Subsidizing newspapers

Do newspapers provide a public good that wouldn't exist in their absence? It's that question that should determine our reaction to David Leigh's proposal for a £2 per month levy on broadband to subsidize newspapers.

There is some evidence to support him. When the Cincinnati Post closed in 2007, voter turnout fell and incumbent councillors were more likely to be re-elected, suggesting that the decline of even small newspapers worsens democracy.

However, I'm not sure this is a clinching argument, for four reasons:

1. The MSM isn't just a public good, but a public bad. The likes of Richard Littlejohn, Rod Liddle and some parts of Comment is Free help to coarsen and devalue political discourse. So too do journalists' sloppy (pdf) thinking and lazy churnalism. It's not obvious why low-paid workers and highly-indebted graduates should be forced to pay more so they can top up Paul Dacre's £1.7m salary. Granted, local newspapers are more of a public good - but Leigh's proposal won't much help these.

2. Leigh's proposal to subsidize papers "in proportion to their UK online readership" provides an adverse incentive. It would further incentivize cheap linkbaiting rather than expensive investigative journalism.

3. It's not clear that newspapers provide much news or analysis that isn't available elsewhere, most notably on the BBC. In today's Times - to take the example nearest to hand - there seems to be only one exclusive UK story of public concern. In economics, do newspapers really tell you much that you couldn't get from the BBC, the ONS or our better econobloggers?

4.It's possible that if newspapers were to disappear, other forms of journalism - some unforeseeable - would expand to fill the gap. Subsidizing newspapers thus helps keep dinosaurs alive and retards the creative destruction that might give us a healthier journalism.  

On balance, then, I don't see much merit in Leigh's idea. The case for subsidizing newspapers is about as strong - and arises from the same motive - as my belief that the government should subsidize left-handed cat-loving guitar-playing economists.

Comments

[Frances Coppola]

Or, for that matter, my belief that government should subsidize singing teachers who like to write about finance and economics in their spare time. Quite.

[Thomas Hobbes]

I have happily confirmed with my ISP that their standard response to any such request will be "get fucked".

[Luis Enrique]

there's an argument that investigative journalism is under supplied - you do all the hard work, but your rivals get to run the story too and the bump in revenues is negligible, so newspapers don't spend money on having teams working away on stories for little return.

So maybe rather than funding newspapers it might be better to fund something more like a news agency, like this lot:

http://www.propublica.org/about/

[pablopatito]

I think it may be a benefit to funnel some of the money that goes to the BBC into other organisations that provide similar content - whether that be independent documentary film makers or investigative journalists. Why not? Why should the BBC decide how taxpayer money is spent? Making judgements based on hits is obviously stupid though. The Guardian is now ruined by cheap link bait, we really don't need any more. But the principal of subsidizing public good providers isn't a new concept and is worthy of discussion in the new internet age.

[Anonymous]

Surely not the same newspapers that shrilly announce support for so-called free markets? Or who call for public subsidies to the disabled and jobless to end? And who publish misleading reports that serve the owner's interests?

Blimey! Surely some mistake.

There was me believing that VAT should be slapped on them. The exemption from said tax is already effectively a subsidy.

[Account Deleted]

David Leigh is an investigative journalist, which means his view represents a particular class of news-content producer, not newspapers per se.

Outside a relatively short period of history (post-mass literacy and pre-radio), newspapers have not been wealthy enough to source all their content from paid staff. It is more efficient and effective to use third parties, both in the form of agencies and freelancers.

Newspapers are predominantly publishers (or re-publishers), being responsible for only a little primary production. This is often retained for reasons of social prestige (the legend of Watergate), or to ensure leverage with people in the public eye (from Northcliffe to Murdoch), not because it pays its way in terms of circulation.

The effect of the Web has been a vast expansion in the quantum of news and comment, which is a good thing. This is often discussed in terms of the threat to newspapers, as a publishing medium, but the bigger issue is the pressure it places on newspapers to drop inhouse journalism altogether.

The Guardian can probably make a go of it as a publisher in future (regardless of media, the brand is the key), but they'll need to pension off the likes of Leigh & co to do so. His pitch for a broadband levy is a plea to preserve a class of producer. Unfortunately, investigative journalists, unlike farmers and bankers, have few genuine supporters among the political class.

[Chris Purnell]

Pleased to see "creative destruction" reappearing in economic discussion. How I laboured on that concept in the 1960's.

[Chris Gilmour]

Maybe it would work if The Guardian became an internet service provider, it could charge higher rates than other ISPs and subsidise its news gathering operation exclusively.

[James James]

"voter turnout fell and incumbent councillors"

This is a good thing.

[Francis Sedgemore]

"Maybe it would work if The Guardian became an internet service provider,..."

Alternatively, the Guardian could subsidise its "great journalism" (Leigh) through a money-spinning magazine full of secondhand car ads. Oh, hang on…

[Broilster]

Not sure why the BBC is being held up as some kind of shining beacon of journalism. All too frequently their type of journalism is shoddy, incorrect and at times simply mendacious. Flanders on Keynes for example last week was awful.

[nike shox r4]

All too frequently their type of journalism is shoddy, incorrect and at times simply mendacious. Flanders on Keynes for example last week was awful.