The Marketplace of Ideas is Rigged
Update: On Deck recently launched longevity and ed-tech verticals
Previously, we talked about how free speech leads to moral progress, particularly through what’s known as “the marketplace of ideas”:
“There are two rules underlying the marketplace of ideas: Nobody gets special authority, and nobody has final say. So yes, we may end up relitigating bad ideas over and over again. Many times it’s annoying. Other times it leads to a breakthrough. Trust the process that’s given us all moral progress we’ve had today, even when that process is grating.”
In theory, the marketplace of ideas is a great idea. If only it truly existed...
The point of this piece is to explain how the marketplace of ideas is rigged: It’s heavily regulated, participants have no skin in the game, and, even when it does exist, the best ideas don’t always win.
The Marketplace is Rigged.
The marketplace of ideas is similar to Bitcoin in that it aims to be decentralized.
If someone asks, who’s in charge? The response is, No one’s in charge! *takes a puff* It’s decentralized!
But there has always been someone in charge — someone calling the shots, determining what we can and can’t say. It's very attractive to imagine a trustless system that’s coherent, orderly, and not governed by a centralized entity, but this view doesn’t take into account how humans actually work: Powerful people often want to censor powerless people, and when that same group of powerful people suddenly lose their power, they then flip flop and start advocating for free speech. After all, that’s what happened the last few decades — When creationists lost the battle in the schools, they started advocating for equal treatment between teaching creationism and natural selection. To be sure, when they had the power, they weren’t asking for equal treatment — they were censoring natural selection. This is the pattern: The powerless ask for equality, the powerful try to censor completely. That’s how they keep their power in the first place.
Sometimes, the powerful censor explicitly via a central entity, like the Ministry of Propaganda in Russia. Other times, the powerful censor in a decentralized fashion, mall-cop style, via the chilling effect of political correctness and preference falsification.
Just like economic marketplaces, the speech marketplace contains cartels and players with special privileges.
Accredited universities, for example, get special carve outs from the government that make it nearly impossible for unaccredited universities to compete. And they own the accreditation board, exacerbating the issue. Even if you wanted to start your own university, your voice would be drowned out by legacy incumbents.
Consider the differential speech access between journalists and ordinary citizens. I’m not talking about the disparity of distribution. I’m talking about differential legal protections. The New York Times vs Sullivan case essentially gave the American press the right to be above the laws of libel and slander. Any given copy of the NYT may contain information obtained from the government and sold to you, the subscriber. Not only can you not compete with the NYT on distribution, but if you tried to obtain that information too, you'd potentially get prosecuted.
The Marketplace of Idea
What’s so fascinating about the marketplace of ideas (especially as it relates to media) is that there’s such little variance between different media companies. Marc Andreessen recently joked in this interview that it’s really a “marketplace of idea.” The intellectual monoculture was a shock to him, because in a well-functioning marketplace, you’d have differentiated products.
“In business, you seek to differentiate, to offer a unique product that your customers can't get anywhere else. In economic terms, differentiation is the key to pricing power, which is the key to profits, which is the key to staying in business. This is precisely what the existing media industry is not doing; the product is now virtually indistinguishable by publisher, and most media companies are suffering financially in exactly the way you'd expect. Second, civilizational progress happens not by top down unanimity and ideological instruction, but by debate and dispute. That this should happen, but is not happening, in the institutional media today is obvious.”
Universities act similarly. You'd think that with 3000 universities, no individual person or institution could control them. And yet, they all agree with each other, as if they’re all part of the same department of information. How could that be?
Entrants have no skin in the game
In a previous piece we spoke about how elites can make false statements consistently and not suffer any consequences. They’re elite because they’re elite, the logic goes, and as long as they keep their position of power, virtually no amount of intellectual malpractice will change their status.
But not only are their predictions wrong and nobody cares, their predictions negatively affect people other than themselves. This is tragic: Elites determine so much policy, and yet they’re the most insulated from all downstream consequences resulting from the changes they demand everybody else make.
The classic example is public housing. In the 1950s, the plan was to build many incredible housing projects. But what we got instead was massive public housing failures, areas so dangerous that the cops won’t even respond to 911 calls.
In the process of trying to make things better, we actually made the problem worse. We destroyed these natural ecologies of low income housing, replacing them with sub-par housing projects. To be sure, the people who thought this was a good idea were people like us — they had a vision for a better future, a world that’s safer, fairer, and more just for all. But they failed to create it, as many other top-down initiatives built by people with no-skin-in-the-game often do.
This pattern now gets repeated in every sector. Everyone feels like they have a solution to the world’s problems, and yet the people who invent the solutions have the least familiarity with the problem and the least skin in the game as to the solutions.
This is in stark contrast to how things used to be. Today, politicians can call for war and they don’t have to fight in it. As Dick Chaney proved, they might even profit from it. But this distance is fairly new. Back in the day, being a citizen meant you went to war; it was the powerful people who went to war, and the non-powerful who stayed home. Today, it’s the opposite. The powerful people decide whether we go to war, and then send the non-powerful to fight in their place. Status has become unbundled from responsibility.
The best ideas don’t always win
The marketplace of ideas is based on the assumption that the best ideas will win in a Darwinian sense. Just as free markets produce the best products, the logic goes, the marketplace of ideas shouldproduce the best ideas, because good ideas will outcompete bad ones.
But true ideas don’t always beat untrue ideas. Fit ideas beat unfit ideas. Truth is sometimes fit, but other times not.
What does this mean? Take Marxism as an example: Marxism is not a “true idea” in the sense that its economic theories/implications have led to disastrous effects when tried, and yet the idea still remains wildly popular. It’s not a true idea, but it’s “fit” in that it appeals to a wide number of people across generations.
To take another crazy example: Homeopathy. Again, not a true idea, and yet 70% of the world believes in it.
The truth is we’ve always believed in mass delusions. Bret Weinstein has gone so far to say that religion, while logically false, must be metaphorically true (“fit”) in order to have flourished for so long.
In fact, some ideas are so “fit” that evidence asserting their falsity won’t debunk them. People are so incentivized to believe them that they keep believing in them in spite of evidence to the contrary. Religion, communism, and fascism are common examples. If you expect these to go away via the marketplace of ideas, you're going to be waiting for a long time.
The health of a civil society hinges on making dangerous, bad, and stupid ideas unfit for those who spread them. Even libertarian economists admit there are market failures in free market economies, so the marketplace of ideas should be no different.
Our marketplace of ideas is indeed flawed. It’s heavily regulated, participants have no skin in the game, and, even when it does exist, the best ideas don’t always win.
Of course, this doesn’t mean we shouldn’t strive for it; it just means there’s no guarantee the truth will win out just because it’s true. The marketplace of ideas, even when it exists, doesn’t automatically exalt truth, which means truth has the opportunity to compete. We need to put serious effort into not only discovering truth, but also spreading it. Society doesn’t progress from ignorance to wisdom in a straight line — the truth needs to be sold.
Happy July 4th! I’ll leave you with an Eric Weinstein quote: "The middle finger is the secret of how America will continue to outcompete. The people who are good with middle fingers need to be in touch with the people who've yet to use them, so that we can have cross pollination and gains from trade."
Until next week,