Market Failure

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Back in March, I posted about a paper, “Censorship and Market Failure in the Marketplace of Ideas,” that Professor Jeremy Kidd and I presented at a research roundtable on Capitalism and the Rule of Law hosted by the Law & Economics Center at George Mason University Antonin Scalia Law School. A complete version of that paper is now available here. Here is the abstract:

Use of the familiar metaphor of the exchange of ideas as a “marketplace” has historically presumed that free and uninhibited competition among ideas will reliably arrive at truth. But even the most fervent economic free-market advocates recognize the possibility of market failure. Market failure is a market characteristic (e.g., monopoly power) that precludes the maximization of consumer welfare.

The last few years have witnessed increased calls for censorship of speech and research pertaining to a variety of subjects (e.g., climate change; COVID-19 sources and treatments; and viewpoints concerning race, gender, and sexual orientation) across a variety of fora. The consistent refrain in favor of this censorship is that the spread of false or misleading information is preventing access to or distorting the truth and thereby inhibiting social progress: undermining democracy, fomenting bigotry, costing lives, and…

The Law and Economics Center at the George Mason University Antonin Scalia School of law is hosting a Research Roundtable on Capitalism and the Rule of Law this week in Destin, Florida. My co-author, Professor Jeremy Kidd (Drake University School of Law) and I are honored to present a draft of our current work-in-progress, “Market Failure and Censorship in the Marketplace of Ideas,” at tomorrow’s (March 5, 2022) session. We look forward to receiving feedback from all the brilliant scholars in attendance. Here’s an abstract of the current draft. We look forward to sharing a link to the full draft soon:

As one author notes, the familiar metaphor of the exchange of ideas as a “marketplace” has “permeate[d] the Supreme Court’s first amendment jurisprudence.” If the test for efficiency in the marketplace for goods is wealth maximization, the test for efficiency in the marketplace of ideas has historically been understood in terms of its ability to reliably arrive at truth, or at least the most socially beneficial ideas within the grasp of a community of discourse. And consistent with economic free-market advocates, the received expectation in Western liberal democracies has been that “a process of robust debate, if uninhibited by…