Rupert Murdochs recent takeover of Dow Jones has prompted a host of panicky questions: Can we really afford to have someone as politically slanted as the Australian media tsar running the Wall Street Journal? Will Murdoch open the doors to sensationalism, populism, partisanship, and manipulation? And arent the news media too important politically to be left to...the media business?
While concerns about the Murdoch deal are understandable, they are vastly overblown.
At root is the unquestioned assumption that Murdoch will sacrifice the depth or objectivity of the Wall Street Journals esteemed reportage in favor of profits or political bias--and that American Democracy will suffer significantly because of this.
True, a free and vigorous press is paramount to a properly functioning democracy. The media provide citizens with information about policies, politicians, and parties. They are political watchdogs, and they work as multipliers and agenda-setters. Consequently, reporters have long been celebrated in popular culture. But overly mythologizing the medias role in the political process risks provoking a backlash when the publics high expectations arent met.
Evidence from opinion polls suggests that this already may have begun to occur. A 2006 survey by the BBC, Reuters, and the Media Center found that more respondents distrusted the media (41 percent) than distrusted the government (33 percent). Such dissatisfaction may bode poorly for a free press. According to a 2002 article in American Journalism Review, 42 percent of Americans surveyed believe that the press in the United States has too much freedom.
Granting media outlets special protections from market pressures would be unlikely to restore public confidence. Indeed, it would reinforce perceptions of the medias self-importance--while ossifying the practices that have driven many customers away. On the other hand, keeping the media industry open to takeovers from rivals and upstarts serves to ensure its long-run vitality and esteem.
One source of apprehension about the free market in media ownership stems from a particular economic notion about public goods and market failure. Allegedly, media companies dont provide society with enough useful information because, as business enterprises, they must offer a profitable mix of information and entertainment in proportions that fail to take the public interest into account. The outcome resulting from a businesss bottom-line orientation, however, cant be assumed to be a market failure.
The reason is that we simply cannot presume to know in advance precisely what kind of information, and how much of it, a media outlet should produce. Market forces of supply and demand, however, can suggest that media owners may be reporting too much or too little--or, as may have been the case with the Wall Street Journal, that they may have fallen behind the technological curve in their delivery of financial information.
Acting on those often subtle signals is a risky endeavour best left to entrepreneurs, not government bureaucrats. To ask government to decide when media markets have failed to give voters and consumers the right amount of useful information is to insulate the media from the self-corrective pressures of market forces, leaving them dangerously exposed to political influence.
Government interference to ensure diversity in editorial content is also unnecessary. In a 2002 study for the Federal Communications Commission, University of Wisconsin professor David Pritchard found that integrated news companies such as Murdochs News Corp. may find it worthwhile to enlarge their publishing program in order to cater to differing needs. In such an instance, variety would increase rather than decrease with concentration of media ownership.
Focusing on the coverage of 17 television channels and newspapers that were owned by the same companies during the 2000 presidential election campaign, Pritchard found that in 50 percent of the cases, the TV channels and newspapers took the same positions. For the other 50 percent, however, Pritchard found diversity, that is, either a noteworthy difference or even explicit opposition in the general slant of the TV channel and the newspaper. This proves that as a rule, media conglomerates dont necessarily manipulate opinions; rather, they follow their respective customers.
Even Rupert Murdoch cannot escape this economic truth. Why would he drive away the demanding, faithful readers of what could become his flagship newspaper? Hes an astute businessman, after all. So we shouldnt worry all that much. While readers of the Wall Street Journal may wish to take special notice of what transpires under Murdochs watch, federal regulators should not. Media markets should be governed by the same rules as any other market. Assuming otherwise is precisely what puts the institution politically at risk.