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Abstract

In common usage the communication of information is not sharply distinguished from the use of language or speech to make factual or propositional statements. So it should come as no surprise that one of the main legal justifications for protecting speech--that it underwrites a “marketplace of ideas” and thereby contributes to the search for truth--has strong parallels in the economic theory of information. “Indeed,” as Kenneth Arrow writes, “the market system as a whole has frequently been considered as an organization for the allocation of resources; the typical argument for its superiority to authoritative central allocation has been the greater intake of information through having many participants.”

As it turns out, however, the concept of information in the extensive literature on information theory, communications engineering, and mathematical statistics is ill-suited to serve as the conceptual underpinning for a marketplace of ideas. To make this argument, I analyze and discuss the scientific notion of information, especially in its capacity as a commodity that can be exchanged on a market; I then turn to the special constitutional and statutory protections for speech, especially those based or premised on a “marketplace of ideas”--the defining theory of protected speech.

As I conclude, the prospects for developing a marketplace of ideas within standard economic theory are decidedly gloomy. “The chief point made here,” Arrow reminds us, “is the difficulty of creating a market for information if one should be desired for any reason.” “The presumption that free markets will lead to an efficient allocation of resources is not valid in this case.” Information theory cannot underwrite even a “marketplace of information,” much less a marketplace of ideas.

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