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May 28, 2009 — First, they came for the banks, and a few people spoke out, but nobody listened because banking is mysterious and people hate banks. Then they came for the car companies, and again, a few people spoke out, but still nobody listened because there were so many well-paying jobs at risk. Now, they’re coming for the newspapers. But if they get those, will there be anybody left to speak out when they come for you?
Of course, governments have been messing with banks forever. They supported fractional reserve banking, giving birth to the so-called “business cycle” of booms and busts. They created central banks like the Federal Reserve, loosing inflationary policies upon their populaces and making possible a Great Depression unlike any the world had seen. And they abandoned the gold standard, severing one of the final tethers that had kept monetary policies tied to economic reality. The quasi-nationalization of the financial industry is only the most recent intervention, needed to stave off the unintended consequences of previous interventions.
Car companies, for their part, have been struggling for years to stay afloat in spite of unsustainable labor contracts negotiated with government-backed unions. We have yet to see exactly how that one plays out, but it has been one long downward spiral for shareholders for a while now. Are newspapers headed for a similar fate?
The troubles of print journalism have been well-publicized and also precede the most recent general financial crisis. Revenue models have been imploding as advertizing migrates to the Internet. Readers are heading online too, where they can quickly pick up on all the day’s events from dozens of different sources. Why pay for the paper when they’re giving away the news for free? The problem is, if no one pays for the news, there will be no money to pay the people who report the news. In recent years, many jobs have been cut and many papers have closed. Even the venerable New York Times seems vulnerable.
The United States Senate held a hearing earlier this month to discuss the press’s dwindling fortunes. According to The Dallas Morning News, “Newspaper advocates complained that Google and other news aggregators have unfairly—even ‘parasitically’—hoarded revenue that publishers deserve and need.” No word on how legislators can come up with a price that is “fairer” than that negotiated on a free market, though.
Journalism is a crucial feature of a free society. This is precisely why it is so important to keep it free from government interference.
In fact, Congress and the White House have so far demonstrated a remarkable degree of restraint in refusing to underwrite the newspaper industry. The advocacy group Free Press has recently called for a “ National Journalism Strategy ” that proposes government funding for R&D and journalist training, while denying that such measures would constitute a “bailout.” So far, the government is merely considering allowing newspapers to be run as non-profits , though even this brings up the worry of political interference. The Newspaper Revitalization Act , introduced by Senator Benjamin Cardin on Tuesday, would at the very least prohibit non-profit newspapers from making “political endorsements.”
The main argument for bailing out newspapers is that they are too important to be allowed to fail. Journalism is not just another industry, it’s true, and news is not just another product. It is the fourth estate, a crucial feature of a free society. But this is precisely why it is so important to keep it free from government interference. Government money always comes with strings attached. Do we want the U.S. President driving out the CEO of The Wall Street Journal the way he did the CEO of General Motors? We might as well be living in Venezuela if that happens.
Yes, journalism is vital to a free society, but journalism is not in peril; only its present business model is. Certain technologies for delivering the news may fall by the wayside, and new arrangements for its financing will have to be developed, but journalism will not die. If allowed to function freely, the market will lead various entrepreneurs to develop innovative solutions to the industry’s current problems. If “the news” started to disappear, market pressure would increase for new payment and delivery models.
Television was for decades financed on an advertizing model similar to that used by newspapers. This model was in fact sustained by regulation, and when the regulations came down, it turned out that many of us were perfectly willing to pay for satellite or cable channels. Today, we are increasingly buying our TV on DVD to watch at our leisure. The business of news gathering and delivery will undergo similar shifts, if we allow it to.
Free markets are in a constant state of flux, with old ways of doing things fading away all the time, and new arrangements arising to replace them. Ferries give way to bridges, horses to automobiles, typewriters to word-processing computers. This creative destruction is unnerving at times, but it leaves us all better off in the long run. The Internet has already made consumers of news vastly better off. There may be fewer newspapers around, but our ease of access to those that survive has increased tremendously.
The process is unpredictable, true, but we must let market actors experiment to find the best solutions to the current financing crunch. Maybe the new Kindle and other e-readers will be one part of the solution . Micropayments for online content will probably have a role to play . There will surely be other solutions no one has thought of yet. But the news itself—journalism, the fourth estate, the bulwark against tyranny and corruption—is not about to disappear. Let’s not let governments capitalize on our fear that it will, and take control of yet another aspect of our lives.
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