The Marketplace of Ideas

Here is another topic that came up during the seminars I attended a couple of weeks ago. Liberals who have nothing but criticism for the free market in goods and services often voice boundless support for the marketplace of ideas. This strikes me as strangely inconsistent, because the usual arguments made against the efficiency of goods/services markets apply with even greater force to the propagation of ideas. Good ideas are public goods; bad ideas create negative externalities. There is no profit/loss bottom line to weed out the low-quality ideas, unlike low-quality products. We can therefore expect to observe overproduction of bad ideas and underproduction of good ones.

In recent years, more and more liberals have taken positions in opposition to freedom of expression -- for example, hate speech laws, campaign contribution limits, and the Communications Decency Act (signed into law by Bill Clinton). Although such positions are inconsistent with liberals’ usual stance in support of personal and civil liberties, they are arguably quite consistent with liberals’ antagonism to the free market. If the imperfections of goods/services markets are sufficient to justify government intrusion, the argument goes, then *a fortiori* the imperfections of ideas markets justify intrusion as well.

My own take is that efficiency is a mighty slim reed on which to rest the defense of free expression. A better defense points to the dangers inherent in giving the state the power to make decisions about which ideas are good and bad. This defense might seem different in kind from the usual defense of free markets in goods and services, but it is not. The “perfectly competitive” model used to prove the efficiency of markets is, and always has been, a straw man. The better defense of free markets points to their efficiency *relative* to legislatures and bureaucracies, which cannot be trusted to make decisions more wisely and efficiently than private actors. Liberals, in their better moments, recognize the danger of state action when it comes to ideas; when will they recognize the similar danger when it comes to goods and services?