Just how gullible are we?

“Propaganda is making puppets of us. We are moved by hidden strings which the propagandist manipulates.”

– Everett Dean Martin 1929

That quote comes from a debate between social psychologist Everett Dean Martin and the father or modern propaganda, Edward Bernays in 1929.

Bernays literally wrote the book on propaganda in 1928, and has gone down in history as one of the 20th century’s most manipulative and powerful people.

Here’s a passage from his book, Propaganda (emphasis mine):

The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, and our ideas suggested, largely by men we have never heard of…. It is they who pull the wires that control the public mind.

Bernays later pivoted propaganda into public relations (PR), and became the father of modern advertising.

From Wikipedia:

His [Bernays’] best-known campaigns include a 1929 effort to promote female smoking by branding cigarettes as feminist “Torches of Freedom” and his work for the United Fruit Company connected with the CIA-orchestrated overthrow of the democratically elected Guatemalan government in 1954.

However, in today’s essay, it’s not PR I want to talk about, but propaganda.

Propaganda is still alive and well today

Today, we probably think we would never be swayed by crude propaganda efforts like those seen in the early 20th century. But I would argue that simply isn’t true.

Maybe you’d see straight through something like this pamphlet today:

But today’s propaganda methods are more subtle. And we’re in the midst of well-orchestrated propaganda plan right now. And it centres on Chinese tech company Huawei.

Over the last few months the US has been upping pressure on its allies to drop all business with Huawei.

This, it claims is for reasons of national security. And ultimately, it is.

In yesterday’s Exponential Investor Premium video, Eoin Treacy showed that Huawei is close to controlling 50% of the world market for 5G infrastructure. If it gets there, it will be able to set all the standards.

And if a Chinese company is setting the worldwide standards for 5G, and controlling more than 50% of the market, that is very bad for the US. At least, if you take a tribalist view of things – as most politicians do.

However, instead of just calling it like it is and saying, we can’t compete with Huawei on a level playing field, the US has decided to rewrite the rules of the game.

It has declared Huawei a national security threat and ordered its allies to stop dealing with the company, for national security reasons. Huawei, it says, is essentially a Chinese government agency, whose sole purpose is to infiltrate and spy on the West.

Of course, it has provided no evidence for this. To date, no country has. However, that’s where good old propaganda comes in.

Throw enough mud, and some of it will stick, as the saying goes. The US has now managed to get enough mud to stick that it can declare Huawei a national security treat without too much public backlash.

And because Huawei is now officially a threat to democracy and world peace, it can order Google to blacklist its devices. Opening up millions around the world to real security threats when their phones stop receiving critical updates.

Oh the irony

You have to love the irony here, which was well summed up by the top-rated comment on yesterday’s The Times article about the debacle.

Here was the opening of the article:

Millions of Britons could be at greater risk from hackers after Google announced that it was cutting services to Huawei smartphones to comply with an order from President Trump.

The US technology giant said yesterday that it would no longer provide security updates for the Android operating system to the Chinese company after it was blacklisted by Washington.

This means that owners of Huawei smartphones, including more than three million in the UK, could receive security updates weeks later than owners of phones supported by Google. This will give criminals a longer window to exploit flaws in the software and potentially steal data.

And here was the top-rated comment:

When the US or the UK does something like this, it’s for our own good. But when one of the UK or US’s “enemies” does it, it’s evidence they are the bad guys.

We’ve seen moves like this for years and years. But they usually get called out for what they are. The thing I find strange about the whole Huawei mess is no one is calling it like it is.

None of the major news outlets seems to be thinking critically about it.

Walk around where you live today and you’ll see many a poster for Huawei’s phones and other devices. Huawei is a popular brand. To cut its users off from critical security updates seems very short-sighted.

In fact, it’s basically holding your citizens and the citizens of your allies in contempt.

As The Times said (emphasis mine):

This means that owners of Huawei smartphones, including more than three million in the UK, could receive security updates weeks later than owners of phones supported by Google. This will give criminals a longer window to exploit flaws in the software and potentially steal data.

It’s like a collective punishment for daring to buy Chinese-made technology. But thanks to the wonders of propaganda, it’s being sold as something that’s for our own good.

What will Huawei do now?

The question is, what will Huawei do now, and what’s going to happen to the millions of people who rely on its devices.

As you may expect, Huawei saw this all coming. From Wired yesterday:

The momentous news that Google is cutting off its Android relationship with Huawei in response to a US government ban on the Chinese giant wasn’t much of a surprise to Huawei. A fresh report from Bloomberg today adds to the mounting evidence of Huawei preparing for being shunned by the United States. It suggests that Huawei’s App Gallery, which has been present on Huawei and Honor Android devices for a while, is in fact an earnest, albeit somewhat clandestine, effort to build a genuine alternative to Google’s dominant Play Store.

According to Bloomberg, Huawei pitched app makers in 2018 with the offer of helping them make inroads into China, the world’s largest smartphone market, if they built software for its App Gallery. Like all other Android phone vendors, Huawei is painfully aware of just how dependent it is on Google’s first-party apps and app platform, though unlike the majority of others, this company is also subject to great scrutiny and hostility from the US government. So it makes perfect sense that Huawei would try to prepare for the potential fallout of losing its working relationship with Google.

If Huawei does manage to create a viable alternative to Google’s Android, it could cause huge problems for Google and other US tech companies down the line.

If non-US phone manufacturers have to anticipate that Google might blacklist them on a whim of the US government, or one of its allies, they will all start creating alternative software.

This could ultimately lead to Google and Apple losing their edge in the smartphone wars.

Whether this is good for us, the people, is another matter entirely.

If Huawei really is as evil as our governments want us to believe, then they are doing us a huge favour.

I mean have you seen that poster of “America under communism”? It looks like a nightmare come true.

However, if this is all just posturing and propaganda, it’s kind of a mean thing to do to your citizens.

But in the long run, maybe we will end up better off. Maybe it will ultimately break Google’s grip on the world of smartphones and internet communication.

And maybe, just maybe we’ll end up with a better, fairer alternative.

I guess time will tell.

Now, if communication technology is an area you’re interested in – and if you’ve read this far I would hope you were – I think you’d get a lot out of my publisher Nick O’Connor’s book: The Exponentialist.

As you may expect, it is all about exponential growth in technology, and how you can invest in it. And the best part is, as an Exponential Investor reader, you can get a free copy. Simply click here to claim yours now.

Until next time,

Harry Hamburg
Editor, Exponential Investor

PS what do you think about this whole Huawei fiasco? Let me know: harry@southbankresearch.com.

Category: Technology

From time to time we may tell you about regulated products issued by Southbank Investment Research Limited. With these products your capital is at risk. You can lose some or all of your investment, so never risk more than you can afford to lose. Seek independent advice if you are unsure of the suitability of any investment. Southbank Investment Research Limited is authorised and regulated by the Financial Conduct Authority. FCA No 706697. https://register.fca.org.uk/.

© 2020 Southbank Investment Research Ltd. Registered in England and Wales No 9539630. VAT No GB629 7287 94.
Registered Office: 2nd Floor, Crowne House, 56-58 Southwark Street, London, SE1 1UN.

Terms and conditions | Privacy Policy | Cookie Policy | FAQ | Contact Us | Top ↑