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The Simple Economics of Comparative State Lying

Summary:
As rumors of war smoulder, the question becomes even more important: Between two states who issue contradictory statements, which one is it safer to believe? The economic answer is, of course, the one that has the lowest incentives to lie. Keep in mind that states don’t lie, only their rulers do, and we know that it is often in their interest to, but the question remains. Answering it is not difficult, at least in some cases. In a free or just open society, the incentive for rulers to lie is much lower, because the probability that the liar will be denounced and perhaps punished is higher. The first reason for this is the free press and all the journalists chasing a Pulitzer prize. Partisans often forget that a free press is not one that says what they want, but

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As rumors of war smoulder, the question becomes even more important: Between two states who issue contradictory statements, which one is it safer to believe? The economic answer is, of course, the one that has the lowest incentives to lie. Keep in mind that states don’t lie, only their rulers do, and we know that it is often in their interest to, but the question remains. Answering it is not difficult, at least in some cases.

In a free or just open society, the incentive for rulers to lie is much lower, because the probability that the liar will be denounced and perhaps punished is higher.

The first reason for this is the free press and all the journalists chasing a Pulitzer prize. Partisans often forget that a free press is not one that says what they want, but one that is not going to be punished, and hopes to be rewarded by its readers, for saying what it wants.) In a freer society, also, more independent powers, judicial or quasi-judicial, exist to prosecute state criminals.

The second reason is that, in a free society, the number of moral individuals, including in the government, is much higher, whether they act by deep conviction or by habit. Fewer people “have learned to live with the lie” like under the Nazis (or, for that matter, the Communists). The beautiful review of the film A Hidden Life by our colleague Richard Reinsch at Law and Liberty is a must-read, if only for this reason. Finally, as Gen. Paul Silva told a Senate committee, “we take our values to war”—even if others in the US government seem to have forgotten that or what these values are.

So the conclusion from this brief economic analysis is that, between the government of a freer and that of a more authoritarian country, the latter is more likely to lie. Which does not mean–on the contrary–that its citizens should let their guards down and descend into blind patriotism.

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