« Red Arabia | Main | Cure For Cancer? »

Efficient Markets

Jane Galt says, rightly, that when the media grants huge quantities of coverage to people who kill people -- school shooters, Iraqi beheaders -- in part in order to attract huge quantities of media coverage, they're encouraging more bad actions. She then concludes:

I am foursquare against any sort of government regulation of the media, a fervent believer that a liberal society is the best way to sort out these questions. But I'm foursquare in favour of self-regulation, a technique that libertarians don't mention as much as we should when talking to the rest of the world. Journalists and editors can de-sensationalise the sorts of stories that, like school-shootings and terrorist beheadings, tend to generate more such stories to cover, without depriving society of anything of value.
Well, I think libertarians who want to talk more about the virtues of self-regulation in this field need to go back to the fundamental case for free market economies. The idea, unless I'm badly mistaken, is that inefficient companies will either go under or else start aping the techniques of their more-efficient competitors. A news network that chose to deliberately forego profitability for some high-minded reason or another would immediately face intense pressure from its parent company to shape up. News organizations almost certainly don't lack self-restraint because the people running them lack all conscience or something, they lack self-restraint in their coverage because the structure of the economy doesn't allow them to act on their conscience. They're supposed to be making money for their bosses and shareholders. I don't at all think that government intervention in this field would be a good idea, but self-restraint on the part of editors and so forth is more-or-less a non-started. If behavior is to be changed, it needs to be at the level of news consumers, which strikes me as unlikely to happen.

The economy -- including its media portion -- is set up to maximize our wealth, not to maximize the likely success of American foreign policy. There's not a great deal that can be done about that consistent with liberal norms. And it's quite true that this is something those who mean us ill are aware of and can and will exploit.

November 9, 2004 | Permalink


TrackBack URL for this entry:

Listed below are links to weblogs that reference Efficient Markets:

» Self Restraint from Hellblazer
Mathew of the unpronounceable last name provides the example in his response to Jane Galt's evoking of "Self Regulation" in pursuit of a noble cause.Well, I think libertarians who want to talk more about the virtues of self-regulation in this... [Read More]

Tracked on Nov 9, 2004 7:09:36 PM


Do you really think that showing beheadings is a money maker for the news organizations? I think Jane's point is that they are showing these things because they are news and the press feels that they are important, not because their ratings would slip if they did not show them.

Posted by: Damon | Nov 9, 2004 3:20:53 PM

Let me say first off that I am not against showing the beheadings because they hurt America's foreign policy. I'm a journalist, after all, and I have no interest in getting the media to further any sort of government policies; that's the exact opposite of the media's job. I'm against showing the beheadings because I think this encourages more beheadings, and beheadings are bad. Ditto school shootings and so forth.

Also, I'm not talking about censoring the sotries; I'm talking about running them in small print on page B36, rather than putting them in 20 point headlines, or airing hours of footage on the victims and their tearful families.

I am, of course, asking the media to forgo some profit for the greater good, and there's a good chance that my cartel wouldn't hold. But the media does withold or play down other sorts of stories now: rape victim's names are not reported, interviews with children or the printing of their names are sharply circumscribed, stories are embargoed and details are withheld. I think part of the reason that news organisations run with these stories is a journalistic culture that tells them they should; that's what I'd like to change. It's probably a quixotic quest, but that's no reason not to undertake it anyway, especially since the cost to me is pretty low.

Posted by: Jane Galt | Nov 9, 2004 3:36:08 PM

I don't think there's a big demand for that sort of stuff among news consumers. I think it's more of a supply issue, because a) those events generate a lot of footage and fodder for talking heads and b) that sort of stuff probably doesn't help much at sweeps time. Plus, the level of sensationalism has clearly increased with the rise of the 24 hr news channels.

So they dump all that stuff on the airwaves because it's cheap and easy. Thus Postrel has a point. On the other hand, the alternative for the news provider is to put out stories that "cost more". I don't think any cable news organizations have tried to "take the high road" to see if there are better market returns for that approach. (Witness the Scott Peterson debacle, which is not national news under any standard.)

The only way to find out whether it's a supply issue or demand issue is for someone to try to supply "better product" and see if it sells.

Posted by: Heywood Jablomie | Nov 9, 2004 3:43:58 PM

Well how about some kind of NGO that gives news organizations a "No Beheadings Here" certification?

Posted by: praktike | Nov 9, 2004 3:45:55 PM

My apologies to Jane Galt. I inexplicably confused her with Postrel.

Posted by: Heywood Jablomie | Nov 9, 2004 3:49:03 PM

I think anyone who buts US Weekly, People or Star should understand the profit motive in journalism, and how journalistic standards generally give way to profit.

The journalistic norms that Galt talks about are enforced by consumers. Printing rape victims names will get you bad press, and turn people off your product. There are actually different standards in different countries for this, which is why Pierre Trudeau could father a child at age 70 out of wedlock without much media attention, while Bill Clinton can't eat a hot dog without tabloid headlines and sexual innuendo.

Each country gets precisely the media it deserves. Does American deserve Megan Mcardle and Matthew Yglesias?

Posted by: Ikram | Nov 9, 2004 3:49:04 PM

A news network changes things by changing the definition of "news." Though it may seek to maximize profit, it cannot (in theory) move beyond at least a superficial restraint of pursuing only what fits under the heading of news. But our (and their) understanding of what is news and what is interesting non-news has shifted.

Posted by: Anthony | Nov 9, 2004 4:06:12 PM

Jane Galt, emminant free-marketeer believes that we need a cartel to enforce the optimal solution.

Tell me, Jane Galt, emminant free-marketeer, how do you calculate the dead-weight loss from a cartel?


Posted by: Hipocrite | Nov 9, 2004 4:07:45 PM

One of the truly beautiful things about the modern Republican Party is the way they have been able to sell themselves as the "moral values" party in opposition to "Hollywood liberals", all the while owning and profiting from the distributers of the violence pornography that Ms. Galt claims should be self-censored. Beautiful if sickening.


Posted by: Cranky Observer | Nov 9, 2004 4:08:45 PM

If Jane sees nothing wrong with news organizations forming a cartel to avoid publicizing violence (and presumably enforcing the decisions of the cartel through some form of economic sanction--otherwise it's meaningless) then would Jane object to a group of citizens forming a cartel to impose some other useful regulations on the economy? We could call it a "government" . . .

Posted by: rea | Nov 9, 2004 4:23:23 PM

Give me a break. The types of market responses generated by terrorism are terribly modelled by libertarian market philosophies because they are hugely distorted by irrationality. If people had any idea how to properly apportion the risk and the amount of attention appropriate to attacks, the news markets would not cover the attacks as they do.

Posted by: Chasseur | Nov 9, 2004 4:49:39 PM

If it were the case that consumers prefered gory (to collapse the complexity down to one word) coverage and there were a negative externality to gory coverage, then the free market would deliver too much gory coverage.

Ordinarily, we'd want a tax on gory coverage to bring private costs/benefits back into line with social costs/benefits.

As far as I understand, the 1st Amendment bans most content-based like this. And it's a good thing, too. Some things, like control over who can say what, are too important to be subject to collective-coercive political commands.

Now, collective-voluntary agreements would be another thing entirely. I don't think it's true that such agreements need have legal (gov't or contractual) enforcement to be tenable.

Suppose we model gory vs. non-gory coverage as a repeated Prisoner's Dilemma game. Gory coverage, given that the other guy is going non-gory, gives you a ratings/profit boost. But if you both go gory, you get the same profits as both going non-gory, plus you get dead hostages (and attendant guilt).
Here, even though there is cutthroat (grim pun intended)competition to air gory coverage, both firms might hold back, since the other firm will just go gory the next day, leaving them with no net long run benefit.

Posted by: dubious | Nov 9, 2004 4:49:42 PM

The only thing more ridiculous than believing in god, is believing in "the free market".

Posted by: synykyl | Nov 9, 2004 5:08:01 PM

It was this kind of crap from this Jane Galt character that caused me to stop reading her bloviations.

Let's see. This Galt character says

>I am foursquare against any sort of government regulation of the media, a fervent believer that a liberal society is the best way to sort out these questions.

Oh, really? Has she ever posted that the Federal Communications Act is a violation of free markets? Or the 1st amendment? Not that I know of. The FCA, which allocates broadcast spectrum to certain--favored broadcasters. The FCA is hardly a mark of a liberal society. It would be the analog, in the print media, of the government determining how much newsprint is available, and how much the various media outlets (government selected, of course) can have.

The Galt character also says

>But I'm foursquare in favour of self-regulation, a technique that libertarians don't mention as much as we should when talking to the rest of the world.

This is truly a crock. If a media outlet doesn't want to go along with this "self regulation," what does this Galt character propose to do about it? Jam it? As the Soviets used to try to do with Radio Free Europe broadcasts?

I'm amazed at what this Galt character posts.

BTW, I refer to it as "this Galt character" because it is apparently anonymous.

Posted by: raj | Nov 9, 2004 5:32:47 PM

Jane Galt is not a libertarian. She's a low-tax Republican who is somewhat less authoritarian and socially conservative than the others. For example, she's sort of against abortion, but not really. She isn't completely enthusiastic about George Bush, for whom she voted.

I completely understand why a libertarian wouldn't vote for Kerry, but there's no way a libertarian could vote for Bush.

"War is the health of the state". Libertarians should know that. The ones who caved as soon as the war started never were libertarians at all.

Posted by: Zizka | Nov 9, 2004 5:42:13 PM

To be picky, the economy is not set up simply to maximize our wealth, it is there to maximize our wellbeing.

Posted by: Brendon | Nov 9, 2004 8:03:00 PM

To be even pickier, the economy is set up to provide for a mechanism for transferring goods and services in exchange for tender. Whether or not the tender is "legal tender."

Posted by: raj | Nov 9, 2004 10:37:09 PM

Why then refuse any government control ? (More specifically, why refuse the creation of an independent organism appointed by the sate to regulate the media ?)
Aren't you evading your own conclusions ?

I don't know what has taken over modern ideology that we should refuse, almost as a matter of principle, the right of peoples to regulate their own destinies through the policies of their nation-states.
Information, like some other goods (health, minimum wage and education, particularly) shouldn't fall solely into the hands of market laws, if we consider them so important that we want to insure free and fair access to them for all.

That is the true essence of the left. But somehow, the American left can't seem to have the courage to go that far.

Posted by: Yann | Nov 10, 2004 2:23:56 AM

The idea of being at the mercy of the market kind of falls flat when you consider that there are already numerous qualities we take for granted in TV news that are in conflict with profitability. There is, after all, still the pretense of higher values. In the foreseeable medium term, at least, the more you sell out, the more you make, generally. What we see in TV news is moderate, incremental sensationalism. TV news doesn't lead with Michael Jackson or Scott Peterson over Iraq, or do lurid sit-down interviews with the loved ones of a decapitated hostage.

Providing incentive for violent spectacles is just one of many ways money corrupts news, isn't it? The goal of not encouraging murderers is no more special than the goal of providing intelligent coverage, or of emphasizing the most objectively important topics, or of not sacrificing quality for the sake of flashiness and sensationalism.

I don't think news producers' consciences are really entirely constrained by economic pressures. Running a news division is very expensive, but one can imagine a bare-bones operation and ways a typical operation could meet that model in the middle. Not paying the anchor $10 million wouldn't change things tremendously, I'm sure, but that's still a sign of a sick system.

News divisions are probably more corrupted by competition with the entertainment divisions of their own networks than with their rival news divisions. A newsmagazine show has to be lucrative compared to the CSI or reality show that could be in its place, not another newsmagazine opposite it on another channel. Nightly newses are safe in their spots, but I'm sure comparison to the ratings of entertainment programming creates pressure to do a little here and a little there.

The more interesting issue that should concern libertarian-leaning people is the way money seems to be at least as, and probably more, corrupting of news media than state control (in the PBS or BBC sense). News is a public commodity, like academia, where the fittest may survive, but fitness isn't measured in dollars. You could never expect good scholarship to arise out of a need to make money, because it's accepted that knowledge is an end to itself and the economic benefits of it unplanned. (Now, academics are probably at the exact other end of the spectrum -- barely relevant to society by way of refinement and specialization rather than by way of profit-seeking.)

Posted by: Andrew | Nov 10, 2004 6:54:58 AM

" don't know what has taken over modern ideology that we should refuse, almost as a matter of principle, the right of peoples to regulate."

Simple: "Peoples" are abstractions. They don't really exist. Individuals are what really exist. And this "right of peoples" to regulate, would be more accurately refered to as the "power" of some of the individuals to deny other individuals the right to regulate THEIR OWN destinies.

Posted by: Brett Bellmore | Nov 10, 2004 7:10:20 AM

"Simple: "Peoples" are abstractions."

Peoples, like the groups that they are, are not abstractions. They are concrete ensembles made of individuals.
Such concrete groups take form at different levels, where you find them represented by leaders and elected officials, mandated by the individuals who form them to take decisions in their names in key sectors of their lives.
For example, in our democracies, you'll find such groups at the levels that are cities, states (or provinces in my case), as well as the nation-state. (Here, groups are territorially defined, inasmuch as they are composed of the individuals who reside within their territorial boundaries.)

For the rest, whether you give the mandate to your representatives to regulate in x or y sector (the mandate to decide for the common good of the individuals in your particular group), is a matter voting in the right people.

It is my understanding that America is the only democratic society that denies the existence of its own society to the extent that you just portrayed; while instead putting so much emphasis on the individual.
I understand that is indeed something of a traditional ideology down there. And one that has proved very dynamic in the past (especially in the economic realm).
But I am afraid that certain excesses in that realm are starting to show the limits of such a conception, as America starts to fall behind in its promises of public education, universal access to health, and the availability of quality information.

Posted by: Yann | Nov 10, 2004 7:39:30 AM

Yann, it's important to not make a fetish of "democracy"; As one of our founding fathers, Ben Franklin said, "Democracy is two wolves and a lamb voting on what to have for lunch."

The genius of the American political system wasn't democracy, it was the limits we put on democracy. Without those limits, democracy is just a way of chosing who oppresses you.

Posted by: Brett Bellmore | Nov 10, 2004 7:47:31 AM

The point here is not the merits of democracy, but the merits of giving certain rights to groups over an absolute primacy to the rights and liberties of individuals.

Ideologically, the US is the Western state that comes closest to a Nozickian paradise (even though it falls quite short, by his own standards). And many, like you, will claim that the "limits on democracy" that you invoke is the only possible way to avoid falling into a tyranny of the masses.
But look around : Without becoming fascist or communist states, countries like Canada and in most of Western Europe manage to provide decent services to their citizens by considering that certain classes of goods and services should be at least partially taken out of the economic circuits, in order to be placed in the realm of essential, or basic rights.

That does in no way affect the overall primacy of the rights of individuals over the group. It only moderates it in order to avoid the excesses I mentioned, where unbridled competition tends to exclude and disenfranchised vast portions of the population.

A kind of a "middle way", if you will.
This is the essence of my original criticism : That the American left won't go as far as reclaiming the right of the state to regulate, where access to certain goods is deemed essential to the individuals that inhabit it. (In this case, access to quality information, which is essential to a healthy democracy and a healthy economy.)

This is putting limits on democracy. Whereas what you propose is quite the contrary.

Now sorry but I must go, as I made myself late typing this answer... :(

Posted by: Yann | Nov 10, 2004 8:14:23 AM

I get the impression that Libertarians aren’t as libertarian as they fancy themselves, especially if the “free” world they envision doesn’t go their way.

As a Libertarian, Galt should admire how the free market is working in the world of mass media. Wasn’t the deregulation of the media and airwaves a great Libertarian victory? Pay no mind to the fact this deregulation has led to the degradation of mass media’s product. But let’s face it: the media corporations are not about morality or “doing good” or serving the public weal; they are about turning a buck. They only deliver the kind of product the masses want, and the masses want sex, murder, titillating celebrity gossip, disasters, controversy, and vulgar humor. Why should they sacrifice profits for a greater good?

The people have spoken and they want their crap. And the media delivers this crap by the truckload. Golly, you'd figure Libertarians--of all people--would understand this best.

Posted by: mat | Nov 10, 2004 10:03:18 AM

The comments to this entry are closed.