Thursday, February 27, 2014

Everybody Talks

Listening to a recent Freakonomics Radio episode about gossip got me thinking about journalism and the perhaps unintended role it plays or has played in regulating society some. In the episode we first hear about research by Thomas Corley summarized in his book "Rich Habits" that showed the behavior differences between rich people and poor people. One of the differences he found was that the rich gossip significantly less than the poor. However, the rest of the episode tends to dispute that finding.

What stood out to me was how necessary the role of gossip seems to be for many aspects of society (e.g., norm setting and regulation) and how differently we approach and are affected by gossip. It doesn't seem at all unlikely to me that the wealthy would have different gossip habits and methods than the poor. The rich have different tools--namely, they have journalism. Or at least they had it until those crazy kids started TweetBooking everything.

Here is a theory that probably isn't original to me. I am not completely sold on it myself; it's just a hunch that I think at least partially explains what we've seen.

The rich and powerful have traditionally exerted a lot of control and influence over news media. This part is not in dispute. The creation and growth of news media served two primary purposes: 1) it had an informative value (stock reports, political actions, etc.) and 2) it had an entertainment value (local celebrity news, sports, etc.). But the problem is aside from the cut and dried factual reporting like the price of wheat or the winner of the mayor's race, most news reports have some damaging aspect to them that someone would like to keep quiet. These could range political corruption to a juicy, high-profile divorce to, well, the price of wheat for the guy who is trying to buy at a market discount. When we get down to it, the fact that we have journalism and that the rich and powerful put up with it seems a bit of a puzzle.

So what explains journalism as we know it--journalism that reports the good, the bad, and the ugly for the most part about both the rich and the poor? I think game theory offers a solution. The idea is that journalism is a necessary evil. Basically the job description was artificially created because the role was needed more than it was wanted. This puts it at odds with the idea that journalists are noble superheroes with special investigative and truth-finding powers striving to do good--journalists aren't that special, just don't tell them that. Rather it is as if the rich sat down and played a quick game of MAD where they realized they needed a controlled outlet to realize the informative value and entertainment value of journalism but not have chaotic reporting where the message cannot be controlled. What's more journalism offers what I would call auditor-caused moral hazard--if the auditor doesn't catch it or correct it, then it must be okay. That is a useful if unintentional purpose.

Of course there was not some secret meeting on Jekyll Island where journalism was launched, and the early twentieth century's muckraking shows how different the market for journalism can play out than what the rich and powerful might otherwise like. However, it was some of the rich and powerful on the production side of muckraking. So, no; journalism was not centrally planned or created in the last 200 years. It is a very long-run emergent order. Yet being emergent does not preclude it from my game theory theory or isolate it from powerful guiding influences. I think that my theory well explains how it was nurtured and shaped. Or perhaps captured is the better term. When journalism emerges as powerful enough to threaten the elite, the elite appropriate it for themselves.

With some ebb and flow between a more pure journalism and a more controlled journalism, this all is going along nicely until the Internet comes along. Then chaos. The Internet causes major disruptions to this order by commoditizing the tools of journalism with blogging, smartphones, et al. flattening the business model. The elite did not have this in mind. If the journalists are "us", and all of us at that, then we, elites and all, have to be more honest. We can't control the message or information--at least that control is very greatly weakened. Journalism before served a purpose to tell a story, a version of the truth, to the masses as a few saw fit. Now journalism is telling many stories, many versions of the truth including many with higher truth value than before, to varying numbers of consumers as many see fit. And it is deeper than that. The story isn't so one directional. It is more and more a conversation.

The quickest way to wreck a game theory optimal solution is to change a premise. The Internet is just such a change to the game theoretic outcome that journalism had been for so long.