Not Quite What Bank Of England’s Andy Haldane Said About Social Media

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The Telegraph tells us that this social media stuff is very dangerous indeed, it could lead to destabilisation of the economy. They take this from Andy Haldane of the Bank of England. Except that’s really not quite what he does say:

Social media echo chambers could spread false ideas about the economy, leading to groupthink on a vast scale and undermining growth with “waves of collective irrationality”, the Bank of England has warned.

The economy could be “destabilised” if workers, consumers, house buyers and even businesses end up seeing the wrong information and believing incorrect “popular narratives”, said Andy Haldane, the Bank’s chief economist.

Well, no, not quite. Here’s the speech Haldane did give at the 100th anniversary of the founding of the Bank of Estonia:

In practice, there may be structural factors which could be acting in the opposite direction. The great trust
shift may mean people are less willing than in the past to trust expert opinion (such as through mainstream
media) and more willing to trust non-expert opinion (such as some parts of social media). Around half of
those in the EU use social media as a news source and, among those aged 18-24 in the UK, around a
quarter use it as their main news source.26
Yet we know that information from social media sources is typically filtered and personalised.

That fits people’s (personalised, localised) preferences. But it also results in news narratives which are more likely to
be self-reinforcing and self-referential than in the past. The echoes in this chamber are louder, reach further,
last longer. They are also less likely to be balanced and objective. More powerful, but less balanced,
popular narratives are a potentially destabilising influence on expectations and the economy.
This research points in one direction. The case for improved public understanding of the economy and
financial system has always been strong. But in a world where popular narratives are even more important
in driving economic behaviour, and where these narratives may be even more susceptible to destabilisation,
the case for improving public understanding is significantly reinforced. This is one blade of the scissors of
public engagement.

The point being made is one against groupthink. And yes, groupthink can indeed lead to escalation, to a self-referential spiral of ever more extreme misunderstandings of reality. It’s a real problem. At which point two points.

Firstly, that old world where we were all loyal Telegraph, or Guardian, or Mirror, readers, this had more or less groupthink? More, quite obviously, it’s just that the gatekeepers were different. A quick look at The Guardian’s coverage of austerity as government spending rose in cash terms, real terms and as a percentage of GDP should be all we need for that.

Secondly, what is the cure for groupthink? That’s Galton’s Ox, where all have their say. Yea even the nutters for we humans are actually pretty good at picking the bones out of such an array of opinions and presented facts. And as that wisdom of the crowds observation insists it’s only if all the nutters do have their say that it works.

Sure, groupthink’s a problem but social media is the cure for it. Not that we’d expect one of the gatekeepers of the earlier system, a national newspaper, to agree.

That this ‘ere internet is the solution rather being proven by the manner in which we can all look up Haldane’s speech and see what he actually said, no? We might even say that this web stuff moves us from a rather Catholic society to a more Protestant one, an argument John Wycliffe would recognise.