If the voter, through the political process, is to participate in the formation of economic policy, he must be free to obtain the data on which to make these political decisions. This is the simplest, and most uniformly recognized, function of the First Amendment's guarantee of free speech. Even those who say the First Amendment does not protect artistic expression agree that it is intended to protect the free flow of information for the political process.
Political information consists not merely in the argument for particular principles or philosophical convictions, but extends clearly to include purely factual data, such as the conduct of individuals which is or may be the proper subject of political decision making.
These data include economic data, for, as the Supreme Court recently observed, since many political decisions relate to the regulation of the economy, the free flow of information about goods is "indispensable to the formation of intelligent opinions as to how that free enterprise system ought to be regulated or altered."
The case in which the foregoing quotation appeared involved a challenge to state regulations that forbade the publication of price information regarding prescription drugs. In that case, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 96 S. Ct. 1817 (1976), the United States Supreme Court rejected the so-called commercial speech exception to the First Amendment and ruled that information regarding the price of a good was within the protection of the First Amendment.
When you consider the extent of political involvement with the economy, the Court's recognition of the value of price data to political decision making is compelling. Decisions on the level of welfare or transfer payments require a knowledge of the costs and earnings potentials faced by transfer payment recipients. Decisions about transfer payments to subsidize railroads or ship owners require information about the level of their costs, as well as of their potential incomes, just as decisions about the levels of public assistance require information about the welfare recipient's living costs and income potential. If this information is suppressed or distorted, the political decision-making process is similarly distorted, just as it would be if information about the cost overruns or faulty performance of a government program were suppressed or distorted.
To take another example, if the true price of petroleum is suppressed, so that the voters cannot judge for themselves whether supplies are ample or dear, then they are denied information crucial to an informed political decision on petroleum policy. To be specific, if the government sets the price of gasoline at 65 cents/gal., and this happens to be below the true market price, the voter observes that gasoline is scarce but is foreclosed from knowing whether the market is capable of delivering gasoline at 66 cents/ gal. or 70 cents/gal. or $2/gal. He thus does not know if he should support massive investment in public transportation, vast subsidies to oil companies for exploration, or perhaps simply do nothing until a minor supply problem corrects itself.
Price information generated by a free market is the most accurate source of data about the economy. It is more accurate, more readily available, and more intelligible to more people than newspapers, books, or television.
While television may give you a 30-second interview with a worker or government spokesman, with fleeting shots of a factory or field, the price of a good summarizes, in a single figure, data on the costs, wishes, experience, plans, and knowledge of hundreds of thousands of people throughout the world.
In a society that seeks to regulate or alter economic phenomena, price data is fundamental to the political process. It is as if the voter were denied the knowledge that public lands were being stripped of their resources or that bureaucrats were spending funds on programs that produced no public benefits. Suppression of price data, in this context, is clearly equivalent to the censorship forbidden by the First Amendment.
In this way we see that suppression of price data, and its functional equivalent—price control, are inimical to the rights guaranteed by the First Amendment. Arguments for price (and price data) control thus stand on the same footing as arguments for censorship of political data.
Just as the goals of censorship (the prevention of public harm) must be pursued by other, less constitutionally objectionable, devices, so must the goals that are urged for price controls. If the public wishes to spare the poor the discomfort of high fuel prices, they might, for example, vote the poor fuel subsidies. It should be recognized that suppressing the economic data of the market price mechanism—an act which cuts off the voter from knowledge of the true condition of the fuel market and obstructs the information of informed political judgments on that issue—is a constitutionally forbidden short cut.
We may thus conclude that the pursuit of public economic policy by a democratic government strongly implies that voters must have access to accurate price data, a requirement that would lead us to conclude that government control of prices (or price data) is qualified, if not entirely forbidden, by the First Amendment's protection of free speech and the free flow of data are fundamental to the political decision making.
© 1976 Davis E. Keeler
This article originally appeared in print under the headline "Money: Price Control and Censorship".