THE EMERALD Isle’s ill-fated love affair with bricks and mortar has been well documented in best-selling books by those who claim to have anticipated the meltdown, those who protest their bullish prognostications were misinterpreted, and those who have capitalised on the public’s need for explanations.

Meanwhile, the Government has squandered scarce resources on reports that simply recount the sordid tale, although the latest version highlights the psychological factors that paved the way to disaster.

All bubbles and busts are a product of human nature, though the Irish experience has been traced to “groupthink” – a faulty decision-making process that leads to a low probability of successful outcomes.

The groupthink concept was developed in the early-1970s by Irving Janis, a psychologist at Yale, who attempted to determine why groups, often consisting of individuals with exceptional intellectual ability and talent, make irrational decisions. The basic idea occurred to Janis as he read Arthur Schlesinger’s account of the Kennedy administration’s Bay of Pigs fiasco in the former presidential adviser’s best-selling autobiography, A Thousand Days.

Janis asked: “How could bright men like John F Kennedy and his advisers be taken in by such a stupid, patchwork plan as the one presented to them by the CIA representatives?”

The Kennedy administration’s ill-fated decision in April 1961 to launch Operation Zapata, the plan to invade Cuba and overthrow the government of Fidel Castro, seems incredible in hindsight. The invading force included roughly 1,400 Cuban exiles, of which just 135 were soldiers, versus Castro’s army of some 200,000 men; the element of surprise had been lost as newspapers including the New York Times published details of the plan; and, US involvement could not be disguised as American training of the Cuban exiles in Guatemala was well-known.

Operation Zapata went ahead nevertheless, and not surprisingly, failed spectacularly with all of the invading force either captured or killed within days. The ill-fated decision proved detrimental to US interests in Latin America and to relations with the Soviet Union. Kennedy himself would later ask, “How could I have been so stupid as to let them go ahead?”

Janis broadened his study to cover a number of further high-profile strategic errors including the naval high command’s decision in 1941 not to prepare for a Japanese attack on Pearl Harbour, President Truman’s decision in 1951 to send troops to North Korea, and President Johnson’s decision in 1967 to increase the number of troops in Vietnam.

He uncovered a common pattern of misguided thinking that included an illusion of invulnerability, discouragement of dissenting opinion and an illusion of unanimity.

Janis defined groupthink as “a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when members’ striving for unanimity override their motivation to realistically appraise alternative courses of action”.

Janis highlighted a number of conditions necessary to produce groupthink, but social psychology experiments have long documented conformity effects that are likely to give rise to faulty decision-making. Solomon Asch demonstrated as far back as 1951 that group decisions, even obviously bad ones, influence individual behaviour.

His famous experiment consisted of eight members, of which seven were confederates and one was the subject.

Asch asked the group to determine which of three lines matched the length of a separate fourth line. Each member named their choice aloud, gave correct answers during the first few trials, but then gave obviously incorrect answers.

Surprisingly, more than a third of the subjects conformed to the group’s incorrect judgments and more than 60 per cent gave an obviously incorrect answer at least once.

The psychologist categorised the behaviour of the subjects who mostly went with the majority – some were unaware that the group had distorted their views; others concluded that their perceptions were inaccurate and voted with the majority, while others suppressed their own views and knowingly went with the group. The experiment has been repeated several times since and the results have always been similar.

Asch modified the experiment and discovered ways in which conformity and the resulting faulty decision-making can be minimised. First, he allowed the confederates to voice their answers and the subjects to reveal their choice in private. Under these conditions, the subjects did not conform and gave the correct answer. Second, he varied the number of confederates who gave an incorrect answer and discovered that if just one gave the correct answer, subjects did not conform to the majoritys incorrect response.

The lessons from the faulty decision-making that saw the Irish banks transformed from risk managers to sellers of speculative loans are clear. Diverse opinions based on sound analysis are to be valued rather than frowned upon. To quote Gen George Patton: “If everyone is thinking alike, then someone isn’t thinking.”

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