“A lie can travel around the world and back again, while the truth laces its boots.”
Mark Twain
As an aging economist whose tools and skills are not what they once were, I think the media crisis of the century (Fox News, Republican leader McCarthy, and Donald Trump’s crisis) lends itself to an economic analysis of lies. There is undoubtedly a market for fiction that poorly disguises itself as fact – that is, “alternative facts” When analyzing any market, you start with the basics of supply and demand. These simple tools can inform us of what is happening and the likely outcomes in this market of lies.
The demand for lies, especially political lies, must be understood by looking at what economists call utility functions. Economists take it for granted that each individual seeks the maximum amount of happiness, or what economists call utility. The problem is that our resources are insufficient and our desires for more things are unlimited.
Economists also assume that everyone is different in the things they want. My happiness might come from being on a beach in Montego Bay. Your happiness may be skiing down the Alps or simply feeding your family. With these simple assumptions underpinning human behavior, the question is; Why would anyone demand to be lied to?
When you lose, and you think you’ve won, and there’s someone else out there backing your claim to victory, you’ll demand, not just more, but ever-increasing amounts of this bullshit. Believing lies requires repetition and increasing levels of message intensity. This is how Fox News increases the demand for lies, which literally grows the market for lies.
When millions of middle- and lower-income white Americans hitch their wagons to a snake-oil salesman because he convinces them that their problems are not economic factors that created their environment, blacks, gays, Jews, everyone is watching different. or do not believe like them. The demand to be lied to is the result of deep and real damage caused by global economic forces. It is this harm that fuels racism, anti-LGBTQism and anti-Semitism. The current governor of Florida is promoting his own new set of lies related to vigilantism, but this too will fail, crushed under the weight of falsehood. Ron DeSantis’ bullshit is the result of the same factors that led to belief in the “Big Lie.”
The supply of any good or service in capitalist markets is driven by the desire for profit and wealth. Individual consumers sometimes tell the truth and sometimes they don’t. In this way, we are all potential purveyors of lies. And now with social media, we can broadcast these lies as quickly as Twain predicted. But the shocking nature of this past week’s events surrounding revelations revealed in the Dominion voting machine defamation suit against Fox News is as earth-shattering in the media world as January 6 is in the political world.
There are major generational events like Pearl Harbor, the assassinations of JFK, MLK and RFK in the 60s, 9/11 and more recently January 6th that define the times. The Dominion defamation case may be as big as these seminal events, but it is fundamentally different because in Dominion the news is “the news.” Fox’s deception, hypocrisy, and malice are directly at odds with how the press is supposed to operate, especially in relation to political news. “We report – you decide” became we decide and we manufacture. Fox became an immensely profitable wealth-generating machine in the business of manufacturing and selling lies.
Fox owners and on-air personalities knew that what they said on air were lies. They broadcast the lies that Trump and his team also knew were lies to millions of Trump supporters whose eyeballs are valuable to hundreds of American corporations who also didn’t care what the lies were as long as Fox viewers saw their advertisements. In this symbiotic relationship between Fox, Trump, the Republican Party and Fox’s advertisers, there is no reason to be overtly conspiratorial. This is a business model that works for all players except the Fox viewers if the bubble doesn’t burst.
In 1634 in the Netherlands, tulip bulbs began to rise in price so rapidly that by 1637, just before the bubble burst, the best bulbs would sell for the equivalent of $1 million today. As is the case in any pyramid scheme or “once in a lifetime” opportunity, these events are driven by lies and they are all eventually exposed.
Recently, Silicon Valley Bank collapsed in seemingly a nanosecond. Collapses with tulip bulbs or runs on banks happen because the truth is revealed and the shabby try to save their dignity and/or their assets.
Fox’s market for lies looks more and more like the frenzy of the Dutch tulip bulb market than normal markets. Understanding this, I see a bursting bubble where Fox will lose huge chunks of its audience because of its brazen hypocrisy and hubris. It is interesting that the tulip bubble lasted about as long as the big lie. Some abandoned Fox viewers will find new media homes that support their delusions. Twitter, One America, and Newsmax may try to fill the void, but millions will wipe the scales from their eyes and join us here on Earth One, leaving Earth Two and its alternate facts forever.
We will always have a demand for lies, but if we are to survive as a democratic society, the cost of supplying and broadcasting these lies must be great. History shows that one cannot avoid the inevitable breakdown when behavior is based on lies.
Fred McKinney is co-founder of BJM Solutions, an economic consulting firm conducting public and private research since 1999, and is director emeritus of the Peoples Center for Innovation and Entrepreneurship at Quinnipiac University.