An important kind of regulation is paternalism regarding individual behavior – we often prohibit or require certain choices, and say this is because people can make mistakes. The story told is that expert regulators can carefully consider the mistakes we are likely to make, and adjust our sets of available choices with an eye to reducing those mistakes. Paternalistic regulations now limit, for example, the investments you can make, the food and drugs you can consume, the professionals you can employ, the cars you can drive, etc.
When considering any particular regulation, officials should consider hoped-for gains from fewer mistakes on the one hand, and then on the other hand subtract expected losses from frustrating preferences, reducing innovation, and enforcement costs. When considering whether to allow regulation in some area, voters should also consider the possibility of incompetent, corrupt, or partisan regulatiors.
While public and elite opinion supports many kinds of regulation, there also appears to be a widely-held consensus against one kind of regulation: censorship. While we accept some limits on what kids can hear, and a few limits on extreme adult expressions, the standard view is that ordinary adults should mostly be allowed to speak and hear whatevever they want.
Yet the same human flaws that lead us to mistakenly consume investments, drugs, cars, or professionals can lead us to mistakenly consume claims, arguments, and opinions. And expert regulators have an apparently similar potential to help people by identifying and removing poor choices from their available consumption options. Why are we so eager to regulate so much individual behavior, yet so reluctant to endorse censorship?
It can’t be because our beliefs and opinions don’t matter – they often matter greatly. Yes, censorship can interfere with the competition of ideas and the evolution of better ones, but regulation can interfere with innovation in most any area. Yes, we do like to interfere in the competition of ideas by favoring some ideas via school curricula, public service messages, and subsidized art. But we still usually stop short of actually censoring messages opposed to those we favor and subsidize.
Actually, we don’t stop short as much with for-profit corporations. For example, we won’t let alcohol makers advertize the fact that most research finds those who drink more are healthier. But we are more reluctant to limit what non-profits can say about the subject. This suggests to me that one big thing going on is an anti-dominance instinct against for-profit firms. We are in general reluctant to limit choices, whether of ideas or other things, but we are more willing to make an exception for products and services offered by for-profit firms, especially big ones.
One big noteworthy exception to this pattern is reporters; we are reluctant to limit what large for-profit news firms can say. News firms have somehow sold themselves as being smaller opponents of bigger maybe-illicitly-dominating governments. When most firms are regulated against their will, they are also smaller opponents of bigger maybe-illicitly-dominating governments. But in those cases we side with the bigger governments against the smaller firms. So why side with big news firms against a bigger government?
I suspect there are multiple equilibria here. When governments limit criticism we accept their claim that firms must not be allowed to speak freely, but when news firms are allowed to tell us they shouldn’t be censored, we believe and support this position.