Why Do We Need Human Rights? (32): Market Failure in the Marketplace of Ideas

First, a brief reminder of how I understand the marketplace of ideas and how it justifies freedom of speech. I normally don’t do this, but I can save us all a lot of time by quoting myself:

The point is this: ideas that can get themselves accepted in a competitive market of ideas will tend to be of better quality than other ideas. The marketplace of ideas therefore improves the quality of our ideas and our thinking. If different ideas are presented in an “ideas-market”, and if that market is populated by a maximum number of free agents expressing themselves freely, then those competing ideas will be exposed to a maximum number of supporting and dissenting arguments, and the balance of arguments in favor of or against an idea will be compared to the same balance for counter-ideas. The idea with the best balance will “survive”, because alternative ideas will be seen as comparatively defective, given the fact that the arguments in favor of them are weaker or the arguments against them are stronger.

It’s crucial that there is mass participation in the argumentation and deliberation going on in this market, since only mass participation will allow for the multiplication of possible arguments and alternative ideas. Hence, it’s also crucial that there’s a right to free speech and that everyone (or at least a large number of people) has and effectively exercises this right. This mass participation of free and expressive agents will improve the quality of ideas and of their supportive arguments even before the ideas reach the market: people who know that their ideas will meet probing and massive criticism will prepare themselves for this criticism, and this preparation means that they will preemptively develop supportive arguments and undermine opposing arguments. Hence, these ideas may even change and improve before they reach the market.

If this metaphor of the market is convincing then it can provide a powerful reason for adopting and protecting the right to free speech. There’s hardly a more valuable good than quality in thinking and if free speech can help to deliver that good it’s difficult to argue against this right.

Personally, I do think that the metaphor of the free market can help us to understand the logic and benefits of free and widespread public discussion and of the free exchange of and competition between ideas, and that this understanding can provide a good justification for freedom of speech. Much of what goes on in the marketplace of ideas is similar to what goes on in a market of goods or services. The important similarity is the free exchange of and competition between ideas, the lack of restrictions on exchange and competition, and the freedom of all to join in the exchange and competition on a equal footing. And although I would advise not to push the metaphor too far (a perpetual and fatal temptation of all economic metaphors), there’s probably one more similarity that can be useful, namely the concept of market failure.

Market failure in economics refers to those cases in which a free market, left to itself, fails to allocate goods and services efficiently. In other words, there is at least one market participant who may have been better off without anyone else being worse off had other systems operated instead of the free market. Examples of market failure are

  • information asymmetries, which occur when one party in a transaction has more or better information than the other (classic examples are the used-car salesman selling a defective car to someone who has no knowledge of cars, and the terminally ill person buying a life insurance)
  • externalities, which occur when a transaction has a cost that is not transmitted through prices and that is incurred by a party who did not agree to the action causing the cost (the classic example is industrial pollution imposing costs on the whole society, costs that are not included in the transaction price of the polluting goods).

Market failures can also occur in the marketplace of ideas. It’s important to check whether these market failures are enough of a problem to render the concept of a marketplace of ideas unworkable. If the marketplace of ideas can’t work properly most of the time, then it can’t function as a justification of freedom of speech. However, if market failures are due to insufficient free speech, then free speech can still be justified by the concept of the marketplace of ideas. The problem is that market failures in the marketplace of ideas often go beyond insufficient free speech. Let’s list some of those market failures:

  • Political correctness: political correctness is a form of silencing and therefore introduces market failure; if some arguments or some positions can’t be expressed and heard, then they can’t enter into the calculus of arguments and can’t improve our thinking. This is true even if those arguments or positions are manifestly unsound, because silencing them means that we lose a way of stressing the soundness of other arguments and positions (saying what’s wrong about something is often an indirect way of saying what’s right about something else).
  • Silencing more generally: political correctness isn’t the only form of silencing; pornography may silence women and hate speech may silence minorities; silencing means the absence of arguments and positions, and such an absence always harms the operation of the marketplace of ideas.
  • Polarization: polarization occurs when groups in society do not argue, convince or engage in public thinking but instead simply express claims motivated, not by the willingness to persuade, but by the need to show their identity or belonging; no one is convinced, people stay in their respective camps and these camps drift further apart because absent an exchange of reasons for beliefs, people start to see other groups as increasingly strange, alien and incomprehensible.
  • Biased media attention: a lot of the argumentation in the marketplace isn’t direct but gets channeled through media; if these media don’t take the ideal of the marketplace seriously and don’t function as stages for debate but instead play the game of polarization and present ongoing debates in a biased way, then there’s less debate.
  • Lack of education: the argumentation in the marketplace of ideas obviously requires a relatively high level of education; absent this education for the large majority, the marketplace can’t function since it depends on massive participation.
  • Psychological biases: even if general education levels are high, certain psychological biases can hinder the operation of the market; one example is confirmation bias, the tendency of people to seek out evidence that is favorable to their original beliefs, and neglect evidence that is unfavorable; it’s obvious that this harms the operation of the marketplace.
  • Privacy issues: some people may be discouraged from entering the marketplace of ideas because they can’t handle exposure or the possible intrusions into their private lives that may follow from participation in the marketplace.
  • Etc.

Now, many of these market failures do look pretty serious and may discredit the whole notion of a marketplace of ideas, at least in the foreseeable future. However, most can be addressed in some ways. Media can be forced to present different viewpoints, hate speech can be curtailed etc. So there may be ways of rescuing the ideal of the marketplace of ideas both as an ideal in itself and as a justification of free speech. Much like the economic market in goods and services isn’t necessarily discredited by economic market failure and can be rescued by targeted government intervention.

More posts in this series are here.


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