How 'bout a newspaper bailout?

AIG, gambling banks and crappy car manufacturers all deserve to go bankrupt but are instead receiving massive taxpayer bailouts.

Conversely, we’re letting newspapers fail, even though newspapers: 1) have long provided an extremely valuable public service; 2) have recently become unprofitable through no fault of their own (i.e., the Internet has made it hard for anyone to charge for information); and, 3) need only a tiny fraction of the funds we’re giving the finance industry. Johann Hari of Britain’s wonderful paper The Independent asks “Why?”:

A recent study in The Journal of Law, Economics and Organization found that one of the biggest single factors in reducing corruption in a country is “the free circulation of daily newspapers per person.” Go to any country, and you’ll find that the lower the newspaper circulation, the higher the corruption. If nobody’s watching, anything goes…

In an age of bailouts, several European governments are experimenting with ways to support the world of news-gathering so it will survive for the twenty-first century. The best plan has come from French President Nicholas Sarkozy. He has launched a programme where every French citizen, on her eighteenth birthday, will be given a year’s free subscription to a newspaper of her choice. The effects are subtle. Many young readers will develop a newspaper habit. In turn, newspapers will compete harder to capture this lucrative guaranteed market, and make their product accessible and fresh. A benevolent whirl replaces the current death-spiral.

Of course there is a terrible danger in making newspapers dependent on the government’s actions. Nobody wants that. But there are ways to avoid this trap. In 1971, the Swedish government set up a system of subsidies to newspapers allocated by an independent body on the basis of circulation and revenue data. Intriguingly, the Swedish press became more adversarial and critical after it was introduced, not less.

As the thud of falling newspapers echoes across the Atlantic, we can’t afford to dawdle. Good newspapers — for all their flaws and selective vision — are the sinews of representative government. In 1787, Thomas Jefferson wrote: “Were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate to prefer the latter.” Unless we act now, fast, we may be left with the opposite: a government, but no newspapers left to monitor them.

Posted by James on Monday, March 23, 2009