It’s 2018, and existential questions are in vogue.
Given that a misunderstood tweet could precipitate nuclear armageddon, that makes some sense. In addition, it doesn’t help when state emergency management agencies accidentally tell people they’re about to die*.
In some ways, what we’ve seen is a reassertion of the norm that information and influence—soft power—are just as important, if not more so, than physical strength—hard power. “The pen is mightier than the sword,” as it were. The reminders of that old trope are, somewhat ironically, occurring in an era typified by tremendous backlash to progressive, liberal (in the sense of guaranteeing individual rights) keystones.
The thing that’s prompted swathes of America to plumb the depths of apocalyptic fear is not that our adversaries have more powerful weapons; rather, it’s that our leaders might end the world based on bad information.
While the chances thereof are hopefully remote, there’s another, much more prosaic—yet equally consequential—battle for information occurring every day in our news feeds. Of course, for avid news consumers, there’s nothing particularly novel about such an idea…
For obvious reasons, 2017 forced at least a partial reckoning of the means by which so many of us receive our daily bread of facts, outrage, and bias confirmation. Smart voices inside media agree that the phenomena observed so far seem barely to scratch the surface of global currents. That makes sense, since it’s hard to plot the course of a river when you’re thrashing beneath its surface. What’s more, western societies are only now grappling with the idea of struggling to shore. So, setting metaphors aside, 2018 might be the year in which we start to come to terms with the biological limitations of our ability to process information.
Now, I know MBA students generally have a preternatural affinity for “market-based” solutions to societal problems. On the whole, we buy into notions of equilibrium resulting from the interplay of individuals and institutions seeking some utility-maximizing outcome. Adam Smith’s illumination of “the invisible hand” in 1776 gave us a way to describe the behavior of economic man, rationalizing microeconomics at a macroeconomic scale. Further, it’s undeniable that market mechanisms have resulted in extraordinary societal advancement over the course of human history.
WITH THAT SAID… In my former life as an investment advisor, I learned that the timeline over which markets are efficient is forever. This should not be a controversial statement, but forever isn’t an especially useful time horizon for individuals.
This applies equally in markets for assets and for information. So, whether it’s an errant economic growth assumption or a Wall Street Journal report on what the president did or didn’t say, our reactions often have bad information “priced in.” The negative externalities to which such reactions give rise, too often dismissed over “the long run,” can and do create life-changing consequences for people like you and me.
It follows that as the speed of new information and access thereto has increased, so has the rapidity and potential violence of our reactions.
Among the tech companies shaping communication and societal discourse, Facebook appears to be one of only a handful that have come to terms with that new reality. But while the impact of the News Feed’s redesign, prioritizing friends and connections over popular, third party links, has yet to be publicly measured, financial markets—those that are, in theory, the most informationally efficient—have punished the platform for what appears to be intended as a compromise solution to the negative externalities of its users’ news consumption habits.
Therein lies a striking dichotomy—one between a supposedly-intelligent application of long-term planning aimed at producing a more stable outcome, and the market’s desire for monomaniacal focus on greater profits.
In that sense, maybe the bigger question is whether “doing good” is compatible with being the world’s most prominent organ of communication. Does obeying an informational speed limit have to mean leaving money on the table? Stated another way, can our better, more rational angels profitably bound our basest impulses?
Finally, to come full-circle, consider that the Fermi Paradox expresses the essential incongruity between the scale of the observable universe and the fact that intelligent life hasn’t been discovered anywhere that isn’t Earth. A semi-logical extension thereof is the idea that intelligent life necessarily destroys itself. Those who suggest such a conclusion normally do so on the basis of external observation rather than self-reflection. But even so, maybe our task in 2018 is to turn the lens around—to acknowledge our limits and to work towards self-correction instead of short-term exploitation.