Identity and Market for Loyalties Theories: The Case for Free Information Flow in Insurgent Iraq

When monopoly control over the flow of information is lost, the unavoidable consequence is destabilization. Information flow through a society can be understood as a market - not a market exchanging cash for goods, but loyalty for identity. Hence the market is called the Market for Loyalties - so labeled by an economics of information theory first developed by Prof. Monroe Price, of Cardozo Law School, and Director of the Howard M. Squadron Program in Law, Media and Society, to explain government regulation of radio, TV, cable and satellite broadcasting. In post-invasion Iraq, Saddam Hussein lost or monopoly control over the information market, where loyalty and identity were exchanged. The consequence was the plummeting of loyalty that the former regime could command in exchange for its marketed form of identity. The result of the sudden opening of the market is chaotic and violent. New suppliers of identity hawk wares so potent, that the consumer's loyalty extends to martyrdom in the form of suicide bombing (all for a few moments of temporal fame, and bright prospects of rewards in eternity). The current market for loyalties in Iraq is complicated by an additional characteristic - the impact of tribal structures to limit the number of effective buyers in the marketplace. Tribes function as brokers, restricting, the presence of competing buyers and functioning as resellers of identity in the marketplace. The dilemma for the United States is what to do about the new information market in Iraq - to clamp down and re-exert monopoly control, to stand back, laissez-faire-like, and let the market take its natural course, or to somehow manage the slide to equilibrium by carefully eliminating barriers and engineering the emergence of competitors in the market. This article will first present the theoretical underpinning of the market for loyalties in terms of neoclassical economics, emphasizing the importance of identity in this market. In so doing it will apply the theory to understanding many of the instabilities in Iraq and the Middle East. Second, the article suggests implications of the market for loyalties for U.S. policy. The article concludes that despite consideration of tribal intermediation of the information market, which must and can be addressed, US policy is not to win Iraqi loyalty by promulgating its own particular message of identity, but the creation and maintenance of an open and pluralistic market for loyalties within Iraq's information environment. In such a market, diverse identities are sufficiently numerous to insulate the market from potential disruption caused by provocative messages hawked by radical and violent groups. In essence, this Article presents an argument for freedom of speech and information flow based upon market for loyalties theory. This work is was originally published in 25 Saint Louis University Public Law Review 123 (2005)