Hi Guys,
Its been ubiquitous and effective in the past; it will be a monstrous tidal wave in the coming months. It’s an easy forecast. It’s a looming political propaganda tsunami.
We are all exposed to a bombardment of propaganda on a daily basis in the form of inane consumer advertisements. You all recognize that to be the case in the selling of household goods and likewise, investment products. Soon the fusillade will intensify even more for the November Presidential election. From this incessant and inaccurate barrage, we’ll have to separate the wheat from the chaff. That’s not so easy.
Propaganda has existed for centuries and been craft perfected. The modern development and more sophisticated versions of propaganda are frequently credited to Edward Bernays in the mid-1920s.
Bernays was an early proponent for influencing public opinion using statistical analysis and psychological tools. In the 1920s, America awoke every morning to a coffee and cereal breakfast. Facing excess capacity and inventory, the livestock industry hired him to change that habit into a ham and eggs society. He was wildly successful with what he acknowledged was a propaganda campaign. His 1928 book, “Propaganda”, is considered a classic, and supposedly served as a template for Joseph Goebbels Nazi propaganda machine. The opening paragraph in the book is bone chilling in its scope and frankness. Here it is:
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.”
Bernays recognized the power of persuasion that propaganda held, so he insisted upon complete factual accuracy and honesty in its presentations. However, complete honesty and transparency are rare commodities. He also understood that propaganda could be easily corrupted by unscrupulous charlatans. So the ancient warning that buyer beware is especially pertinent in the next few months ahead.
Our financial wellbeing is intimately tied to events that will climb to a crescendo in the November election. Politics and economics are joined at the hip. Historically, the earliest economic practitioners appreciated that strong coupling by calling their evolving discipline Political Economics. Adam Smith wrote from that perspective. As mathematical concepts were introduced into its study, the Political qualifier was dropped from the title as proof of the scientific nature of the discipline. That was a mistake. The trend is now being reversed with a fuller recognition of the union between the political environment and economic progress.
To be successful, I firmly believe that an informed investor must be economically literate. If, in any way, you feel uncertain in how the economic world works, I suggest you get a copy of Henry Hazlitt’s thin book “Economics in One Lesson” as the single best introduction to the subject.
The One lesson is contained in the first chapter of this accessible book; it is followed with 20-odd chapters that provide specific action examples. The One lesson is:
“The art of economics consists in looking not merely at the immediate but at the longer effect of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups”.
The most famous illustration of this wisdom was given by French economist Frederic Bastiat in his 1850 classic “The Broken Window”. In that parable, Bastiat identifies the significant difference between “what is seen and what is not seen”. I’ll provide Links to two versions of this famous story a little later.
When considering any source, the recipient must be fully cognizant of the motivations and biases that govern the source’s perspective. Henry Hazlitt was a very conservative, small government man. Today, his philosophy survives and resides in places like Hillsdale College and the Ludwig von Mises Institute. Milton Friedman is one of their renown heroes; John Maynard Keynes is one of their arch villains. So, if you are a proponent for small government you will see Hazlitt in a favorable light; if you are pro-big government you will see him as a leader in the economic underworld.
I am a protagonist for Hazlitt’s book and the Austrian school of economics. It has much to offer, but like all of the unsettled social sciences, it has major shortcomings. Keynes was spot on-target on many assertions, particularly when articulating his views on speculative investment trading matters.
As promised earlier, here are two Links that document Hazlett/Bastiat’s “what is seen and what is not seen” rule. They both illustrate it with the Broken Window story. The first presentation employs a rather softer propaganda technique. The second deploys an in-your-face, take-no-prisoners approach. It’s like being slammed with a sledgehammer.
Although the basic Hazlett message is nearly identical in both these videos, the selective and unfair merging of videos in the sledgehammer presentation is a little offensive. The juxtapositions of words with imagines are obviously no accident. It is definitely hard core propaganda. There’s a propaganda lesson here.
Which of these was most effective? I suspect that if you are hard core conservative you enjoyed the second presentation; if you are among today’s liberals you despised it. The assessments are in the individual eyes and heart of the beholder.
I would suspect that is you are more neutral in your political persuasion, you likely felt that the more gentle format was more compelling and surely more fair. I believe Americans are a fair-minded people. We appreciate that all advertisement is propaganda to some degree. We do want it to be accurate and honest, just like Edward Bernays declared over 70 years ago.
As Aristotle proclaimed in the opening lines of his seminal work “Metaphysics”: “All men by nature desire to know.” But, because of propaganda, sometimes what we know or think we know is wrong. Propaganda has the power to do mischief. So we must always be prepared to be skeptical, to challenge, to explore, and to be open minded enough to revise our viewpoints. As John Maynard Keynes observed: “When the facts change, I change my mind. What do you do, sir?” I too change my mind.
It’s a hot Summer that will morph into a still hotter Autumn season because of the upcoming political debate. Just remember that politics and economics are tangled like the Gordian Knot. It’s our civic duty to untangle that knot. I’m sure we can successfully accomplish that task with persistent skepticism.
We like to think that we are immune to the long reach of propaganda’s tentacles, but in many instances we can not escape its impacts.
How do we blunt the pervasive exposure and influence of carefully crafted propaganda? Well, first recognize its characteristics. In 1984, Robert Cialdini wrote a popular and practical book that identified its major features and how to neutralize or defeat its purposes. The book is simply titled “Influence”. His work in this communication field is the most often cited by researchers in that social arena; his book is widely distributed and referenced. He condensed over 30 years of experimental work into six fundamental principles. Here is a video Link that summarizes those six guiding principles:
There are a zillion videos that focus on Cialdini’s findings. Many of these elaborate on each of the six principles; many are delivered by Cialdini himself. Enjoy. Cialdini is now retired from university teaching, but he will make a comfortable salary giving lectures on the power of persuasion and how to counteract it.
Differences of opinion are caused by many diverse factors including even gender. A famous comic observed that “ Men socialize by insulting each other, but they don’t really mean it. Women socialize by complimenting each other, and they don’t really mean it either.” There is much wisdom in this comic saying.
Our patron David Snowball knows a thing or two about propaganda. He has studied, published and teaches in that arena. He specializes in Third Reich and other 20th century propaganda. I hope he finds time to move us further down the road on this subject.
Your comments are also encouraged and welcomed. Always remember that any advice you receive, especially including any from me, is probably worth slightly less than what you paid for it. A sense of humor and a sense of proportionality are needed assets in these stressful and tension-filled times.
After finishing this post, I wondered if my purpose was a heads-up alert or a keep your head-down warning. You decide
Let not the imminent tsunami quench freedom’s flame.
Keep Smiling and Best Regards.
Comments
A lunge for the TV remote, a stab at the car radio buttons lest something unclean be imparted. Access denied, nanananaNAna, silence is golden.
Orwell's 1946 classic essay Politics and the English Language
http://www.orwell.ru/library/essays/politics/english/e_polit/
But you are not obliged to go to all this trouble. You can shirk it by simply throwing your mind open and letting the ready-made phrases come crowding in. They will construct your sentences for you — even think your thoughts for you, to a certain extent — and at need they will perform the important service of partially concealing your meaning even from yourself. It is at this point that the special connection between politics and the debasement of language becomes clear.
When one watches some tired hack on the platform mechanically repeating the familiar phrases — bestial, atrocities, iron heel, bloodstained tyranny, free peoples of the world, stand shoulder to shoulder — one often has a curious feeling that one is not watching a live human being but some kind of dummy: a feeling which suddenly becomes stronger at moments when the light catches the speaker's spectacles and turns them into blank discs which seem to have no eyes behind them. And this is not altogether fanciful. A speaker who uses that kind of phraseology has gone some distance toward turning himself into a machine. The appropriate noises are coming out of his larynx, but his brain is not involved, as it would be if he were choosing his words for himself. If the speech he is making is one that he is accustomed to make over and over again, he may be almost unconscious of what he is saying, as one is when one utters the responses in church. And this reduced state of consciousness, if not indispensable, is at any rate favourable to political conformity.
Unfortunately, all of this adds to investor unease. Folks who listen to these all day long start actually believing what they hear. Then when some smallish rumor or event does occur, these folks are the ones to bolt for the exits, and dump their dollars into "safe" long-term Treasuries.
I want to thank everyone who responded to my submittal. It can be a prickly subject to freely discuss without bias charges. So I want to especially thank PatShuff and BobC for their lively and erudite replies. Both painted colorful pictures with their fine words.
PatShuff and BobC expanded the propaganda thread into areas, corners, and nuances that totally escaped my sometimes myopic perspective. They accomplished this feat in a thoughtful and respectful manner. So, an extended thanks to you guys. Great stuff.
I suppose I’m a very fortunate soul with regard to propaganda exposure; I sort of naturally isolate myself from it without really trying. I don’t watch any of the business TV outlets on anything remotely resembling a familiar basis; when you guys write about TV hosts, I seldom recognize a single name.
Because I am an infrequent evening TV viewer, I am not often exposed to electioneering propaganda. But I do watch sporting events. The little I do see is greatly disturbing by its misrepresentation of well understood factual matters, and commonsense generally.
Since I am a California resident, and the National election outcome is close to a certainty in my State, I suspect the national election ad budgets assigned to California will be somewhat muted. Therefore, the damage they do to national unity and sanity in my home State should be minimal. In this silly season, political lying will replace baseball as the national pastime.
Once again, I thank everyone for taking their valuable time to read my screed. I do try to spice it up with some anecdotal storytelling and a little humor.
Best Wishes.
We attempt the same here; as to the point of trying to have a discussion, as needed about anything they may come into play from school or the short blasts of tv news blips that do little more than announce that something happened, but of course; seldom any real discussion about the details.
I believe the following is related for now and into the future; which also causes me concern, being the young ones, including 30 & 40 year olds who are with family and/or friends within hands reach of one another and are attached to their smart phones either talking or texting. First, I consider this a very rude social function and lastly I am also concerned about what type of social structure is being established as well as the affect upon critical thinking skills that require a "real" face to face discussion about any given topic.
These are the type of actions that may allow for robotic control beginning with the most simple versions. The most wonderful "group think".
Only my opinion and what I may view from any-street America.
Take care of you and yours,
Catch
Hi Fundalarm,
Thanks for your story from the recent immigrant front. I interact with many immigrants on a regular basis. It is surprising how similar their viewpoint is with yours.
They abandoned a safer, but perhaps an unsatisfying life in their country of origin, and choose a more risky adventure in the perceived wild United States. I have met nobody who regretted their choice to come.
I often see that their enthusiasm and satisfaction with their choice is successfully transferred to their children. Your story reinforces that that will happen in your specific case to your daughter. Your visit to Washington DC lights the way.
We share some common history. My mother’s parents immigrated to the US from the Ukraine at the turn of the 20th century. They were farmers who politically supported the “White Russian” movement during the early years of the Communist civil war revolution. Eventually, they fled the Red Russians, saving their lives and not much else.
Propaganda can be extremely effective. I have some firsthand experience here. After the fall of the Berlin Wall, the US government tried to assist a crumbling Russian economy by purchasing some of their Space hardware. I met a few Russian engineers who were sent to the US to help integrate their hardware into our Space program. That never did work; their stuff was just too incompatible with our stuff.
The Russian engineers were true believers. Propaganda had convinced them that the TV version of American life was a fiction, a propaganda lie. For example, our food supply and choices were not as depicted. One of my fellow engineers decided to persuade them otherwise. He took them on a tour of our supermarkets.
Initially our newly minted Russian buddies accused us of cheating; they claimed that the CIA had created false markets to confuse them. Eventually, this small Russian group, after visiting many markets of their own choosing, were compelled to concede the abundance of food stuffs available to all citizens. Two of the four Russian engineers actually cried.
Indeed, propaganda can be very effective and very frustrating.
Thank you for coming to America. America has always welcomed immigrants. America, its wealth, and its success have been powered by immigrants.
Best Wishes.
Great observation about immigrants in this thread, by people who know what it's like to be an immigrant. Immigrants have powered nations the world over, not just the USA. Look at how countries as diverse as Singapore, Hong Kong, Canada and Australia have all prospered as the result of hungry immigrants eager for a better life and freedom of choice.
Just think of how much better off our economy would be if the money funneled into political advertisements were instead used to help those less fortunate. I suppose we should welcome political ads. because they represent "choice" which others in the world don't have the right to. I don't mind ads. trying to influence my decision on diaper purchases, but the political ads. do bother me.
I haven't even touched upon the incessant machine generated phone calls...