Word of mouth is probably the best method for evaluating products and services. But it is dangerous for evaluating ideas. In fact, it poses such a grave danger to us in the present economic crisis that feel I need to sound another warning and take active steps to try to counteract the almost certain disaster that word of mouth is about to cause. [See previous posting here]
While word of mouth is usually a powerful and positive force, it also has its toxic forms — rumor and gossip. In its extreme forms, WOM can be so dangerous that it is no exaggeration to call it a weapon of mass destruction.
As an expert in word of mouth, I have to say that I'm stunned by the amount of groupthink and herd mentality that's rampant right now during our present financial crisis. While I was optimistic that the WOM of the Internet can be a constructive force, I'm getting more and more pessimistic. The situation is getting worse, and I see no signs of a turnaround.
I think we’re seeing only the tip of the iceberg. We have the classic ingredients of panic and mob rule: frustration, anger, the urgency for action that a crisis seems to demand, outraged people blindly repeating widely held myths, strong peer pressure not to raise certain questions, and many more. When you add dashed hopes, shattered dreams, moral outrage and populist indignation at unfair treatment, you have an explosive mixture. This mixture will be ignited when people realize that they are the victims of a Ponzi scheme that makes Bernie Madoff look like an amateur: that their money was hijacked in 1913 by the Federal Reserve, then decoupled from gold in 1933 and 1971, and gradually turned into worthless paper by a cleverly engineered inflation calculated to create the illusion of prosperity by making more dollars looks like more money.
Most Republicans and Democrats are on the same side of the major economics issues, having adopted Keynesian economics many decades ago. They’re only dickering over the details of how we can spend stimulus money and how much to spend.
We are going down the path that, on some level, almost everyone realizes cannot work and will make things worse.Yet, most people, including most lawmakers, believe that economics is so complicated that they cannot possibly figure out what is going on. So, they are left to repeat plausible sounding bromides. This is very dangerous if the prevailing opinion happens to be wrong. In such a case, people just dig themselves in deeper, while comforting themselves by the false sense of certainty that comes from phrases like “we all need to work together,” “we need bipartisan agreement” and “everyone agrees that…”
When you are trying to decide on whether or not to purchase a product, word of mouth is a very good strategy because people can reliably report their direct experiences with it. Instead of spending huge amounts of energy sifting through mountains of information, how far wrong can you go with “I’ll have what he’s having”?
But, “I’ll have what he’s having” in the realm of ideas is a disaster. Here, Follow the Leader is a dangerous game. Instead, “20 Questions” is much more appropriate, even if much more unsettling.
I am not upset that people don’t have answers. I am not upset that people don’t have my answers. I am very upset that fear and uncertainty — and the deadly form of word of mouth called Groupthink — are preventing people from asking the tough questions and thinking for themselves.
In subsequent posts, I’ll have some suggestions about what’s needed to turn the situation around.