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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A Message Concerning NY from The National Rifle Association Institute for Legislative Action

New York State Senate Called Back for Special Session!

Please Contact Your State Senator!

At the urging of Senate Democratic leadership, the New York State Senate will return to Albany for a one-day session on Thursday, August 6.

While Senators are expected to take up the controversial issue of control over the New York City schools, there is the potential for other pending legislation to be acted upon as long as they are in session.

Contact your State Senator and ask him or her to oppose the following list of anti-gun bills should any come up for consideration while the Senators are in Albany.

Senate Bill 4397A and Senate Bill 6005, both micro-stamping bills, would ban the sale of all semi-automatic handguns not equipped with micro-stamping technology.

Senate Bill 4753 would prohibit the possession of concealed firearms in any park or recreational area.

Senate Bill 1598 would require five-year renewals on pistol licenses.

Senate Bill 1715 would impose new restrictions on licensed dealers and require retailers to obtain liability insurance against the possibility of a crime being committed with a firearm any time after it is legally sold.

Senate Bill 5228 would outlaw handguns ”capable” of being fired by anyone five years of age or younger, this legislation would outlaw virtually all handguns in New York.

Senate Bill 2379 would ban frangible ammunition.

Senate Bill 5489 would institute a training requirement for issuance of a pistol license.

Senate Bill 4752 would outlaw .50 caliber firearms.

Senate Bill 3098 would require the mandatory storage of firearms.

Contact information for your State Senator can be found by clicking here.

Declining Integrity Hurts Small Business

Alexandra, my wife's friend from Woodstock, just mentioned that many of the small businesses in the Hudson Valley/Catskills region are dishonest. In fact, it took me ten years to rehab my house in West Shokan in the Town of Olive, and almost as long to find honest craftsmen--an honest, competent plumber who knows how to design a heating system; a responsible electrician; a sober landscaper who does the work efficiently and intelligently; a mason who shows up and does a competent job quickly; a carpenter who finishes the job; a roofer who does not allow tar to spill over the side of the roof and knows that the problems are in the corners and details; and a snow plow guy who shows up punctually when it snows. Along the way I met a builder who took almost two years to re-work my bathroom (including an extension) and disappeared when I objected to the cost's becoming four times his original estimate; a landscaper who went way over budget and called me dishonest for objecting; another landscaper who left a new septic tank sitting on my front yard for almost a year; and a mason who never finished the job.

Without going into details excessively, I learned that requesting references chases away the worst perpetrators (several of them simply disappeared when I requested references) and to get all estimates in writing.

Although construction may be the worst venue, dishonesty seems to be common now. I have seen this in northern New York (Potsdam) as well, and I do not believe it to be a regional pattern. Rather, I suspect that ethics are on the decline.

That is unfortunate. Small business can offer a lot that big business cannot: good relationships, superior service, and understanding local needs. But the lure of the quick buck blinds too many of us from the traditional path of building a reputation through fair dealing. Unfortunately, big business has contributed to this moral climate. I do not believe that a business can become big by being dishonest. But once big, businesses too often utilize their market power in questionable ways. This should open up competitive avenues for small business. But instead of seeing the opportunity in quality, too many entrepreneurs see the opportunity in emulating corporate managers in seeking the quick buck.

The Catskills never seems to develop (which incidentally is fine with me now that my house is built and I have a good list of contractors). I think one reason is the failed moral attitude whereby money and short term gain are put before integrity. Show me an honest culture and I will show you a successful one.

Why Not Socialized Medicine?

Anonymous said...

Dear Dr. Langbert:

Why should we be afraid of "socialized medicine"? The government runs health care for our service men and service women. The health care for our military is first rate. You get health care from CUNY. Under their plan you are covered even for dental care. The Senators and Congressmen get their health care from the government. They, too, have excellent coverage.

So the military, the Congress, and you are part of the "socialized" medicine system in this country. I have not heard you complain about the quality of care that you receive.

Mitchell Langbert said...

We should not be afraid of socialized medicine. We should recognize it as another potentially mismanaged government program that will reduce standards and intensify the 30-year decline in the real hourly wage. Take a trip on the New York City subway. The service irregularities, filth, often rats scurrying around. Now, project the same incompetence to health care. A few years ago there was a major scandal about the Veterans Administration hospitals, where the veterans were being kept in filth. Do you wish to treated in a hospital run by the same people? Have you visited a DMV office lately?

Now, you mention CUNY. CUNY does not provide me with care. They pay for the care I receive. The care is provided by an independent hospital that makes its own decisions and has to compete with other hospitals. That is not what is being proposed now. That is to be eliminated.

As far as the CUNY dental insurance, the benefits were repeatedly reduced between 2000 and now to virtually nothing. We no longer have meaningful dental insurance. What is to stop Washington from similarly reducing health benefits?

That is their plan. I do not deny that the current system has resulted in waste. The reasons are complex and many of them would be resolved by a single payer system. But that system would result in government controlled rationing and an elimination of medical innovation.

The problem with socialized health care (which is NOT the current proposal) is that it causes stagnation. There is one country that has been responsible for the majority of pharmaceutical and health care advance: the United States. There is also one country with a non-state-dominated financing system: the United States. Proponents of national health insurance aim to manage the cost of health care by REDUCING TREATMENT (and eliminating innovation). The reason that national health insurance is cheaper in Canada is that the Canadians limit treatment. Much of this is for unnecessary care, which is an advantage. But also, they will reduce innovative or new treatment.

Thus, a national system will enjoy economies of scale and possibly better management in some ways, but it would eliminate innovation. It would enable government officials to pull the plug on treatments that they deem inappropriate. Obama proposes this by requiring counseling to the elderly not to receive treatment but to die on narcotics. That is the crux of the reason why costs are lower in Canada and in Europe. Is that what you want, to be told to die when you are old?

Since the bureaucratic approach to government management has been an abject failure elsewhere in our society, why do you believe it to be an effective method when applied to health care? Veterans DO NOT receive "first rate" care. The standards at the veterans hospitals have been an ongoing scandal. Like everything else government touches, the veterans hospitals have been turned into sh*tholes.

The potential for break through cures that significantly extend life will be staunched by national health insurance. A decentralized system can support innovation much better and will facilitate the application of new and different treatments.

National health insurance is failure of the American dream. The Declaration of Independence states that all of us are entitled to "life, liberty and the pursuit of happiness". Socialized medicine attacks liberty; it circumscribes and attacks the right to life; and it limits the pursuit of happiness.