Economics

Censorship Isn’t the Answer to “Misinformation.” But Retrodiction Markets Might Be

The recent controversy surrounding the Joe Rogan Experience (JRE) Podcast presents some problematic concerns for the nature of free speech. Throughout the course of the COVID-19 pandemic, Rogan has been accused of proliferating “misinformation” about the virus, but the straw-that-broke-the-camel’s-back came in December (episode # 1757), when the podcaster had as a guest the virologist Dr. Robert Malone, a credentialed expert who holds contrarian views regarding the COVID-19 vaccines. 

This episode prompted 270 “medical experts”—most were not actually medical doctors— to send an open letter to Spotify asking the company to take down the inaccurate information disseminated through Rogan’s podcast.

“Spotify has a responsibility to mitigate the spread of misinformation on its platform,” they wrote, “though the company presently has no misinformation policy.” 

In short, the outpour of concern over the JRE Podcast promoting inaccurate information put pressure on Spotify to either edit or remove the content, even though, from a legal perspective, the Swedish streaming service has every right to distribute Rogan’s content. (In response to the uproar, Spotify issued a new policy to mitigate “misinformation.”)

When taking into account that Spotify entered into a deal with Rogan totaling over $100 million, it becomes clear the company values Rogan’s content. Ethically, however, there are free speech concerns regarding social pressure to moderate and censor content. It is also evident that Spotify is not terribly troubled by the content produced on Joe Rogan’s podcast. The actions taken primarily appear to be a response to increased public scrutiny and pressure. 

The Problem

In a world with a multitude of information outlets, it is becoming increasingly difficult to separate fact from fiction. The Internet has effectively democratized the distribution of media and information, now giving individuals with heterodox perspectives a platform for producing content. Invariably, there will be content producers that perpetuate misinformation. The quandary becomes: who decides what constitutes misinformation?

One option is to have the government decide, but this runs into serious problems. After all, the First Amendment is intended to protect unpopular speech, as demonstrated in Johnson V. Texas (1989) (validated at the state level) and United States v. Eichman (1990) (at the federal level). Generally,  so long as incorrect information is not defamatory, it is protected speech, as the government was not intended to be the ultimate arbiter of the truth. 

Another option is to rely on the opinions of credentialed experts. This situation parallels the phenomenon of rational ignorance examined in Public Choice Theory. The basic idea is that deference to experts and public figures is cost-effective to the average layman. No need to read dozens of medical journals filled with opaque jargon. This method presents its own set of issues, however. For one, expert consensus is not unanimous when it comes to COVID-19. Dr. Robert Malone and his critics, for example, are all credentialed experts. Which group of experts should the public listen to? It is also  possible that medical professionals supporting the conventional wisdom have ulterior motives for doing so, which could compromise the integrity of their “expert opinion.”

A Potential Solution 

Fortunately, these are not our only alternatives. Instead of passing laws suppressing speech or relying on an oligarchy of experts, why not have a platform where users determine the veracity of the content? For instance, Professor and scholar F.E. Guerra-Pujol suggests in his paper Betting on Conspiracy Theories: Kurt Godel and ‘The Leibniz Cover-Up’  (2021) that we should validate conspiracy theories by betting on them. This could happen through the implementation of a Retrodiction market, a modified version of a Prediction Market.

In prediction markets, participants place a bid on whether or not a future event is likely to occur. Traders can purchase a yes or no contract on the proposition on the speculated event. The cost of a specific contract typically reflects the consensus on the probability of an event happening. For example,Will Joe Biden select J. Michelle Childs as Stephen Beyers’ replacement on the Supreme Court?”; Yes ($2)/ No ($5).

The benefit is two-fold: the aggregation of information bridges information asymmetries and adjusts for bias. Also, the incentive of a monetary reward gives participants a reason to make accurate judgements.

A Retrodiction Market is a version of Prediction Market where traders bid the validity of past events or information. An excellent example of a Retrodiction Market proposition would be “Do Vaccines Cause Autism?”. If most market participants are willing to risk money supporting a contrarian claim on a given topic, this could be a signal that the claim has some veracity. Alternatively, if most of the money is betting against the claim, there’s a good chance the claim is false.

This solution would effectively allow platform users, regardless of their level of expertise, to judge with a degree of certainty whether an article or other type of media is likely accurate.   

Betting markets such as Guerra-Pujol’s proposed Retrodiction Market assist in validating information by bridging information asymmetries. As explained by Nobel laureate F.A. Hayek, the nature of knowledge is dispersed and is not concentrated in any single individuals or institutions. This is why past attempts to use top-down governance to manage economies have failed, for it is impossible for one person or organization to have all the relevant information to effectively plan economic activity.

The same principle applies to the market-place-of-ideas, since no one person has enough knowledge to validate every theory being promoted on the Internet. An incentives-based method of aggregating consensus can consider different sources of information and the experiences of the participants, resulting in an increased likelihood of accuracy.

Spotify might feel compelled to remove the contentious episodes of the JRE podcast, but capitulating to such pressures would act as an informal form of censorship. A better alternative would be to have Spotify listeners judge the accuracy of the content of these episodes, perhaps through a modified form of a Retrodiction Market to avoid the regulation and compliance requirements placed on gambling activities and binary option contracts.

Spotify subscribers are the consumers, so the company should take their input seriously. If Spotify’s listeners deem the episodes to be problematic, the company could place a disclaimer on the disputed episodes instead of removing them or censoring them outright. Simply put, a voluntary measure that incorporates the consent and consensus of one’s customers is a superior solution to having a corporation act as a top-down content moderator. 

The post Censorship Isn’t the Answer to “Misinformation.” But Retrodiction Markets Might Be was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.

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