Infonomics

By Daniel Freund

Infonomics is a unique and groundbreaking work that utilizes the science of economics to study the flow of information. Based on the premise that information is filtered through a "marketplace of ideas", the author examines this marketplace through the economic framework of market structure. Drawing upon the work of famed economist John Kenneth Galbraith, the book transforms our understanding of how knowledge and information is and should be processed. Infonomics is a fascinating exploration of the factors that shape some of the most basic elements of our collective conventional wisdom. It delves into the hidden side of market forces, market structure, mass media, and human psychology to reveal the true nature of the market which controls our ideas.

• Language: English
• Publisher: Daniel Freund
• Release date: Oct 2, 2014
• ISBN: 9781311927910

Book preview

Infonomics

A Study of Market Structure

and the Marketplace of Ideas

By Daniel Freund

Copyright © 2014 Daniel Freund. Last Revision 2019.

All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the author except for the use of brief quotations in a book review.

Table of Contents

Introduction

Chapter 1 - The Marketplace of Ideas

Chapter 2 - The Self-Regulating System

Chapter 3 - Free Market Cooperation

Chapter 4 - Centrally Planned Cooperation

Chapter 5 - Cooperative Advertising

Chapter 6 - The Public Space and the Third Space

Chapter 7 - The Airwaves

Chapter 8 - Media, Politics, and Money

Chapter 9 - The Information Superhighway

Chapter 10- Monopolistic Competition

Chapter 11 - The Role of Government

Chapter 12 - Restructuring the Marketplace of Ideas

Chapter 13 - The Public's Role on the Information Superhighway

Chapter 14 - The Bill of Rights

Chapter 15 - The Problem of Efficiency

Conclusion

Endnotes

Introduction

Modern economic thought is widely held to have begun in 1776, with the publication of The Wealth of Nations by 18th century British philosopher Adam Smith. For approximately one century following, economics generally presupposed the notion of competition, and the suggestion that all markets might not operate in the same, convenient, uniform manner was not yet readily accepted. Only at the dawn of the 20th century, did it become clear that all markets were not created equal.

Once the model of perfect competition was questioned, it was necessary to create other categories into which markets could be placed. To accomplish this task, new terms such as oligopoly and imperfect competition entered the economic lexicon. These terms represented various forms and differing degrees of competition. As markets of differing characteristics were classified accordingly, the concept of market structure was born.1

One marketplace that has not yet benefited from an analysis of its market structure is the proverbial marketplace of ideas. In this marketplace-by-analogy, the existence of competition has by and large been assumed, in a fashion more characteristic of 18th century thinking than of modern times. If the analogy contained in the marketplace of ideas is taken seriously, however, the question of market structure must be addressed. Is today’s marketplace of ideas competitive? Or, should its market structure perhaps be characterized as more imperfect?

The study of market structure in the marketplace of ideas is really the study of how information flows and is filtered within society. A marketplace of ideas that is structured to allow for perfect competition presumably provides society with the highest level of relevant and accurate information. If the market structure is less than perfect, however, ideas that favor those with competitive advantages will prevail. Accordingly, understanding the market structure of today’s marketplace of ideas provides a roadmap for better evaluating information generally.

Chapter 1 - The Marketplace of Ideas

As communication technology continues to advance, misinformation spreads ever faster. How should society respond to the spread of misinformation? The prevailing view accepts the argument that the society that maximizes the free exchange of information is also the society that is best equipped to stop the spread of misinformation. In the United States, the right to free speech is embedded in the First Amendment of the Constitution.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances

Accordingly, it is not censorship, but freedom of speech that solves the problem of misinformation. One person falsifies, another speaks the truth. As government steps out of the way, it is the truth which prevails. This simple idea formed the basis for the term marketplace of ideas.

The term marketplace of ideas is taken from the economic model of the free market. This model also calls for government to step out of the way and allow the economy to self-regulate. If the consumer is free to buy products that are superior, inferior products disappear. Businesses will be forced to lower prices and provide quality goods and services by way of the free market’s invisible hand of competition and self-interest. This free market theory is also referred to as laissez faire – a French phrase that literally means – let do.

Although scholars have long applied laissez faire to the free market economy, the concept has been applied to the marketplace of ideas, as well. John Milton was a 17th century poet who firmly believed that truth would ultimately prevail in a setting of free speech. He famously summed up the concept in a few short sentences.

Let all with something to say be free to express themselves. The true and sound will survive. The false and unsound will be vanquished. Government should keep out of the battle and not weigh the odds in favor of one side or the other.2

Thomas Jefferson is also considered one of the intellectual fathers of the marketplace of ideas. He was a strong advocate of the open intellectual atmosphere of the university. Of the University of Virginia he wrote:

This institution will be based upon the illimitable freedom of the human mind. For here we are not afraid to follow truth wherever it may lead, nor to tolerate any error so long as reason is left free to combat it.3

On the issue of freedom of the press, Jefferson was an equally strong proponent. He explained that democracy could not properly function if the public was not properly informed.

The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those