Groupthink is as strong in Ireland as it was before the financial crisis
Published 29/01/2016 | 02:30
At the Fine Gael ard fheis last weekend, one TD declared with great enthusiasm: "It's an extraordinary time. The country is in very safe hands. Another two years and the country will be on such a trajectory we will be unstoppable."
When is the last time we heard that kind of talk? Oh yes, it was during the boom. It is very hard to believe that anyone could think like that after all that has happened. But there it is.
The truth is that we are still in a very uncertain place. In fact, the world is inherently uncertain. This is why so many predictions come unstuck.
Many of the world's most powerful people met in Davos, Switzerland, last week for the annual World Economic Forum. These figures have on tap the best advice money can offer. But several times in recent years, Davos has called things wrong.
In the immediate aftermath of the economic crash, the consensus at Davos was that the world was heading into a 1930s-style Great Depression. Things became very bad, but for most countries not as bad as that.
At a later meeting, the consensus was that the 'Arab Spring' would lead to, well, an Arab Spring. Now we know better. It has led to anarchy and bloodletting on a grand scale.
Davos also failed to see the economic crash of 2007 and 2008 coming. This is what the most expensive advice money can buy gets you.
Why are we so fond of making big, confident predictions? It's because we like to think we are in control. The illusion that we are in control suits politicians in particular. It allows them to present a confident front to voters.
It suits us as well. We can only handle so much uncertainty.
The report of the Banking Inquiry, like the other reports into the circumstances of the economic crash, is really an investigation of human nature.
To this extent, the various investigations shouldn't have restricted their enquiries to politicians, economists, bankers and so on. They should also have sought out social psychologists to tell us why we feel this need to think we are in control, to tell us more about confirmation bias and groupthink and how to avoid these things in the future.
In the run-up to the crash, all we wanted to hear was whatever confirmed what we believed anyway, namely that if the boom ever came to an end, it would be with a soft landing.
This is why the handful of critics of the boom were marginalised, if not demonised.
Business journalist Simon Carswell told the inquiry: "For these [political] parties, it was too comfortable and self-serving for some to stay in the crowd and stick with the consensus… The result was that contrarians were ridiculed, silenced or ignored to ensure the credit-fuelled boom continued for years..."
Economists, politicians, the media, bankers, businessmen, trade unionists and so on, convinced themselves that we were unstoppable.
On the role of the media, journalism lecturer Harry Browne said: "Print and broadcast media in Ireland played a difficult-to-measure but almost certainly significant role in the inflation of the property bubble and the legitimisation of risky behaviour by the financial services sector in the lead-up to the crisis of 2007 and 2008."
This meant that day in, day out, we were exposed to 'happy talk' about the economy. The occasional dissenting voice simply cuts no ice in such an environment, especially when those voices are so easily marginalised and are given platforms only to give the appearance of a debate.
This is groupthink in action. Groupthink takes hold when we listen only to evidence that confirms what we want to believe.
This is an extremely easy thing to do when your view is ideologically dominant. It is very hard to do when your view is subjected to constant attack.
Groupthink is especially deadly in a small society where dissenters are few in number anyway. We ought to have learnt that in the days of Catholic dominance.
Groupthink extends beyond the economy into debates about social issues as well. We saw it in the run-up to the marriage referendum and we are seeing it again now in the run-up to a likely referendum on abortion.
There are certain things that all 'respectable' people are meant to believe and certain things they are meant to shun. The desire to be 'respectable' easily hardens into a dangerous conformism. We'd rather be 'respectable', to have views our peer approve of, than hold unpopular views.
That desire is so strong that it has proved absolutely impervious to the crash. Instead of becoming wary of consensus, instead of becoming more willing to listen to dissident voices, the craving to hold approved views remains fully intact.
'Sunday Independent' columnist Gene Kerrigan in a recent article worried that the third of voters who support the likes of Sinn Féin, People Before Profit and the Anti-Austerity Alliance are being demonised.
Precisely the same thing happened to the 38pc of voters who voted against same-sex marriage in May.
When he appeared before the Banking Inquiry, Derek Moran, secretary general of the Department of Finance, said that in formulating economic policy at the Department "dissent ... or contrarian views … are accommodated within that sort of dialogue that goes through the process". I hope that's true.
It is not true of any other aspect of decision-making I can think of. Politicians and policy-makers live in as insulated a world as always. They are exposed only to approved views and dismiss unpopular views in precisely the same way as during the boom.
Worse than that, they take pride in dismissing those views.
If we really want to learn the lessons of the economic crash, then we have to guard against groupthink in all areas. We need to incorporate dissenting voices into the decision-making process across the board in the same way the Department of Finance appears to be doing.
Unfortunately, the chances of that happening are extremely remote. We feel so comfortable being part of the crowd that given a choice between being shunned by the crowd and going over a cliff, we'd prefer to go over the cliff. Of course, we'd convince ourselves there was no cliff at until far too late. After all, that's what happened before the crash.