According to Oxford Dictionaries the word of the year for 2016 is “Post-truth”, which it defines as,
“Relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief”.
The word certainly has an Orwellian newspeak ring to it as it alludes to the abuse of language and truth. Indeed, the two primary driving forces behind the word’s increased popularity were the UK’s Brexit vote and Trump’s victory in last month’s US Presidential election. As many commentators have pointed out, in order to sway voters to their side both campaigns made statements that – let us be polite – had little in common with the facts.
Two of the more egregious examples of such statements were Trump’s claim that Mexico was sending criminals and rapists to the US – we are repeating the phrasing on the Washington Post fact-checker blog[1] – and the £350 million figure blazoned across the Leave BattleBus[2].
Given the patently false nature of these statements – something that was obvious even before voting began – for those who found themselves on the losing side, the results were prima facie evidence that we now inhabit a “post-truth” world, one where public opinion is influenced by emotional responses, often triggered by fake news and lies, rather than by rational debate based on factual evidence.
However, the notion that we must be in a “post-truth” world simply because the winning campaign or candidate had a more tenuous connection with the facts than their opponent is not robust proof.
Electorates do not support a campaign or candidate, no matter how charismatic, unless their message strikes a chord, namely it accords with their daily experiences. Moreover, public opinion is not formed in isolation, people and organizations interact and share views about the key issues, especially so in today’s highly connected world. Hence, if we are in a “post-truth” world, one would expect to see a large uptick in the degree of subjectivity within news and/or social media posts reflecting the increasing dominance of emotions over facts.
From our analysis of millions of finance articles[3] published daily this is something we are able to monitor at Amareos because subjectivity is one of the four primary sentiment indicators we track.
As can be seen in the exhibit below, there has been an increase in subjectivity versus more fact-based content in US focused financial articles. Interestingly, the most pronounced rise in subjectivity occurred in mainstream media rather than social media, despite it being positively biased[4] towards Clinton (the more factually accurate of the two candidates[5]). Yet, even taking this into consideration, the rise hardly constitutes uncharted territory. Indeed, the US subjectivity indicator is not even back to levels that have been observed in several preceding years.
Exhibit 1. Subjectivity of Financial Articles – US Focus
Source: www.amareos.com
Moreover, in UK focused financial articles (see exhibit below), the extent of subjective versus fact-based content is even lower, roughly in line with its long-run average[6].
Exhibit 2. Subjectivity of Financial Articles – UK Focus
Source: www.amareos.com
So, while many members of the “chattering class” may well believe we inhabit a “post-truth” world following the Brexit and Trump wins, based on our analysis of millions of financially-focused online posts we see little evidence of a strong rise in subjective, “fact-light”, content. This suggests that “post-truth” believers might be, and not without a hint of irony, as distanced from the facts as those they are critical of.
This is not the only aspect of the “post-truth” concept, or the implications that flow from it, that we find troubling.
The very word “post-truth” is problematic. It may appear innocuous, but thought about more deeply it is far from it. It stigmatizes and delegitimizes the populist, deglobalization, anti-establishment up-swell evident in many developed countries by implicitly assuming that the “great unwashed”, which constitute its support base, are either (or all) of the following: delusional, ill-informed, ignorant, bigoted, racist… the list of negative adjectives goes on. It is, in short, an offensive, socially divisive word.
Moreover, it downplays the fact that humans are not Spock-like logic machines who weigh up perceived costs and benefits when making decisions. Rather, all human decisions have a large emotional element. In fact, they are an integral component of the decision-making process because without an emotional trigger even simple decisions such as deciding what to eat for breakfast become impossible[7].
Such findings are hardly cutting edge science. In 1994 neurologist Antonio Damasio published a book entitled “Descartes Error”[8] containing numerous case studies examining the important role emotions play in the decision-making process. It should, therefore, come as no surprise at all that whichever side has the stronger emotional appeal – left or right wing – the better their chance of success. When considered in this context, it is clear that the recent results are not unequivocal evidence of the public’s sudden collective drop in intelligence (emotional, social or otherwise) but that it simply reflects a deeply fundamental characteristic of the human condition.
The more pertinent question for those on the wrong side of the two recent votes, and those who face similar situations in the not too distant future[9], is not whether we are in a “post-truth” world, but rather why their arguments no longer resonate with the electorate resulting in failure at the ballot box?
In our view, the greatest contributor to this outcome has been the failure of macro policies, implemented in response to the Great Recession, to deliver self-sustaining, inclusive, economic growth as originally promised. With many people having suffered financially as a result of this failure, the collective social mood has become increasingly negative; a trend we can, again, quantifiably demonstrate as shown in the exhibit below, which plots the evolution of 100+ crowd-sourced country sentiment indicators since 2010.
Exhibit 3. Global Country Sentiments – 2010 onwards
(Click http://i.giphy.com/N0E0qWrLbNhQs.gif to play)
Source: www.amareos.com
Given such sentiment trends is it any wonder that, faced with politicians offering more of the same, an increasingly jaded electorate decide go with the alternative, even one that is not “fact-heavy”[10]. After all, what have they got to lose from trying something different, and which may well succeed, versus sticking with a failed “devil-you-know”[11].
Moreover, as we have seen both after the Brexit, and more recently with Trump’s election, the economic outcomes have, at least so far, been better than feared, something that is likely to reinforce rather than discourage the drive for change.
Perhaps the “chattering class”, rather than admonishing the “great unwashed” for having the temerity to vote against their deeply-held beliefs and thrusting us into a mythical “post-truth” world, should instead devote some mental capacity to reflect on the fact that it may be they who are wrong. That is, of course, if they have any wish to reconnect with the voting public in the months and years ahead.
[1] See: https://www.washingtonpost.com/news/fact-checker/wp/2016/03/22/all-of-donald-trumps-four-pinocchio-ratings-in-one-place/?tid=a_inl
[2] This deceptive statistic has been used ad nauseam by Remainers to illustrate the deceit of the Brexit campaign – see: https://www.theguardian.com/commentisfree/2016/may/13/boris-johnson-donald-trump-post-truth-politician
[3] Although the sentiment data focuses on finance rather than more broadly defined topics, it is true, especially in the case of Brexit, that economic arguments played a key role in the campaigns.
[4] See: http://www.washingtontimes.com/news/2016/nov/8/mainstream-media-maligned-10-examples-blatant-bias/
[5] See: http://www.politifact.com/personalities/hillary-clinton/ and http://www.politifact.com/personalities/donald-trump/ . We especially liked the “pants on fire” labelling.
[6] This equates to zero.
[7] It’s just calories right? Try telling that to the person suffering from the bacchanalian aftereffects of the night before who rejects a bowl of cereal in favour of a less wholesome breakfast. Obviously, the importance of emotions applies to investment decisions as well as we have documented in earlier Market Insights – see: https://amareos.com/blog/emotions-and-markets/
[8] See: https://www.amazon.co.uk/Descartes-Error-Emotion-Reason-Human/dp/0099501643
[9] See last week’s Market Insight: https://amareos.com/blog/political-economy-redux/
[10] To clarify we are suggesting that the Brexit and Trump campaigns were successful not because of the falsehoods they made – we credit the electorate with more intelligence than that – but rather despite them i.e. Remain and Clinton lost, rather than Brexit and Trump won.
