Updated: Dec 6, 2019
Facts provide the foundation for solid analysis and strategic decision-making. But for professional investment analysts, corporate strategists, and journalists, finding facts increasingly feels like a high tech, high stakes scavenger hunt.
The Distributed Age makes it easier and faster to find information. It increases exponentially the amount of information available publicly from policymakers. Ironically, however, it also decreases the proportion of fact-checked, objective information compared with opinion, inaccurate information, and malicious, deliberately false information. Search engine optimization and search algorithms reward one-side, biased, scantily researched content as well as false content. This in turn accelerates the proliferation of rumors and misleading information. It is a vicious cycle.
This #longread post explains why finding facts is becoming increasingly difficult. It closes with insight into how companies are deploying technology to help analysts and strategists combat information overload and misdirection. At the end, we share an infographic designed to help readers distinguish between different kinds of content they may encounter in their scavenger hunt for facts in the news stream.
The Information Equivalent of Gresham’s Law
Gresham’s Law posits that “bad money drives out good money.” Specifically, people hoard “good money” with real value. In the 1500s when the behavior was first observed, people would hoard coins containing real metal (e.g., gold, silver) while spending in circulation coins that had been “de-based.” For more on Gresham and his "law," see this new biography which was reviewed recently by the Financial Times HERE.
In the Distributed Age, the sheer volume of information combines with incorrect, incomplete, and advocacy-based information to decrease the visibility of objective facts. Bad information drives out access to solid information. And as we will see at the bottom of this post, professionals increasingly use technology to hoard access to reliable information in order to construct a better foundation for informed decision-making. Sadly, average retail consumers of the news cycle (i.e., voters) have limited if any access to these resources.
The more sheer volume of 24/7 information flows turbo-charged by social media information sharing combines with shortened attention spans and time constraints, it creates real information gaps. Amid the noise of the news cycle, even mistaken information with zero malicious intent can interfere with the ability of an electorate or an investment analyst to make an informed decision.
The resulting noise and confusion increases vulnerability to malicious information flows. State-sponsored and non-governmental actors armed with advanced technology enter the fray with increasingly sophisticated content from deep fakes and memes to deliberately false and misleading content. Not all this information is shared through social media. But when it is shared in social media, it amplifies the Gresham’s Law effect in the information ecosystem.
Information Overload -- Innocuous and Malicious Content
As the diagram below illustrates, information overload is not merely a problem generated by access to too much information. Incomplete information (delivered for innocuous as well as malicious purposes) competes with and crowds out fact-based reporting in the battle for attention. Note that most of these categories of information flows pre-date the advent of digital media.
No wonder people have a hard time understanding what is -- and is not -- real.
Note that not all information is shared on social media, which implies that even draconian restrictions on free speech on social media platforms will not address the core problem although it may slow the velocity and scale with which problematic information is disseminated.
The harsh truth is that not everyone actually wants to build or to see a truly 360 degree view of the facts. Especially at the retail level, many people simply seek validation of their world view.
Consider the recent Nobel Prize award for Richard Thaler’s behavioral economics research that fueled “nudge economics” and modern social media marketing. From the childhood game of telephone (in which messages become garbled and distorted each time they are repeated) to middle school social dynamics to political “whisper campaigns” and the persistent popularity of tabloids, people are famously susceptible to manipulation and inclined to believe rumors without checking the facts.
Advocates (e.g., lobbyists, non-governmental organizations, non-profits with a public purpose, journalists writing opinion pieces, investigative journalists) understand this and highlight selected certain facts in order to convince non-experts to agree with their point of view. The use of selective facts for advocacy purposes is as old as human susceptibility to peer pressure, rumor and innuendo. It is not always malicious.
This complicates considerably the job of knowledge professionals and analysts seeking facts for an informed decision-making process. Much public discourse involves advocates and officials dueling with facts and figures all of which are accurate and factual, but not all of which may be relevant or meaningful. It has never been more important -- nor more difficult -- for professional analysts to remain objective. The importance of objectivity for investment analysts in particular is discussed in THIS POST for Interactive Brokers earlier this year.
The fine, fuzzy line between highlighting favored facts and deliberately hiding problematic facts or misrepresenting facts was not invented by Twitter and Facebook. Social media platforms merely amplify and accelerate the ability of the loudest voices or deepest checkbooks to gain traction with problematic facts and falsehoods.
Traditional media is having a hard time adjusting. Journalists and editors are also subject to the same barrage of information as regular people. Their role in society is to determine which facts to share with readers. But the curation function journalists provide has not always – or even predominantly – been free of bias.
In many countries, it is the norm for newspapers to provide an ideologically driven view of the facts. For example, in France, leading media outlets are affiliated with specific political perspectives on the left (Liberation, Le Nouvel Observateur, L’Humanite), the right (Le Figaro, L’Express). The U.S. fixation with objective news is a direct outgrowth of the nation’s experience with “yellow journalism” in the late 19th century and early 20th century which sought to increase newspaper circulation through sensationalist reporting which often had only a cursory connection to concrete fact.
The modern analogs for yellow journalism, of course, would be (i) “click bait” journalism designed predominantly for search engine optimization and (ii) the continued existence of tabloids which print often comically absurd stories that somehow people still believe. As JSTOR lamented three years ago,
“Established media outlets and social networks are not just supported by the dollars-for-clicks they earn by displaying fake news headlines; they are increasingly built upon a common culture of clickbait-y headlines, partisan hyperbole, and a prioritization of human interest stories over hard news.”
Now consider the revered New York Times commitment to share with readers “all the news that’s fit to print.”
The value proposition is about curation and insight, not necessarily a fully objective 360-degree view of a situation.
News outlets that provide purely objective reporting and minimally curate information as it emerges (news “wires” like the Associated Press, Agence France Presse, Reuters, Bloomberg, C-SPAN, etc.) rarely find readers in the retail space.
And as the data below indicates, information acquisition patterns (i.e., media consumption) are shifting dramatically. The move to mobile makes information acquisition via social media so much easier. Even when traditional print and broadcast media adjust by distributing content via email, apps, and social media, the reality is that these traditional sources of information are increasingly losing the battle for eyeballs and credibility. The trend will accelerate as the generational shift replaces traditional media consumers with Distributed Age media consumers.
The outcome at the retail level is increased susceptibility to government-sponsored propaganda (which can mobilize concrete, real facts presented in a misleading manner) and malicious content designed to mislead, confuse, and generate fear. The outcome at the knowledge management/professional analyst level is that subpar, misleading and false information increasingly crowds out access to strategically significant details.
The Dark Side -Propaganda, Deep Fakes, and Disinformation
On the far end of the spectrum lies state-sponsored or official sector disinformation and propaganda activities perfected by the communist Soviet Union during the Cold War and still used today by totalitarian and authoritarian regimes around the world. Merriam-Webster indicates that the term “disinformation” itself has an ignominious history originating in Nazi Germany and the Soviet Union’s department for disseminating propaganda.
Governments no longer hold a monopoly on the ability to disseminate false information with the deliberate intention to deceive.
Mobile devices and increased accessibility to both information and image editing software means private individuals and non-governmental organizations can be just as effective as governments in generating misleading or incomplete information masquerading as facts.
Simultaneously, traditional media is evolving in a way that makes it far less effective in delivering an antidote. As the Atlantic Council recently noted:
As the key generators of both the message and as the primary messengers, media organizations are still central actors in the response to disinformation. In this sense we must distinguish between the dwindling number of professional media actors (e.g., journalists and editors) and the informal and unaccountable “content generators” who are often conflated with them. While they are facing a deeply disrupted, fractured, and challenging industry, media professionals arguably play a more important role than they ever have before. As the number of professional “gate-keepers” has been eroded, those who remain are more vital than ever. This is not to suggest that all journalists, editors, or media executives are innocent in the dissemination of disinformation or the murkiness or the current information environment. Rather, the industry needs continued reform and improvement. Greater guidelines and best practice are needed to increase transparency about bias. Distinguishing between objective reporting, opinion, and paid-for content would go a long way toward restoring trust in the media as an institution.
Effective disclosure would have to occur at the beginning in order to have any hope of serving as an effective transparency mechanism for readers.
While we wait for the industry to evolve, readers may find it helpful to keep on hand this infographic. It is designed to level the playing field between unscrupulous content generators and readers.