Conspiracy Theories Don't Scale

Donald Trump is promoting yet another conspiracy theory. This time, he’s suggesting that the economy itself is a sham. He’s asserting that:

  1. Janet Yeller, Chair of the Federal Reserve, has been a puppet of Obama, and that Obama has instructed her to keep interest rates artificially low to bolster the economy.
  2. Unemployment figures reported by the Bureau of Labor Statistics (BLS) are outright and knowingly false. Trump suggests that the actual unemployment rate is over 40%, whereas the figure reported by the BLS is about 4%.

This isn’t the first conspiracy theory that Trump has promoted. He continues to deny the impact of carbon and climate change, he continues to state that Obama is a Muslim that wasn’t born in the United States, that the electoral system is “rigged”, among many other accusations.

There are lots of problems with conspiracy theories. But there’s a common thread I’ve observed in most of them: conspiracy theories don’t consider the challenge of human coordination and human propensity to leak facts. As a result, conspiracies don’t scale.

What do I mean by “scale?” Let’s look at a few high profile examples:

Enron — it the wake of Enron’s collapse, the SEC learned that only a handful of individuals who really knew what was going on prior to the collapse: Chairman Ken Lay, CEO Jeff Skilling, and CFO Andy Fastow. It seems that 1 or 2 of Arthur Anderson’s (Enron’s auditing firm) partners had some inclination of what was going on, but not more than that. On the eve of Enron’s demise, which ultimately destroyed tens of billions of dollars of value, only a handful of people knew knew the truth.

Bernie Madeoff — Bernie’s children turned him in after he admitted to them in private that his entire wealth management operation was a Ponzi scheme. Not even his children, both of whom were senior executives at the firm, knew of any fraud. In the investigation afterwards, it was discovered that Bernie ordered two junior staff members to produced fraudulent investment reports when clients requested redemptions. In a $65B fraud case — the largest in history — only ~3 people knew what was going on, and it’s likely that only Bernie knew the true extent of fraud.

9/11 — All together, only 15–20 people were involved in the planning of the 9/11 attacks. Of those, approximately 8 were pilots who actually flew the planes. No more than 10 others were involved. Based on what we know, the pilots didn’t even know what their targets were until weeks before the attack. All the pilots knew was that they were being recruited for a secret mission. Only a handful of Al Queda leaders actually planned the operation.

When you hear statements that fly in the face of common sense, the simple litmus test to think through is is “How many people would have to be lying for this to be true?” If that number exceeds 20, it’s likely a conspiracy theory, and nothing else. This is especially true when conspirators know that the truth is incriminating. As the number of people involved in a scandal grows, the truth will eventually leak. It’s simply human nature.

Let’s look at some of Trump’s claims through this lens. How many people would have to be lying for Trump’s statements to be substantiated?

False unemployment numbers from the BLS — dozens, if not hundreds of people work on these reports each month. There is a lot of transparency provided during the process. The process itself is scrutinized by many others. All together, hundreds of people are involved in this process, and it’s ongoing. It never stops. There is simply no way that hundreds of people are keeping secrets on this issue over the last 8 years of the Obama administration.

Climate change — even if you ignore all of the independent research done on the subject and only read the research of the EPA, the data is clear: climate change is real. The EPA has published dozens if not hundreds of reports on the issue, which represent the culmination of hundreds of researchers working for thousands of hours. There is simply no way all of these highly knowledgeable and intelligent researchers are producing reports suggesting there is a problem when in fact there isn’t one.

Electoral fraud — when Trump’s polling numbers began to dip in early August, he began to hint that, if he loses in November, that people should suspect that the electoral system is rigged. This statement is utter nonsense. Since votes are reported on a county basis to the state level, then if there were to be any fraud, state and county level officials would have to coordinate. Hundreds of county level and dozens of state level staff would have to knowingly commit fraud to make sure the numbers added up in plausible way to move the needle in favor of one candidate. There is no way that this many people can plan, in anticipation of losing, to adjust their votes, and to coordinate in real time on one day. It is simply not possible.

Conspiracy theories don’t scale. So please, when you hear people call out organizations, ideas, or movements as frauds, please just think: if this theory were to be true, what would it take to be true? If more than 20 people would have to conspire to make it so, then it’s overwhelmingly likely that the theory is false.