The second group was subdivided into eight discrete groups or "worlds". An individual within one of these worlds could see the song-ratings by his fellow world-members, but not the ratings of non-members. The researchers found that individuals' behaviours were deeply swayed by the ratings given by their peers:
In all the social-influence worlds, the most popular songs were much more popular (and the least popular songs were less popular) than in the independent condition. At the same time, however, the particular songs that became hits were different in different worlds, just as cumulative-advantage theory would predict. Introducing social influence into human decision making, in other words, didn’t just make the hits bigger; it also made them more unpredictable.
...The song “Lockdown,” by 52metro, for example, ranked 26th out of 48 in quality; yet it was the No. 1 song in one social-influence world, and 40th in another.
Similar things happen in wider economies. During the early 2000s house-building was in the Irish zeitgeist. Just as the arbitrary popularity of particular songs on the New York Times article was reinforced by peer perceptions of their worth, in Ireland building houses was a self-perpetuating fad that drew ever more money and labour into an upward spiral of construction.
People talked offhand about "investing" in property, indicating an assumption that prices could only increase. Ireland's household saving rate became exceptionally low, while household debt grew extremely high, both signs that Irish people expected the future to bring even greater wealth than the present. Employment in the construction sector bloated 40% between 2002 and 2008; there was a general rush in the same direction as public optimism and high borrowing trends became the norm.
That optimism was misplaced. Houses were not wise investments. Populist increases in government spending were paid for by taxes on construction, and immediately became too expensive once that revenue dried up. The zeitgeist was destructive, a great number of people got it wrong.
Today it is popular to blame individual actors from the bubble years - politicians, bankers and builders - but the low savings and high debt rates indicate that there was a wider spending frenzy that took in many more people. There were dissenting voices during the 2000s but most people took their cues from their optimistic peers and neighbours instead of pessimistic rebel economists, dragging the economy towards its collapse.
This is all quite depressing.
Yet remember that conformity and a wide public optimism turned out to be misplaced and destructive, leading to the economic crisis. Might the majority of people now also be mistaken in their more recent pessimism? Might there not be value in undermining the new pessimistic consensus just as there was value in the 2000s in warning against the optimism? In finding scapegoats in politics and business many people may be missing the destructive nature of conformity itself, be it positive or negative.
The majority of people were wrong in the recent past. Consumer sentiment was high in the early 2000s when the economy was built on sand, yet it is much lower today. Like the credit rating agencies that proved their inability to predict the future, perhaps we should take hope from today's pessimistic zeitgeist. They were wrong before, hopefully everyone is wrong again.