In 1895 Gustave le Bon published a book “Psychologie des foules” (The Crowd, a study of the popular mind) in which he, rather convincingly, argues that groupthink as we call it today is essentially a contradiction in terms as groups, crowds, assembles etc.etc. do not think and instead descend to the lowest possible denominator of emotional impulsive action. Both Hitler and Mussolini apparently kept a copy at their bedside in order to read up on how to manipulate the crowds to their advantage. Interestingly both “prestige” and “contagion”, some of the factors identified by le Bon, are clearly dominant in the brokerage business, particularly in operations that used to be referred to as “boiler-rooms”. They , of course, displace rational thinking. The book is a good read as a whole, but for the moment what interests me is a footnote on page 121 that reads as follows;

This is from the Economist and it is about how expenditures, in this case on railways, are voted on. More interestingly le Bon goes on to mention specifically Portugal, Greece, Spain and Turkey as bankrupt countries that used the 4/5 reduction in the payment of interest on bonds as a means to again balance their budgets. Today, 152 years later, nothing has changed except that Turkey, then the Ottoman Empire, is not yet on the list.

For those that prefer English, below is a rough translation.The book is available on the internet;