Praxeology and Robert Malone’s “Surveillance Capitalism”

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Vincent Cook
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Dr. Robert Malone’s recent Mises University talk, PsyWar: Enforcing the New World Order, raises important and timely questions about advanced mass psychological manipulation capabilities being weaponized by globalized corporatists through what he calls the “surveillance capitalism,” practiced by firms like Amazon, Google and Facebook. These firms sell highly-detailed personal data that facilitates things like targeted advertising, advocacy journalism, online trolling, censorship, and deplatforming for large-scale manipulation of individual beliefs, values, and feelings, and for waging “fifth generation warfare” against domestic and foreign adversaries of the NATO states.

Does this new, personal, data-driven authoritarianism extract value from individuals against their will and use it to rob them of their autonomy? How do Austrian economists incorporate such assaults on individuality into their praxeological analysis of society?

The notion that psychological manipulation can nullify individual autonomy is far from new. In the 1890s, the French sociologist Émile Durkheim argued that one’s beliefs and values are largely shaped by the influence of others and not by one’s own experience, so that purposefulness is allegedly vested in the “collective consciousness” of a society and not in the separate minds of individuals who compose it. In the early 1920s, Walter Lippman and Edward Bernays extended this irrationalist theory of cultural determinism by arguing for the feasibility of propaganda experts systematically manipulating a culture by using non-rational rhetoric that exploits authority figures, stereotypes, and emotionally-charged words and imagery in their messaging. It was Bernays who originally coined the phrase “psychological warfare” in connection with his World War I propaganda efforts on behalf of the Committee on Public Information (CPI). Lippman, who had lobbied President Woodrow Wilson to create the CPI in 1917, two decades later went on to assist British intelligence in its highly successful covert propaganda campaign to discredit opponents of American intervention in World War II. Both Lippman and Bernays practiced what they preached.

In 1958, John Kenneth Galbraith explored the economic implications of the Lippman-Bernays model of psychological manipulation in his book The Affluent Society. He noted that, with the power to shape consumer tastes, private businesses are incentivized to manufacture artificial consumer desires via commercial advertising, inducing consumers becoming more affluent in terms of material goods than their rational self-interest requires. Among Austrian economists, Murray Rothbard objected to Galbraith’s claims about the manufacturing of artificial consumer desires in his treatise Man, Economy, and State. Rothbard’s trenchant critique of Galbraithian affluence theory provides a significant starting point for how Austrian economists can address Malone’s questions and address the claims of the cultural determinists.

Rothbard emphasized that persuasion is necessarily a voluntary process—the target of advertising must voluntarily choose to adopt the ideas for advertising or other propaganda to work. He further pointed out that marketing research, for example, would be pointless unless advertisers were interested in catering to desires that exist independently of their own psychological manipulations. In a “psywar” context, Rothbard’s observation regarding market research applies to the market for personal data harvested by Big Tech firms—it is precisely because individuals have behavioral characteristics that aren’t manufactured by propagandists that data about those characteristics becomes valuable to propagandists.

It is still the individual actor who ranks possible courses of action and acts upon those rankings. One might add that the availability of any personal data that aids in the crafting of a more persuasive message is also a function of a voluntary waiver of privacy. If a propagandist’s influence happens to warp his target’s perceptions of reality and derails the target’s pursuit of happiness in the propagandist’s own interest, it is not because the target has been mysteriously robbed of his or her autonomy. Contrary to Durkheim, every action is still guided by an individual mind, not by a mere cell in some collective hive-mind.

Given the voluntariness of persuasion, we must reframe the key “psywar” questions as: why have so many people become so gullible and so unconcerned about their own privacy in the age of social media? Why, in the new social media world of compromised privacy, has it become so much easier to influence people into accepting new beliefs and values that are contrary to their own rational self-interest?

One way to address these questions is with a thymological understanding of human behavior, enabling one to infer that the application of rationality to the formation of beliefs and values is not automatic for human individuals, but is itself an act of will. This, in turn, suggests that the new big data technologies are making it easier to detect and exploit pre-existing irrational prejudices and to reward willful irrationality, altering the natural disposition favored by the innate features of one’s emotional responses.

While economics doesn’t specify how goals are formulated, an independent ability to formulate goals must, as Rothbard noted, logically precede any attempt to influence the goals of others. While cultural determinists presume a deep distrust of the ability of individuals to keep themselves grounded in their own humanity and in a realistic understanding of their own circumstances in the face of social pressures. Of course, they beg the question of how they themselves, and any propaganda technicians following their advice, are supposed to transcend such limitations. Propaganda can only work when its targets choose not to reason about it or filter it using more fundamental principles that are grounded in reason.

If a propagandist can build a personalized profile of an individual’s intellectual weaknesses and craft messages to exploit them, such circumvention might be made more effective. Even worse, if individuals are indoctrinated to embrace irrationality as a part of their “education,” then (as Dr. Malone observed) these “educated” people will be even more susceptible to the influence of propaganda than the relatively undereducated “deplorables.” Not only crony internet firms, but government-controlled schools too have a lot to do with the contemporary trend towards increased susceptibility to manipulation.

Another way to address these questions is with the economic inference that one can’t benefit reliably from information derived from other people’s rationality and experiences whenever a monopolistic “gatekeeper” stands in the way. Such gatekeepers are incentivized to manufacture and selectively amplify falsehoods that better suit the gatekeeper’s interests, while preventing dissenting truth-tellers from being heard. What Dr. Malone calls “surveillance capitalism” is better described as “surveillance corporatism,” where selective subsidies, threats of regulation, immunities from lawsuits, and discrimination by privileged financial and investment firms favors government-compliant gatekeepers over competitors who happen to offer more privacy and/or fewer restrictions on speech. Interventionism has helped create the internet environment that is so hostile to privacy and to dissenting speech.

What manipulative “psywar” techniques boil down to is centralizing control over the flow of information and undermining the confidence that individuals have in using their own faculties to sense, feel, think, and act for themselves. Dr. Malone’s observations about attempts by elites to engineer free-floating anxiety, a sense of unreality, a hypnotic adherence to charismatic authority figures, etc., on a global scale in connection with the Covid pandemic response speak directly to these points.

However, we have also witnessed widespread grass-roots opposition to “psywar” narratives and censorship emerging, some of it inspired by Dr. Malone himself when he famously broadcast his observations about “mass formation” on Joe Rogan’s podcast. The good news is that the self-evident truth of each person’s purposefulness implies that each of us still has the power to keep our own beliefs and values anchored in our own rational understanding of the world, regardless of whatever nonsense we are fed. The empirical evidence that points to censorship and gaslighting have not become universal yet, let alone having spawned a global backlash.

Looking forward to a society based on liberty and peacefully-acquired ownership rights, such widespread threats to privacy and free speech aren’t likely to arise. Market competition may incentivize profit-seeking businesses to create internet services that better promote our free speech and privacy. To be sure, free competition by itself is not an ironclad guarantee against malignant influence. Falsehoods—whether manufactured by propagandists serving their own interests or spontaneously arising and propagating through a process of cultural evolution—will always be competing against truths that spring from one’s own intellect, from truth-tellers combatting the falsehoods, or from received traditions that happen to reflect the reasoned wisdom of prior generations.

It is still up to each individual actor to take an active role in continually improving their own beliefs and evaluative principles, always honing their generation of ex ante utility scales to better optimize their ex post experiences of satisfaction. The ultimate responsibility for guarding against deception and manipulation and for achieving such personal moral progress rests with each individual. First, one must understand and cherish open, rational discourse and selective disclosures of personal information before markets can properly align information flows to one’s needs.