Fake News and Its Impact on the Global Economy
“The master signifier in fake news is power and politics. That’s fixed, everything else floats… The world is deep in the throes of a disinformation era through fake news, alternative facts and post truth.” – Glenda Daniels.
The topic of fake news as well as its impact on global political and economic events continues to rears its ugly head. Recent examples are the election of Donald Trump as the 45th President of the USA, as well as the continued discussions and debates around Brexit. Where does fake news come from? Unfortunately, the advent of the easy access to the internet as well as the popularity of social media are a very easy way of spreading rumours and made-up stories about current, past, and future world events. Social media is an exciting new platform; however, it runs the risk of being a primary source for fake news.
The political impact of fake news
How realistic are the charges that fake news has played and continues to play a major role in the outcomes of major global political events?
It is without a shadow of a doubt that any news and commentary about these events spreads quickly and has a wider range due to the rapid increase in the use of various social network platforms such as Twitter, and Facebook. According to the article in the Washington Post titled ‘More and more people get their news via social media. Is that good or bad?’, political science hasn’t fully understood what the implications of how people use social media to get news are. However, they have determined that consuming news makes people more likely to vote.
What happens if the news that people are consuming is fake?
Needless to say, the consequences of fake news being interpreted as the truth will be disastrous. We can see from the hullabaloo around the recent USA elections that both sides accused each other of spreading fake news. If the rumors of fake news are true, then it played a major role in the outcome of the recent elections.
I am not a political scientist but, in my understanding, even the Russians have been accused of spreading fake news to influence the results of the USA presidential election. Did the Russians really spread rumors about the candidates? Even if this statement is true, was the impact of this spurious news so powerful that a large percentage of American citizens changed their vote from one political party’s candidate to the other candidate? I am not sure that we will ever know the honest answers to these questions.
The economic impact of fake news
We know that fake and actual news about geopolitical and socio-economic events plays a major role in influencing the price movements of the assets listed with the global financial markets.
A good example of this is how the markets reacted with shock and horror to the results of the Brexit vote, even though this news was not fake. I am not sure that anyone, apart from the people who campaigned to leave the EU, actually believed that the majority of voters would vote for Britain to leave the European Union.
In a nutshell, global stocks were hammered as the Brexit result shock shook the world’s financial markets. According to the authors of this article, Nathan Bomey and Matt Krantz, the “U.S. stock market suffered its worst drop in 10 months… as shock over the United Kingdom voters’ move to exit the European Union and Prime Minister David Cameron’s subsequent resignation announcement sent global markets into a tailspin.”
This article was published eight months ago, and the saga around Brexit is still ongoing. Needless to say, as news, including fake news, continues to break around this topic, it will continue to have a major impact on the markets one way or another.
Unfortunately, professional journalists and the press are now being accused of spreading fake news. According to the president of the British Supreme Court, Lord Neuberger, members of the media are guilty of attempting to undermine the courts during the delivery of the Article 50 judgement.
Determining whether news is fake or not
Needless to say, no matter how the daily news is disseminated, it’s not an easy matter to determine whether this news is fake or not. We live in a post-modern world where 50% of the global population has access to social media via mobile devices; therefore, it is much easier for global citizens to gain access to the news. People are also known to react emotionally to causes they care about; thus, it is much easier to get people riled up by carefully planting fake news stories about major global events, knowing full-well that they will spread like wildfire around social media.
Professional journalists and researchers are uncovering fake news and offering people tips on how to spot this news. But the reality is that it is going to be virtually impossible to shut down all of the fake news sources. The fake news is also going to become more and more believable as time goes by; thereby, creating a greater challenge to determine what is real and what is concocted by mischief-makers.
In summary, fake news is about political intrigue harnessing the power of social media. It also apropos the creation of fake news websites which masquerade as authentic news sites. Finally, fake news is about politics and power and not about truth and virtue.