Keynesianism in the Marketplace of Ideas

What kind of interventionism do we want from our social platforms?

Recently, I’ve been reading “The Man Who Knew”, Sebastian Mallaby’s great new bio on the life of Alan Greenspan. In addition to diving deep into some lesser known trivia about the Fed chair (including his brief stint as a jazz musician in early 1940s), the book ends up being simultaneously an account of the evolution of economic thought about markets during the 20th century.

I’ve been thinking that this intellectual evolution has useful parallels to the current discussion about the challenges (take your pick: fake news, clickbait, shallow discussion, negligence towards harassment) facing a different marketplace — the online marketplace of ideas on social platforms like Twitter and Facebook.

First, some basic context. During the 1930s, the Great Depression ushered in a fundamental rethinking of the self-correcting equilibrium of markets, and the desirability and role of intervention in stabilizing the economy. Prior to this period, economic theory had focused on the self-clearing nature of the marketplace: supply and demand would always meet since price would rise or fall to ensure that goods were exchanged. The upshot of this model is that competitive markets would naturally tend towards full employment, since wages would adjust to ensure that all the supply (labor) was utilized. State interventionism was considered unnecessary and potentially dangerous.

Keynesianism revised this picture — pointing out the range of ways markets can fail to be self-correcting, and highlighting circumstances under which recessions could persist indefinitely. In doing so, the theory made an argument for active government intervention during recessions, leveraging tools of monetary and fiscal policy to restore confidence, boost output, and smooth the ups-and-downs of the business cycle (more on this).

I’d argue that our thinking about online platforms and the “marketplace of ideas” has moved through a similar arc from the mid-2000s to the present, moving from “classic” notions of the open marketplace of ideas as a naturally functional, self-sustaining system towards a critical re-evaluation:

  • Excitement about the democratization of publishing through blogs and the activities of citizen journalists to uncover the truth has given way to pessimism around the effectiveness of deliberately created fake news and the pernicious spread of misinformation.
  • Optimism about the power of crowd voting and decision-making to identify and surface quality has given way to dismay at the manipulability of these systems, and skepticism about their ability to deliver truthful or helpful results.
  • Malleable platforms for participatory publishing — wikis — recede further into the background as a go-to piece of community infrastructure. Mentioning them now can seem quaint, if not actively foolhardy.

There is one line of argument that will assert that these earlier positions were always naive, that the marketplace of ideas was never functional in this self-sufficient way. But doing so would miss the deep changes ongoing within the social marketplaces of the web: greater market consolidation, shifting underlying economics, and the increased sophistication of those looking to break these marketplaces for their own ends. To that end, our mental model of the marketplace of ideas has stayed roughly fixed even as the markets themselves have changed dramatically.

As we seek an intellectual frame to structure a cohesive approach to these challenges, I wonder if we might take a more Keynesian approach to the marketplace of ideas: holding that free economies of ideas are frequently efficient, and functional. But, like economic marketplaces, they are susceptible to persistent recessions and bad, self-reinforcing equilibria that require systemic intervention at critical junctures.

We may be in such a recession now. But, like Herbert Hoover (an engineer!) sticking to his guns as the economy deepened into crisis in the 1930s, government and online platforms alike cling to classical models of idea marketplaces, sitting on the sidelines and faithfully waiting for their markets to resolve themselves. Like the fear and aversion towards intervention into the economic markets during the Great Depression, so too do we see great unease towards intervention into our idea marketplaces.

So where might digital Keynesianism lead us? I think it would entail two major critiques of existing online marketplaces of ideas and provide directions on the ways we can move forward.

For one, the truth of the matter is that major, present day idea marketplaces like Facebook are not laissez-faire. They feature deep, constant interventionism on the part of the platform to mediate and shape idea market outcomes through automation and algorithm. Digital Keynesians would resist these designs: marketplaces of ideas are typically functional without heavy mediation and platform involvement, and doing so creates perverse distortions. Roll back algorithmic content curation, roll back friend suggestions, and so on.

Secondly, digital Keynesians would, however, attack the current inaction on the part of the platforms in a specific period of recession. It would advocate for the development of finely calibrated mechanisms which can be selectively activated to balance the idea economy, cooling it when it is overheating and hitting the gas when it is sluggish. It would advocate for clearer definition of the circumstances under which platforms and governments would intervene to right the ship more extensively during a crisis in the marketplace.

In short, such Keynesianism would reframe what intervention looks like, and the proper purposes to which it is put in managing the online idea marketplaces of the web. Following along this line of thinking, some questions for discussion that I think may be particularly rich:

  • What kinds of interventionism would be acceptable on the part of platforms? On the part of governments? What precisely constitutes a “recession” in the marketplace of ideas?
  • One primary objective in Keynesian economic management is the careful balancing of employment and inflation. What are metrics that a Keynesian approach to the marketplace of ideas should seek to optimize for?
  • Two primary levers exist for government management of the markets — monetary and fiscal policy. What is “monetary” and “fiscal” policy in the marketplace of ideas? For governments? How about for platforms?
  • What sorts of governance structures are necessary for sound management of the online marketplace of ideas? What is a “central bank” or a “federal reserve” (public-private) in this context?
  • Should we accept a transactional market frame in the first place? What alternative metaphors allow us to port models of governance from other contexts to deal with these challenges? Should we accept the blurring of public “government” and private “platform” policy that this metaphor allows for?