| Mob Mentality: Are Entrepreneurs Immune? |  |
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By William Bonner and Lila Rajiva
Remember explaining to your mother why you’d taken some (ill-advised) action because all your friends were doing it? And remember her stock response? If all of your friends jumped off a bridge, would you do it, too? she would ask, hands on hips and voice rapidly escalating to tones of incredulity. Unfortunately for you and your mother—the answer probably would have been yes. What’s more, it probably would still be. It seems we humans never outgrow the powerful urge to go along with the crowd, even when the crowd’s decision will result in financial loss, humiliation, physical injury, or in extreme cases, death.
Just think about this common scene on the evening news. A sports team has just won a big game, and to celebrate it a group of otherwise sane and responsible people have collectively determined that it’s a good idea to set cars ablaze, clamber up telephone poles and street lamps, and jump over bonfires. Why? Because they’re no longer thinking as individuals but have given in to the “mob instinct”—which rarely results in anything but catastrophe.
That mob mentality can have devastating effects on human behavior. It’s part of the reason why we blindly follow leaders who are clearly wrong, succumb to witch hunts stirred up by pundits, and buy ridiculously overpriced stocks just at the moment when we should be selling them. The secret to understanding politics, markets, wars, fads, and manias is understanding the problem that arises when human beings make decisions as part of a big group even though they are wired to operate best in small groups. This kind of “public thinking” is a setup for disaster.
Read on to learn about the absurd and sometimes frightening ways in which the herd instinct drives us as individuals, as a nation, and as world citizens… “