Latte leftist defends the ABC’s phony independence with phony economics

Gerard Jackson
BrookesNews.Com
Monday 27 March 2006

Errol Simper, latte leftist and unstinting apologist for the ABC (Australian Bolshevik Corporation), is aghast at the prospect of the Government appointing someone to the ABC who might actually take its charter seriously. Naturally, such a person would, in Simper’s leftist eyes, be nothing but a rightwing “head-kicker”. In his view what is needed is someone who is loyal “to the fundamental concept of independent public broadcasting”. (Why Sandra Levy has had enough, The Australian, 25 March 2006).

By “independent” Mr Simper does not mean free from ideological meddling but free from any government direction. In other words, the ABC is not to be held accountable to those elected by the people and whose money funds its operations. Instead, it is to kept in the thrall of a pack of kindergarten Marxists who use it to promote their rotting ideology.

Simper is a typical leftist, smug, ignorant and patronizing. Some years ago this mastermind displayed his brilliant grasp of economics when he commented at length on a Bureau of Transport and Communications report that contained a segment on ‘market failure’ that claimed market forces are unlikely to achieve “broadcasting excellence”.

The essence of the report’s criticism was that the drive to maximise the size of their audience meant that the “three competing commercial broadcasters tend to service the most popular tastes, but none of them has an incentive to service minority tastes. . . . There is no market mechanism by which viewers can provide feedback to broadcasters. . . . This is known as market failure”.

Moreover, the report also asserted that diversity of ownership could threaten editorial opinion if the owners have similar views. Of course, this led the brilliant Mr Simper to state that the report “constitutes a formidable case for public broadcasting”. In reality, the report presented a formidable case for replacing the authors with people who have a firm grasp of economic reasoning — people who have, for example, read and understood Coase and Demsetz.

That Simper should support the report’s findings will come as no surprise to those of us who have long suspected that he thinks Murdoch pays him for the sole purpose of defending the privileged position of the left-wing dominated ABC. (Come to think it, what does Murdoch pay him for?)

The report’s suggestion that media owners are the cause of the homogeneity of views in the media, and that public broadcasting has escaped that fate is particularly misleading, in not actually grotesque. As Max Suich said of the ABC: “It is their ABC, not ours”. The ABC, as Simper well knows, is run by its journalists, producers et al. for their own ideological benefit. Quite simply, it has been captured by a self-appointed ideological elite. But you won’t hear any of this from the likes of Simper. Unfortunately, most journalists in the commercial media are not much better.

‘Market failure’ (how socialists love that term) is said to occur when voluntary transactions have a harmful effect on a third party. Now what the report overlooked is that you cannot have so-called ‘market failure’ in the absence of a free market. It is because we do not have a genuine free market in broadcasting that minority tastes are not well catered for. The State has made it illegal to provide these services without a licence. This is why there is no effective “feedback mechanism”.

What we are dealing with here is government failure — or should I say government greed and ignorance. By restricting broadcasting to three companies governments have created the very results that the likes of Simper piously condemn as evidence of ‘market failure’.

There is no technical reason why the airwaves cannot be completely given over to the free market. If this were done, any minority would be free to broadcast just as they are free to publish. That, however, would not be to the liking of Stokes or Packer. Come to think of it, the ABC and its mates wouldn't like it either.

All of which brings me to oysters. Writing for The Age (this was sometime ago), Max Walsh gave us the tragic tale of the British oyster. According to Walsh the British oyster industry was virtually wiped out by 19th Britain’s passion for laissez faire, i.e., free markets. In support of this view he quotes the 1863 Royal Commission into Sea Fisheries which recommended “unrestricted freedom of fishing be permitted hereafter”.

The result was that the oyster beds were fished out. (However, this is something any laissez-faire economist would have predicted). Not only that, but in 1902 a number of people were afflicted with food poisoning (four died) after eating oysters polluted by human waste.* On the other hand, the French oyster industry prospered under the benign guidance of the state.

Under Jean-Baptiste Colbert (1619-83), Minister for Finance, certain fishermen were granted oyster concessions (licences to fish). Even so, the beds were over fished by the 1850s. Under advice from Coste the oyster beds were replenished and tightly regulated, as they still are. This is why Britain only produces 10 million oysters a year compared with France's 2000 million. According to Professor Neild (from whose book Walsh obtained his information): “. . . laissez faire was applied to the oyster”, to which “it was inappropriate”. Walsh, of course, enthusiastically endorsed the Professor’ indictment, glibly adding that “... the real lesson is never to be blinded by dogma”. Quite so. It’s a pity that Walsh did not take his own advice.

It is impossible to exhaust any economic good in a free market because its price would rise to a point where the it would become uneconomic to use. Where any resource, including oysters, is treated as a free good it will be excessively used. And where the cost of exploiting such a resource in relation to its value is low that resource could be completely exhausted.

The devastation of the British oyster industry was due to the oyster being treated as a free good instead of an economic good. The tragedy of the British oyster was a graphic example of the “tragedy of the commons”. For the oyster to be fully integrated into the market process fishermen would have had to be given property rights over the oyster beds in the same way that farmers exercise property rights over their lands and livestock.

But Governments would not permit this. Predictably, the beds were virtually fished out. Another clear case of government failure. All of this is something Walsh was paid more than enough to know. Furthermore, it was local governments who polluted the oyster beds, not laissez-faire dogmatists. A crystal clear case of local government failure.

Unfortunately, Walsh and Simper are all too typical of what passes for informed journalism in our media.

*In February 1997 an outbreak of hepatitis in New South Wales infected hundreds of people and killed a 77-year-old pensioner. It was later discovered that the outbreak had been caused by a local council allowing sewage to pollute Wallis Lake. However, Mr Walsh neglected to report this case of ‘government failure’. The point is that this tragic incident does not differ in principle from the 1902 tragedy. Yet Walsh blamed laissez faire for the latter.

Gerard Jackson is Brookes’ economics editor