Digital reality as a Ponzi scheme: you benefit from replies of others
And there is no other value there
In today’s Bloomberg newsletter “AI, Orality, and the Golden Age of Grift,” Joe Weisenthal discusses how new media induce a reality in which values have no physical anchors, making fraud an environmental condition.
The physical world verified truth and validated values through sensory experience—most reliably through physical harm and, ultimately, death. Subjectively perceived objects had objective physical characteristics that our sensorium learned to recognize for the sake of survival. Walking into a wall or insulting others led to perceptible consequences, so physical verification commanded respect.
The media-induced reality does not have “objective” and “solid” points of reference. Its only referents are others (virality).
Without objective referents for “good” and “bad,” induced reality seems easy to manipulate. It’s not that easy, though—if someone finds a recipe for manipulating virality, he or she will rule the Galaxy. So, the risk of someone taking control over virality is not the greatest one. The greater harm is that this environment invites everyone to manufacture social capital through virality, which also leads many to manufacture political and financial capital just by “building” responses and nothing else.
This environment invites polarization, but it also invites grifters and frauds.Frauds are among the key affordances of the digital environment, because this environment is made of what we, collectively, make of it.
The environmental feature works not only within the digital sphere itself. Any medium recalibrates sensory-cognitive settings and thus conditions the brain and behavior, not just the environment. From the dominant medium (digital), cognitive and behavioral patterns spread elsewhere. The ethics of no-reference-point values permits all practices.
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The reality induced by electronic media (which Debord called the “society of the spectacle” for its spectacular illusiveness) was kindergarten compared to digitally induced reality.
Baudrillard said that in a society with material abundance (damn capitalism!), value shifted from the material to the symbolic sphere. People buy clothes not for their use value but for their prestige. So, in addition to use value and exchange value, Baudrillard argued, we need to introduce symbolic, or sign, value. (And the society of the spectacle managed to refine sign value from human emotions, commodify it in the form of audiences, and sell it to advertisers.)
Baudrillard did not live long enough to see how naive (and “solid”) the world of his sign value is compared to NFTs.
The values in the digitally induced reality have no other expression than the participation of others—as if it were a Ponzi scheme. And it is a Ponzi scheme. Anything viral and “participatory” brings more value to earlier contributors, but this value exists nowhere except in the engagement of later contributors. Be it cryptocurrency or a viral discussion of Trump, the early contributors benefit entirely from later contributors joining. (Although it’s not always a benefit—sometimes it’s suffering.)
Those joining later pay a “tribute” of responses to those who joined earlier. (Read more in my The Digital Reversal—sorry for the self-quote; at least self-quote is the honest NFT of all.)
The digital Ponzi scheme is, essentially, another reading of the network effect, according to which the benefits of using a network grow for each user with the growth of the network itself.
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Same as with truth, value is now a referendum by clicks—the validation by dissemination. It’s not someone’s moral tweak or failure—it’s purely a media effect.
This phenomenon was first described as a factoid by Norman Mailer in his 1973 biography of Marilyn Monroe. The only reality of a factoid is its dissemination in the media. But factoids are not lies. They are much better than lies—they are even better than reality. Marilyn herself subjected herself to the factoids that the media spread about her. Throughout her entire life she enacted nothing else but the Marilyn of the media.
It’s Baudrillard’s simulacrum: a copy without an original, a picture that precedes the world it depicts, a map that shapes the territory.
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Amid the lack of physical referents for the validation of values and the verification of truth, the massivity of others piling onto a topic (~viral speed) is the only verifier in a reality composed entirely of others (and algorithms).
Unlike the old, broadcast media reality, in which we journalists had the monopoly over the factoid, the new digital reality entitles everyone to attempt their own “validation by dissemination.” Everyone can try to go viral—which is very hard—or to simulate being viral—which is more or less doable for anyone grasping that…you can now do it.
The emancipation of authorship by the internet also meant the emancipation of factoids. The coagulation of DIY factoids into the most massive collective truths becomes a new truth referent and ethical guideline for everyone, just as it was in tribal orality—hence digital orality. In a society shifting from books to digital, absolute truth reverses into crowdsourced truth. The difference between primary orality and digital orality is the solidity of physical walls and other people’s fists. You cannot cheat the materiality of objects or other people in the physical world by distributing factoids.
This new environment invites new kinds of grifts and frauds, now based on the simulation of virality. Digital frauds simulating virality FALSELY induce the induced reality. How unethical.
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Joe Weisenthal mentions the means by which people induced reality throughout history—and these were media means, of course (“Everything is a media effect” is the motto of this blog).
He highlights the level of interactivity of a medium that allows us either to detach or to immerse ourselves. That is the essence of the “literacy vs. orality” dichotomy—now a trichotomy, with a new hybrid form: digital orality. TV, says Joe, was in some ways similar to the book: it broadcast a top-down, authoritative reality, with users having little say in it.
Joe refers to a startup, now invested in by Amazon, that allows “viewers of TV shows to use AI to create their own scripts of shows they like.” My take: it won’t fly. It’s the rearview-mirror effect: they engineer a “future” aimed at enhancing the past.
It resembles the concept of the “Daily Me” by MIT Media Lab’s Nicholas Negroponte from the mid-1990s: a special program would ask readers what they wanted to read about and then create a customized newspaper—the “Daily Me.” It was the rearview mirror effect, too. Besides, the concept had another major flaw: it required users to identify and declare their informational tastes and needs—an unnatural task for a regular person. Truly customized “Daily Me” emerged 10 years later on social media—without requiring users to reflect on what they consumed or to choose authors and topics. Algorithms handled the job, learning preferences from users’ online behavior.
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Anyway: TV, ackshually, was not that much of a “one-way” medium. We got the remote control (which ruined the happy lives of advertisers and forced them to be more inventive, as viewers began switching channels during commercials).
Curiously, the TV screen became a testing range for user engagement not only because of remotes. Here is another shameless self-reference, this time from my 2020 Postjournalism and the Death of Newspapers, where I quote Rushkoff and Leary:
“User-managed interactivity entered the media via video games. Douglas Rushkoff, in his 1994 book Media Virus!, described the first user interference with media, citing his interview with Timothy Leary. Leary recalled that the early-1970s video game Pong let kids “move things on a screen.” As he told Rushkoff,
The importance of the Nintendo phenomenon is about equal to that of the Gutenberg printing press. Here you had a new generation of kids who grew up knowing that they could change what’s on the screen... The ability to change what’s on the screen is the tremendous empowerment. (Rushkoff, 1994, p. 30.)”
Screen was so engaging that it invited to overcome broadcasting. Most importantly, even TV already fostered “empathic involvement” (McLuhan): delivering distant news and dramas into homes and, at the same time, delivering discarnate users to dramatic scenes—a precursor to our resettling into the digital today.
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Media evolution started with detaching human mental or physical faculties through media into surroundings (McLuhan’s “media as extensions of man”) and has led us to attaching our mental and physical capacities to media, within which we now create a new reality comprised entirely of us and our interaction with the medium. The human explosion into the world reverses into media implosion into humans and reverses everything else.
(That’s why deep space exploration will never happen; even Musk’s Mars mission is simply outside the logic of media evolution—see The Chain of Singularities.)
As of now, it’s still the digital Stone Age. We still move, essentially, the cursor on the TV screen, amazed by the Pong game. Soon, however, AI will be moving the cursor in our consciousness. What will be the referents for values then? Time? Fulfillment? Or just quite easily induced hormonal pleasure?
See also books by Andrey Mir:
The Viral Inquisitor and other essays on postjournalism and media ecology (2024)
Digital Future in the Rearview Mirror: Jaspers’ Axial Age and Logan’s Alphabet Effect (2024)
