The Political Economy of Alternative Realities

We build a model in which a politician can persuade voters of a coherent alternative reality that serves to discredit the intellectual elite. In the alternative reality, members of the elite conspire, and criticize the politician’s competence because she disagrees with them about a divisive issue such as cultural values. The alternative reality is false, but if the voter believes it, he will distrust the elite’s criticism. This model makes several predictions. (1) The alternative reality is spread by low-quality politicians and reduces accountability. (2) The alternative reality is only spread in sufficiently divided societies, and the nature of the divisive issue—cultural versus economic—determines whether right-wing or left-wing politicians spread it. (3) Once the elite has been discredited, the voter will not trust its advice even in unrelated domains such as climate change. (4) The politician will follow policies (e.g., anti-vaccination) that contradict the elite consensus even if she knows those policies to be universally harmful, to avoid the appearance of being in the elite conspiracy. (5) Discrediting the elite creates demand for non-elite media outlets (e.g., Fox News), which spread misinformation to reinforce beliefs in the alternative reality and sustain that demand. We discuss evidence consistent with these predictions.