Dec

18

I have been thinking of claques, the group who were hired to go to operas and other theatrical events since time immemorial, and were paid to laugh, cry, and clap. We see them often in the markets, and almost every fixed system, no matter how bad or how out of date, has its group of paid supporters who proclaim how good the results they’ve had from using it are. One finds them amongst groups of noble traders exchanging propaganda on how this book, that system, this personage is a great boon to mankind, and the competitors are the worlds worst.

One sees this behavior in the orchestrated upgrades of brokerage houses, that invariably come after the market has hit a bottom, with their star analyst recommending an increase of 5 percentage points in the stock allocation, and the last remaining weak long position (all too often myself) being extricated from his holdings. One sees it in the news about heavy selling and how the technicals look bad, that often follows the big boys having established a short position in the market. One sees it when this or that eminence goes on television to discuss how he sees imminent Armageddon in the markets unless the agrarians get elected — or how inflation is sure to explode in the next 10 years. One sees it in the threatened actions against anyone who reports that this or that trader has lost billions for his former customers and fund holders. One sees it in the second handers, down and out former stars who disseminate the idea that the market cannot go up to their followers and conservative news men, while the Fed Chairman is establishing his credibility. This is then memorialize with the sending out of a dozen wise men and governors a week to emphasize their vigilance towards and hatred of any inflationary outcropping. One sees it in the interviews of the leading bears that always follows a day when the market drops more than 150 Dow points, and of course in individual stocks — the fund managers who establish a big position in a stock and then modestly allow the media to know that they have been buying it after it goes up more than 5% in a day because of a rising earnings optimism.

My queries are; what are the general principles of claque formation? And what are the economics of the industry, the demand and supply curve of claques, and the relation of the equilibrium points in quantity of claques to increases in uncertainty, past rises or declines, the level of GNP, and the attractiveness of other related occupations like propagandist et al.?

George Zachar adds:

Poking around claque-land, I came upon this crimes of persuasion site, which features a lengthy list of scams.

John De Palma mentions:

A few excerpts that you might enjoy from the 4th chapter (”Social Proof”) in Robert Cialdini’s Influence: The Psychology of Persuasion

Cialindi on claquing:

… the heavy-handed exploitation of the principle of social proof can be traced through the history of one of our most venerable art forms: grand opera. This is the phenomenon called claquing, said to have been begun in 1820 by a pair of Paris opera-house habitués named Sauton and Porcher. These men were more than opera goers, though. They were businessmen whose product was applause …

Cialdini introduces this discussion:

Experiments have found that the use of canned merriment causes an audience to laugh longer and more often when humorous material is presented and to rate the material as funnier. In addition, some evidence indicates that canned laughter is more effective for poor jokes … To discover why canned laughter is so effective, we first need to understand the nature of yet another potent weapon of influence: the principle of social proof. It states that one means we use to determine what is correct is to find out what other people think is correct … In the case of canned laughter, the problem comes when we begin responding to social proof in such a mindless and reflexive fashion that we can be fooled by partial or fake evidence … Our tendency to assume that an action is more correct if others are doing it is exploited in a variety of settings. Bartenders often ’salt’ their tip jars with a few dollar bills at the beginning of the evening to give the impression that tipping with folding money is proper barroom behavior …

And as you did in Chapter 4 of “Practical Speculation,” Cialdini writes on the Keech cult:

Mrs. Keech, though, was the center of attention and activity. Earlier in the year she had begun to receive messages from spiritual beings … The transmissions from the Guardians, always the subjects of of much discussion and interpretation among the group, gained new significance when they began to foretell a great impending disaster- a flood that would begin in the Western Hemisphere and eventually engulf the world … The crucial event occurred sometime during ‘the night of the flood’,’ when it became increasingly clear that the prophecy would not be fulfilled. Oddly, it was not their prior certainty that drove the members to propagate the faith; it was an encroaching sense of uncertainty … So massive was the commitment to their beliefs that no other truth was tolerable. Yet that set of beliefs had just taken a merciless pounding from physical reality: No saucer had landed, no spacemen had knocked, no flood had come, nothing had happened as prophesied. Since the only acceptable form of truth had been undercut by physical proof, there was but one way out of the corner for the group. They had to establish another type or proof for the validity of their beliefs: social proof.


Comments

WordPress database error: [Table './dailyspeculations_com_@002d_dailywordpress/wp_comments' is marked as crashed and last (automatic?) repair failed]
SELECT * FROM wp_comments WHERE comment_post_ID = '140' AND comment_approved = '1' ORDER BY comment_date

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search