Why is there Trust in Markets and Antitrust in Media?

Sergei Guriev, Chief Economist at the European Bank for Reconstruction and Development has a piece.

He says though people support the markets but are dissenting against inequality and the media. The media is increasingly seen as owned by oligarches who are using it to shape expectations:

There is a clear need to tackle the unfair political influence of the super-rich. Most directly, this means making political financing more transparent, with stricter and more effective regulations. But it also means addressing the use of media by oligarchs to manipulate politics to their own benefit.

As Luigi Zingales pointed out in 2012, oligarchs can use media ownership to solidify their political positions, which they can then exploit to secure rents from which they can fund media. Former Italian Prime Minister Silvio Berlusconi, Zingales argues, was masterful in this regard. But many oligarchs in the post-communist countries have done likewise.

Some oligarchs would argue that it is better that they own the media than that the government does; at least they can compete with other oligarchs. That is a red herring. Yes, ownership of media by a kleptocratic or authoritarian government is dangerous. But so is ownership of media by oligarchs who can collude with one another to protect their collective interests – interests that may differ sharply from those of the rest of society.

Media lie at the foundation of modern democratic societies. That is why ownership should be transparent, with, ideally, media owners prohibited from owning other assets. In short, media should be subject to the same kind of antitrust policy as, say, infrastructure industries.

Of course, such an antitrust policy would face fierce political resistance. And even if such a policy were implemented, tycoons would continue to work to influence the media through, say, mispriced advertising contracts. And, to some extent, some media might welcome oligarchic subsidies as a way to manage new challenges to traditional business models.

To address these problems requires, first and foremost, a strong independent regulator. At the same time, transparent and de-politicized public subsidies can help to support the social good of honest news media. Implementing an effective media antitrust framework will not be easy. But it will still be easier than contending with an increasingly dissatisfied public losing faith in democracy and open markets.

The continued decline in lack of trust in media has to be arrested..


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