Misleading content, commonly known as “fake news,” propagated by different actors are, in many ways, reshaping global politics, economics, and our day-to-day life. Sohana Nasrin discusses the impact of fake news on the global economy by focusing on the financial market, global health sector, climate change, and election.
In January 2020, Netflix released The Social Dilemma, a documentary that probes into the damaging effects of social media and the extent to which a handful companies including but not limited to Google, Facebook, Instagram, and Twitter can impact billions of people worldwide. The documentary does a great job parsing through the business models of these companies and lo and behold, the business models are largely based on surveillance capitalism and data mining. While the documentary can be scary and revealing for many, most of the things discussed in it are no secret to a large number of people who are becoming increasingly aware of the economy of the technological conglomerates. However, one particular idea that has been focused on the documentary stood out to me, perhaps because of its literary undertone: “if you are not paying for the product, then you’re the product.” Indeed! We are the product; every piece of information from every nook and crannies of our lives are the currency that help run the technology giants. The more engaged we are, the more posts we like or the more pieces of news we share, or the more searches we do, the better for the technological platforms as engagement can directly translate into money. And “fake news” does exactly that- it creates engagement, often standing on the shoulders of black propaganda, or click bait, or conspiracy theories.
While the impact of “fake news” on the global economy is an important topic, it is not a widely discussed one. In fact, I have found different stakeholders talk about “fake news” in silos; mainstream media see it as an active agent that erodes credibility, political parties and governments discuss its effect on polarization, scientists and social scientists have been tracing its paths to understand its dissemination. The impact of “fake news” on the global economy is to the extent that it can cost lives and causes businesses to plummet, unless the business is based on data mining, and fed by mal-information practices. The most recent and prominent example of “fake news” costing lives is the COVID-19 pandemic that seems to be never ending at this point. The term infodemics started trending as the world struggled to deal with a virus that wreaked havoc and completely changed the ways we used to conduct our businesses. Infodemics refers to rumors, false information, conspiracy theories, and stigma that seem to surface during health emergencies. If the world has learned anything after dealing with Ebola outbreak in Congo in 2019 or SARS outbreak in China in 2002/2003, it is that misinformation or “fake news” spread like wildfire at a time of crisis and just as wildfire would do, “fake news” destroy lives by inciting violence, inducing mistrust among different stakeholders, and creating social disturbance. Countries that are particularly vulnerable to difficult racial history suffer even more as there’s often misleading content that stigmatizes races. Targeted attacks on healthcare providers also complicate the situation in many countries, including in developed countries like the United States where the antivaxxer movement gained prominence during any epidemic or pandemic.
At this point you might ask, “so what exactly is fake news costing the world?” An Israel based cybersecurity firm CHEQ and University of Baltimore conducted a study that reports that the “fake news” is costing the global economy $78 billion each year. It is due to this staggering number that the World Economic Forum ranks the problem of “fake news” among the world’s top global risks.
The aforementioned study breaks down the cost of “fake news” as:
As evident from the study, the stock market is the most volatile to “fake news.” In December 2017, “fake news” caused stock market losses of $300 billion in a single incident when ABC News Network in the US reported that the National Security Advisor Lieutenant General Michael Flynn testified that President Donald trump hand instructed him to contact Russian government officials during the 2016 election campaign. Following this story, the weighted index of 500 largest US publicly traded companies dropped by 38 points inducing a loss of $341 billion. It turned out that this report was inaccurate and by the time ABC retracted the news the next day, the final loss was lessened to $51 billion. This particular incident shows only part of the risks that the global stock market has to deal with. Financial markets have been dealing with hoaxes, frauds, and misinformation for decades. The ubiquity of access to web-based information, that is often unverified and/ or created by bad actors for political or financial gains, has heightened the risk manifold.
The cost of “fake news” in the public health sector is directly related to people’s livability and safety whereas the economic cost is the secondary effect. Simon Stevens, the head of National Health Services in the UK has said that the misinformation spread by the anti-vaxxer on social media has created tripling in measles cases in the country. Diseases like measles which is preventable by vaccines costs the United States nearly $9 billion per year; unvaccinated people are generally responsible for inducing the lion share of this cost. A study published in The Lancet reports that In the Democratic Republic of Congo, nearly half of the respondents of a survey believed that Ebola did not exist or that it was created in a lab to destabilize the region or gain financial profit.
The second contender for dealing with most shared “fake news” globally is the issue of climate change. The report produced by CHEQ and the University of Baltimore suggests that the economic effects of misinformation in the climate crisis is explosive. The study also mentions a grant that reviewed more than 30,000 free online resources on climate change and found only 700 articles broadly accurate. To put things into perspectives, the accuracy is about 2.3% which is potentially dangerous especially when it comes to an issue that is directly tied to our existence and sustainability of the world. Frank Niepold, a climate education coordinator at the National Oceanic and Atmospheric Administration in the US says that there is a lot of information that is backdated, not scientifically sound, or misleading. According to the National Bureau of Economic Research in the United States, failure to tackle climate change would yield a 7. 2% cut to GDP per capita worldwide by 2100.
When it comes to “fake news” in elections, the US takes the trophy. The country spent about $10 billion as election campaign spending and $200 million of those were spent on misinformation and propaganda, according to the CHEQ and University of Baltimore study. Globally, an astounding $400 million is spent on fake political news. A country wise breakdown of the cost below shows that countries all over the world partake in this cost:
Last but not the least, the resources that are dedicated to tackle the impact of “fake news” worldwide costs a significant amount. For the United States, the Mueller report alone cost US taxpayers $32 million. Facebook CEO Mark Zuckerberg said the amount of budget that goes toward their safety system is greater than Twitter’s annual revenue which was $3 billion in 2018 when Zuckerberg made that comment. Governments around the world are finding themselves spending more and more in fighting technological solutions for spotting manipulated fake videos to fight national security. For example, in the United States, the Department of Defense Advanced Research Project (DARPA) has spent $68 million on finding technological solutions to fight faked videos. Whether all these investments from stakeholders are helping to fight the infodemics is a question that remains to be answered. What gives me a beam of hope and optimism is that citizens all over the world are becoming more conscious and deeming digital literacy more valuable and that just might be the saving grace after all.