
Greenspan humor : C Humor :
Scripting Humor :
Real Programmers Humor :
Web Humor : GPL-related Humor
: OFM Humor :
Politically Incorrect Humor :
IDS Humor :
"Linux Sucks" Humor : Russian
Musical Humor : Best Russian Programmer
Humor : Microsoft plans to buy Catholic Church
: Richard Stallman Related Humor :
Admin Humor : Perl-related
Humor : Linus Torvalds Related
humor : PseudoScience Related Humor :
Networking Humor :
Shell Humor :
Financial Humor Bulletin,
2011 : Financial
Humor Bulletin, 2012 :
Financial Humor Bulletin,
2013 : Java Humor : Software
Engineering Humor : Sun Solaris Related Humor :
Education Humor : IBM
Humor : Assembler-related Humor :
VIM Humor : Computer
Viruses Humor : Bright tomorrow is rescheduled
to a day after tomorrow : Classic Computer
Humor
The Last but not Least Technology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
Ph.D
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