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.