Monday, March 16, 2009

Group Think

by Lucy Puryear, M.D.

It is no longer 1984, but George Orwell was on to something when he penned his classic and prescient novel. Published in 1949, Orwell wrote of an eerie world where individualism was rejected and universal group adherence was mandated. Although the fear that 1984 would resemble "1984" the novel did not come true, many of his concepts are relevant to our culture today.

I would like to talk about group behavior and crime. In 1979, social psychologist Irving Janis coined the phrase "groupthink." He defined groupthink as "a mode of thinking that 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."

I am proposing that groupthink contributed to the financial crisis that we are facing today and allowed white collar criminals like Bernie Madoff and Sir Allen Stanford (pictured left) to swindle large numbers of intelligent investors. Those of us on the sidelines can't imagine how so many were taken in by unrealistic promises of over-the-top financial returns. But I'm certain if I saw the fortunes many of my friends were making I would want to join the party. When Madoff's funds consistently beat the market while others didn't, common sense would demand questions be asked. But no one wants to tell the Emperor he's naked, especially if they're serving caviar and champagne at the party.

It takes a charismatic, talented individual to conceive of and pull off a massive fraud on the scale of Stanford's and Madoff's. But without individuals following, the Ponzi scheme never would have worked. It was only when there were no more investors left with money that the plan fell apart. But we weren't immune to the bandwagon.
The stock market is a prime example of groupthink. We think the economy is doing well and we invest as we see stock prices rising. We think the economy is doing a nosedive and we panic, pulling our money out and stopping our spending. None of really knows what the economy will or won't do, but the group dynamic says we're in really bad shape here whether or not we personally are.
The dominant message from the politicians is restoring consumer confidence. Meaning, if we believe things will get better, we will reinvest and re-spend and the stock market will go up. The stock market often has less to do with real data and more about how people feel. And right now we're all feeling bad.

It is not just financial malfeasance that is made possible by groupthink. Large crimes against
humanity require people to function with a singular group mentality rather than with individual judgement. Why did so many Germans, otherwise good people, tolerate the Holocaust and the torture and slaughter of millions? How is it possible that Jim Jones in Ghana convinced hundreds to drink purple Kool-Aid? David Koresh? Marshall Applewhite (shown right)? All of these men became cult leaders, convincing numbers of usually bright, well-meaning people to follow them, even to their deaths.

Groupthink is frightening and we are all susceptible to it. It takes a unique individual to stand up to the mob and risk being ridiculed, excluded, or worse. Remember what it was like to be a teenage girl, listening to others make fun of your best friend, but deciding to go along so that you could be a part of the cool crowd and not be ostracized from the clique? As the examples above prove, people will choose death over losing their place in the group and being left behind. Most frightening of all, as we become more and more enveloped by groupthink, we begin to think of those thoughts and ideas as our own and lose our ability to think for ourselves.

People are not responsible for the choices criminals make, but in certain situations it takes our cooperation (unconscious though it may be) to become victims. Those charismatic, narcissistic, antisocial individuals know a lot about groupthink, and how to use it to their advantage.


Rose said...

Very interesting perspective, thanks. I think you may be on to something.

FleaStiff said...

Groupthink and crime; Groupthink and investments?
I'm not so sure.
Investment decisions are usually not made as part of a group. I think a more apt analogy might be to these Black Widows that prey on men with money.
Its a loss of all perspective once some great lure is dangled in front of them. A con man offering returns that are too good to be true might be similar to a situation wherein a beautiful woman is able to start living with a wealthy man without having been subjected to a private-detective screening. Its a personal and private decision rather than "groupthink".

cheryl said...

I can hardly believe it, but I agree with Flea on this one. I don't see the relationship between private investment and "group think". Unless there is a culture of wealth seekers that I know nothing about.

A Voice of Sanity said...

Jim Rockford was right. Let the suckers hook themselves, let them beg to invest. It still works.