Sunday, August 2, 2009

The World Wide Web, Syndicalism and the New Market for News

The news is dead. There is no news because the amount of information exceeds the abilities of journalists. Paradigms, or applicable models of reality, change too rapidly for mass market reporters. The fundamental obstacle is that elite Americans, including journalists, have been educated in twentieth century modernism, which emphasizes the importance of scale to economic progress; the morality of displacement of violence to bureaucratic systems (as in socialists' belief that because socialist violence is the work of the state it is non-violent); and the inability of university-trained government experts to understand economic change. Thus, reporters are deferential toward advocates of scale, bureaucracy and rituals of expertise.

Most crucially, journalists cannot or refuse to grasp the causes of the chief phenomena that characterize today's world: inflation; declining real wages; transfer of wealth from productive to elite sectors such as in the "bailout"; and repeated financial and economic scandals such as Enron. Arguably the autism of the American news media is linked to its owners' economic interests, but such interests depend on the nexus of primitive twentieth century ideology with news.

The American news media lives in 1969.

This poses a problem for democratic government, which is impossible on a large scale without mass media. The way American government was re-organized in the early twentieth century coincided with Progressivism and modernism. A post-modern government needs to decentralize. This would reduce the cognitive burden on journalists as well as on government experts. It would imply state sovereignty. The commitment to traditionalism, that is, the ideology of economic conservatism, constrains this progression and should be jettisoned. Current institutions, which were libertarian in the 18th and early nineteenth centuries became increasingly non-libertarian beginning with the Dred Scott decision in the mid 19th decision as the federal government intruded upon the states. In turn, large scale industry could legitimately exploit economies of scale but also gain government subsidy. The gains from laissez-faire were so large that they overwhelmed even the corruption, waste and incompetence associated with the construction of the railroads, the development of large-scale commercial banking, oil company rights of way and Wall Street. But as subsidies to scale proceed, the scope of laissez-faire diminishes, and it is small enough today that innovation has stalled except in specialized technological areas.

Technology and political change go together. American democracy was a development of Medieval decentralization, and decentralization occurred because of the fall of Rome twelve hundred years earlier. Medieval decentralization led to innovation that eventually overcame the loss in economies of scale associated with the end of the Roman slave system. The medieval period was far more innovative than was Rome. By 1300 or so the economic growth from the three field crop system and other agricultural innovation had caused the western Europeans to exceed the economic level of Rome, and in turn led to the invention of the printing press and the discovery of America. As the economy led to increasing education and awareness of rights, kings began to displace local sovereigns in part by energizing the people against local tyranny. The increasing centralization and scale of society led to expansion of markets and economies of scale.

Thus, two forces coincided: the creation of monarchy in the late Middle Ages reflected the centralizing trend while the long pattern resulting from the fall of Rome reflected the decentralizing trend. The Founding Fathers, who were able to establish the United States in a "state of nature" observed the two patterns and arrived at the Federalist system, which involved a balance of scale and decentralization. But republican processes had to permit changing the balance, and subsequent patterns led to increasing centralization well past the point of diminishing returns.

By the late nineteenth century economies of scale still contributed to efficiency but also to claims for government subsidy. In the 1500s the Elizabethan Statutes of Artificers had limited monopoly and this led to limits on labor unions in America, but utilitarian claims as to the advantages of economies of scale led to direct subsidies to business, overcoming the common law. Indeed, privileges for large scale enterprise had been the theory of Mercantilists, Federalists and Whigs. Scale has both positives and negatives with respect to economic change. The positives tend to be shorter term and involve lower cost per unit. The negatives tend to be longer term and involve increased coordination and communication costs and limits on innovation. Subsidization of large scale has short term advantages but long term costs. In today's world communication costs have declined because of technology, but have not been eliminated. In fact, technology may in some ways increase the onus on communication and interpersonal skill. There is no known optimal size of a business that can be theoretically derived, but increasing scale is not by definition increasing efficiency. Rather, the optimal scale can be derived by empirical observation over decades, but where society is set up to subsidize large scale, empirical observation may involve circular logic. The larger the firm the greater the subsidization, so apparently the more efficient. Objective measures like the performance of real hourly wage suggests where the economy is going in general. Gross domestic product does not because it includes considerable waste and economic dislocation. Real hourly wage is the best indicator of how well Americans are faring. According to it, the American economy has not been faring well for nearly 40 years.

Technology affects economic change but also the intellectual process by which social debate occurs. Technological change has permitted increasing decentralization at limited or no scale costs. Newspapers were necessary because the cost of acquiring information could be spread over many readers. Today, the World Wide Web permits the dissemination across a billion readers without the need for a single source. The problem remains, though, as to divisibility, paying the source of information. Much information can be acquired by local citizens, possibly for free. The problem arises with respect to centralized political power and acquisition of difficult-to- obtain information, such as war news or news arising from monitoring of legislative processes. How, for instance, can the president provide information to the Web?

It would seem that basic citizenship skills need to be updated. Acquisition of information directly from government Websites (e.g., the White House Website) ought to be a form of good citizenship in a Web-dominated world. In turn, bloggers ought to begin to consider obtaining information from public source material. Pressure should be brought to bear on political office holders to hold open press conferences via the Web, open to the public, that is. Public Q&A ought to replace the press conference.

Obtaining on-the-spot news such as concerning crimes and earthquakes can be obtained by bloggers who live near events and can feed to centralized websites. People interested in crime news ought to be able to turn to specialized blogs that rely on independent, local sources. Reporters need not work for a single newspaper but rather could sell stories to pay-based websites. The model of employee-employer can be converted into one of subcontractor. This already exists with respect to the Paparazzi. Reporters who develop relationships with police officials can sell information to commercial websites and blogs. Pricing might facilitate blogger participation in various reporters' news services.

Organization theorists have long considered that market forces might cause the importance and scale of organizations to diminish. Movie companies, for instance, assemble a team of labor that collaborates on a specific film and then disperses. News could follow this model. Assemble a group to report on a specific topic and then disassemble it. Websites specialized in a given form of news, for instance, war news, could put together a team.

With respect to policy issues, it seems evident that newspapers and television news that cater to general audiences are incapable of understanding specialized issues sufficiently to know what is important. Rather, industry- and interest- based organizations are better at disseminating news to their constituents. For example, the National Rifle Association provides excellent updates on anti-Second Amendment legislative proposals. Likewise, organizations that specialize, such as Citizens Against Government Waste, English First, the Manhattan Institute, the Milton Friedman Foundation (which specializes in education issues) and the like can provide ongoing feeds concerning their issues. Reporters can contract with organizations to provide reporting services to their newsletters.

Syndicalism is the idea that government ought to reflect producer interests. Thus, a syndicalist congress would include representatives of farmers, manufacturing, service and similar kinds of interests. William Appleman Williams in his Contours of American History argues that this was the idea that the last Progressive, Herbert Hoover, advocated.

Syndicalism can be applied to news and other excessively centralized organizations. There is no reason, given today's technology, that a single organization ought to provide information about (a) the economy (b) hurricanes (c) war (d) terrorism (e) political debate (f) science and so on. The information burden is too great and this results in the debate becoming too stupid.


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