1. Goldman, A. I., Epistemology and Cognition (1980), 5–6, 136–137Google Scholar; Liaisons: Philosophy Meets the Cognitive and Social Sciences (1992), Chs. 10. 11, 12Google Scholar; Knowledge In A Social. World (in preparation); and Cox, J. C. and Goldman, A. I., Accuracy in Journalism: An Economic ApproachGoogle Scholar, in Socializing Epistemology (Schmitt, F. F. ed. 1994).Google Scholar

2. See. Hayek, F. A., Individualism and Economic Order (1948), 85–86.Google Scholar Hayek emphasizes, however, that the price system of the market provides only limited information to each participant, only the information he or she needs to be able to take the right course of action, not information (for example) about the factors that have caused changes in prices.

3. Here, we have in mind the “unraveling result,” in which sellers arc impelled (in equilibrium) to reveal accurate information about their product, because, if they remain silent, buyers will infer it is worse than it is. See Baird, D. G., Gertner, R. H., and Picker, R. C., Game Theory and The Law (1994), 89–109.Google Scholar The unraveling result applies, however, only in very special circumstances, namely, where information can be verified once it is disclosed, and where lying is sanctionable. It is doubtful how far these special circumstances generalize. For discussion of these kinds of issues, see subsections IV.C and IV.G below.

4. See Mueller, D. C., Public Choice (1979).Google Scholar

5. Milton, J., Areopagitica, A Speech for the Liberty of Unlicensed PrintingGoogle Scholar (1644, Cotterill, H. B. ed. 1959)Google Scholar;Mill, J. S., On Liberty, in On Liberty, Representative Government. the Subjection of Women (1859/1960).Google Scholar

6. Holmes, Justice (dissenting), Abrams v. United States, 250 U.S. 616 (1919), at 630.Google Scholar

7. Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969), at 390.Google Scholar Stanley Ingber cites 10 other Supreme Court First Amendment opinions from 1966 to 1981 that are permeated by the marketplace of ideas thesis. See Ingber, , The Marketplace of Ideas: A Legitimizing Myth, Duke I.J. (1984). at 2. n. 2.Google Scholar

8. Free Speech: A Philosophical. Enquiry (1982), Ch. 2.Google Scholar

9. Id. at 16. Since the quote appears in the chapter entitled “The Argument from Truth,” it is evident that by “best” ideas, Schauer means true (or, perhaps, “truest”) ideas.

10. Id. at 33. Of course, the truth rationale might be weakened somewhat so that it does not assign truth preeminence among values. We shall not explore this issue, however, since our concern is with the factual premise of the argument from truth.

11. Actually, (MMTP°) speaks of the market being unregulated; but this is contrasted with situations in which speech is regulated, with the implication that speech is unregulated in a market system.

12. Freedom of entry does not mean that market entry is costless. It means that no rent is derived from incumbency, i.e., that new agents can enter at a cost that does not exceed the cost incurred by incumbents, and, hence, incumbents do not have a competitive advantage over potential entrants.

13. Theorists such as Cass Sunstein and Owen Fiss deny that there is a legitimate contrast between market regulation and state regulation, because the state institutes the system of property rights that underpin a market system. We shall address this point more fully in section II.

14. The first, formula given here is due to Alston, W., A Realist Conception of Truth (1996).Google Scholar For similar defenses of realist, or correspondence, theories of truth, sec also David, M., Correspondence and Disquotation (1994)Google Scholar, Schmitt, F., Truth (1994)Google Scholar, and Goldman, A.. Knowledge in A Social. World, Ch. 2 (in preparation).Google Scholar

15. Thanks to Frederick Schauer for this suggestion.

16. For further discussion of these and related proposals, see Goldman, , supra note 14, Ch. 3.Google Scholar

17. See Goldman, , supra note 14Google Scholar, for further discussion. To register differences in interest or importance, the representation of the social aggregate of truth possession might weight more heavily each agent's true beliefs in propositions that interest him more. This approach might help address the worry expressed by Larry A. Alexander about the variable importance individuals attach to information. See Alexander, , Trouble on Track Two: incidental Regulations of Speech and Free Speech Theory, Hastings L.J. 44 (1993): 939–911.Google Scholar

18. The example is due to Scanlon, T., Content Regulation ReconsideredGoogle Scholar, in Democracy and the Mass Media (Lichtenberg, J. ed. 1990).Google Scholar

19. Other examples might be adduced to suggest that second parties, as well as third parties, can engage in the second form of regulation. Since this point is inessential to our overall thesis, we will not pursue the matter further.

20. Baker, , Scope of the First Amendment Freedom of Speech, UCLA L. Rev. 25 (1978): 974.Google Scholar

21. Ingber, , The Marketplace of Ideas: A legitimizing Myth, Duke L.J. 84 (1984): 25.Google Scholar

22. Baker, . Supra note 20, at 976.Google Scholar

23. See Kunda, Z.. The Case for Motivated Reasoning, Psychological Bulletin 108 (1990): 480–498.CrossRefGoogle ScholarPubMed and Goldman, A., Psychological, Social, and Epistemic Factors in the Theory of Science, in PSA 1994, VOL. 2Google Scholar (Forbes, M. ed. 1995).Google Scholar

24. Fiss, O. M., Why the State?, Harv. I. Rev. 100 (1987): 781CrossRefGoogle Scholar, and State Activism amistale Censorship, Yale L. J. 100 (1991): 2087Google Scholar; Sunstein, C. R., Free Speech Now, U. Chic. L. Rev. 59 (1992): 255CrossRefGoogle Scholar, and Democracy and The Problem of Free Speech (1993).Google Scholar

25. Fiss, , State Activism and State Censorship, at 2100.Google Scholar

26. Fiss, , Why the State?, supra note 24, at 786.Google Scholar The final phrase originates with Brennan, Justice, in New York Times v. Sullivan, 376 U.S. 254 (1964) at 270.Google Scholar

27. The state is suspect, of course, on two types of grounds: (1) it is not (always) a disinterested party, and (2) it may not be a wholly competent truth-oriented regulator. This need not imply, of course, that state regulation never promotes truth acquisition or error avoidance. In fact, we shall present ostensible cases of this sort in section III. But. as we shall indicate, most of these cases are open to debate.

28. emocracy and The Problem of Free Speech, supra note 24, at 34.Google Scholar

29. Id. at xvi–xx, 18–23, 51.

30. Id. at 31.

31. Farber, D. A., Free Speech Without Romance Public Choice and thr First Amendment, Harv. L. Rev. 105 (1991): 554–583.CrossRefGoogle Scholar

32. Director, A., The Parity of the Economic Market Place, The Journal of Law and Economics 7 (1964): 1–10CrossRefGoogle Scholar; Coase, R., The Market for Goods and thr Market for Ideas, American Economic Rev. 64 (1974): 384–391.Google Scholar

33. Milgrom, P. and Roberts, J., Relying on the Information of Intersted Parties, Rand Journal. of Economics 17 (1986):18–32.CrossRefGoogle Scholar

34. Posner, R. A., Free Speech in an Economic Perspective, Suffolk U. L. Rev. 20 (1986), 1–54. p. 7.Google Scholar

35. The issue will be briefly revisited in section V, however, where ihe indicated line of defense against the present counterexample will he undermined.

36. For further examination of the advertising case, in connection with Coase's theorem, sec section IV.

37. It is noteworthy, in this connection, that erratum notices in physics journals do not appear to be very effective in avoiding error propagation from an initially published mistake. See Thomsen, M. and Resnik, D., The Effectiveness of the Erratum in Avoiding Error Propagation in Physics, Science and Engineering Ethics 1 (1995): 231–240.CrossRefGoogle Scholar

38. See Goldman, A., Epistemic Paternalism: Communication Control in Law and Society, The Journal of Philosophy 88 (1991): 113–131CrossRefGoogle Scholar; reprinted in Goldman, A., Liaisons: Philosophy Meets the Cognitive and Social. Sciences (1992).Google Scholar

39. Federal Rules of Evidence for United States Courts and Magistrates (1989), Rule 102.Google Scholar

40. Fed. R. Evid., Rule 403.Google Scholar

41. The statements in the text also assume that truth and falsehood function like other goods or commodities, a basic premise of the argument from truth. This premise will be challenged, however, in subsection IV.F. below.

42. The point of this paragraph is in the neighborhood of a point made by Alexander, , Trouble on Track Two: Incidental Regulations of Speech and Free Speech Theory, at 936–939.Google Scholar Alexander points out that purchasers of information typically agree to a price for an item (or body) of information before receiving the information, i.e., before they know what it will be. Our point is not only that purchasers of information do not know beforehand what messages they will receive from a source, but also that once they receive a message they still may be unable to assess its truth value correctly. They won't necessarily know whether or not it is an instance of the product-type: true speech.

43. Akerlof, G., The Market for “Lemons”: Quality Uncertainty ami the Market Mechanism, Quarterly Journal of Economics 84 (1970): 488–500.CrossRefGoogle Scholar

44. For the definition of “bid price,” See Pratt, J. W., Risk Aversion in the Small and in the Large, Econometrica 32 (1964): 122–136.CrossRefGoogle Scholar

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47. See Samuelson, P. A., The Pure Theory of Public Expenditure, Review of Economics and Statistics 36 (1954): 387–389.CrossRefGoogle Scholar

48. For a general treatment of public goods, see Ledyard, J. O., Public Goods: A Survey of Experimental ResearchGoogle Scholar, in The Handbook of Experimental Economics (Kagel, J. and Roth, A., eds. 1995).Google Scholar

49. Farber, , Free Speech without Romance: Public Choice and the First Amendment, supra note 31.Google Scholar

50. Id. at 555.

51. Id. at 560.

52. Of course, there may be other constraints on speech opportunities in addition to cost. Positions of power and influence, for example, can affect speech opportunities, especially when the latter are not sold on the open market but allocated in some other fashion.

53. Milgrom, and Roberts, , Relying on the Information of Interested Parties, supra note 33.Google Scholar

54. We use the term “strictly” Pareto-optimal to denote Milgrom and Roberts' assumption that the full information decision is Pareto-optimal and no other decision is Pareto-indifferent to the full information decision.

55. Of course, it would be misleading to suggest that the legal adversary system is wholly distinct from an economic system. Obviously, parties to legal disputes hire their attorneys, and the economic resources at their command can make a significant difference to the level of skill and the amount of time their advocates devote to their case. Nonetheless, there are important paints of contrast between the judicial adversary system and the ordinary economic marketplace for speech.

56. For example, defects in the jury selection system may skew judicial results away from truth: and defects in the discovery system may fail to uncover crucial pieces of evidence. (On the latter topic, see Talbott, W. and Goldman, A., “Games Lawyers Play: Legal Discovery and Social Epistemology,”Google Scholar in preparation.) There are many complexities and incomparabilities here that cannot be examined. For instance, nothing in the open market for ideas is analogous to a jury, where a set of decision makers or “believers” is selected to represent the system or institution. There is also a problem of relating verdicts with beliefs of jurors. Voting for a verdict is an action, which may be inspired by many things other than an opinion about the substantive matter in dispute. So it cannot be assumed that a factually false verdict reflects false opinions of jurors. They might vote a certain way to “send a message” of some sort, or to engage in jury nullification. Thus, however difficult it is to determine which verdicts are true or false, it is even more difficult to determine whether jurors had true or false beliefs, which is our official topic here. This is further complicated by the “beyond reasonable doubt” standard for guilt in the criminal law.