Standing here on the threshold of the third decade of the 21st century, we've watched the Digital Age transmogrify into the Information Age. Now awash with a digital record of everything that's ever been said, written or happened, from area news to Aristotle's ethical teachings, the barrier to whatever else we need or want to know is literally no higher than the tap of a finger. And if being up-to-the-minute isn't fast enough, we now have the world, and parts of the cosmos, available in real-time.
And all of this information is a good thing -- until it isn't. In his song, "Against the Wind," Bob Seger lamented that deadlines and commitments made him have to decide, "What to leave in, what to leave out." As digitally driven information morphs from handy to firehose overload, we have to learn how to consume it with increasing discernment - what to leave in, what to leave out.
As the children of the Information Age, we're constantly and increasingly at risk of becoming victims and/or purveyors of a potentially dangerous phenomenon: Availability Cascade. It occurs when we're exposed to something so much -- a maxim, a meme, misinformation or disinformation -- that we begin to accept it as truth and reality, and worse, act on it without confirming accuracy or relevance. Here's an old story from the Analog Age that demonstrates the power of Availability Cascade.
A busy baker saw this headline on a newspaper: "Economy headed for recession." Reacting to this "information," he cut his flour order in half. In a matter of days, the local miller was compelled to reduce his wheat order from nearby farmers, who cancelled equipment orders with the manufacturer, who laid-off employees who now couldn't afford to eat at the restaurants that purchased the baker's bread, causing bread orders to crumble. In the economy, Availability Cascade is a circular process, like a tornado.
By the way, the day the baker cancelled his flour order, he had plenty of business. But now, out of business and locking up his shop for the last time, he happened to notice the paper where he'd previously seen the gloomy headline. Looking closer, this time at the date, he was shocked to see that the newspaper was decades old. Turns out, it had been part of a display his antique store neighbor was creating. By not checking the information against the reality in front of his very eyes, he became both the creator and victim of Availability Cascade.
Out here on Main Street, the baker in our world is Wall Street. Headlines like "Recession in 2019?" or "Will the Fed continue to raise rates?" or "Is Brexit Deal in Jeopardy?" or "Will there be a trade war?" are actual potential hazards. But when stock indexes move hundreds of points up and down in a single day on these headlines -- for several days -- they become the baker. Their thousand-point, single-day gyration hysteria produces a byproduct called, you guessed it: Availability Cascade. And like the baker, overreaction by "The Markets" has the potential to create a recession that wasn't going to happen. It's another example of disconnect between Wall Street and the Main Street economy -- where you and I operate and from which real GDP performance is measured.
Today, it seems most information is free. But the information you can depend on, and use safely, isn't. Remember, Availability Cascade is just two-dimensional information until someone gives it life and legs by acting on it without jaundiced eye verification and skeptical ear due diligence. Today, free and easy "BREAKING NEWS" comes with a price: the responsibility to become discerning consumers of Information Age information. Especially today, in particular right now, regarding economic news and reporting.
Small business owners, the Information Age can level the playing field and empower us as never before. But it can take us down if we become victims of its worst aspects, like getting caught up in Availability Cascade. We can do our part to avoid talking ourselves into a recession with three steps:
- Do your own research and come to your own conclusions about the fundamental economic conditions in front of you.
- Spend more time listening to what customers need AND want.
- Spend less time listening to talking heads and the wildebeest herds known as Wall Street.
Write this on a rock ... If things are good with your business, say that -- out loud -- to whoever will listen. There's no law against a good news Availability Cascade? It could happen.
Jim Blasingame is the author of The 3rd Ingredient, the Journey of Analog Ethics into the World of Digital Fear and Greed.