Crikey regards Senator Richard Alston as one of the most contemptible ministers in the Howard government. His subservience to media moguls and preparedness to sacrifice the public interest for Kerry Packer’s interest is well exposed in this article by Melbourne University’s Tony Phillips.
At one level his argument was so laughable and so weak it appeared to indicate that, faced with an ALP surprisingly holding its nerve in the Senate, he was just going to go through the motions. On another it revealed a woeful minister barely on top of the issues in his portfolio, something any amount of media policy decisions have already indicated. In short Alston was prepared to trot out poor quality spin that passed off a plea for partisan interest as some sort of liberalism defending the public good.
Fantastically he used market rhetoric about the importance of diversity to advocate a policy ensuring an increase in ownership concentration. Why? Because, he argued, market limitations (by which he actually meant failures but of course dares not speak that name) mean that only ever larger and fewer media conglomerates can deliver quality product in news. This bit of spin is presumably borrowed from banking PR of the last twenty years and we all know what quality levels of service banks now offer!
Alston argued that diverse and quality products require fewer providers, that is there should be less market from the point of view of buyers (advertisers) and consumers. This is the same man who only a few years ago, while drafting laws to protect current TV owners, argued that entrenched oligopoly in old media was acceptable because the new technologies would provide a route to diversity. Ironically (or more disturbingly, without a trace of irony) his rules on datacasting soon killed off the potential of this contribution to diversity. Perhaps this is why he thinks media owners now need to increase their share of the old technologies, print and TV, rather than investing in new technologies or overseas markets?
This latter point is crucial. Alston continues to argue that, on the one hand there are now a number of competing sources of information due to new technology, so increased oligopoly is not so worrying. On the other hand he argues, using those old chestnuts of “economies of scale” and “commercial flexibility”, that the amount of new sources of information means the existing owners need to be free to further concentrate their control over old media and buy up the new as it becomes profitable (read competitive?). Only by doing this will they be able to keep their quality levels up. Beneath the spin and obfuscation, and leaving aside the highly moot point regarding existing “quality” levels, Alston’s point comes down to this. In a media world changing under the impact of new technology the protected position of media owners must be protected.
Indeed taken to its logical conclusion Alston’s reasoning of diversity through oligopoly becomes an argument for either (a) nationalisation or (b) the contracting out Australia’s media provision to a single, extremely large, media corporation (did someone say News Corp?) Both of these would provide excellent “economies of scale” and high levels of flexibility within the organisation. And of course they make life much easier for those in a position of power and certainly guarantee profits. Just ask Telstra or the TV licence holders. Many of Australia’s media barons have long enjoyed government protected markets through the licensing laws and an extremely slack broadcasting authority. The natural tendency of markets toward monopoly, along with inadequate corporate regulation, have delivered similar levels of protection in the concentration of print media. This is bad for democracy and bad for the economy.
Economists would refer to many of the “profits” being made in the Australian media as actually being rents. Likewise the activities of the media businesses could more properly be described as rent extraction rather than business or entrepreneurial activities.
Given this scenario wouldn’t it be better if the continuation of cross-media rules, combined with the changing world of media production Alston outlines, actually pressured the big boys to compete? Rather than devoting management hours to devising strategies for protecting their markets, or squeezing more out of their workers with yet another rationalisation or merger, they would be pressured to use their protected profits as a springboard for expansion into the new markets opened up by information technology and a globalising economy. Let them actually act as entrepreneurs!
If, as Alston implies, Channel Nine needs to acquire a greater diversity of content to maintain its quality(!?!) in news and current affairs then let Nine expand in all the other parts of the world that are not Australia’s capital cities. If more markets are needed perhaps capital could be invested in producing product saleable overseas. If we look at the electronic media in Australia it seems the larger it is the less likely it is to pursue either of these tactics. Rather the strategy is to seek even more guaranteed profit by further domination of your known markets, or moving into new areas where a monopolistic edge is offered, eg. casinos. This is hardly surprising, it’s a perfectly rational approach from the point of view of the individual business, but it’s also why markets are needed to discipline and prevent such behaviour and force/encourage capital to be used in more efficient and beneficial ways.
To relax cross-media laws is to weaken the market and encourage risk avoidance not risk-taking. The latter is already in very short supply in Australia’s corporate sector, why reduce incentives for it even further?
The media and information industry is emerging as the engine of the world economy for the foreseeable future. As a small player Australia’s positioning in world production in this area is crucial to its long term prosperity. We do enjoy some comparative advantages, a cheap dollar, a well educated workforce with skills in the area, and English as a native language. Our small capital base is a problem but it’s not going to get better if it’s allowed to parasitically settle down to an oligopolistic, or even duopololistic, feeding frenzy on the domestic market until such time as a foreign buyer turns up with a big barrow of cash to take it over.
This sorry government has already shown itself bereft of political liberalism in its contempt for human rights and abdication of ministerial responsibility. Alston’s ridiculous proposals show that any economic liberalism in the government (a commitment to the maintenance and extension of competitive markets) has long since gone. Alston’s newspeak in the Age claiming that black is actually white seems merely a good indication of how in thrall of the media oligarchs Australia’s government already is.
* Tony Phillips, amongst other things, teaches Politics and Public Policy at the University of Melbourne.