On free speech and free markets
15 August 2024
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Monetary Policy
Economic Theory
15 August 2024
Here’s a stylised version, a little exaggerated for effect, of a type of debate I have had many times with market-sceptical, interventionist conservatives:
Them: “The state should control the price of ice cream.”
Me: “That’s a bad idea. It would cause shortages of ice cream.”
Them: “Well, yes, in your simplistic, Econ101 textbook world. What people like you, with your narrowly economistic view of the world, don’t understand is that real life is infinitely more complex than that. It rarely conforms to such reductionist abstract modelling.”
Me: “I’m pretty sure it does in this case.”
Them: “You see, the freedom of market participants is not absolute. Never has been. Never will be. There’s no such thing as completely “free” market. It’s pie-in-the-sky.”
Me: “Maybe so, but ice cream vendors should still have the freedom to set their own prices.”
Them: “Markets don’t exist in a vacuum. They exist in a very particular cultural and legal context, shaped by real, living, breathing human beings.”
Me: “Yes. And within that very particular cultural and legal context, we should have market prices for ice cream.”
Them: “You think of people as utility-maximising automatons. As calculating cyborgs. Real people, in the real world, are not like that. You need a richer, more nuanced and multi-faceted understanding of human nature, in all its wonderful and contradictory complexity.”
Me: “And how does that lead you to state-controlled ice cream prices?”
Them: “Do you think there should be market prices for places on a lifeboat, on a sinking ship? Would you abolish the Olympic games, and just replace them with an auction where people bid for medals?”
Me: “No. But I would have market prices for ice cream.”
Them: “You assume perfectly rational, omniscient beings. Have you ever met anyone who is remotely like that? I bet even you don’t always conform to that theory yourself, Mr Economist!”
Me: “I don’t. But neither would your People’s Ice Cream Commissar.”
Them: “Markets aren’t always perfect, you know. Market failure is real. You might want to look it up.”
Me: “Sure, but how does this market fail? And how does your solution fix that?”
Them: “You just don’t get it, do you? Look, the real world, complexity, nuance, balance…”
What is the logical error that this hypothetical-yet-not-entirely-made-up person is committing?
They are jumping from the highly abstract and general to the ultra-specific, without anything in between, and without linking the two. More precisely, they are jumping from highfaluting rhetoric about potential limitations of markets to justifying one very particular anti-market intervention. But their conclusion does not follow from their premises. Yes, markets are not perfect, and economists don’t have the answer to everything. That is trivially true. But it does not follow that this specific market is failing, let alone that this specific intervention is the solution.
Market-sceptical conservatives often feel intellectually superior to free-market liberals. That is because the like to argue with a hypothetical free-market liberal who lives in their minds: someone who has memorised a standard economics textbook, takes every line in it at face value, and thinks there is nothing else to know about the world. This leads them to believe that defending free markets is automatically narrow-minded, simplistic, and reductionist, and that favouring limitations on free markets automatically makes you a more sophisticated and well-rounded thinker.
Over the past couple of days, we have seen a similar line of argument over free speech. In my (quite possibly distorted and retroactively idealised) recollection of the 1990s and 2000s, if somebody had told you they were “pro free speech” or “anti-censorship”, that would not have told you much about where that person stands on the political spectrum. The Great Awokening of the 2010s changed that. Nowadays, you would immediately assume that that person is either a conservative or a classical liberal.
Defending free speech has become a low-status opinion, and being blasé about censorship has become the corresponding high-status opinion. Of course, nobody would literally say “I am against free speech.” Instead, what speech restrictionists do is present their position as a more nuanced and sophisticated alternative to a primitive, simple-minded “free speech absolutism”. In this view, oafish people cannot think beyond “free speech good”, while more refined intellects recognise the greater complexity of the situation. They recognise that the right to freedom of speech is not, has never been, and could not be an absolute right.
Just like “markets aren’t perfect” and “there’s more to life than economics”, the argument that “free speech is not absolute” is trivially true. In fact, even IEA Fellow Dr Jamie Whyte, who is definitely on the more libertarian purist end of the spectrum, says in his book Why Free Speech Matters:
“[F]ree speech is not an unalloyed good. The freedom to say whatever you want could be used for wrongdoing. You might use it to defraud people with whom you are doing business or to falsely accuse someone of committing a crime or to incite people to commit murder. No one thinks that valuing free speech means people should be able to say whatever they want, whenever they want to. […] Certain restrictions on free speech are justified.”
And yet. It would be a bit of a leap from “free speech is not absolute” to “whatever speech restriction politician X, Guardian columnist Y, or Twitter user Z, currently calls for must be good, and proportionate”. The latter does not follow from the former. No more than “let’s have state-controlled ice cream prices” follows from “markets aren’t always perfect”.
Speech restrictionists need to, quite literally, take a leaf out of Jamie’s book. And I don’t just mean that in the sense of “they should stop being speech restrictionists, and adopt Jamie’s position” (although ideally, they should). What I mean is that for Jamie, the point that “free speech is not an unalloyed good” and that “[c]ertain restrictions on free speech are justified”, is no more than a start. He then goes on to develop a clear set of criteria for when such restrictions could be justified, and on what grounds.
Jamie sets a very high bar, and as a result, there are hardly any speech restrictions that he would accept. Others, perhaps even some on the broadly liberal side, might set the bar a little lower, and accept more limitations. That’s a topic for another article.
The point is that there has to be a pre-defined bar. We cannot make it up as we go along. Liberals do not defend free speech because they think free speech will always lead to a high level of informative and intellectually stimulating debate, in which good ideas will defeat bad ones by the sheer force of their intrinsic persuasiveness. Nobody who has ever spent five minutes on Twitter could possibly believe that.
Liberals know, however, that actually existing speech restrictions, especially when loosely and broadly defined, will not conform to some theoretical ideal either. They will get politicised; they will get weaponised in the Culture War; they will be enforced unevenly, selectively, and incoherently. As with many market “corrections”, the cure will be worse than the disease. Free speech rights may not be absolute, but we should treat them as, for most intents and purposes, near-absolute anyway.
Them: “The state should control the price of ice cream.”
Me: “That’s a bad idea. It would cause shortages of ice cream.”
Them: “Well, yes, in your simplistic, Econ101 textbook world. What people like you, with your narrowly economistic view of the world, don’t understand is that real life is infinitely more complex than that. It rarely conforms to such reductionist abstract modelling.”
Me: “I’m pretty sure it does in this case.”
Them: “You see, the freedom of market participants is not absolute. Never has been. Never will be. There’s no such thing as completely “free” market. It’s pie-in-the-sky.”
Me: “Maybe so, but ice cream vendors should still have the freedom to set their own prices.”
Them: “Markets don’t exist in a vacuum. They exist in a very particular cultural and legal context, shaped by real, living, breathing human beings.”
Me: “Yes. And within that very particular cultural and legal context, we should have market prices for ice cream.”
Them: “You think of people as utility-maximising automatons. As calculating cyborgs. Real people, in the real world, are not like that. You need a richer, more nuanced and multi-faceted understanding of human nature, in all its wonderful and contradictory complexity.”
Me: “And how does that lead you to state-controlled ice cream prices?”
Them: “Do you think there should be market prices for places on a lifeboat, on a sinking ship? Would you abolish the Olympic games, and just replace them with an auction where people bid for medals?”
Me: “No. But I would have market prices for ice cream.”
Them: “You assume perfectly rational, omniscient beings. Have you ever met anyone who is remotely like that? I bet even you don’t always conform to that theory yourself, Mr Economist!”
Me: “I don’t. But neither would your People’s Ice Cream Commissar.”
Them: “Markets aren’t always perfect, you know. Market failure is real. You might want to look it up.”
Me: “Sure, but how does this market fail? And how does your solution fix that?”
Them: “You just don’t get it, do you? Look, the real world, complexity, nuance, balance…”
What is the logical error that this hypothetical-yet-not-entirely-made-up person is committing?
They are jumping from the highly abstract and general to the ultra-specific, without anything in between, and without linking the two. More precisely, they are jumping from highfaluting rhetoric about potential limitations of markets to justifying one very particular anti-market intervention. But their conclusion does not follow from their premises. Yes, markets are not perfect, and economists don’t have the answer to everything. That is trivially true. But it does not follow that this specific market is failing, let alone that this specific intervention is the solution.
Market-sceptical conservatives often feel intellectually superior to free-market liberals. That is because the like to argue with a hypothetical free-market liberal who lives in their minds: someone who has memorised a standard economics textbook, takes every line in it at face value, and thinks there is nothing else to know about the world. This leads them to believe that defending free markets is automatically narrow-minded, simplistic, and reductionist, and that favouring limitations on free markets automatically makes you a more sophisticated and well-rounded thinker.
Over the past couple of days, we have seen a similar line of argument over free speech. In my (quite possibly distorted and retroactively idealised) recollection of the 1990s and 2000s, if somebody had told you they were “pro free speech” or “anti-censorship”, that would not have told you much about where that person stands on the political spectrum. The Great Awokening of the 2010s changed that. Nowadays, you would immediately assume that that person is either a conservative or a classical liberal.
Defending free speech has become a low-status opinion, and being blasé about censorship has become the corresponding high-status opinion. Of course, nobody would literally say “I am against free speech.” Instead, what speech restrictionists do is present their position as a more nuanced and sophisticated alternative to a primitive, simple-minded “free speech absolutism”. In this view, oafish people cannot think beyond “free speech good”, while more refined intellects recognise the greater complexity of the situation. They recognise that the right to freedom of speech is not, has never been, and could not be an absolute right.
Just like “markets aren’t perfect” and “there’s more to life than economics”, the argument that “free speech is not absolute” is trivially true. In fact, even IEA Fellow Dr Jamie Whyte, who is definitely on the more libertarian purist end of the spectrum, says in his book Why Free Speech Matters:
“[F]ree speech is not an unalloyed good. The freedom to say whatever you want could be used for wrongdoing. You might use it to defraud people with whom you are doing business or to falsely accuse someone of committing a crime or to incite people to commit murder. No one thinks that valuing free speech means people should be able to say whatever they want, whenever they want to. […] Certain restrictions on free speech are justified.”
And yet. It would be a bit of a leap from “free speech is not absolute” to “whatever speech restriction politician X, Guardian columnist Y, or Twitter user Z, currently calls for must be good, and proportionate”. The latter does not follow from the former. No more than “let’s have state-controlled ice cream prices” follows from “markets aren’t always perfect”.
Speech restrictionists need to, quite literally, take a leaf out of Jamie’s book. And I don’t just mean that in the sense of “they should stop being speech restrictionists, and adopt Jamie’s position” (although ideally, they should). What I mean is that for Jamie, the point that “free speech is not an unalloyed good” and that “[c]ertain restrictions on free speech are justified”, is no more than a start. He then goes on to develop a clear set of criteria for when such restrictions could be justified, and on what grounds.
Jamie sets a very high bar, and as a result, there are hardly any speech restrictions that he would accept. Others, perhaps even some on the broadly liberal side, might set the bar a little lower, and accept more limitations. That’s a topic for another article.
The point is that there has to be a pre-defined bar. We cannot make it up as we go along. Liberals do not defend free speech because they think free speech will always lead to a high level of informative and intellectually stimulating debate, in which good ideas will defeat bad ones by the sheer force of their intrinsic persuasiveness. Nobody who has ever spent five minutes on Twitter could possibly believe that.
Liberals know, however, that actually existing speech restrictions, especially when loosely and broadly defined, will not conform to some theoretical ideal either. They will get politicised; they will get weaponised in the Culture War; they will be enforced unevenly, selectively, and incoherently. As with many market “corrections”, the cure will be worse than the disease. Free speech rights may not be absolute, but we should treat them as, for most intents and purposes, near-absolute anyway.
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