If Lie Detectors Worked
A polygraph, often incorrectly referred to as a lie detector (Wikipedia)
My novel Salamander is a fantasy in which some mages are truthtellers. I did not put as much thought as I should have into the question of how a society would be different if it was possible to tell when someone was (subjectively) lying, a question relevant to fictional worlds but also to possible futures. A better understanding of how the mind works might produce a real lie detector, one that reliably reported whether a speaker believed that what he said was true.
What effects would it have on our society, assuming the lie detector was inexpensive and available to almost everyone?
Firm Size
The size of firms is determined by the tradeoff between the transaction cost of market transactions and the inefficiency of hierarchical coordination; a profit-maximizing firm does things in-house until it gets big enough that the cost of increased inefficiency from a larger firm outweighs the cost of doing them on the market.1 A reliable lie detector would reduce some of the problems of market transactions. You would still not know if a potential suppliers product was as good or he was as reliable a source as he claimed but you would at least know if he thought it was. It would also reduce the inefficiency due to hierarchy, since one source of that is the loss of information transmitted up and down the hierarchy due to workers, or employers, saying what they want believed instead of what they believe is true. That makes the net effect on firm size indeterminate, but since both effects are reductions in cost it ought to make the society richer.
Government Size
I do not know of a theory of government size, measured by population, area,2 or power, as well worked out and convincing as Coase’s theory of the firm. One approach might be to look at factors that make a government more likely to become large, another to look at factors that might make a larger government more likely to be overthrown.
If one believes that political mechanisms tend to produce the optimal size of government, Whig History writ large, the Coasian logic carries over; a lie detector improves both hierarchical production by government and its market alternatives, making the net effect uncertain. If one believes that the size of government is largely determined by how easy it is to collect, or to evade, taxation, then a lie detector would produce a bigger government. If, on the other hand, one believes that size is a function of how easy it is for politicians to lie to their population, a lie detector should have the opposite effect.
Torture Works
“Magister Coelus once spoke to me of the limits of magery to extract information without destroying the mage one used it against. It had not occurred to him that the combination of torture with truth telling, a simple magery familiar to our enemies as to us, provides a means of extracting information from a prisoner with no injury to his mind, only his body.” (Prince Kieron in Salamander)
That was one effect of truthtelling that I did include in my novel. The existence of truthtelling might reduce public distaste for torture, since the authorities can argue that if the suspect is innocent he only has to say so.
Further effects to be considered are those on law courts — defendants and witnesses may still say things that are not true but only if they believe them. Also on dating and on marital fidelity.
There are sometimes things one doesn’t want to know; there might be questions you never ask amongst friends and family.
The lie detector is judging subjective truth. That opens up opportunities for people who are good at believing what they want to believe, a talent that could be especially valuable to politicians.
It might even get one elected president.
Evidence
We have some evidence on the question. There have been societies, such as the Commanche,3 whose members believed that an oath taken in a particular form had supernatural consequences, that perjurers would die. In 17th century England one argument against allowing hearsay testimony in a trial was that the person being quoted had not been sworn so could not be trusted, implying that those who had been to some degree could be. A residue of such a belief survives in our society in the practice of testifying under oath.
By looking at a society where such beliefs were strong and nearly universal, one ought to be able to learn a good deal about what consequences reliable truth telling would have, whether in a fantasy society or our own high tech future.
Arguably, the effect of a lie detector would be to make the society higher trust, so one could get some evidence by observing how existing high trust societies differ from others.
Additional ideas welcome.
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My first journal article in economics was an attempt at one.
Described in Chapter 13 of my Legal Systems Very Different From Ours.

What your essay highlights is that a reliable lie detector doesn’t increase truth; it increases epistemic resolution. It sharpens the boundary between what people believe and what they merely assert. But that boundary is exactly where most institutional dysfunction lives.
A society with subjective-truth detection would quickly discover that the real political skill isn’t lying; it’s self-deception. The people who rise fastest would be those most capable of manufacturing sincere belief on demand. In other words, the lie detector doesn’t eliminate political manipulation; it selects for a more psychologically integrated form of it.
That’s why the Comanche oath analogy is so interesting: it didn’t eliminate falsehood; it changed the cost structure of falsehood. A modern lie detector would do the same. It wouldn’t create a high-trust society; it would create one where trust is outsourced to a device and belief engineering becomes a competitive advantage.
The deepest consequence, I suspect, is that institutions would reorganize around the difference between truth, belief, and narrative coherence. And the people who can fuse those three — not the honest ones — would end up running the place.
I wonder how much that would change anything if the use of a true lie detector were voluntary.
Presumably, the government would remain constrained by a right to privacy [knock on wood]. For private relationships it might become required by some parties. But already today, to get a mortgage loan one has to disclose a lot of information that is verifiable.
I suppose in relationships where intentions matter, it could be useful. College admissions come to mind [ha!], and marriage.
I toyed with a far narrower version of this idea ages ago, when I wondered what would happen if everyone were forced to wear a badge exhibiting their net worth. Colleges, potential spouses, and financial marketeers would surely be interested! But aside from that, I doubt everyday life would change much. Reduces search costs? :-)