Stuart Whatley in LA Review of Books:
How does a marketplace of ideas operate? Most who use the phrase today would say they’re speaking figuratively; a free market itself is a liberal ideal, positing that rational self-interest on the part of individuals will, collectively, lead to the best outcomes. In the realm of ideas, the maxim that “the market knows best” seems promising, but it doesn’t always work out that way. As Cass Sunstein, one critic of the metaphor, notes, valid information can be elusive in an open exchange because of various cognitive biases and information cascades:
Rumor transmission often involves the rational processing of information, in a way that leads people, quite sensibly in light of their existing knowledge, to believe and to spread falsehoods […] the processes that underlie the “marketplace of ideas” sometimes work poorly, because they ensure that many people will converge on falsehoods rather than truth.
Or, as Stendhal observed long ago, “petty despotisms reduce to nothing the value of public opinion.”
Beyond Sunstein’s heuristic critiques, markets in the real world are susceptible to monopolistic machinations, asymmetrical information, and distortions from government, industry, speculation, and malfeasance. It is important to remember that the marketplace of ideas is a market, and it fails as a metaphor for anyone lacking a starry-eyed view of markets themselves. It is not the “contest of opinion” Thomas Jefferson once described in his first inaugural address; there is an aspect of business to it, and with this, certain consequences.
In fact, the metaphor of a market for ideas isn’t really a metaphor at all. It’s a description of public relations, the one industry where ideas are actually supposed to be bought and sold; it shouldn’t come as much of a surprise, then, to learn that it was PR men who helped to bring the “marketplace of ideas” into common usage in the first place.