JOURNALISM, MARKETS AND DEMOCRACY Danny Frederick* Draft 13 September 2012


Abstract It is often claimed that journalism provided for profit in a competitive market is biased, dumbed-down and irresponsible, and that ‘public service’ journalism, provided or funded by government, is essential for a democratic society. Reasons given for the claim are that an informed citizenry requires unbiased reporting, that consumers do not have the competence to judge the quality of information, and that publicly-funded agencies can, whereas market exchanges cannot, take account of third-party impacts of reports. I argue that these claims reveal a misunderstanding of markets, exhibit a misplaced faith in the goodwill and the capacities of government agencies, presuppose a naïve and mistaken theory of knowledge and an untenable view of consumer passivity, ignore market mechanisms for dealing with externalities and, if acted upon consistently, would tend to bring about a stagnant and closed society governed on behalf of organised minorities. Keywords bias, closed society, democracy, externalities, government, information, journalism, markets, morality, profit

1. Introduction Journalists produce information on a diverse range of topics for consumers. In a market economy, the journalist may work for profit or as an employee of a profitmaking organisation, in competition with other suppliers for consumers. Privatesector news organisations may also be in competition for advertisers or sponsors to fund, or help fund, their businesses. Many journalists work for government or nonprofit organisations, which are more insulated from competition, and which espouse a ‘public service’ ethos. It is often argued that non-market, ‘public service’ journalism is an essential part, and should perhaps be the dominant part, of the journalistic industry in a democratic society because, unlike the competitive, profit-motivated journalism provided by the market, it can provide objective reporting upon which citizens can rely, because it can educate and improve its consumers, and because it can publish in a socially responsible, and socially accountable, way. I argue that all this is mistaken. In section 2, I offer a brief and, I take it, uncontentious description of journalism and its place in our lives before setting out the types of reason usually offered in favour of government funding or provision of journalism. In section 3, I discuss the claim that democracy requires authoritative ‘public service’ journalism. I argue that journalism that is provided by, or under the auspices of, government is likely to be inferior to that provided in a competitive market and that the idea of ‘authoritative’ sources depends on a discredited positivistic conception of knowledge. In section 4, I briefly consider and dismiss the contentions that the market provides ‘dumbed down’ journalism and that government-funded journalists are needed to improve consumer tastes. In section 5, I discuss and rebut the objection that only ‘public service’ journalism can take account of harmful effects on third parties. I conclude the discussion in section 6.


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MARKETS AND DEMOCRACY 2 2. a community. The organisation to which these items are sold might sell products. or humanity or the world in general. current affairs. In the developed economies instances of each of these kinds of journalistic activity is to be found. It would be naïve to assume that people’s demands for information are necessarily or even normally demands for the truth. such as a writer selling articles or reports. magazines and broadcasters. for example. (ii) desirous of being a part of something bigger than themselves. medicine. sports. or an activist selling his word-processed tracts at a political gathering. (iv) usually alert to potential opportunities for advancement. Examples of the first could be an author of a self-published exposé. about topics in which it is or may be. or a whistleblower selling a story about malpractice. enjoying the activity of entertaining and criticising rival opinions and attempting to rate them as better or worse. are of some interest to almost everyone. science. by and large. (iii) anxious about possible threats to the well-being of themselves. markets. or a commuter selling images of an explosion on a train which he has recorded with his camera-phone. (vii) disputatious. or perhaps ought to be. friends and communities. (iii) selling information-producing services to an organisation which sells or provides information to the public (employee). interested. (iv) doing any of the preceding without demanding payment (amateur). or that the information supplied . such as newspapers. the people in it. a blogger or someone posting a video on YouTube. (v) more or less keen to help others who are in difficult circumstances. rather. In principle. Journalists may undertake to supply the various demands for information in one or more of the following roughly-demarcated ways: (i) selling information directly to the public (entrepreneur). or because it is financed by taxpayers. trades. whether it be a group. for example. Examples of the third type of journalism are employees of public-sector or private-sector media organisations. as in the case of government-managed or government-funded media agencies.JOURNALISM. This general demand for information appears to reflect the facts that humans seem. Most of these interests are more or less specialist. (vi) concerned to evaluate themselves in comparison with others. politics. such as newspapers. but others. such as the British Broadcasting Corporation (BBC). (ii) selling information to an organisation which sells or provides information to the public (freelance). Examples of the second would be people who sell reports to newspapers or television companies. particularly current affairs. any topic may be a suitable one for journalistic reporting. Journalism: Producers and Consumers The professional aim of a journalist is to inform the public or. a society. as may be seen from the diverse varieties of journalism covering. more especially. to be: (i) curious about their environment and. or it might provide its products to consumers for free because its activities are financed by advertisers or sponsors. Any of the preceding examples will be an example of the fourth type if the journalist gives rather than sells his products or services. some section of the public. appealing to a relatively small subclass of people. or a member of the public selling a lurid kiss-and-tell report about a celebrity. magazines or television or radio programmes. their families. and so on.

Very often people quite rationally accept that the truth. it is often claimed that. MARKETS AND DEMOCRACY 3 by journalists is normally intended to be the truth. that journalism. academics. see or read. Objectivity Existing markets in journalism show that there is a great variety of apparently cranky views and interpretations of events for which some consumers are happy to pay. The media organisation may often prefer a false report for the same reasons that a journalist often will. is too important to be left to the market. a journalist will very often prefer a false account.JOURNALISM. the government must provide or fund journalistic activities. no matter how a monopoly has arisen. either because it flatters him or because it flatters his consumers. or anything close to it. Similarly. for a selection of such claims). but in other cases the journalist’s direct consumer will be the media organisation to which he offers his products or services. For example. is too difficult to come by. or convey. politicians or bureaucrats. as freelance. In fact. but ‘public service’ journalism can take account of the impact on the public at large. Further. 57-84). Thierer 2005. where news organisations are run for profit the news will be distorted by the opinions of the organisation’s owners or by the desire to satisfy advertisers (see Keeble 2001. But in a democracy. Also very often. the remedy for it is to re-establish open competition. In any case. (ii) private-sector journalism is undemanding but ‘public service’ journalism can educate consumers and improve their tastes. in which the citizens can and should take part in political decision-making. even in mainstream media. and that. but democracy requires authoritative and trustworthy sources of information so that citizens are well-informed. by journalists. 112114. either because it feeds a self-deception. or because he thinks it will promote some purpose that he holds dear. someone who entertains a romantic idea of himself as some kind of revolutionary may desperately want information that paints a picture of the world that makes appropriate the sorts of actions he wants to perform and the sort of life he wants to lead. The journalist’s consumers will be the end consumers of the report in the case of the journalist-entrepreneur who sells (or gives) information directly to the general public. One claim I will not discuss is that markets inevitably lead to monopoly suppliers who raise the prices and lower the quality of goods sold to consumers. In the next three sections I discuss and rebut these reasons in turn. . It is often affirmed. or because it might tend to deceive others and thereby promote some purpose he holds dear. employee or donor. or at least news and current affairs reporting. consequently. 3. (iii) when information is sold for gain. often-made claims about concentration of media ownership have been grossly exaggerated (see Shew and Stelzer 1996. and the growth of the internet has enabled such off-beat theories to multiply and flourish. a false picture that is accurate enough for the purposes at hand. or simply because it conveys what he thinks his target consumers will want to hear. The main reasons appear to reduce to the following three: (i) the journalism supplied by the market is biased and mistaken. a consumer will prefer a flattering or false account. monopolies arise from barriers to entry and these are usually imposed by governments. Further. buyer and seller cannot take account of harmful effects on third parties. and they are happy if they can obtain.

antiAmerican. this gives greater scope to its managers and journalists to impose their own biases. it isn’t easy to see how to regain a place for genuinely dispassionate reporting that will be authoritative in our public deliberations. pro-multiculturalism and more sensitive to the feelings of Muslims than of Christians. rather than from prices paid voluntarily by consumers. Such an organisation is hardly likely to present a robust challenge to the political powers that be. To that extent it can please itself. whether it be by means of imposing a particular slant or style or even by prohibiting coverage of specific topics. MARKETS AND DEMOCRACY There has to be a source of information which can be trusted to be accurate in its news. usually government-funded television services. which constrain the sort of information that can be conveyed. its senior appointments and its continued existence depend upon the government (Hargreaves 1993. But a governmentfunded provider obtains its income from taxes imposed upon citizens. documentaries and current affairs programmes and to be impartial between different social and political views. which are free to consume because they are financed by a tax on television viewers. 28-29). It is a necessary. so its power to promote specific biases is dependent upon customer approval. including journalistic ones. anti-countryside. Such government suppliers are more heavily regulated than are private-sector suppliers: government (that is. the proceedings of which were leaked to the press. as the organisation can afford to be inefficient. First. Further.JOURNALISM. but not sufficient. This has two consequences. but responses to it of the above-quoted kinds exhibit two egregious errors. 4 Similarly. alongside suppliers of journalism that spring up in the market. some government-provided or governmentfunded suppliers. 14-15) says: when market forces have fractured the news media. Democracies generally have. taxpayer) funding comes with strings attached. Second. The first error is to think that not-for-profit journalism is likely to be less biased than commercial journalism. The problem of bias is a serious one. 30). For example. For example. Andrew Marr. Leading BBC political journalist. For example. some BBC executives and journalists avowed that the BBC is Left-leaning. a past director of BBC News and Current Affairs described the organisation as ‘a paradigm of inefficiency’ and ‘prodigiously wasteful’ because it was ‘run without market disciplines’ (Hargreaves 1993. if the government is not heavy-handed in imposing biases on the organisation. in the United Kingdom (UK) the BBC provides a range of services. a profit-seeking news organisation in a competitive market will actually make a profit only if consumers continue to buy its products. condition for this to be possible that some at least of the broadcasters be independent of any political party and of any business interest (Graham & Davies 1992. so it does not have to please consumers in order to stay in business. it is subject to government interferences that reflect policies or priorities of the day. The situation is likely to be worse the more extensive is government power or influence (see Leeson & Coyne 2005 for a case study of post-communist Romania). allowing different accounts of the facts to attract different segments of the polity. but it must operate within a ‘public service’ remit laid down by the government (BBC Royal Charter 2006). Kitcher (2008. at an internal meeting. the quality of products (as defined by consumers) is likely to fall and the costs of products are likely to rise. and its own policies are shaped in light of the fact that its funding. 184). stated (Walters 2006): .

it also suppresses competition and acts as a barrier to entry. It's a publicly funded. It has a liberal bias not so much a party-political bias. apart from the poker-waving. with a mirror attached. a physicist observes the electrical resistance of a coil (Duhem 1954. indeed. descriptions is an even greater problem in social situations where inter-personal interactions are embedded in a complex network of rules. However. the latter brandished a poker in a fit of rage. For. ethnic minorities and gay people. they are less likely to consume competing products for which a price must be paid. or challenged. For. views or intentions are. and which they might rather not have.’ No matter how dispassionate or objective someone sets out to be. They had arisen between people all professionally concerned with theories of epistemology (the grounds of knowledge). We usually impose theoretical interpretations without realising it. Bias due to allegiances is an additional problem. the unavoidability of fallible interpretation. sending a beam of light to a celluloid ruler. As two journalists put it (Edmonds & Eidinow 2001. and what conventions are being adhered to. and all with a keen interest in what was happening. when consumers can obtain journalistic products. she will inevitably present a particular point of view in her reporting. thereby reducing the options available. There were thirty people present. and why and when. roles and relations or where there is an interplay of different cultures or subcultures. The existence of government-funded suppliers means not only that people are compelled to pay for journalism which is costly as well as biased in a way they may find objectionable. the layperson might not even recognise the bar as iron or realise that . by the different agents. all academics and mostly philosophers. Two people observing the same social situation will see very different things if they hold or arrive at different theories about what the agents’ roles. 5): There was a delightful irony in the conflicting testimonies. but. The proliferation of conflicting. It is better expressed as a cultural liberal bias. and the theories employed may be false (Kuhn 1970. their accounts of what happened contradict each other with regard to who said and did what. 62-65). MARKETS AND DEMOCRACY The BBC is not impartial or neutral. does not consign us to relativism. Yet they concerned a sequence of events where those who disagreed were eyewitnesses on crucial questions of fact. who (if anyone) the agents represent. though sincere. without paying a price for them. even poor quality ones. For there is the same unavoidability of interpretation in the physical sciences. trained and educated. every report of fact involves theoretical interpretation. because the theories are part of the culture or specialism in which we have been brought up. To cite a well-known and simple example: during a ten-minute discussion between Popper and Wittgenstein in 1946. 5 In a similar way.JOURNALISM. understanding and truth. where a layperson observes an oscillating iron bar. urban organisation with an abnormally large number of young people. The second error is to assume that there is such a thing as ‘a source of information which can be trusted to be accurate’ or ‘genuinely dispassionate reporting that will be authoritative. 145). a not-for-profit news organisation funded by charitable donations or grants (some of which may come from the government) would be highly likely to express a bias that reflects broadly the views of its funders and more particularly the views of it managers and journalists. For example. and thus of bias. and yet in these sciences there have been substantial improvements in our knowledge over time.

JOURNALISM. including observation statements. A government-funded news agency which inherently suppresses or frustrates competition can only be a barrier to this. had to be rejected after Urey’s discovery of heavy hydrogen in 1931 showed that what scientists had previously taken to be water was in fact a mixture of two physically different substances (Popper 1966. 268. 1966. generation of surprising predictions which survive testing. and correction of previously accepted results (Popper 1972a. Anticipation of such open criticism should spur journalists to improve their reports to avoid suffering loss of reputation. but these implications may be inconsistent with other observation statements (Popper 1972a. 42. open to criticism and testing. Similarly. Scientists make progress in the face of competing interpretations by testing theories against the world as we experience it and rating theories as better or worse in terms of a range of explanatory merits. Thus. 1983. and any opinion may be criticised by anyone. see also Kuhn 1977). insofar as we are concerned to improve our knowledge of the matters upon which journalists report. nor via accurate or authoritative sources. we should welcome views from diverse sources and encourage free debate. what matters is that it can be tested to discover its strengths and weaknesses (Popper 1972b). This. 374-75. “And that’s the way it is”. in footnote 19 to the passage from which the quotation above is taken. 1972c. also Wilkes 1980. 2. 2. Vol. for deeper levels of interpretation see Popper & Eccles 1977. The best arrangement for achieving this is a competitive market in journalism. but via open competition between alternative theories in a harshly critical environment (Popper 1966. The source of a view does not matter. Even so simple an observation statement as ‘Here is a glass of water’ implies that the receptacle will exhibit the law-like behaviour of glass and that its contents will behave in the law-like way that water does. we all believed him. including open criticism (Popper 1972a. Social arrangements in which any opinions may be put forward. 121-22). of course. 94-95). Vol. MARKETS AND DEMOCRACY 6 the spot of light on the ruler had been sent there by the mirror (Watkins 1984. presupposes that there are many theories to test. 216-21). 91-92. 2. including simplicity. 266). many such statements that were once accepted because the liquid in the glass had passed all the scientific tests for being water. Kuhn 1977): improvement in our knowledge is achieved not via dispassionate or passive observation. 218). consistency with accepted observation statements. and it will help to expose lies. . ability to explain a range of different things. will permit an open public assessment of which hypothesis has stood up best to criticism so far. Kitcher. obstructing the publication of new hypotheses and new criticisms and making it more difficult to detect error and to improve our understanding. Vol. imagination and criticism enable us to transcend our current biases (Popper 1994. The growth of knowledge depends upon encouraging new theories and holding all theories. Indeed. And this requires institutions and traditions that safeguard and encourage freedom of thought and speech. adds wistfully: When Walter Cronkite would end his newscasts with his signature phrase. in which anyone can set up in business and challenge prevailing views and even make a living at it if enough people buy her products. 26171. 54.

Alan Rusbridger. the claim that private-sector journalism has been dumbing down is contested by many journalists. and under competitive pressure to cut costs the quality of journalistic products is substantially reduced. their own experience and their own capacity to comprehend. several commercial networks established in the early 1980s to provide cultural programmes could not survive because the potential audience was small. Of course. 126): Shallow uniformity is not an accident but a consequence of what Marxists optimistically call late capitalism. which were free to view. when a tip-off involves investigation. By contrast. news is the first casualty because it is time-consuming to collect and. However. rather than the journalism they would demand if elite journalists were publicly funded and could force-feed them better quality information. In a similar vein. managers cannot guarantee that there will be a story they can run when the hacks finish their investigations. that does not prevent the niches from being served by other suppliers. . 174) urge a point about television in general that seems to apply with equal force. there is a very real danger that consumers will under-invest in the development of their own tastes. For example. First. ruminations on ‘Aren’t husbands horrid?’ ‘Is the New Lad dead?’ or ‘Does Tony Blair hate Gordon Brown?’ are cheap and certain. the private sector might not meet niche demand where competition is hampered at every turn by barriers to entry such as a government-funded provider or government monopoly licences or restrictive government regulation. editors and academics. Paternalism A common complaint against the journalism provided by market participants is that. interviews. if any. For example. editor of the Guardian. Second. in the search for greater profit. appears to be false. For example. mass-market and niche products may be offered by the same overall supplier (as with News Corporation). more interesting and clearer. former editor of the Observer (broadsheets with a generally anti-market bias) have both argued that recent years have witnessed a ‘dumbing up’ of the media (Keeble 2001. the charge that the journalism provided by the market is dumbed down. The complaint is thus not merely that journalism is dumbed down to cut costs. if it is true that a private-sector mass-market supplier will pay little attention to market niches. opinion polls. the market for newspapers exhibits demands for broadsheets and for a multiplicity of special-interest journals despite the mass circulations of the tabloids. in forty percent of its broadcasting time (Sawers 1996. Graham & Davies (1992. the costs of original programmes was high and the taxsubsidised Public Broadcasting System was already providing expensive cultural programmes. but the Orwellian overtone is chilling (see Watkins. 62-63).JOURNALISM. 1957. 4. lifestyle pieces. For example (Cohen 1999. Anglo-Saxon economies put short-term gains for transient shareholders above the long-term future of organisations. for an explanation of the totalitarian implications of positivistic epistemologies like that of Kitcher). to journalism in general: if all television is elicited by the market. but that a competitive market gives consumers the journalism they demand. In the media. and Will Hutton. 96). it is ‘dumbed down’ to appeal to the largest number of consumers. in the USA. who see journalism becoming more sophisticated. MARKETS AND DEMOCRACY 7 Presumably this is just naïveté on Kitcher’s part. indeed. as is often the case in television.

their own experience and their own capacity to comprehend. Although it may not be directly relevant to ‘the West. a research report published in the UK medical journal. This is not a case of consumers ignoring government-funded journalism. the vast majority of whom. while the publication of lies and the invasion of privacy might be mutually beneficial to the journalist and her consumer. as we saw in section 3. even someone who sticks with one provider of journalistic products will typically interact. The Lancet. at least in some circumstances. the contention that state-funded journalists can improve public discernment seems fanciful. in workplaces. and the resulting discussions would tend to stimulate curiosity and spur experimentation. Some consumers might not even glance at the publicly-funded information. on the other. 5. preferring instead to pay for a private-sector alternative or to consume journalism that is provided to them for free because it is funded by advertising or by charities. with other people who are getting news and views from other sources. 172) remonstrate: . be a consequence of it. MARKETS AND DEMOCRACY 8 Further. Government medical advisors rejected the claim as did general practitioners. So long as there is freedom of movement and of association in a dynamic economy. For one thing. clubs and pubs. The variety. are government-funded. and low levels of political knowledge and political participation. it is true of each of us that our tastes in information and our capacities to comprehend it can be improved and that our lives can be enriched thereby.JOURNALISM. 19) opines: Sex. As this is one way in which people can ‘underinvest in the development of their own tastes. a large media agency which is funded by government is likely to offer wastefully produced journalism which reflects the biases of its managers or journalists. because earlier government health advice about bovine spongiform encephalopathy had been scandalously mistaken (Driscoll 2004). Externalities Stephenson (1998. However.’ a recent empirical study of post-socialist societies in Eastern Europe (Leeson 2008) shows a strong positive correlation between government involvement in the media. on the one hand.’ it seems that the very evil that ‘public service’ journalism is supposed to address might. but it is analogous. Other kinds of journalism may also have harmful effects on third parties. they can have very harmful effects on their victims. For example. in the UK. Graham & Davies (1992. and refused the vaccine for their children. Nevertheless. or of the government. views and criticism available. Further. consumers cannot be forced to swallow the publicly-funded journalism. in 1998 claimed that the measles-mumps-and-rubella vaccine could cause autism. they might not take it seriously (see Leeson and Coyne 2005 for the ‘credibility crisis’ in Romania). Yet a substantial minority of parents rejected this information from government-funded sources. and its existence will reduce the diversity of news. But it seems unlikely that this can be better brought about by top-down compulsion than by an environment that stimulates curiosity and self-education. choice and novelty available in a competitive market give people opportunities to try things out for themselves and to discuss the upshot with other people. lies and the invasion of privacy of individuals have certainly been an important part of the staple diet of popular British newspapers since British newspapers have existed. Even if they peruse it.

and a market can function properly only where private property rights are recognised and largely respected or enforced.JOURNALISM. on people other than the journalists and their consumers. that is. disclosing failure of a well-intentioned government programme may mean that incumbent politicians are not re-elected. guilt or innocence will not usually be known before the allegations are aired. complete a transaction that harms a third. it is not so clear that the conclusion is desirable. but their point presumably applies to television journalism in particular. Of course it is well known that it is extremely difficult to take the indirect effects of consumption into account. which may in turn prompt a take-over of the company which results in job losses for its senior managers. and so on. producing a stagnant. and it can be generalised to all forms of journalism. under the influence of lobbying from organised minorities. with impunity. The argument is also mistaken in its claim that market transactions cannot take account of harmful effects on third parties. However. Reformulating the argument in terms of innocent third parties does not avoid the problem. I trust that. at least in principle. the decisions will tend to reflect the prejudices and sympathies of its managers and journalists. 2000). intended to be responsive to the concerns of the public at large. the outcome will tend to favour effective political lobbyists. For example. that third person is entitled to compensation. responded to and debated. First. publishing information about a new invention may reduce the demand for old technologies and put innocent hard-working people out of business. MARKETS AND DEMOCRACY [T]he television that is broadcast ought to reflect the preferences not only of those who watch it but also those affected by it indirectly – yet the market cannot do this. Where a transaction between two people violates a private property right of a third. by which time many harmful effects have already been sustained. again. But this will lead to cronyism (see Olson 1982. 9 The authors are talking about television in general. it is impossible to avoid having harmful effects on innocent parties in any dynamic society. A good deal of investigative journalism is intended to expose wrongdoing and thus to have harmful effects on the wrongdoers. Market transactions involve an exchange of private property. closed society. a public service broadcaster is. that is. then. It follows that. But if the government delegates the selective decisions to a government-funded media agency. Second. as we saw in section 3. established organised minorities. whereas the market is bound to ignore them. Stifling information that may have harmful effects on third parties will tend to enforce the status quo. if the selective decisions are taken by the government. The powers that be may attempt to permit some change by making selective decisions about which negative third-party effects are to be permitted. more ‘bad’ TV (bad in the sense of being judged to have harmful side effects) and less ‘good’ TV will be purchased than consumers in aggregate would have wished if they could have acted collectively. when spelt out. the point is that. for two reasons. if left just to the market. reporting a company’s losses or mistaken investments may reduce its share price thereby diminishing the wealth of the shareholders (most of whom will usually be ordinary working people who have invested through their pension funds). The conclusion would be that ‘public service’ journalism will produce fewer harmful effects on third parties. This means that two people may. For. so long as they do not thereby violate any property right of that third party (we should for this purpose regard a person has .

in a competitive market. the exchange will normally still go ahead if the transactors obtain sufficient benefit from the deal. to which the harmed person may consent for a suitable payment. If a third party suffers an impairment of reputation or a loss in value of a brand. there are serious questions about what rights people should have with regard to privacy. Hibbs 1993. exchanges will tend to go ahead if and only if the gains to those involved in the transaction are greater than the losses to the injured party (for full discussion. with the different issue of journalists breaking the criminal law in the process of gathering information. The existence of such rights need not prevent the publication of information that infringes them: such publication will tend to go ahead if and only if the gains to those involved in the market transaction (the publisher and his customers) are greater than the losses to the injured party. the advent of technology enabling charging for the use of roads according to time of day as well as distance of travel means that private property rights in roads are now feasible and may be the best way of reducing pollution and congestion (see Glaister & Graham 2004. there is current concern that the UK’s strong libel laws are tantamount to censorship and need to be reformed (Sweeny 2009). which liberties and duties – should be recognised. For example. whom the publisher will have to pay. and the organisations for which they work. as well as important qualifications. The . If there is a right to privacy. the answer to this question will often need to be revised in the light of changes in technology and other circumstances. its infringement will permit the victim to claim compensation. see Coase 1988a. or of the same jurisdiction at different times (see Hayek 1960. the exchange will normally not go ahead if the third party is willing to pay the potential transactors to refrain (which will normally be the case if the exchange would impose a loss on the third party that is greater than the benefits it would confer on the potential transactors). compensation can be sought. Thus. Arguably. Further. the correct delineation of rights. Vol. and they are usually taken into account when deciding whether to publish. Further. the question of whether they should exist at all deserves serious consideration. But we can note that it is a particular form of a more general question concerning which private property rights – and. 1988b). indeed. Such prospects are well known to journalists. whatever answer we arrive at will be constantly under review. various private property rights are recognised which may be infringed by publication of reports or images. liberties and duties is that which most facilitates human flourishing. even if a private property right of a third party is infringed. an essential part of which is the critical comparison of the experiments of different jurisdictions. In the case of journalism. For instance. also Popper 1966. Since all such rights pose an obstacle to freedom of debate. MARKETS AND DEMOCRACY 10 having private property in her own body). 69-76). but what delineation will promote this aim can be learned only through a trial and error process. in which case nobody loses. 65-68. It is important not to confuse this issue of the harm that may be brought about by publishing information. 1. 157-68). 1988. the third party may be able to claim damages through the laws of libel or slander. This is a large issue which cannot be pursued here. In practice. because then they should be able to offer the third party sufficient inducement to waive her right. However.JOURNALISM. and the UK government is currently considering changes to the law. as in the recent ‘hacking’ scandal in the UK. In cases where a third party would be harmed but no rights of hers would be infringed. reputation and even copyright. If publication of a piece of information encroaches on copyright.

it is false that government agencies do or can offer unbiased reporting: their reports reflect the biases promoted by the government and. and this is precisely what a competitive market in journalism enables and what government involvement frustrates. If there is a legitimate role for government with regard to journalism. more particularly. Conclusion It is often claimed that democracy requires informed citizens who are able to make intelligent contributions to public debate and public decisions and that this in turn requires government-provided or government-funded journalism in place of. The contention that publicly-funded journalists are needed to improve the discrimination of the citizens therefore seems preposterous. the journalism provided by the market. Further. and that it can take account of social impacts in a socially responsible way. and its assumption that citizens are passive and uncritical receivers of information seems false.JOURNALISM. including criticism. It is often falsely claimed that the participants in market transactions take no account of negative impacts on third parties. either because they will have to pay compensation for infringing a right or because an injured party may be willing to pay them not to undertake the transaction. In practice governments will be impeded in any efforts to do this by lobbying on the part of . there are doubts about the quality of government-funded journalism because it is less responsive to consumer disapprobation and because it crowds out alternative views. it is in securing the effective working of markets by removing barriers to entry into the market (including the market for advertising) to ensure open competition. the biases of their managers and journalists. A competitive market in views and their criticism. will spur the growth of knowledge and the development of the critical powers of the citizens. or as an alternative to. closed society in which little is published that is not condoned by the extant coalition of organised minorities. although the presence of a large governmentfunded agency in the market may frustrate competition to such an extent that rival private-sector offerings are poor or virtually non-existent. 11 6. In contrast. The main reasons offered are that ‘public service’ journalism can be objective and authoritative. that it can educate and improve the public. the only objectivity we can achieve is that which results from an open discussion in which diverse and novel hypotheses may be proposed by anyone and tested in open criticism by anyone. The claim that the journalism produced in a competitive market inevitably dumbs down appears to be false. As a consequence. where decisions about publication are made by politicians or by government-funded agencies. MARKETS AND DEMOCRACY latter is a matter for law enforcement. and criminal actions may be performed by journalists working for publicly-financed as well as those working for privatelyfinanced news organisations. This will tend to bring about a stagnant. in contrast. Further. The fact is that in a competitive market potential transactors have incentives to take account of third-party impacts. Under such circumstances there will be a tendency for publication to go ahead only where the benefits to the transactors outweigh the third-party costs. However. they will tend to be taken in a way that benefits organised minorities at the expense of the population at large. it stifles innovation. since unbiased reporting is impossible.

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