In 1945, economist F. A. Hayek wrote what turned out to be a classic paper on how decentralized knowledge is made available to the public by means of the free market.
He argued that most knowledge is decentralized, and the free market allows people who own such knowledge to reap profits from this ownership. There is no way that any government committee can assemble accurate comparable knowledge, and then implement this information, with anything like the efficiency of the free market system. This article is reprinted in Chapter 4 of his 1948 book, Individualism and Economic Order. You can read it on the website of the Mises Institute. Click here.
What Hayek wrote about economic information is equally applicable to information in general. Accurate information is held by individuals at the local level. It is highly decentralized. There is no way that any central bureaucracy, or group of bureaucracies, can assemble more than a tiny fraction of this information.
Fast forward to 2013. Scott Pelley, CBS News anchor, said this:
“The country is only as strong as its journalism — that’s the way democracies work. The higher the quality of the information, the better informed the electorate is and the better the government runs. And the American people can always be trusted with the information.”
Mr. Pelley is a representative of broadcast journalism. He therefore is a representative of the federal government.
From 1928 until the present, the federal government has regulated the creation of over-the-air radio stations and television stations. Historians generally date the first commercial radio broadcast in the United States with the 1920 broadcast by Pittsburgh radio station KDKA of the results of the presidential election. The multiplication of radio stations led to overlapping broadcasts, due to the limitations of radio spectrum. The federal government intervened in 1927 by passing the Radio Act, and a regulatory system was set up in 1928. From that time on, the federal government has controlled the number of radio licenses, and it has used politically progressive standards to allocate the increasingly valuable spectrum.
(For the rest of my article, click the link.)