Conspiracy Theories and Personal Finance

What are Conspiracy Theories?

This term gets bandied about a lot recently, and these theories find their fans at both ends of the ideological spectrum.

Source: Jan Willem van Prooijen, Andre Krouwel and Thomas Pollet, “Political Extremism Predicts Belief in Conspiracy Theories,” Social Psychological and Personal Science 6(5) June 2015. Retrieved from ResearchGate, 2022-06-19.


Here is a general definition as provided by the European Union (the very existence of which is no doubt cited as evidence to support a conspiracy theory).


What are they?

The belief that certain events or situations are secretly manipulated behind the scenes by powerful forces with negative intent.


Conspiracy theories have these six things in common

  1. An alleged, secret plot.
  2. A group of conspirators.
  3. “Evidence” that seems to support the conspiracy theory.
  4. They falsely suggest that nothing happens by accident and that there are no coincidences; nothing is as it appears, and everything is connected.
  5. They divide the world into good or bad.
  6. They scapegoat people and groups.


Why do they flourish?

They often appear as a logical explanation of events or situations which are difficult to understand and bring a false sense of control and agency. This need for clarity is heightened in times of uncertainty like the COVID-19 pandemic.


How do they take root?

Conspiracy theories often start as a suspicion. They ask who is benefiting from the event or situation and thus identify the conspirators. Any “evidence” is then forced to fit the theory.


Once they have taken root, conspiracy theories can grow quickly. They are hard to refute because any person who tries is seen as being part of the conspiracy.


People spread conspiracy theories for different reasons

Most believe they are true. Others deliberately want to provoke, manipulate, or target people for political or financial reasons. Beware: They can come from many sources e.g., internet, friends, or relatives.


Some Conspiracy Theories Related to Personal Finance

Debt Slavery Theory

In former times, debt slavery may have been known as indentured servitude. For example, on a trip to a historic site in Virginia, we learned about a wealthy landowner in the colonial era who had made his way across the Atlantic by paying his passage with his labour for a certain number of years. After working off his debt, he went on to establish himself as a man of wealth and influence.


These days, however, debt slavery has to do with the conspiracy theory that everyone is enslaved by debt holders, banks, corporations, the Rothschilds, etc. The solution is to stop paying debts, which will cause the economy to reset, jobs will be freely available, and everyone will be able to keep all the things that they bought on credit.


The Bible presents a vision of what something like this might look like in Leviticus 25, referred to as the Year of Jubilee. At the end of 50 years, slaves are to be freed and land is to be returned to its original owners. There are more details than I am willing to go into here, but there is a clear difference between the modern-day conspiracy theory fueled by resentment and scapegoating, and the ancient community-oriented restoration of just relationships.


Feminists Use Credit Cards to Destroy the Family

According to some in the men’s rights movement, radical feminists have been at war against the traditional family for decades. Among them, Henry Makow, a Canadian conspiracy theorist (and, interestingly, inventor of Scruples, the board game about moral dilemmas). How are feminists fulfilling this scheme to displace men from their traditional leadership role as head of the household? By promoting women’s economic independence that can be gained, in part, by access to credit.


This is such an odd story. Feminists are not manipulating credit to spread their agenda. It seems like a desire to return to an era that really only existed on TV. There are some men, though, who feel threatened and scared. Women are taking on financial power and independence and it means sharing power and mutuality in the household.


Worldview of Conspiracy Theorists

As David Robert Grimes reports in the Financial Times, “This worldview has no room for coincidence, ineptitude, or randomness. Events are engineered by a nebulous ‘them,’ pantomime villains with sinister intent. Conspiracy theories pivot on the idea that nefarious groups are responsible for events, even when other explanations are far more probable.”


One of the reasons conspiracy theorists are able to spread their worldview is because social media gives them efficient access to an audience craving for a simple solution to the problems or injustices they perceive. They then exploit the Illusory Truth Effect, coming to believe as true something we know is false but being overwhelmed by constant repetition of the same misinformation.



Here are some recommendations on how to address conspiracy theories from Andrew Feinberg.


Filter Out the Noise

Be alert to the possibility to the possibility that one side of the story is receiving undue attention.


Facts Can Distort

Conspiracy theorists may cite facts once in a while, but they may not be relevant to the argument they purport to make. Focus on the facts that matter most.


Consider the Source

While facts can distort, you should at least expect what you are hearing to be based on facts. Is the advice you are given based on evidence? Have others reviewed it? Does it come from a source known to be reliable and trustworthy?


What Can We Do?

It seems simple to say, but critical thinking and fact-checking are important. When you are presented with a message that may meaningfully change your perspective, that is not the time to simply trust the messenger. And don’t think that just because you are educated and intelligent, you know what’s true.


Because so much of our day is filled with decision making, we often use intellectual shortcuts – heuristics – to save mental energy. That makes sense for a lot of the things we do. An example of a financial heuristic that we may apply when shopping is, “you get what you pay for.” A more expensive product is thought to cost more because more effort went into making it. That works well when we are in the market for a high-quality custom-tailored suit. However, for too often this has been applied, uncritically, to expensive mutual funds. Fact-checking that claim, however, leads to the discovery that one of the most consistent factors in mutual fund performance is the inverse relationship between fund fees and fund performance. To be clear, this is not a guarantee, but the probability of this outcome is strong.


If you feel someone is getting caught up in a conspiracy theory, one of the things you should not do is mock them, fun though it may feel at the time. Empathy is essential. Many people who accept conspiracy theories are themselves victims of purveyors who are seeking power or money. If daily life has become difficult, these theories provide a simple and straightforward solution. Calling on the governor of the Bank of Canada to be fired is a simple action presented as the solution to a complex problem. Ridiculing someone is not going to work if by doing so we undermine their very sense of identity. Instead, help them to engage their own critical thinking skills by asking, “What information would help you change your mind about …debt slavery, …microchips in vaccines, …mutual fund fees?”


Finally, don’t forget our own propensity to swallow lies. A dose of humility and critical thinking will serve all of us well.


This is the 153rd blog post for Russ Writes, first published on 2022-06-20.


Next weekend, my wife and I will have the privilege of attending our second daughter’s wedding. I will be taking a bit of a holiday from posting a new blog article as a consequence.


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Disclaimer: This blog post is intended for general information and discussion purposes only. It should not be relied upon for investment, insurance, tax, or legal decisions.


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