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Friday, February 14, 2025

Dr Eric Crampton: The (transplanted) paranoid style in Kiwi politics


Some essays are timeless. In 1964, Richard Hofstadter diagnosed what he called “The Paranoid Style in American Politics”. His essay in Harper’s Magazine began:

“American politics has often been an arena for angry minds. In recent years we have seen angry minds at work mainly among extreme right-wingers, who have now demonstrated in the Goldwater movement how much political leverage can be got out of the animosities and passions of a small minority. But behind this I believe there is a style of mind that is far from new and that is not necessarily right-wing. I call it the paranoid style simply because no other word adequately evokes the sense of heated exaggeration, suspiciousness, and conspiratorial fantasy that I have in mind.”

The immediate context was the Goldwater Republicans. But Hofstadter argued that the style of political rhetoric was longstanding.

Senator McCarthy’s 1951 assertion that America must be subject to “a great conspiracy on a scale so immense as to dwarf any previous such venture in the history of man.”

The 1895 Populist Party’s manifesto arguing that “secret cabals of the international gold ring” were ruining America.

Newspaper stories from the 1850s warning that the Executive Chamber “is tainted with the infectious venom of Catholicism”, and that funding from Catholics abroad helps “the propagation of their creed.”

And other examples going back to the 1700s, from fear of the Freemasons to warnings of plots to install the House of Hapsburg as Emperor of the United States.

I’ve been re-reading the essay these past few weeks because I keep seeing the paranoid style here as well.

Hofstadter had warned that the paranoid style “is not confined to our own country and time; it is an international phenomenon.”

Last week, the University of Auckland took to Twitter to try to rebut a claim that ought to have been literally unbelievable.

A relatively small Twitter account had claimed that the University of Auckland had received over a billion dollars (NZD) from the American government, linking it to America’s USAID foreign aid programme. The USAID programme was under scrutiny in the US for bundling leftish American cultural programmes among its more normal work of stopping HIV transmission from mothers to infants in Africa.

Weird small Twitter accounts make all manner of claims. But this one took off.

The University’s response made perfect sense for anyone familiar with the basics of how universities are funded and US tax reporting requirements. So of course it didn’t help at all.

BusinessDesk’s Dileepa Fonseca later explained it for those less familiar with the basics. An American “Data Republican” website had scraped IRS forms that must be submitted by organisations with US charitable tax status. Auckland Uni solicits donations from alumni and others in the US so must file that form. The form requires listing of government grants but doesn’t distinguish between US government grants and New Zealand government grants.

And so a confused conspiracy theory took off. But it really shouldn’t have.

Suppose that you knew nothing about how universities are funded and saw the claim.

The first thing that should have occurred to a reasonable person is that a billion dollars is a large sum of money, even in New Zealand dollars. The University of Auckland’s Annual report for 2023 had total revenue at $1.5 billion. The annual report is not a secret document. Anyone can download it.

The University’s annual report said the University had received $64 million in research income from non-New Zealand government sources. $9.8 million of that total came from overseas governments.

If you knew nothing of how universities were funded, checking the annual report ought to have been simple. A billion-dollar discrepancy, on a one-point-five billion dollar budget, would be something of a Big Deal. University accounts are audited annually. The Annual Report lists Ernst & Young as the University’s auditors. The accounts being out by that much would be noticed.

And even if you thought that the auditors and the university were conspiring to keep a billion-dollar secret, academics who receive external research income tend to brag about it. They don’t keep it secret. New Zealand is a small place. Someone would have said something. Any journalist able to pin down a billion-dollar discrepancy in the University’s accounts would have earned that day’s front page – and a succession of subsequent front-pages.

There’s an aphorism that holds that everything looks like a conspiracy if you don’t know how anything works. But to a first approximation, nobody knows how anything works in a complicated world. Inventing elaborate conspiracies rather than checking the annual report seems part of the paranoid style.

The replies to the University’s attempt at explanation are particularly depressing.

The paranoid style is hardly limited to the political right. Replace USAID as villain with the Atlas Network or the Mont Pelerin Society and the style of argument hardly changes. Just the general political stance of the person weaving together fantastical strands.

Hofstadter concluded that “We are all sufferers from history, but the paranoid is a double sufferer, since he is afflicted not only by the real world, with the rest of us, but by his fantasies as well.”

The next four years are going to bring a torrent of erratic policy out of the United States – some good, but much bad. It will also bring a terrible information environment, with absurd claims bubbling up from fever swamps overseas.

If we can avoid the paranoid style and be a bit more cautious when evaluating implausible claims, we might suffer a bit less from this bit of history.

Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE

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