How liberal democracy might lose the 21st century

Liberal democracy could lose its advantage in the 21st century if information becomes cheap, because wasteful competition over private information would then drain liberal societies' resources while totalitarian information control becomes an asset. The argument is offered as a conjecture that its proponent does not fully believe, and it builds on Hayek's view that prices aggregate dispersed knowledge, along with the contrast between Grossman and Stiglitz (1980), where costly information makes markets more efficient, and Hirshleifer (1971), where cheap information produces wasteful races to trade first. Thomas Philippon has shown that U.S. finance rose from about 10-12% of corporate profits and roughly 4% of GDP in the late 1940s through early 1980s to closer to 30% and 8% today, much of it spent on asset management.