Explaining Modern Economic Growth
Economist Deirdre McCloskey on economic development, Adam Smith, and the importance of liberalism
If you look around the world you will see that news is a very important part of lives of ordinary people in almost every society. It is true that news is a part of political and cultural life in USA, it’s true in China, it’s true here in Russia. I think, however, that there is a growing evidence that the position of news is slipping in society. Today I am going to start by talking about the situation with newspapers which is only form of news, but I am going to try to generalize from that to say that overall there are problems for news and its place in our society and these problems have big implications.
The newspaper is a good place to start because the symptoms of the crisis are very evident there. There are in fact two dimensions to this crisis. One a relatively simple dimension is economic. If one looks at the USA, one sees that over the last decade or so roughly 30 per cent of journalists have lost their jobs, retired or not being replaced or whatever. The number of journalists is declining, the wages of journalists are falling and so on. There is a good and simple reason for this, which is that the US newspapers are experiencing financial difficulties. The financial difficulties are primarily to do with the collapse of the newspaper advertising market. In the year 2000 the US newspaper on average got about 85 of percent of its revenue from advertising. Over the last 15 years that revenue has vanished, not vanished completely by fallen by a half. It’s fallen because advertising has moved to a more efficient place. It is moved essentially online.
It is more efficient for the advertiser to place their money, their advertisement with Google or another online service than in The New York Times, or in The Washington Post or anywhere else. And newspapers in the US have experienced a significant financial restriction, which is why the number of journalists have fallen, which is why the situation with newspapers is increasingly problematic.
Not minor, but simple problem to understand. A much more difficult problem to understand is that since the mid-1980s the absolute number of people in the US reading newspapers has steadily declined without interruption. And this decline is particularly acute amongst the young people. People under the age of 34 in the USA are increasingly unlikely to read newspapers. This is the Unites States of America, which is a big and important country but is not the only country in the world.
However, I can point to similar crises, to similar problems in Western Europe and, surprisingly enough, in China. What has been a conventional wisdom for the last 10 years or so is that while newspapers are declining in their traditional markets in the West, they are growing in places like India and China. This is still true for India, it is still true for many developing countries, but it is no longer true for China. As China has become more developed, as the internet has been spread more widely in China so we get the beginnings of the similar problem to the USA. So the questions which confronts us is why young people no longer want to read newspapers. I think that one answer that people give is that now they get their news online, and this is of course true. Young people go online much more regularly, increasingly from mobile apps and so on. However, this is a different form of news consumption than that provided by the traditional newspaper or for that matter by the traditional television program.
If we look at the most followed figures on twitter, only one of them is Barack Obama is the kind of figure that is traditionally associated with the front page of The New York Times or the front page of The Guardian for that matter. The normal kind of figure, the other nine people like Justin Bieber, Lady Gaga, Taylor Swift – popular entertainers essentially.
However, what is happening online is not that people are looking at Taylor Swift or whoever and at other traditional news subjects, but instead of. You can see that clearly if you look at the top ten Google searches from year 2015, of the top-ten Google searches two fit the model of classical news stories. Both, essentially, the same thing – Charlie Hebdo and Paris. These are both references to the terrorist attacks in Paris. Those are clearly part of the traditional news agenda of any medium. However, the other eight are again popular entertainers. In case of Google searches mostly the stars of television series called ‘The Kardashians’, which I am told is as popular in Moscow as it is in New York or London. So what we have is the evidence that yes, young people go online, yes, young people find news online, but the kind of news that they look for, the kind of news they are consuming tends to be different from the kind of news you would find in The New York Times, in The Guardian or in most of the Russian newspapers for that matter.
What this suggests to me is that there is a general problem with news. It is not simply an economic problem of the newspaper. If you look at television news it is true that they have 24-hour news channels, but these have very-very small audiences. In Britain, the most successful channel BBC-24, this is a news channel, has one-percent audience share. CNN in Britain has the audience share so small that it cannot be measured – less than 0.1 percent of the audience. I would guess that is true here in Russia as well. That CNN has an audience, but it is a very small audience. The fact that it is such a small audience does not mean that it is unimportant, but that audience is going to be businessmen, politicians, diplomats, civil servants and so on – very important people, but there are not very many of them. People like you and me are not in general watching 24-hour news.
The evidence seems to suggest that overall there is a crisis of news. This immediately raises the question as to why there should be such a crisis. In order to answer this question we have to try to establish why in the first place people in 1990 or in 1980 were able and willing to read large quantities of newspapers, watch television programs with news content and so on. There is no well-established answer to this.
Clearly a number of factors contribute to news consumption. First is that news consumption tends to be disproportionately an urban phenomenon. So that is that countries like China or India today, Russia 50 years ago, Britain 150 years ago, went from being largely rural peasant societies to being urban societies, so newspapers, and later television and radio news became a part of people’s everyday lives. Clearly literacy in the case of newspapers is a major factor – illiterates cannot by definition read newspapers – so it is the spread of literacy which in case of Britain dates to 120-130 years ago, in Russia I would guess it dates from 1920-30s, but I do not know, in China dates really probably from the establishment of the new China in 1949 and so on. The establishment of literacy is clearly a contributory factor.
Reasonable disposable income is clearly also a contributory factor. The very poor need food and clothing and shelter, and before they need newspapers. So I think these are factors which explain why in general there should be a newspaper readership. But they do not explain why there is a present such an acute crisis. And I think I would want to relate that to the changing nature of the contemporary society. The newspaper, if you like, and news in general, are arguably characteristic of modern society. And as we pass from modern to postmodern societies, so the place of news shifts.
I think one of the characteristics of modern society, and this is true in the whole range of political forms – it is true in the case of American dream, it is true in the case of the European social democracy, it’s actually true also at the rhetoric at least of Stalinist Russia and of Maoist China. It is that we are all in it together, that whatever the difficulties we face, whatever the inequalities we encounter, in one way or another working together things will get better – America will get better, Russia will get better, China will get better or whatever.
I think that inclusive rhetoric is increasingly hollow for people. That if you look at, let say, the current American presidential election, if you look at the current referendum in Britain on the membership in European community, you will see that many people no longer believe that inclusive rhetoric.
There is a suspicion of elites, there is a sense that one does not belong in one’s own country, there is a sense in which one’s views or beliefs are ignored.
Very often this sense finds very radical actual expression, for example, Donald Trump’s anti-immigrant feeling, racism in Britain and so on. I am not saying this is a good thing, but I am saying it is a common phenomenon. And in that kind of society, when people think that they no longer have the place in the society, their views no longer matter in society, so knowing about society becomes less important. So participating in politics, knowing about political life, reading the news is no longer the essential part of being a citizen.
Today being interested in the news is for most people something of an eccentricity. Much more sensible to be interested in Taylor Swift, in football, or ice-hockey, or whatever. Diversion is one’s most interested in. It makes much more sense to people in terms of their everyday lives. Politics is remote, distant, politics is for professional politicians. Economics is for bankers, for industrialists. Economics and politics are not for me, not for us, they are not for the ordinary people. And if they are not for us, not for people like us, why should I read about them? Much better, much more interesting to read about scandals, sensations, sport, sex, or whatever. So I think that is the origin of the crisis of news. That society is no longer organized in such a way as to make a traditional diet of news which, for educated people like me, and for many other educated people, should be about how the society is run, about what the choices facing the society are, about what the threats and dangers facing society are. That is no longer a matter of real concern. It is outwith our concerns, outwith our interests, outwith our path to do anything about it.
And so I think that the appetite for news is dying and with it the news organizations are slowly but surely dying, except at the elite level. Except at the level of The New York Times, The Financial Times, except at the level of the subsidized news organizations, like Russia Today. At that level there is clearly an audience. Bankers still want to know what is happening to finance, politicians still want to know what is happening to politics, elite individuals want to know about the world they run and control. Their media survives. Our media, the kind of media which made us feel part of a world that we thought we had a stake in, are slowly dying. And they are dying because it is becoming clearer and clearer to more and more people that we do not have a stake in society. What we think does not matter. That we no longer control what we ever did, the direction in which the society is moving.
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