Why we need public financing of investigative journalism
by Don Smith

Numerous books and articles describe the sorry state of journalism. The problem is: according to the relentless logic of the marketplace, the return on investment from funding traditional newsrooms is too low to justify their continued existence. Because of the Internet, content can now be accessed for free and ad revenues are no longer sufficient to subsidize substantial news gathering. Yet America needs a diverse, independent press to act as a watchdog on both government and the private sector.

In this article I argue that the decline of privately funded journalism is to be expected; I present the case for public funding of journalism; and, perhaps most importantly, I address libertarian objections to such public funding,

Journalism as a public good

Americans have taken it for granted that privately held news organizations would devote sufficient resources to investigative journalism. But is it reasonable to rely on the good will of private. for-profit news corporations to perform the very necessary service of investigative journalism?

Even in the days before the Internet, when newspapers made good money, investigative journalism emerged serendipitously and quite unreliably as a by-product of the real products in demand: entertainment, classified ads, gossip, and financial information.

As a society, we delegate responsibility for public safety and the courts to specialized public servants who are expected to uphold high standards of professionalism and objectivity. We pay police, prosecutors and judges to ferret out the facts and apply the law impartially. Investigative journalism is equally essential to the well-being of society, and we shouldn't expect for-profit private corporations to find the truth about news either. Journalists, like police and judges, should be shielded from commercial considerations.

A well-funded, independent press is a public good, akin to police protection, courts, transit, national defense, childhood immunization, clean air, and banking regulations. For such public goods, for which the benefits accrue to everyone, a market-based approach is infeasible, since allowing people the choice not to contribute would undermine the system: people would 'free-load' and rely on other people to pay for it. Consequently, government tax revenues should be used to fund news gathering and investigative journalism, and we should construct a wall separating public funding from political interference.

The overstated risks of political interference

The standard argument against government funded journalism is that there are risks of political interference. But as argued by Richard Baker in How to Save the News, "There are numerous democratic nations with public broadcasting systems that are both well funded by their central government and also well shielded from its political influence." Indeed, "Better funding for All Things Considered on NPR or NewsHour on PBS will not turn either program into a propaganda outfit for the government. The BBC is not Pravda, and Japan and most of Europe, which have enjoyed extremely well-funded public media for decades, are not a network of totalitarian states."

In How to Save Journalism John Nichols and Robert W. McChesney write, "Perhaps the strongest contemporary case for journalism subsidies is provided by other democracies. The evidence shows that subsidies do not infringe on liberty or justice; they correlate with the indicators of a good society. In The Economist's annual Democracy Index, which evaluates nations on the basis of the functioning of government, civic participation, civil liberties, political culture and pluralism, the six top-ranked nations maintain some of the most generous journalism subsidies on the planet.... Freedom House ranks the heavy subsidizing nations of Northern Europe in the top six spots on its 2008 list of nations with the freest news media. The United States ties for twenty-first."

In reality, any wall separating a publicly subsidized press from political interference must be porous: we mustn't fund traitors who support Al Qaeda or crackpots who promote Holocaust denial theories. But the risks of interference are overstated, and the alternative to government funding seems dire: news and opinion increasingly sold to the highest bidder or omitted entirely in favor of speculation, hearsay, spin, and entertainment.

America under-funds public broadcasting

According to a report by the Center for American Progress, Germany and Great Britain spend over $80 per capita on public broadcasting annually; Canada and Australia spend $28; the US spends a measly $1.70. In 2007 the U.S. spent about $480 million in total on public broadcasting. That's about the same as what it costs the military to occupy Iraq for two and a half days and a small fraction of the funds used to bailout banks and Wall Street. Yet for years Republicans have been trying to cut even that funding.

Nichols and McChesney report that America's founders understood the vital importance of the press and gave large subsidies to newspapers and magazines in the form of reduced postal rates. Nichols and McChesney write, "If, for example, the United States had devoted the same percentage of its GDP to journalism subsidies in 2009 as it did in the 1840s, we calculate that the allocation would have been $30 billion. In contrast, the federal subsidy last year for all of public broadcasting, not just journalism, was around $400 million.... Only an extreme libertarian or a nihilist would argue to end all public support of higher education to eliminate the threat of [political interference by educators]... Likewise, the government does not tax church property or income, which is in effect a massive subsidy of organized religion. Yet the government has not favored particular religions or required people to hold religious views."

There are several ways to finance journalism from public funds.

The public option

One model for funding journalism is to fund independent, government-sponsored news agencies, such as PBS, NPR, BBC in Britain, and NHK in Japan.

This is not a suggestion for "single payer" journalism. Private media companies would continue to operate. We'd just be setting up a complementary and competing "public option", similar to the public option for health care.

The hybrid option

Another option is to fund not a monolithic national news source, like the BBC, but rather multiple competing news sources. Two analogues are public financing for campaigns, in which any candidate with sufficient support obtains government funding, and Medicare: public funding with private delivery. Similarly, under the hybrid approach, a producer of investigative journalism could obtain government funding, via grants or tax benefits, provided it demonstrates sufficient professionalism and endorsement by consumers.

President Obama recently expressed openness to a bailout of struggling news organizations. He said he might support tax breaks to news organizations willing to restructure as nonprofits.

Compared to the public option, the hybrid option has the advantage of promoting a greater diversity of viewpoints. It also builds on the expertise and infrastructure of existing media outlets.

Libertarian qualms, progressive responses

A libertarian would argue as follows: Government is inefficient, and it's usually corrupted by special interests. Furthermore, if there is demand for news and investigative journalism, people will be willing to pay for it. Indeed, Americans donated over a billion dollars for the 2008 elections. So why don't people just pay, or donate, to the news sources which best match their political persuasions and self-interests?

First of all, it's worth repeating: a strong independent press is a public good, like the police, and unless people are forced to pay, via taxes, they will freeload on others.

Second, people don't always act in their self-interest, especially when the benefits are neither immediate nor concrete. In fact, many people don't realize that journalism matters.

Third, I question whether government is necessarily or usually less efficient than private corporations. Government-funded health care in many industrialized countries is both cheaper and more effective than America's market-based system. Medicare in the US has lower overheads than private insurance, and VA health care is excellent. Nor are private companies immune to corruption, waste, and incompetence; consider Enron, AIG, GM, Wall Street, banks, and the pharmaceutical and insurance industries.

For example, a former Editor in Chief of the New England Journal of Medicine, writes of the pharmaceutical industry: "Instead of being an engine of innovation, it is a vast marketing machine. Instead of being a free market success story, it lives off government-funded research and monopoly rights." See The Horrifying Hidden Story Behind Drug Company Profits and The Truth about the Drug Companies. The insurance companies are no better.

Americans need to stop believing conservative talking points about the inevitable inefficiency and corruption of government. Besides, from 2000 until 2006, when conservatives controlled Congress and the White House, inefficiency and corruption flourished. (Indeed, the mismanagement was in many cases intentional.) In any case, the fact that government is sometimes corrupt and inefficient is no reason to minimize government, any more than the fact that people misuse medicines is in itself sufficient reason to eliminate medicines.

Or, dear conservative friend, how about guns? People sometimes use guns to kill innocents, just as government sometimes is corrupt and inefficient. Shouldn't we then, by your logic, minimize the availability of guns?

Government is often corrupted by private corporations. Why not then eliminate private corporations?

We need to fix government, not minimize it.

Fourth, the billion or so dollars spent on elections in 2008 may seem large but it's about the same as the amount Americans spend yearly on bubble gum (source: Freakonomics, by Steven D. Levitt and Stephen J. Dubner).

Another problem is that the libertarian approach to journalism competing news providers with diverse, partisan biases leaves little room for professionalism and objectivity. In fact, there is an inherent bias in the market. Due to self-interest, the people with power and money will tend to support conservative views: anti-regulation, anti-taxation, and pro-welfare-for-the-rich. So, market-based journalism will always have a rightward and corrupting bias.

Moreover, even conservative and moderate newspapers are struggling. A few effective national news companies may survive, but local and regional news will struggle. Who then will be a watchdog on government?

Dealing with human cupidity

Self-interest leads the rich to amass power and wealth, while causing the average citizen to skimp on paying for news and investigative journalism for which the benefits are diffuse.

We have government, religion, and art to constrain and redirect our baser instincts. Without government, we'd live as hunter-gatherers, or in a Somalia-like state of constant war. With government funding, we have a chance for diverse, balanced and solvent journalism.


"Public goods, private bads" is of course a one-sided view of politics. Sometimes, "Public bads, private goods" is more descriptive. Sometimes governments are repressive and corrupt. My point is: we need both government and private initiative. Under the influence of corrosive conservative and libertarian ideology, America has veered too far to the right. Moreover, appropriate public policy can have the effect of correcting public bads: we need government-funded journalism to act as a watchdog on both private and public corruption.

Some useful links about public news media:

The Death of the News

Public and Government Models

Saving the News

Building a Digital Democracy through Public Media

How to Save Journalism
Public Media and the Decommodification of News


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