Free Markets, Free People

Lee Bollinger

Subsidize journalism with public funds? The bad idea that won’t go away

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ver since the internet has thrown the private journalistic business model into disarray, the idea that perhaps public funding should be used to "save" private journalism has found purchase among some.

I, as you might guess, wouldn’t be one of the "some".

This time it is Lee Bollinger, Columbia University’s president, pushing the "public/private partnership" necessary to "save" journalism. He cites the BBC and NPR as examples of the sort of partnership he’s talking about. However, he wants to expand that, obviously, across the board. His rational for such an expansion is to claim we’re essentially doing that now anyway. His examples?

Meanwhile, the broadcast news industry was deliberately designed to have private owners operating within an elaborate system of public regulation, including requirements that stations cover public issues and expand the range of voices that could be heard. The Supreme Court unanimously upheld this system in the 1969 Red Lion decision as constitutional, even though it would have been entirely possible to limit government involvement simply to auctioning off the airwaves and letting the market dictate the news. In the 1960s, our network of public broadcasting was launched with direct public grants and a mission to produce high quality journalism free of government propaganda or censorship.

The institutions of the press we have inherited are the result of a mixed system of public and private cooperation. Trusting the market alone to provide all the news coverage we need would mean venturing into the unknown—a risky proposition with a vital public institution hanging in the balance.

You have to love this convoluted thinking evident here – letting the market alone provide all the news coverage is “unknown” and “risky”.  Getting government more deeply involved in regulating and subsidizing “journalism”, however, apparently isn’t.

What Bollinger really doesn’t want, much like the priests and monks of Gutenberg’s era, is to loose their monopoly on providing the news, just as the priests didn’t want to lose their monopoly on the possession of and therefore the interpretation of the bible.  Unfortunately the printing press changed that dynamic forever.

In this era the internet has forever destroyed the journalistic business model that provided monopoly power to “journalistic” institutions by removing the barriers to entry.  For minimal cost, anyone can publish on the internet.  And the proliferation  on the internet of sources and opinions on the news – some far better than the traditional outlets provided – have decimated their advertising revenue base as readers turn from high cost alternatives to low cost ones.

Welcome to creative destruction – a lynch pin of capitalism and the engine for advancements in technology and the delivery of goods and services.  Lower cost and better delivery will usually always win out over higher cost and poorer delivery.

If you want the news as quickly as you can get it (assuming the internet didn’t exist) and your choices were newspaper, network news and cable news, which would you most likely choose?

Obviously – and the ratings and subscription info seems to support this – you’d choose cable news.  Who wants stale stories delivered the next morning via newspaper, or appointment TV, where you have to take time to sit down and watch when they decide to broadcast to catch a half hour capsule of the news?

So this revolutionary change didn’t start with the internet.  The internet has simply expanded the choices and put the “traditional” outlets in even more disarray.

It isn’t the job of government or the taxpayer to subsidize the old and discredited business models to which the Lee Bollingers of this world cling.  What Bollinger should do, instead, is join the legions of owners, publishers and other experts working hard day and night to find a viable new business model that will preserve at least part of the “traditional media”. 

But all government subsidy will do is intrude in a dynamic changing market and distort it. And journalists of the traditional media will simply become one more rent seeker among many.  We don’t need to be moving toward more crony capitalism, we need to be moving away from it as quickly as possible.

Bollinger is sure that the system he envisions could easily be kept free of government interference and journalistic integrity would be maintained. He sites various examples that he’s sure proves his point.  But that’s not the point – at least not the one that is important (even if I don’t believe his point to be true in the long run).  What is important is the government should have no role whatsoever in subsidizing a “free press”.  When it does, no matter how benign the subsidy, the word “free” disappears from “free press”.

And intellectually that’s a non-negotiable point.

~McQ

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