In freer rather than less free societies, even if not truly free as Western societies stand, people get used to debates and criticism, which tend to push them in the path of truth and thus, at least in the long run, economic efficiency. This is a major advantage over less free and unfree societies. This observation must also be valid in war, at least ceteris paribus—for example, given an equal public support for a war.
An information revealed by the Wall Street Journal about a classified report being prepared by the Pentagon illustrates this point. The subject matter is the military causes and circumstances of the disastrous American retreat from Afghanistan last summer (“Report on Pentagon Role in Afghanistan Is Under Review,” July 18, 2022):
An initial draft of the Pentagon’s assessment, completed by authors affiliated with National Defense University, was submitted in March. …
The problem with the report submitted in March wasn’t that it was too critical, [an anonymous senior defense official] said. “A draft document would not have been returned because the belief was that it was too critical; you get nothing out of an after-action analysis if it is not critical enough,” the official said [my emphasis].
Defense secretary Lloyd Austin previously declared:
We want to make sure that we learn every lesson that can be learned from this experience.
The information, of course, could be false or embellished, but there is a good probability that it is correct because of the general quality of fact reporting by the Wall Street Journal. The information is not surprising anyway: the freer a society, the more criticism is valued and expected; and the more officialdom has problems hiding the truth, if only because it is likely to be leaked. A free press plays an important role—and it should be noted that a free press is not one that says what you think it should say, but a set of medias not barred from Power from saying what they want. Nothing is perfect, of course, but most things are more imperfect in an unfree society.
READER COMMENTS
Craig
Jul 21 2022 at 1:16pm
Government puts out mucb economic data which markets eagerly anticipate which, if we assume the efficient market hypothesis is correct, doesn’t fully make sense. I wonder what would happen if this information simply wasn’t made available?
Jon Murphy
Jul 21 2022 at 4:02pm
Why? The EMH means that actors are taking into account all information that is currently available. If new information becomes available, especially if it is unexpected, we would expect market participants to anticipate that information.
There is the obvious question of whether or not the government is the best provider of this additional information, but the fact the market reacts to it doesn’t undermine the EMH
Craig
Jul 21 2022 at 5:28pm
The theory behind the objection to the theory of the EMH is that the government report is reporting information that actually is available otherwise the government wouldn’t be able to report it. The two examples I recall from my professor at that time was the jobs report and the inflation report. When the jobs report comes out, stocks move, but that’s retrospective and those people were working and spending/saving and adding to the bottom lines of the companies being traded so in theory the indices should get the report and do nothing since those stocks should already have been bid up. Or with respect to inflation, the report comes out and the bond market moves, the bond market should already ‘know’ what the inflation rate is, the bond market will have already ‘sniffed it out’ and so when the report comes out the bond market shouldn’t move.
Jon Murphy
Jul 21 2022 at 10:05pm
Not necessarily. Only if the reports reveal new information.
Pierre Lemieux
Jul 22 2022 at 10:55am
Jon: I agree with the points you made regarding the EMH. Only new information can move the market. Governments, being by their very nature less readable than market organizations, have information that is more difficult to find out and act upon. Hence the importance of FOIA laws to force governments to reveal as much as reasonable of their proprietary information.
Pierre Lemieux
Jul 21 2022 at 2:22pm
Craig: Good point (and good criticism)! In a free society, market rationality serves as a model and a constraint for government. In an unfree society, government tries to impose its irrationality to the market. My post focused too narrowly on rationality within the apparatus of government (in an unfree society, tank tires are cheap produced for a captive consumer market). As you suggest economic information is in general much better produced by the market.
Craig
Jul 21 2022 at 5:40pm
“As you suggest economic information is in general much better produced by the market.”
One of the big problems of the GFC was the likes of S&P and Moody’s overrating MBS securities in no small part because the issuer paid the ratings agency. No conflict of interest there?
If you read about WW2 and want to get really into it, one book I would recommend reading would be Speer’s “Inside the Third Reich” but my caveat would be that the book IS absolutely Speer-apoligism. There’s the bias, right? Went all Godwin there pretty quickly, I know.
I like listening to Peter Schiff, but if you do, you better be aware that Peter Schiff is trying to sell you gold. Likewise one voice I respect about inflation is Professor Hanke and I read his articles in WSJ that he co-authors with John Greenwood and I listen to youtube videos of his various appearances on many finance channels. He absolutely calculates foreign inflation rates that are separate and distinct from the country he is reporting on, for instance Turkey where the official rate is much lower than Hanke’s estimate. Likewise, Hanke publishes a gold sentiment index which people can subscribe, but he is absolutely anti-Bitcoin and seems to like gold and I wonder if he has positions in gold, though to be honest I’m not sure, unlike Schiff where his bias is right out there.
The government provided information can have a bias as well, for instance I’m critical of owner’s equivalent rent for purposes of calculating inflation, but I don’t think they contrived it to make inflation look lower today for instance.
Monte
Jul 21 2022 at 7:01pm
A free press, alone, will no longer suffice. The public’s opinion of press accuracy is at an all-time low. In order to restore its credibility, we need a more open and honest media with greater access to information:
Lippman and Cronkite were journalists who commanded a great deal of respect in their day. I think we need some new Walters…
Pierre Lemieux
Jul 22 2022 at 10:49am
Monte: As all rights TO, the “right to access information” is very suspicious. If everybody has the “right to access information,” somebody must have the obligation to provide it. But what if the provider does not provide true information? To prevent this, we know of only one way: let everybody free to provide information and let the competition go on. Of course, given the government monopoly, citizens must have a right to access (most) government information.
Monte
Jul 24 2022 at 12:35am
Your point is well taken, Pierre. Perhaps this lack of accountability in journalism can be framed more as a pricing problem, rather than ethical one. The media presumably have a responsibility to counter-balance political and economic power in a democracy, and reliable investigative journalism is crucial to that responsibility. But it is costly, which means someone must be willing to pay. Unfortunately, total financial support for quality news in the U.S. is almost non-existent. Consequently, we get what we pay for – tabloid journalism.
Pierre Lemieux
Jul 24 2022 at 12:28pm
Monte: That is why I read the financial press (Financial Times, Economist, Wall Street Journal), where I basically get what I pay for: information (even if the underlying ideology is often confused).
nobody.really
Jul 22 2022 at 11:11am
Eh.
Yes, Lippmann and Cronkite commanded a great deal of respect–as did a number of authority figures. They operated during the middle of the century, when respect for authority (and social cohesion in general) was at an all-time high. See Putnam’s The Upswing (analyzing a dazzling array of variables to show how social cohesion was low during the Gilded Age, rose as the Progressive Era advanced, reached an apex around 1965, began declining in the Vietnam/Watergate era, and nosedived with the election of Reagan/Thatcher.)
Does openness and honestly promote credibility? Few propogandists seem to share this view.
In contrast, perhaps authority figures commanded credibility because media declined to cover anyone who contradicted the authorities. Roosevelt spent his entire administration in a wheelchair. Kennedy suffered from back problems, and pursued multiple affairs. How much coverage of these facts do we find in the media? You can say that suppressing this coverage was good or bad, but you can’t say that the public wouldn’t have been interested. The media was able to maintain a wide embargo on such coverage because the media was so concentrated: Those in charge could effectively control the scope of public debate (the Overton Window), for good and ill.
Today there are many fewer restrictions on what messages get disseminated–again, for good and ill. One arguable consequence is that authorities command less respect. Because anyone with Google can find support for pretty much any proposition, we are free to believe whatever feeds our emotional needs. True, I may suffer if my false beliefs somehow imperils my long-term interests–but often the consequences of false beliefs are remote in space (“The Ukrainian War is a hoax!”) or time (“Climate change is a hoax!”), impeding the feedback that might prompt learning.
Monte
Jul 24 2022 at 1:18am
Even so, Lippmann and Cronkite possessed a sense of decorum and objectivity in reporting that’s seems to have been lost. And if we’re to judge them by the same standards we judge the most influential journalists of today, there’s no contest, IMO. So I ask again, where have all the Walters gone?
Pierre Lemieux
Jul 24 2022 at 12:42pm
nobody.really: You write:
You may be right, but… With a bit more perspective, on can see that the moon is not bigger than the biggest star. There was much more respect for authority and social cohesion in the Middle Ages, and even more in Sparta. Respect for authority and social cohesion seem to be very questionable criteria.
nobody.really
Jul 25 2022 at 12:54pm
1: I don’t know much about respect for authority and social cohesion during those periods. Chaucer’s Canterbury Tales (1387-1400 C.E.) suggests a certain degree of popular cynicism about nobles and church officials in the late Middle Ages.
People often contrast the relatively liberal Athens with the relatively militarized Sparta. Whatever impediments Sparta confronted due to an excess of respect for authority and social cohesion, they did not keep Sparta from defeating Athens in the Peloponnesian War (431-405 B.C.E.), thereby becoming the most powerful city-state in the region and bringing an end to Athens’s “golden age.”
2: “Respect for authority and social cohesion seem to be very questionable criteria”–for what? If we’re judging why people held authority figures such as Lippmann and Cronkite in high esteem, then respect for authority would seem to be pretty relevant criteria.
Perhaps you mean that respect for authority and social cohesion have costs as well as benefits. I would agree with this.
Jim Glass
Jul 23 2022 at 4:18pm
“most things are more imperfect in an unfree society”
Yes, indeed.
As to imperfect information in an unfree society relating to beliefs and war, consider the opinions of “a prominent Russian political scientist” about the justification for and future of the Ukraine war.
Why Russia Believes It Cannot Lose the War in Ukraine
There’s a heck of an after action report gestating there.
Pierre Lemieux
Jul 24 2022 at 1:19pm
Jim: I read the interesting interview of Karaganov you linked to, but am still unsure of what you mean to say. Karaganov, for example, declares:
If you mean that his after-action criticism raises some valid questions about the state of Western civilization and especially for individual liberty in Western countries, I agree. If you mean that his his after-action criticism raises some questions for his own government and Russians in general, I don’t think so: it is a collectivist-minded panegyric for the repressive Russian regime (obviously more repressive than our political regimes).
Can you elaborate on what you think?
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