FREE BONUS: Class 38. The Distorted "Marketplace of Ideas" in the Digital Age

Let's just say there's a lot of unfair competition on social media.

If you are just joining The Freedom Academy, welcome! As a reminder, this post is a standalone “lesson” and you do not need to be caught up to follow along! I’ll reference any previous posts that offer relevant background, and you can always visit the syllabus and catch up at your own leisure. All class posts have an audio recording if you prefer to multitask while listening to me lecture!

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Thanks to those of you who offered your commentary on the class assignment I posted last week. I’m hoping that it gave you some food for thought about what we mean when we talk about a “marketplace of ideas,” an oft-used phrase when we are talking about free speech. But is it a concept that even makes sense in the digital sphere? That’s what I want to explore today.

Today’s lesson is intended to give you a starting point for thinking about our talk later today with Renee DiResta, author of Invisible Rulers: The People Who Turn Lies Into Reality. Renee’s book examines how the ideas that influence how millions of people perceive reality are in fact shaped by a few select people who command an inordinate amount of clout on the internet and social media. You can think of them as the plutocrats in the marketplace of ideas. But to provide a baseline for why this new so-called “attention economy” is so disruptive to our ideal of how free speech ought to work, I want to think through how we imagine a perfect ideas market working.

The phrase “marketplace of ideas” has its roots in a 1919 Supreme Court case upholding a conviction under the Espionage Act for Soviet sympathizers who distributed literature intended to undermine the then-ongoing U.S. war effort. Dissenting from the majority opinion, Justice Oliver Wendell Holmes criticized the government for punishing what he believed to be constitutionally-protected free speech. Rather than trying to censor speech the government found unfavorable, Holmes argued, “the ultimate good desired is better reached by free trade in ideas — that the best test of truth is the power of the thought to get itself accepted in the competition of the market.”

In other words, in Holmes’ view, the answer to bad speech was more speech — or, more specifically, competition with good (better) speech. When left without interference, Holmes is saying, good ideas will win out over the bad ones, much like a better product will win out over an inferior one in the market for goods, or a more profitable company’s shares will win out over a less profitable one in the stock market. It’s the free speech equivalent to Adam Smith’s economic idea of the “invisible hand” that suggests that when left to its own devices, the market reaches a perfect equilibrium that provides the maximum net benefit for society.

It’s an interesting analogy, and in theory, it seems like the lassaiz faire approach makes sense if you want to keep the government out of the business of deciding which ideas are “dangerous” and which ones aren’t. But, for those of you who might remember basic econ from college, or participate in the stock market, for a market to function perfectly you need a number of things — like accurate accounting of a company’s profits, or buyers having access to the same information as everyone else, or an even playing field for all companies to compete.

The problem is that in reality, the market doesn’t exactly incentivize these factors — which is precisely why we have laws to correct for market distortions. For instance, you don’t need to look much farther than any major corporate scandal (see Enron, or FTX) to see that companies are more than willing to take advantage of any loophole — or engage in outright fraud — to make their firms seem more profitable than they really are. That’s why we have laws about accounting requirements, disclosures, and consumer fraud. And equal access to information? People often benefit from “tips” on when to sell or buy — hence, our insider trading laws punish people who try to get an unfair advantage. And if any one company gets too much market share that it stifles competition? Our antitrust laws prevent monopolization, and ensure that the small guys get a fair shake to compete in the market,.

In other words, in the real profit-making “markets,” we know that some government intervention is necessary in order for them to function efficiently and to society’s net benefit. Unfortunately, we haven’t found a way to translate those kinds of corrections into the marketplace of ideas on social media.

Last week my assignment asked you to watch the following video and answer some questions. This speaker is disseminating what I think most people (I hope) would consider “bad” ideas — ones that would, in the marketplace, not get much traction and be snuffed out by better ideas promoting equality, and tolerance. And at one time, they largely were. Why is that is much harder now?

I use this video because I think the dynamics it portrays most closely approximate what we are trying to achieve with a public town square where ideas compete to remain viable. But just consider how these dynamics play out on social media, and you’ll see why the “marketplace” model just doesn’t work in the same way.

Transparency

Let’s start with the two basic roles depicted in this clip. There is a speaker, and there are listeners. You might say that the speaker is the “supply” and the audience is the “demand” — if the audience ain’t buying and they walk away, this guy is basically just ranting to himself.

Let’s consider how the audience decides whether they will buy what the speaker is selling. For one thing, there is a real person doing the speaking — meaning that there is accountability. The folks listening could figure out, by asking him or verifying in some way, what this person’s agenda is, who he is affiliated with, what his purpose might be. If he’s a card carrying member of the German Nazi Party, most of the audience might not be so interested…at least not in 1947. (I looked at how accountability impacts the power of propaganda in Class 2.)

The audience can also use facial cues and body language — information we unconsciously take in to determine trustworthiness — to assess credibility. Importantly, the audience can do this with each other, as well, as in the end of the clip, when two audience members discuss what they heard and share their perspectives.

Now imagine how this plays out on social media. First, everyone is a speaker, and everyone is a listener, flattening the “market” considerably. Anonymity cancels out accountability, often preventing us from assessing the credibility and trustworthiness of the information itself. And most people commenting on social media aren’t really discussing the content with each other, they’re usually just trying to make their own voice heard above the noise.

In short, social media is not set up for a real competition of ideas. But the features make it worse.

Virality

Imagine if the dude in the clip above wants his ideas to travel far and wide. He’d first need to persuade a number of people in the audience to his point of view, and then hope that they would spread the word. Maybe some of them would go tell their friends and family, perhaps a bold one would set up a soapbox in some other town square and repeat the process. At best, a journalist reporting on the scene might quote some of the material in a paper that has a decent distribution. (Broadcast TV would, of course, be able to disseminate it even further.)

But think about how long it might take for this one person’s idea to reach, say, a million people. A long frickin’ time. Even Russia’s Operation Infektion, which I wrote about in Class 1, took five years from the time it was seeded in an Indian newspaper to when Dan Rather broadcast it on the evening news. Limitations on geography, technology, and resources limited the reach of any idea without expending a lot of extra effort and expense.

Elon Musk currently has 205.4 million followers on X, worldwide. And he can spread an idea to all of them in less than a second.

Popularity

If you were walking by Mr. Nazi’s soapbox in the town square, you’d probably take note of how many people were standing around listening to it. If it was a huge crowd, you might be inclined to go and listen. If it was sparse, or people were rolling their eyes (facial cues!) and walking away, you might not bother to stop.

Let’s say you heard what this guy was saying, thought it sucked, and wanted to offer a counterpoint. Well, you’d set your soapbox on the other side of the town square, and then, quite literally, you’d be competing for the same audience. In this kind of a setting, you could gauge the “value” of the speech based on the size of the crowd listening to it. It might even be fair to say that the more popular speaker has better ideas.

But consider the “like” button on social media. Is it really the same as the crowd in the town square? Can you even be sure that the number of people who have “liked” a post are all real, individual people? And are speakers really competing for the same audience to begin with? I would posit that the answers are no, no, and no.

Amplification

Finally, let’s say you really wanted to stick it to the Nazi and make sure no one even heard him. You could bring a gang of friends to his little soapbox area and heckle and shout him down. Or you could set up shop next to him with a megaphone, and just drown out his speech with your own. You’d not really be allowing for a real competition of ideas, though, and there might be some local officials, or even the audience, telling you to cut it out and play by the rules.

On social media, there are no rules. You can buy an army of trolls and bots to harass, heckle, and intimidate speakers you don’t like. Or, you can use the same trolls and bots to engage with your own content, triggering the algorithm to expose your ideas to more people.

And if you are an influencer who has amassed an enormous following, you would not even need trolls and bots: You can say anything — the crazier and more outrageous, the better — and watch it become the most popular idea in the so-called marketplace.

As Renee DiResta says in her book, “If you make it trend, you make it true.”

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In short, all of these free speech models we have come to rely on — the marketplace of ideas, the public town square, speaker’s corner — break down on social media because these platforms are not designed or intended to function as any of those things. Social media platforms aren’t built to reward the best ideas, they’re built to reward ideas that generate the most engagement…which are typically ones that cause high emotional reactivity (especially anger). That’s why the Nazi speaker who can’t hold a crowd in a public town square commands a huge market share in the digital town square.

Rather than an “invisible hand,” there are what DiResta calls “invisible rulers” who find the equilibrium in the marketplace of ideas on social media. We’ll learn more about them, and how they came to power, in today’s talk.