The costs of suppression

October 11, 2017
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The fall of Harvey Weinstein reminds me of an important phenomenon in the social sciences – that of preference falsification, as described by Timur Kuran.

Recall another despot, Nicolae Ceausescu. For years, he faced little dissent because people were afraid to speak out. Fearing that their friends or neighbours would shun them or denounce them to the secret police, Ceausescu’s critics kept quiet. They falsified their preferences. And because dissent was so rarely heard, others also kept their own hatred of Ceausescu to themselves. There was an equilibrium of silence: millions hated Ceausescu but kept quiet which incentivized others to keep quiet.

That equilibrium lasted for years, but it was brittle. When Ceausescu gave a speech on December 21st 1989 a few in the audience began to jeer. This emboldened others to express their true opinion and within days Ceausescu was dead.

There’s a parallel here with Weinstein. As the New Yorker says:

Previous attempts by many publications, including The New Yorker, to investigate and publish the story over the years fell short of the demands of journalistic evidence. Too few people were willing to speak, much less allow a reporter to use their names, and Weinstein and his associates used nondisclosure agreements, monetary payoffs, and legal threats to suppress these myriad stories. 

As with Ceausescu, however, when one or two did finally call him out in public, others were emboldened to do so. And like Ceausescu his fall was swift after being so powerful for so long. When people suppress the truth, writes Kuran, “deceptive stability and explosive change are thus two sides of a single coin.” (Private Truths, Public Lies, p21)

One corollary of this is that persistence is not necessary a sign of sustainability or efficiency. Dysfunctional structures – Ceausescu’s tyranny or Weinstein’s domination of the film industry or Fred Goodwin’s RBS – can persist not because they have hidden benefits or because their leaders are geniuses, but because of the brittle equilibrium of false preferences.

Something similar happens in financial markets. Just as people suppress their opposition to a tyrant because they believe others support him, so investors can suppress their doubts about an asset’s value if they see others buy it. In this way, bubbles can emerge – as we saw in tech stocks in the late 90s and credit derivatives in the mid-00s. And just as one or two voices of opposition to a tyrant can trigger an avalanche of opposition that brings him down, so can a few otherwise innocuous pieces of news trigger a crash. Information cascades work in both directions.

You might think that all this amounts to an argument for freedom of expression and cognitive diversity, of the sort expressed by John Stuart Mill or Nick Cohen. True. But it also reminds us that the enemies of that diversity don’t lie only in the state. The Weinstein affair reminds us that men in the private sector can also achieve power and wealth by suppressing freedom. And, in fact, self-censorship can also sustain inequality, inefficiency and injustice.

A clarification. I’m not of course trying here to tell the full story of Weinstein or Ceausescu. I’m simply highlighting one particular mechanism. The social sciences are, in essence, an inventory of mechanisms.

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