29 June 2007:

Ken Auletta on the Murdochs and the Bancrofts, in The New Yorker

Ken Auletta is by any standard an important chronicler of modern business, with an unparalleled grasp of the business of knowledge, as manifested by the media, Microsoft, and Wall Street merchant banking. You might say that his specialty is post-industrial capitalism. He is tough-minded, with an inborn respect for power that at the same time is not servile. If a businessman has acquired a lot of power, Mr Auletta presumes that he is gifted with above-average abilities, and he accepts, as a muscular realist must, the delight that powerful men take in exercising their power. He is, in short, no softie. He does not share an iota of the ordinary liberal's visceral suspicion of strong CEOs. This is at least what I've gathered about him from a not particularly religious following. (I have, for example, read none of his books.)

In the current New Yorker, Mr Auletta's "Promises Promises" displays so many layers, or so many different points of view, that the author might be accused of evasiveness - if he were setting himself up as a pundit. The question on everyone's lips is this: If he is allowed to purchase Dow Jones, will Rupert Murdoch degrade The Wall Street Journal? Mr Murdoch is notorious for making promises to families from which he purchased media outlets, only to break those promises with practical posthaste. He does not seem to know the meaning of the word "quality." He has kowtowed shamelessly to the Communist Party in China. Mr Auletta quotes Bruce Page, formerly of the Sunday Times (London) and author of The Murdoch Archipelago (2003):

Rupert is a very kind man personally. He bailed out old war correspondents who have hit hard times. He has great charm, in a certain dry way. There's a lot to be said for Rupert Murdoch the man. There's nothing to be said about Rupert Murdoch the journalist.

There is, of course, no law that would bar Mr Murdoch from ownership of the Journal on the grounds of moral unfitness, and, as Mr Auletta reports, members of the Dow Jones board of directors fear that the failure to accept the News Corp bid will expose them to liability in a shareholders' suit. But the proposed purchase ratchets up to the highest volume (so far) the tension between late-stage capitalism and intellectual integrity.

Intellectual integrity may not be important to most people, who don't much need it. (This is regrettable but true.) It's vital, however, to society's elites, who depend on getting the right information. Generations of modern elites have learned that the best information is the most accurate information. Fully accurate information is unattainable, to be sure. Some bias is inevitable in every human utterance. But we have learned, most recently from the Bush Administrations, that wishful talking is no better than wishful thinking. The Wall Street Journal is a famously objective business newspaper. Its newsroom is better-insulated against proprietarial interference than are those of The New York Times and The Washington Post. Until recently, members of what's known as the Bancroft family have been content to let the paper run itself.

The very fact that you are reading this, at no cost beyond that of Internet access, is one small suggestion of the troubles besetting all the great newspapers. The business model that worked in the past has broken down, and developing a new one is hampered by the general desire to keep producing something that is no longer in such demand. It is also complicated by a generational hiatus: many, many leading businessmen remain relatively illiterate with regard to the Internet. Like computers themselves, the Internet won't reveal its full capacities until the generations that grew up using it have acceded to the top jobs. Today's business leaders cannot be expected to suss out a plan for technology that they don't use or really understand.

So the field is ripe for opportunists such as Mr Murdoch. When his interest in the Journal was announced, The Economist opined that he is too smart to fiddle with a crown jewel of journalism; the Journal succeeds because readers trust it. But I find this thinking rather blinkered. Mr Murdoch might decide that the world needs something other than what the Journal is now, and crowned jewels be damned. (Mr Auletta is kindness itself on the subject of Mr Murdoch's treatment of the Sunday Times - which has become a tabloid. Other than the Sunday Times, I'm not sure what experience Mr Murdoch has had with crown jewels.) One fact seems to prevail: Mr Murdoch is willing to part with more cash than any other prospective purchaser. Don't the laws of capitalism dictate that he be awarded the prize?

Yes, they do - and there's something very wrong about that. Increasingly, capitalism reveals itself to me as a great and powerful machine that is missing important governors. Governors are widgets that measure and stabilize machinery, so that it doesn't heat up and explode. Modern capitalism reminds me of the lifeboat situation on the Titanic. There were (far) too few lifeboats on the Titanic because regulations had not been updated in about twenty years, during which time the modern behemoth liner came into existence. What was good enough for the largest boats of 1890 was woefully inadequate for those of 1912. Modern capitalism, similarly, seems inadequately self-protecting. More and more, it's iceberg-happy: pouring more and more money into fewer and fewer pockets. And where the corporation in question is in the information business, the power of one man to corrupt intellectual integrity becomes absolutely insupportable.

Do I have any answers? None that are directly on point. I believe, as I've said many times before, that corporations ought not be allowed to own real or intellectual property. How this would block the pernicious effects of Rupert Murdoch's interference with his newspapers, however, is not at all clear. I'm left with the suggestion that you read Mr Auletta's article and think about it. Maybe you'll have a brainwave.

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