[Viewpoint] The perils of groupthinkThe International Monetary Fund last week issued a rare self-critical evaluation. The report on the Fund’s surveillance performance between 2004 and 2007 by its internal independent evaluation office forthrightly acknowledged that the fund has failed in its fundamental role of economic watchdog to guard against the risks and dangers of the global economy before the Wall Street-triggered meltdown.
The auditing body blamed the IMF’s failure in detecting and warning of pertinent risks on a “high degree of groupthink, intellectual capture, a general mindset that a major financial crisis in large advanced economies was unlikely.” I cannot agree more, having had the experience of serving in the organization. The Washington-based institution may be better organized and effective than its sister entity the World Bank, but remains rigidly dogmatic in its mindset and assessment.
The critique could raise the credibility of the institution. Any organization can fall prey to groupthink. A voice out of tune with general opinion and conventional wisdom is often ignored or muffled into silence no matter how right it may be.
“Intellectual capture” should resonate as a strong word of warning to today’s intellectual elites, especially economists. It could be more perilous to our society than a group mindset in the long-term.
The opinions of mainstream intellectuals can influence the systems and policies of today and set the direction for the future of society. The pupils of neoclassical economics that dominate today’s mainstream economics and the American and British institutional school of thought have been prone to blind faith in the market, determined by supply and demand through functional efficacy and human rational choices.
Such unrestricted confidence in market capabilities and functions was prevalent in academia, the media, governments, parliaments and international organizations like the IMF, accelerating the liberalization of financial markets since the 1970s and creating vulnerabilities everywhere that experts and authorities alike failed or refused to see. The result was a global financial crisis.
Such traps of self-indulgence and self-assurance are omnipresent, not only in economics, but also in diplomatic, security, social and public policy fields. Public institutions as well as corporations and press organizations can slip into them. The pitfall of the collective mindset is especially deep in a polarized community. In order to defeat and overwhelm the opponent, one must be armed with sensational and sharp weapons of thought to attack with tenacity. In the process, one becomes confined to one train of thought and argument.
When universities, corporations and the media present biased and self-delusionary opinions and products, they pose less danger. The public and consumers can shun them and move on to better choices.
But it is a different matter when public institutions that make and implement policies fall into the same trap because the public becomes an innocent victim to their bad decisions.
Local government organizations, the central banks and financial supervisory institutions too should have a systematic mechanism to watch over them. One idea would be enhancing and expanding the role of the Board of Audit and Inspection. In addition, government organizations should expand the hiring of outside experts and young people to breathe new air into the bureaucratic system. An organization of self-bred staff cannot timely recognize and react to the unpredictable risks of today’s fast-changing society.
The government, ruling party and presidential office should be more alert to the risk of groupthink and intellectual traps. In the democratic power game, the process of attacking and discounting political rivals to win votes and gain power forces every player to go along with the groupthink rule.
When lines are drawn, players group strongly with their own colleagues and ideas in order to effectively triumph over and silence the opposing team. At the end of the day, both parties find themselves poles apart in their respective groupthink. The five-year presidential time limit fans zeal and a single-minded determination to achieve goals.
But these are losing, not winning, factors. The president should, most of all, watch out for these precarious risks. Teamwork is effective to get the work done, but can at the same time feed groupthink frailties.
The president and government should stop and look around if any of their approaches on North Korea and economic affairs are byproducts of groupthink mentality.
*The writer is a professor of Songang University School of International Studies.
By Cho Yoon-jae