Thursday, April 29, 2010

Information and Society

Matt Yglesias ponders the regulation of salty foods:
Clearly, the goal here is to get people to eat less salt. And it’s true that once we accept that concern for public health is a legitimate public concern we are opening the door in principle to a lot of government activity. On the other hand, even though a lot of people have libertarian instincts about novel paternalistic measures relatively few people have a consistent view in the other direction. Government policy encourages vaccinations against infectious diseases and you never see anyone agitating for the right of poor people to use SNAP to buy tax-free cigarettes.

This is about information. The strong libertarian believes that if it is possible for one to have the knowledge necessary to make a decision, they must be held accountable for the decision. So for instance, it is obvious that smoking crack is bad for you. If you do it, you have only yourself to blame. Basically, information is liberty.

The problem non-libertarians generally have isn’t that we don’t believe in liberty – it’s that we are more skeptical that information is so free. We see evidence of people on a daily basis making decisions that, were they to have had the information, they would not have otherwise. There is a large amount of evidence for this.
This explains why the non-libertarian is skeptical of business: to a large degree, business often profits from an imbalance in information. The whole Goldman Sacks fiasco is predicated on just this sort of dynamic. On a small scale, you can see this happen when the auto mechanic charges too much for a service because the customer doesn’t understand the procedure or has no knowledge of cheaper service elsewhere.

Libertarians are generally thought of as utopians because there is obviously not a perfect distribution of information – nor will there ever be.

Now, taking things to the next level, we ought to ask, “What is information?”. Because when one makes a decision, they are not only making a rational decision, but also acting from countless hidden, unconscious impulses. The advertising industry is predicated on this fundamental truth about human nature. Businesses hire advertisers not only to selectively provide specific information to consumers, but to actively craft messages that exploit the human unconscious. The fact that Tylenol exists is a testament to this fact: despite the generic being the exact same product, and sitting right beside Tylenol in the pharmacy aisle, Tylenol is a very profitable brand.

So the libertarian not only must deal with citizens not having access to equal levels of literal information, but unconscious and emotional information as well. The two together are what social scientists refer to as “human capital”.

Both of these together conspire to create a world in which the libertarian assumption of liberty through information really amounts to a world in which liberty is very unequally distributed. The coherent intellectual and moral response to this is to try and structure society in a way that maximizes information. Intellectually dishonest libertarians will peddle the claim that this social structure is one in which government is highly limited and markets are thus free.

But the obvious answer is that not only will information become even more stratified, but so too will the means of action. Wealth and information are power. Those who have more will always have an advantage. As we have seen throughout history, if left unchecked power will accrete. Liberty is eroded. The non-libertarian’s response is thus to strategically erect governmental bulwarks against this natural process.

Of course, the opposite of the libertarian, the communist, will end up doing much the same thing. Although instead of power accumulating among business oligarchs it accumulates in the state. Interestingly, both ideologies claim to be on “the side of liberty”. Yet if liberty is both information and the ability – conscious or otherwise – to act on information, neither system provides it. In fact, both actively destroy it.  The answer then, which  most responsible democracies have adopted, is a mixture of both market freedom and government regulation.  The question is not whether regulation or markets are bad, but how you do them.

1 comment:

  1. The Libertarians HAVE their paradise. It's called the internet. It takers only a few clicks to compare prices, research companies and have problems explained. Most of the internet is tax free and there's almost no government oversight.

    So it's something else entirely they want when they start insisting on eliminating government watchdogs and social services. As they say, there's two reasons for everything; the good reason and the real reason. And the real reason for Libertarians is that they want their inheritance trust funds and bank vaults of bullion to be totally tax-free.