All Together Now

The Brooklyn Bridge was the largest structure in the western hemisphere when it opened in 1883. It was almost twice as long as any suspension bridge built before it. People reasonably asked: Is it stable? Will it collapse?

The fear over whether the bridge would hold was so widespread that P.T. Barnum was asked to parade a herd of elephants across the bridge on opening day, proving the giant structure’s strength to anxious onlookers.

But doubts remained. One week after opening day, crowds of New Yorkers showed what happens when uncertainty and groupthink meet.

It started when a woman crossing the bridge tripped and fell down a wooden staircase that served as a pedestrian exit. Another woman screamed in fear. Someone then yelled that the bridge was collapsing. Panicked bridge-crossers rushed for the exit, swarming into a jumbled mass.

More than a thousand pedestrians were crossing the bridge. It took less than 15 seconds for the entire mile-long span to engulf into human chaos.

The New York Times wrote:

In a moment the narrow stairway was choked with human beings, piled one on top of the other, who were being crushed to death. In a few minutes, 12 persons were killed, 7 injured so seriously that their lives are despaired of, and 28 others more or less severely wounded.

Controlling your behavior amid uncertainty can be hard enough. Controlling your reactions to other people’s behavior is way harder. Fear is more contagious than any virus, and can instantly push people to react in ways that would have seemed unthinkable a moment prior.

The most interesting take I heard about Silicon Valley Bank’s implosion is that it couldn’t have happened to any other big bank – at least the speed at which it collapsed – because virtually all of its account holders reside in the same social group. They live in the same neighborhoods, go to the same parties, talk in the same WhatsApp groups, work for the same companies, invest in the same startups, etc. That’s not the case for, say, Wells Fargo.

Bank runs have been happening for centuries. SVB was unique because it had the social web of a tiny town but the balance sheet of a big, disparate, bank. When one person yelled fire, every other deposit holder instantly heard it, and $50 billion rushed out the door.

I imagine both the people crossing the Brooklyn Bridge, and SVB customers, reacted in ways they never would have imagined before coming face-to-face with peer panic.

It’s easy to watch these events and criticize. Panic can look so irrational. Even people whose deposits were FDIC insured pulled their money out of SVB. Even people who were well off the Brooklyn Bridge kept running for their lives – there are reports of melee hundreds of yards from the end of the bridge.

In all cases I think it’s easy to underestimate your propensity to panic when you watch other people panic.

A few years ago a group of researchers ran a massive experiment on Facebook. By tweaking users’ newsfeeds – controlling what people saw – they could influence what kind of posts those users would generate themselves. “When positive expressions were reduced, people produced fewer positive posts and more negative posts; when negative expressions were reduced, the opposite pattern occurred.”

When this happens – there’s a whole field of study about this process, called emotional contagion – people never say, “Oh, I acted this way because I was influenced by everyone else around me.” Everyone assumes they come up with their own decisions independently, in their own head.

Years ago I interviewed Yale economist Robert Shiller. He said something that stuck with me: “You have to realize, your thoughts are not really your own thoughts. They percolate in from other places and from other people.”

That idea has to be stronger now than ever before, as social media increases the number of people you interact with, and rewards the most hyperbolic, performative, and attention-seeking posts.

Some people are more impressionable than others. But everyone is a product of the experiences they’ve had, the people they’ve met, the people they’ve observed, the people they’ve read about, and the people around them at any given moment who are shaping their behaviors in good, bad, and ugly ways. That alone explains so much wild behavior in the world.

One takeaway here is that when you realize how susceptible you are to others’ emotions, you become more thoughtful about who you surround yourself with. Who you follow on Twitter, who you watch on TV, where you work, who you hang out with after work. Who you marry – that’s a huge one. The higher the stakes, the more thoughtful you need to be about those who surround you.

But emotions will always be contagious. Bill Seidman, the former head of the FDIC, once said, “You never know what the American public is going to do, but you know that they will do it all at once.”