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The term “conspiracy theory” is used to indicate a narrative genre that includes a broad selection of (not necessarily related) arguments for the existence of grand conspiracies. The term is frequently used by scholars and in popular culture to identify secret military, banking, or political actions aimed at “stealing” power, money, or freedom, from “the people”.Conspiracy theories are based on the notion that complex plots are put into motion by powerful hidden forces. Less illustrious uses refer to folklore and urban legend and a variety of explanatory narratives which are constructed with methodological flaws or biases. Originally a neutral term, during the political upheaval of the 1960s it also acquired a somewhat derogatory sense, implying paranoia. The term is sometimes used to automatically dismiss claims that are deemed ridiculous, misconceived, paranoid, unfounded, outlandish or irrational. A proven conspiracy theory, such as the notion that Nixon and his aides were behind the Watergate break-in and cover-up, is usually referred to as something else, such as investigative journalism or historical analysis.

The political scientist Michael Barkun holds that a conspiracy theory is a belief which explains an event as the result of a secret plot by exceptionally powerful and cunning conspirators to achieve a malevolent end. According to Barkun, the appeal of conspiracism is threefold: First, conspiracy theories claim to explain what institutional analysis cannot. They appear to make sense out of a world that is otherwise confusing. Second, they do so in an appealingly simple way, by dividing the world sharply between the forces of light and the forces of darkness. They trace all evil back to a single source, the conspirators and their agents. Third, conspiracy theories are often presented as special, secret knowledge unknown or unappreciated by others. For conspiracy theorists, the masses are a brainwashed herd, while the conspiracy theorists in the know can congratulate themselves on penetrating the plotters’ deceptions.

Some scholars argue that conspiracy theories once limited to fringe audiences have become commonplace in mass media, contributing to conspiracism emerging as a cultural phenomenon in the United States of the late 20th and early 21st centuries, and the possible replacement of democracy by conspiracy as the dominant paradigm of political action in the public mind. According to anthropologists Todd Sanders and Harry G. West, evidence suggests that a broad cross section of Americans today gives credence to at least some conspiracy theories. Belief in conspiracy theories has therefore become a topic of interest for sociologists, psychologists and experts in folklore.

In an essay on conspiracy theories originating in the Middle East, Daniel Pipes notes that “[f]ive assumptions distinguish the conspiracy theorist from more conventional patterns of thought: appearances deceive; conspiracies drive history; nothing is haphazard; the enemy always gains; power, fame, money, and sex account for all.” According to West and Sanders, when talking about conspiracies in the Vietnam era, Pipes includes within the fringe element anyone who entertains the thought that conspiracies played a role in the major political scandals and assassinations that rocked American politics in the Vietnam era. “He sees the paranoid style in almost any critical historical or social-scientific analysis of oppression.”

Noam Chomsky, linguist and scholar, contrasts conspiracy theory as more or less the opposite of institutional analysis, which focuses mostly on the public, long-term behaviour of publicly known institutions, as recorded in, for example, scholarly documents or mainstream media reports, rather than secretive coalitions of individuals.

Proven conspiracies and conspiracy theories

Katherine K. Young states “(t)he fact remains, however, that not all conspiracies are imagined by paranoids. Historians show that every real conspiracy has had at least four characteristic features: groups, not isolated individuals; illegal or sinister aims, not ones that would benefit society as a whole; orchestrated acts, not a series of spontaneous and haphazard ones; and secret planning, not public discussion.”

“Some historians have put forward the idea that more recently the United States has become the home of conspiracy theories because so many high-level prominent conspiracies have been undertaken and uncovered since the 1960s.”

The existence of such real conspiracies coupled with the denial of any conspiracies what so ever even though the government itself promoted conspiracy theories (such as Communism plans to take over the world) helps feed the belief in conspiracy theories.

In the criminal justice system, actual conspiracies and conspiracy theories can also be distinguished by scale, as actual conspiracies are usually small in scale and involve “a single event or issue.”