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Conspiracy Theories

Conspiracy theories are a fascinating phenomenon. In essence, they explain events as the outcome of secret actions perpetrated by powerful groups operating behind the scene. They rely on a fallacy named the ‘the appeal to ignorance’ whereby a statement must be true if it cannot be proven false. Perversely, attempting to debunk a conspiracy theory often leads to its strengthening. Supported by the mass and social media, conspiracy theories are having a field day in a post-truth, post-trust world (see also ‘Propaganda’, April 2016). In ‘The Walls song ‘Mother’, Pink Floyd asks ‘Mother, shall I trust the government?’ Half of the global population thinks not according to Edelman’s 2019 annual study, noting that the trends have been worsening. The media achieves the same level of distrust.

Theories abound across an infinite spectrum of domains. Take the entertaining ‘Superconstellation of 1776’ for example, well described in a research report called ‘The Conspiracy Of the Invisible Hand’. That year, three important events occurred, purely coincidentally (or maybe not?): the publication of Adam Smith’s opus on the wealth of nation with the mysterious ‘invisible hand’; the foundation of a secretive group led by Adam Weishaupt later called the Order of Illuminati and deemed to look for global economic dominance; and the United States’ Declaration of Independence. Some claim that the United States of America were founded by the Illuminati – as the embodiment of Adam Smith’s invisible force – to rule the world.

A prevailing conspiracy theory related to the financial markets relies upon the existence of the ‘Plunge Protection Team’ or ‘PPT’. This widespread theory is based upon the existence of the Working Group on Financial Markets established by Ronald Reagan in 1988 in the wake of the 1987 crash and reporting exclusively to POTUS. It includes the Treasury, the Fed and the SEC and was set up with a view to ‘enhancing the integrity, efficiency, orderliness, and competitiveness of [the] Nation's financial markets and maintaining investor confidence.’ According to conspiracy theorists, the PPT interferes with the functioning of the markets far beyond its mandate to boost sentiment whenever they deem it convenient, as it is said to have done in December 2018. Conspiracy theories about the gold market are fashionable too: Some claim there is no gold at Fort Knox!

In ‘The New Conspiracism and the Assault on Democracy’, political scientists R. Muirhead and N. Rosenbloom note that conspiracy theories do not even need a theory nowadays. Stories take the shape of fake news which gets carried through social media like a contagious disease – virulent, uncontrollable and omnipresent. It often comes with a nihilistic flavor which I translate as anti-whatever and pro-nothing. The authors explain that ‘its proponents dispense with evidence and explanation. Their charges take the form of bare assertion. […] It is a powerful force, with the capacity to animate popular fury.’

Fake news increasingly affects business. ‘Deepfakes’ relying on artificial intelligence are able to portray leaders making statements they never actually made in fake letters, videos or audios. A Harvard Business Review article encourages corporates to have a fake news monitoring team living in a constant state of paranoia and a rapid response mechanism as part of their crisis scenario planning. Industrial Technologies groups are not immune to attacks given their central role in society, from industrial automation equipment to power generation and the machinery required to exploit natural resources.

I would also expect fake news to play an increasingly important role in any contested M&A process. This threat must be reckoned with by any party engaging into public M&A as the new propaganda tool becomes increasingly commoditized and falls in the hands of parties with reprehensible financial motives looking to influence investors.

Conspiracy theories cannot be beaten and do not need to be. They are part of the fabric of society and tend to be defeated by common sense. By contrast, fake news must be frontally addressed. Experts recommend an ultra-fast, calibrated reaction relying upon a fact-based counter-narrative. Having said so, all seem to suggest that even with the best response the damage can be substantial and lasting.

Truth can still win, over time, but it now requires a highly sophisticated and effective machine to be heard and believed.

‘Oh Mother, shall I build the wall?’

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