Geoff Lightfoot and Tomasz Wisniewski, Senior Lecturers in the School’s Finance and Accounting Group, describe information asymmetry as a politically prevalent predicament about which we should all be concerned
Knowledge production has always been a political matter to the extent that it has always coincided with the production of ignorance. The Ancient Egyptian priests protected their understanding of flood patterns of the Nile within their not generally accessible hieroglyphics. The celebrated Babylonian library, for its part, was assembled for the sake of challenging an established religious orthodoxy while the Gutenberg press was opposed by another for its democratising potential. The exclusionary trend continues today.
As with their predecessors, contemporary information technologies collect, store, sift through and analyse data. It is the volume of information which these technologies process today that is unprecedented. This increase in the amount of information processed, however, has not led to a levelling out in the access to that data. Instead, we find that much information is restricted to corporate and political elites, excluding the rest of us, a situation which economists call information asymmetry. The detrimental costs of such asymmetries have been well-documented in the literature, in the cases of market failures, insider trading or excessive costs of capital, for example. Any benefits from a situation of unequal access to information can be seen to accrue, as they always have, only to the few.
In totalitarian states, information is often contorted and censored – propaganda, disinformation and selective disclosure are constituents of everyday life. In developed democracies, on the other hand, the manipulation of information takes much more subtle forms. According to Herman and Chomsky’s influential propaganda model, news outlets are severely restricted by governmental licence and capital requirements. Media content, on this account, is dictated by owners, demands from advertisers, ‘flak’ avoidance, as well as political, corporate and ideological compromise. In effect, the media consuming public only ever receives information which has already been filtered through this media machine.
Contemporary organizations operating within democratic settings – state departments included – actively restrict access to information through formal document classification systems, Chinese walls and contractual obligations. The situation is exacerbated by the existence of exclusive information networks such as interlocking company directorships, gentleman’s clubs, Masonic lodges, fraternal societies, sororities and other professional networks. The lack of transparency often leads to socio-political pathologies where employees and taxpayers are routinely put at a disadvantage.
Beyond the ever present figure of CCTV surveillance, the contemporary democratic citizen also exists as an object of transactional and financial records, of web-browsing and telecommunications observation, of health and DNA databases, and of GPS and RFID tracking. When the need for all of this is questioned the response either pays homage to the provision of convenience or to the prevention of crime and terrorism. These answers are far from satisfactory: Edward Snowden’s case brought widespread attention to the enormous amount of material that is being collected on citizens for the sole benefit of the powerful. The actual use of all this information is rarely divulged to the subjects being observed and serves to fortify the position of those collecting it.
Our recently published paper overviews these mechanisms. Following the classic work of Stephen Lukes, we approach the contemporary problem of information asymmetry less as a technological matter and more as a problem of power. Through ‘the control of information, through the mass media and through the processes of socialisation’ (p.23), according to Lukes, desires can be moulded and individuals can become indoctrinated. Our paper outlines the persistence of such mechanisms today, through the concept of information asymmetry. Any prospect for improving this situation is limited but, we argue, not altogether hopeless.
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