Friday 17 April 2015

From the comments: Surely this can't be right

Eric Crampton left the following comment on the Surely this can not be right post:
I'm likely to credit or blame for that particular part. I'll walk it through more slowly.

1. Goods that are nonrivalrous in consumption may still be underconsumed relative to an unattainable blackboard optimum even if they are excludable.
2. The good in question here, the improved performance of the polity when there's better vigilance against rorts, corruption and the like, is non-rivalrous and is also non-excludable.
3. Journalism is one way of producing that vigilance.
4. Viewers of Campbell Live believe that his show is one of the more important sources of that watchdog role; others note that there are still many alternatives, and that the merits of this particular show are more debatable.
5. Where the high demanders for the programme each only count as one viewer under the current funding model that ties advertising to the provision of the non-rivalrous but potentially excludable tv programming, and where the high demanders aren't sufficiently valuable to advertisers relative to the viewership that might watch alternatives, the programme will fail absent alternative funding.
6. High demanders can and should use mechanisms like PledgeMe to fund the programme directly.
My response would be to deal with points 2 and 3 to argue that journalism as a useful consumable end product is not a public good - my point is the previous post. Let me use an example to make my point. Take a free-to-air television transmission. This you could argue is a public good but even if it is, its a pretty useless one without a tv on which to watch it. So to get a useful end product you need to bundle the transmission with a tv. TVs are private goods which effectively makes the transmission a private good.

I would argue the same for journalism in general. Whether journalism in conveyed to the public via tv or newspapers or radio or whatever, for the journalism to become a consumable good you need to bundle it with some other good, eg, a tv, a radio etc. These other goods are private goods and thus the need to bundle the journalism with these goods effectively makes the journalism a private good as well.

This is not to say that journalism doesn't have neighbourhood effects, its just too say it isn't a public good.

For those of you who think Campbell Live should be saved take note of point 6.

1 comment:

Eric Crampton said...

I'm going to disagree with a few points here.

First off, the way of making tv excludable is by using scrambled signals, like Sky does, not by bundling it with the physical TV. Bundling it with the TV is what yields things like the BBC TV tax.

Second, and again, the public good that's being debated is the improvements in policy you get with a more informed polity and the improvements in governance you get with more vigilance. Those effects are nonrivalrous and non-excludable.

How do you distinguish neighbourhood effects from public goods? I'd think of neighbourhood effects as being nonrivalrous and nonexcludable within a small area. The public good here in question apparently applies to the whole polity.

The better critique, I think, is that it's ambiguous whether some of this is public good or public bad - Campbell Live is responsible, in part, for wrecking the legal highs framework through populist drumbeating, for example.