The economics of free speech
The economics of free speech
What's the value of free speech? It depends on your resources
Recently, I had the rewarding experience of working with two talented economists, Diana Voerman-Tam and Nicholas Watson, on a project that analyses who benefits most from free speech. It is one of the most important topics I have worked on in my career. It is especially topical today when we find freedom of expression (or “free speech” or “freedom of speech”) under threat both by authoritarian regimes and by instances of ‘cancel culture’ in otherwise liberal developed countries.
The principle of freedom of speech is beautifully illustrated by the novelist Evelyn Beatrice Hall who wrote (in 1906):
“I disapprove of what you say, but I will defend to the death your right to say it.”
(This quotation is often misattributed to Voltaire, who nevertheless expressed similar sentiments.)
A legal definition of free speech is set out in the UN International Bill of Rights which incorporates the UN Declaration of Human Rights. A person has the right to freedom of opinion and expression, including the right to seek, receive and impart information and ideas through any media and regardless of frontiers.1
The right to freedom of expression is enshrined in most constitutions (noting that even in countries with a high degree of free speech, there may still be restrictions against hate speech, terrorism and treason). Yet people in many countries face restrictions on their freedom of speech.
The ‘marketplace for ideas’
Economic analysis of the importance of freedom of speech dates back at least to the work of the great 19th century political economist and philosopher, John Stuart Mill, who argued that there should be a ‘marketplace for ideas’.2 Ideas should ‘compete’ in an open marketplace and be tested by the public to determine which ideas will prevail. When tested, good ideas will live on while bad ideas will be rejected and consigned to the dustbin of history.
More recently, economists from the Law and Economics field (including Coase3 and Posner4) have argued for a more nuanced position which considers that speech should be subject to the same regulatory processes as other marketplaces. Essentially, if externalities or other market imperfections exist, then consideration may be given to interventions that offset those externalities.
In recently published research written with my two co-authors, we refrained from debating these theoretical conjectures and instead asked the empirical question: “Which groups of people, defined in terms of their resources, benefit most from freedom of speech?” Is it people with the most resources (e.g. income and education) who benefit more, or is it people with few resources?
Free speech: luxury good or necessary good?
One hypothesis, consistent with Maslow’s hierarchy of needs, is that people with the most resources (e.g. income and education) benefit more from free speech. People with few resources are likely to rank items such as food and shelter as their most pressing needs while ‘self-actualisation’ items such as free speech are viewed as luxuries and so are rated most highly by people whose basic needs have already been met. This view reflects the words of former Malaysian Prime Minister, Mahatir Mohammed, who stated publicly that: “You must eat before you can vote.”
The opposing hypothesis is that people with fewest resources benefit most from free speech. This view is consistent with the idea that marginalised people have less scope to influence decisions in society through their spending or networks, so require freedom of speech to influence societal decisions.
Our analysis includes 300,000 individuals from more than 90 countries over four decades. It uses wellbeing and other individual data from the World Values Survey and the Latino Barometer survey. Wellbeing is measured by how people rate the overall quality of their life.
We supplement the individual wellbeing data with measures of country-level free speech and human rights sourced from two independently compiled databases (CIRIGHTS and VDEM). Many countries in the surveys had marked changes in their free speech levels over the study period.
We have two key findings:
First, people with more resources place greater stated priority on freedom of speech (when asked to rank its importance relative to choices that include “fighting rising prices”).
Second, it is people with fewer resources who benefit most in terms of their life satisfaction from free speech. The results indicate that free speech empowers those with fewer resources, so providing a greater lift to the wellbeing of more marginalised people.
The two results are not incompatible: People with fewer resources may need to prioritise basic needs more than ‘luxuries’ such as free speech but, being in marginalised populations, they may still benefit most from having freedom of expression.
Another interesting finding is that people who state that they value free speech do actually benefit more than others when living in countries with free speech.
We find also that preferences towards free speech vary according to other population characteristics. Those who are more likely to prioritise free speech include the young, students, non-religious people and those on the left of the political spectrum. People in the ‘West’ (Western Europe, Australasia, Canada and USA) are more supportive of free speech than people in other regions of the world.
My interpretation of these results is that, notwithstanding current risks with social media ‘echo-chambers’, John Stuart Mill’s basic insight about the marketplace for ideas still has much to recommend it. People must be able to express their views and receive the views of others openly. The UN Declaration of Human Rights emphasises this two-way aspect of freedom of expression, i.e. people have “the right to seek, receive and impart information and ideas”.
Legal scholars argue that for every right there is a corresponding duty. At a personal level, a reciprocal duty (to the right of free speech) might be that we should endeavour to be a good listener even when, to quote Hall: “I disapprove of what you say.” If we listen to the views of those with whom we disagree, we can hone or modify our own ideas within a tolerant society that subjects ideas to the open scrutiny of the marketplace.
The paper, The Economics of Free Speech: Subjective Wellbeing and Empowerment of Marginalized Citizens, published in the Journal of Economic Behavior and Organization, is freely available for download.
By Arthur Grimes
United Nations General Assembly. (1948). The Universal Declaration of Human Rights (UDHR). New York: United Nations General Assembly.
Mill, J.S. (1859). On Liberty. London: John W. Parker and Son, West Strand.
Coase, R.H. (1974). Economics of the First Amendment: the market for goods and the market for ideas. Am. Econ. Rev., 64 (2), pp. 384-391
Posner, R.A. (2014). Economic Analysis of Law. Wolters Kluwer Law & Business, New York
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