On April 23, 2013 a fake tweet from a hacked Associated Press account stated that explosions at the White House had injured Barack Obama. Stock prices immediately dropped, wiping more than $130 billion off the value of the S&P 500, and market liquidity dramatically declined:
In addition to raising further concerns about high-frequency trading algorithms, the hackcrash provides an opportunity to rethink how reality is created, framed and reported.
In The Image: A Guide to Pseudo-Events in America, Daniel Boorstin writes that in contemporary culture the fabricated, the inauthentic, and the theatrical have displaced the natural, the genuine, and the spontaneous, until reality itself has been converted into stagecraft. This concept of pseudo-events is quite powerful if we can differentiate between what is meaningful and what is merely represented to be meaningful in our environment – or if we structure our own pseudo-events to produce desired outcomes. (See Chris Hedges’ Empire of Illusion for further analysis).
The most essential skill in political theater and consumer culture is artifice. -Chris Hedges
Events help define reality. The activities and communities in which we participate (and those we choose to recognize or ignore) begin to create our reality.
In baseball, there is increasing evidence that specific actions of catchers influence umpire’s calls. By providing a more stable target and minimizing glove movement (i.e., pitch framing), a catcher can increase the likelihood that pitches are called strikes. In effect, certain catchers provide different outcomes for physically-identical events, as depicted in Baseball Prospectus:
Reactions help define reality. They do in baseball particularly because the umpire’s call becomes the record. Once the call is final, what occurred in the physical world no longer matters – whether it’s a pitch a few inches off of home plate or a potential perfect game. Officially, it never happened.
He who controls the past controls the future. He who controls the present controls the past. -George Orwell
The phrase “perception is reality” comes to mind. I hear it too often on projects when someone either doesn’t want to delve into historical facts or someone hasn’t adequately addressed a performance issue. Sometimes what actually happened matters less than what is agreed and communicated (i.e., how it is framed).
British con man John Drewe introduced false records into official archives to legitimize forged works of art. By placing documentation of his fakes next to established masterpieces, he manipulated the art market’s records and reputation. Similar to the hackcrash, he also demonstrated the potential impact of compromised sources of truth. Think about this the next time you see strongly partisan news broadcasts; the concept of manipulating reality undercuts a great deal of modern, mainstream reporting.
While the hackcrash was a result of (fictitious) reporting from a traditionally reputable source of information, the speed with which it occurred and the resulting impact demonstrate that reality is too often taken at face value – rather than evaluated with a careful consideration of how reality is created, framed and reported.