ProMarket student editor Surya Gowda reviews Jeff Kosseff’s arguments for protecting the free marketplace of ideas despite the harms of misinformation in his new book “Liar in a Crowded Theater: Freedom of Speech in a World of Misinformation.”

Most Americans take great pride in their country’s robust protection of their right to free speech under the First Amendment of the United States Constitution. And yet, schoolchildren and career politicians alike can tell you that there are cases in which this most basic right may be constitutionally restricted. The example one hears often is the state’s right to forbid individuals from falsely yelling “fire!” in a crowded theater. Recently, many Americans argued for similar government interventions to curtail misinformation surrounding Covid-19. There have also been calls for the government to regulate speech regarding election misinformation and hateful speech against minorities. In his new book, Liar in a Crowded Theater: Freedom of Speech in a World of Misinformation, Jeff Kosseff claims that individuals use “fire in a crowded theater” too often and for too wide a range of cases to justify regulating speech they believe is harmful or objectionable, especially within the context of online misinformation.

The example of “Shouting ‘fire’ in a crowded theater” originates from a line in Justice Oliver Wendell Holmes Jr.’s opinion in the 1919 landmark Supreme Court decision Schenck v. United States. In that case, the Court held unanimously that the defendant’s distribution of leaflets criticizing the military draft during World War I was unlawful. Defending the decision, Holmes explained that words that are “of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress has a right to prevent” are not protected under the First Amendment. He continued, writing, “The most stringent protection of free speech would not protect a man in falsely shouting fire in a theatre and causing a panic.”

Kosseff, a cybersecurity law professor at the United States Naval Academy, argues that while the crowded theater scenario might have made sense to use in the context in which Holmes created it, the metaphor is misinterpreted and wielded irresponsibly in present-day America. In contemporary political debates, Kosseff says, most individuals use the phrase “fire in a crowded theater” to advocate for giving the government greater censorial power. Acceding to their demands would be a grave mistake, he says.

Liar in a Crowded Theater provides a powerful defense of America’s libertarian approach to the regulation of speech. To start, Kosseff clarifies that since Schenk, the Supreme Court has rolled back some of the justifications for Holmes’s “clear and present danger test.” In the 1969 case Brandenburg v. Ohio, it ruled that for speech to lose its protection under the First Amendment, it must both aim to and be likely to incite or produce “imminent lawless action.” Kosseff further states that while U.S. law does not protect all false speech—there are, of course, laws on the books regarding defamation, fraud, and false advertising—standards for holding people liable for stating falsehoods in the country are relatively high. Indeed, they are higher than they are in Europe or Canada where, for example, many forms of hate speech have been outlawed. This high bar for censoring free speech in the U.S. may very well be repronounced when the Supreme Court rules this year on the government’s ability to pressure social media companies to scrub misinformation from their platforms in Murthy v Missouri.

The libertarian approach to free speech adopts a self-regulatory framework known as the “marketplace of ideas,” Kosseff explains. Unexpectedly, this framework’s articulation also comes from Holmes. Just eight months after Holmes wrote his opinion in Schenck, he wrote an influential dissent in Abrams v. United States articulating a theory of free speech that has since provided the basis for shielding falsehoods from lawsuits, regulation, and prosecution. In Abrams, the Supreme Court ruled 7-2 to uphold the 1918 Amendment to the Espionage Act of 1917, which criminalized activity advocating to curtail the production of materials needed to wage war against Germany with an intent to hinder the war’s progress. Holmes, dissenting with Justice Louis Brandeis, wrote that while it may be tempting to ban unpopular or harmful speech, “the ultimate good desired is better reached by free trade in ideas.” 

Holmes explained further: “… the best test of truth is the power of the thought to get itself accepted in the competition of the market, and that truth is the only ground upon which their wishes safely can be carried out. That at any rate is the theory of our Constitution. It is an experiment, as all life is an experiment.”

Kosseff praises Holmes’s formulation of the “marketplace of ideas” framework—though Holmes himself did not use the exact phrase—and calls attention to how it drew inspiration from the classic liberal political philosophy of John Stuart Mill. Holmes, according to Kosseff, was guided by Mill’s principle of fallibilism, which holds that “all propositions are subject to perpetual testing. And that process of testing … must always hold out at least the possibility that prior understandings will be displaced.”

In Mill’s conceptualization, the marketplace for ideas is guided by participants’ desire for truth. As participants validate the accuracy of speech and ideas shared in the market, those that are false are removed. Government intervention, including censorship, risks distorting this flow of information, including by protecting false or harmful speech. Kosseff adds that the marketplace framework does right by both the producers and consumers of speech: it not only protects speakers’ right to freely express themselves but readers’ and listeners’ right to receive speech and form their own judgments regarding it, as well. A free marketplace of ideas offers society the best system with which to provide citizens the right to speech and expression while correcting for those ideas that are false and even harmful. Kosseff argues it is this contribution from Holmes that should be remembered and employed in debates over the regulation of speech.

To be sure, Kosseff acknowledges that the marketplace of ideas has its weaknesses. Critics have rightly pointed out that the framework incorrectly assumes that everyone has an equal ability to participate in the marketplace and that a single objective truth will prevail on the open market. It may also be too optimistic in assuming that consumers of speech are rational actors capable or invested in determining the facticity of competing narratives. Kosseff notes that, as free speech scholar Lyrissa Barnett Lidsky has written, First Amendment protections presuppose that receivers of speech constitute a “rational audience.” According to Lidsky, “Only rational consumers can sort through undifferentiated masses of information to discern what is valuable, to pluck the wheat from the chaff.” Finally, it may be outdated in presuming an open and common public square capable of rational discourse to arrive at shared facts and values rather than a fragmented market made up of speech producers interested in outrage and profit-making.

Nevertheless, Kosseff says the solution to harmful speech lies in strengthening the free market for ideas rather than government regulation. The regulation of free speech poses its own dangers to democracy and does not propose any long-term solutions. Acknowledging that the American public sphere is fractured and its participants oftentimes irrational, Kosseff argues that the solution to harmful speech is to create a citizenry equipped with the mental faculties that would allow it to resist the pull of harmful lies. Reducing the people’s demand for misinformation, he says, would require that the government regain the public’s trust in order to allow its technocrats to preserve their narratives of facts and information, invest more heavily in media literacy and civics education, and enact policies aimed at supporting libraries and independent news organizations. (Kosseff recognizes that independent media outlets are often the most prolific disseminators of misinformation, “but at least journalists belong to a profession that attempts to provide readers and viewers with the truth,” he writes.)

But while the aforementioned proposals would enable citizens to distinguish better between truth and lies, Kosseff fails to grapple with the immense limitations to carrying them out successfully in contemporary America. Kosseff hopes that more honest and transparent public messaging will help rebuild public trust in government and points out, for example, ways in which American leaders could have exercised greater humility in their coronavirus-related public statements to prevent people from being susceptible to mask and vaccine misinformation. However, as Kosseff himself hints, it is impossible to tell how much low trust in government is the result of public officials’ lack of candor and how much is due to other failures, such as high levels of economic inequality or even past foreign policy fiascos and persistent congressional gridlock—all problems that are far more difficult to address than botched public health messaging. Moreover, could U.S. public schools, which arguably lag behind those of other developed nations and whose curricula are determined by the politics of individual states, be trusted to effectively and uniformly impart sufficient knowledge of media literacy and civics? And can tax credits and direct subsidies to local news media effectively counteract the broader economic trends that have caused the destruction of the journalism industry or, for that matter, what much of the public perceives as a decline in commitment to long-standing professional ethics and standards among the journalists who remain?

Attempting to create a more rational public by rebuilding public trust or reviving local journalism is an admirable pursuit despite the great impediments to doing so. These “demand-side” solutions to the problem of misinformation also serve as good reminders that free markets, whether they trade in goods and services or ideas, don’t exist in a vacuum; they are only able to deliver optimal outcomes within the context of a healthy socio-political community. If we as Americans wish to adhere to libertarian free speech principles, we’ll need, at the very least, to acknowledge that the free marketplace of ideas is broken—after all, it did lead us to our current misinformation crisis in the first place. If it is to have any hope of supplying us with truth rather than harmful lies and conspiracy theories, we’ll need to expend great time, money, and effort into generating a level of competence among citizens and institutions that, as America’s economic and political situation currently stands, may very well be nearly impossible to ensure.

Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.