February 15, 2014
Speech v. Economic Activity
Posted by Gordon Smith

Ronald Coase had some ideas about why speech is given more protection from government intervention than economic activity:

The paradox is that government intervention which is so harmful in the one sphere [speech] becomes beneficial in the other [economics activity].... What is the explanation for the paradox? ... The market for ideas is the market in which the intellectual conducts his trade. The explanation of the paradox is self-interest and self-esteem. Self-esteem leads the intellectuals to magnify the importance of their own market. That others should be regulated seems natural, particularly as many of the intellectuals see themselves as doing the regulating. But self-interest combines with self-esteem to ensure that, while others are regulated, regulation should not apply to them. And so it is possible to live with these contradictory views about the role of government in these two markets. It is the conclusion that matters. It may not be a nice explanation, but I can think of no other for this strange situation.

Ronald H. Coase, The Economics of the First Amendment: The Market for Goods and the Market for Ideas, 64 AM. ECON. REV. PROC. 384, 386 (1974).

There are some powerful counters to this argument (e.g., speech is a public good that is likely to be underproduced, especially if not protected vigorously), but I just thought it was interesting that Coase had written this article on the First Amendment.

Economics, Law & Economics | Bookmark

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