The Not-So-Invisible Hand in Twitter's Marketplace of Ideas

The story about the Twitter Files is Musk's ability to create a story about the Twitter Files.

If you’re looking for the dumbest scandal right now on the internet, look no further than the “Twitter Files.” This is the supposedly earth-shattering expose currently being blown open by journalists Matt Taibbi and Bari Weiss, along with Twitter CEO Elon Musk, who claim to have uncovered a nefarious plot under previous management to “shadow ban” conservative voices on the platform. The Twitter Files do highlight a problem, but it’s not the one Musk and his allies claim it is. Contrary to Musk’s assertions, the Twitter Files aren’t a sign that the government has overreached its role in social media regulation, but that it’s not doing enough. The so-called scandal illustrates why leaving social media companies to self-regulate their distorted “marketplace of ideas” is a recipe for disaster, and dangerous to democracy.

A quick recap of the what the Twitter Files is about: Taibbi and Weiss, in a three-part series of Twitter threads, detail three different sets of decisions taken by the platform in or around 2020. The first was marking a New York Post story about Hunter Biden’s laptop as “unsafe” and preventing it from being shared for 24 hours, out of concerns that it was based on hacked materials in violation of Twitter policy. The second involves reducing the visibility of tweets by certain accounts (which is listed as part of the company’s enforcement terms of service). The third was the suspension of Trump’s account following his attempted January 6 self-coup. All of these, the authors argue, are evidence of systematic bias and discrimination against conservatives in an attempt to silence their voices on Twitter. Musk, a self-proclaimed “free-speech absolutist,” claims that these practices violate the First Amendment and even amount to “election interference.” (NB: They don’t.)

In fact, the mechanisms described above can more properly be understood as an attempt by Twitter to self-regulate its “information market.” To understand their efforts through this lens, we should unpack the concept of the “marketplace of ideas,” which has its origins in a dissent by Oliver Wendell Holmes in a 1919 Supreme Court case upholding a conviction under the Espionage Act during World War I. Criticizing the government for punishing what he believed was protected speech, Holmes wrote:

Persecution for the expression of opinions seems to me perfectly logical. If you have no doubt of your premises or your power, and want a certain result with all your heart, you naturally express your wishes in law, and sweep away all opposition. To allow opposition by speech seems to indicate that you think the speech impotent, as when a man says that he has squared the circle, or that you do not care wholeheartedly for the result, or that you doubt either your power or your premises. But when men have realized that time has upset many fighting faiths, they may come to believe even more than they believe the very foundations of their own conduct that 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, and that truth is the only ground upon which their wishes safely can be carried out. That, at any rate, is the theory of our Constitution.

Basically, Holmes believed that an economic model could be applied to speech: The answer to bad ideas was not censorship, but better ideas. In this framework, the value of an idea would be reflected by how popular it was among rational, fully-informed consumers — and these “market forces” would naturally allow the best ideas (the “truth”) to rise to the top while bad ideas would fail and disappear. Sounds simple enough, right? Not really.

The problem is that for this to work, you have to have a close to perfect market — and social media is far from one. The primary obstacle is that the “value” of an idea on social media isn’t a reflection of how good it is, but is rather the product of the platform’s algorithm. For instance, Facebook’s algorithm prioritizes engagement — making content that produces strong emotional reactions more likely to travel farther and faster (privileging false content in the process). Further, a post can be artificially “liked” or amplified by bots or coordinated networks, thereby overvaluing its popularity or acceptance in the information ecosystem. And real users are apparently not rational consumers, as a perfect market envisions: A study by MIT found that false stories, including conspiracy theories, travel seven times faster on Twitter than true stories, mainly due to human user activity. In short, the features of social media platforms don’t allow for free and fair competition of ideas to begin with.

When we discover distortions like these in other types of markets, we correct for them. Take, for example, the securities market. We recognize that for the stock market to accurately reflect a company’s value, investors must be able to make informed decisions about where to place their money. To achieve these goals, we have rules and regulations: Prohibitions on insider trading, for example, ensure that investors operate on a level playing field. The Sarbanes-Oxley Act creates penalties for companies that try to distort the market by misrepresenting their balance sheets, as Enron did before the act was passed (leading to the largest corporate bankruptcy in U.S. history). Without these parameters and left to its own devices, the securities market would not operate very well, because the incentives to game the system would be very powerful. (Elon Musk, of all people, knows this better than anyone: He’s still under a consent decree by the SEC for tweeting false information about his company that artificially inflated its stock value; he now has a “Twitter sitter” who approves his company-related tweets before they are published.)

Similarly, what the Twitter Files have uncovered (which was mostly not secret in the first place) were the company’s attempts to correct the market distortions on its platforms caused by its own algorithm. Unfortunately, unlike the securities market, there is no objective baseline against which to measure these efforts. We know what an efficient financial market should look like, which is why we can identify exactly how distortions happen and what rules will fix them. But we don’t know what a “perfect” digital town square would look like on social media in the absence of likes and shares and retweets and artificial boosting and amplification by secret algorithms. I mean, if we were all standing in a real town square, would Ben Shapiro really have the largest audience out of every other speaker there? My gut tells me no, but there’s no way to demonstrate that for sure.

This means that any attempts to “correct” for distortions caused by Twitter’s algorithms are just shots in the dark, based on whatever subjective values Twitter wants to maximize at any given moment. That might not seem so bad if those values include things like avoiding disinformation around elections, promoting public health, or preventing the overthrow of the government — all things that appeared to be driving Twitter’s previous decisions, even if they were blunt and clumsy (and even debatable) in execution. But if you get a new sheriff in town, like Musk, then those choices can easily be spun as biased or discriminatory to particular viewpoints. More importantly, they can suddenly be replaced by other subjective values, like prioritizing partisan narratives promulgating conspiracy theories or fomenting distrust in our government — which is ultimately what the Twitter Files are trying to do.

There’s no Sarbanes-Oxley Act for social media. Nor could there be: The government can’t (and shouldn’t) police the accuracy of speech to ensure integrity of the information market. (I’ll be looking at the limitations on the government’s ability to address and counter propaganda in this week’s lecture for my class, Democracy in the (Dis)Information Age.) But that doesn’t mean that the “marketplace of ideas” on a social media platforms should be a free-for-all controlled by anyone rich enough to buy it: Relying on the good intentions whoever is in charge to self-police is not a great regulation strategy. The government can, and should have a role; what that looks like remains to be seen, but it could start with requiring more transparency on how social media algorithms “value” speech on their platforms.

In the meantime, despite what the Twitter Files claims to have exposed, they seem to be the exact same policies that Musk himself tweeted less than a month ago:

Elon Musk @elonmusk

New Twitter policy is freedom of speech, but not freedom of reach. Negative/hate tweets will be max deboosted & demonetized, so no ads or other revenue to Twitter. You won’t find the tweet unless you specifically seek it out, which is no different from rest of Internet.

The only difference is that Musk, not Twitter’s Trust and Safety Team, is deciding who and what meets his criteria. And while Republican members of Congress have threatened to bring oversight investigations into Twitter’s practices, the truth is that they have no reason to want them to change now that one of their boys is in charge. But that's exactly why it needs to: Princeton Professor Anne Marie Slaughter and State Department policy advisor Ben Scott describe the urgency of addressing “information insecurity” in order to defend democracy:

Rules, standards, and investments in the media marketplace are not simply economic policies. They are security imperatives, alongside green energy and public health. Unless we act soon, our information security will weaken further, dividing us against ourselves. Autocrats and domestic rabble rousers can then shape a self-serving narrative of intensifying democratic dysfunction.

Count Musk among the “domestic rabble rousers” who is reaping the benefits of an unregulated information market, and take the the Twitter Files with a grain of salt.