One and a Half Cheers for Fox News
By David Henderson
Senator Jay Rockefeller made a splash Wednesday by suggesting that the Federal Communications Commission shut down the Fox News Channel and MSNBC. My guess is that he mentioned MSNBC because he wanted to sound equally oppressive of both left and right; the viewing numbers show, though, that viewership of FNC is a multiple of MSNBC. Rockefeller swore to uphold the Constitution, which includes the First Amendment, and he intends to start doing so any day now.
What’s interestingly economically is that Rockefeller’s attack gives the lie to the idea that politicians’ only purpose in having the FCC is to allocate scarce electro-magnetic spectrum. Ronald Coase shot a hole in that idea in his classic 1959 Journal of Law and Economics article on the FCC, an article, incidentally, that helped lead to his formulation of the Coase theorem in the JLE the following year. But, given that FNC is cable, even those who never thought of, or agreed with, Coase’s argument for auctioning had no ground to stand on in advocating restrictions on cable.
Also interesting is Rockefeller’s bald statement of his motive in wanting to get rid of the Fox News Channel. He wrote:
It’d be a big favor to political discourse, our ability to do our work here in Congress, and to the American people, to be able to talk with each other and have some faith in their government and, more importantly, in their future.
That’s what’s missing: faith in our government. How come I didn’t think of that? Although FOX’s faith in the government program called war seems unrestrained, in some other ways, FOX does undercut many people’s faith in government. I wrote a partial defense of FNC in 2005 titled, “Two Cheers for the Fox News Channel.” After their treatment of Ron Paul and various other failings, I can give only 1.5 cheers. But that’s still something. Here’s part of my conclusion of that article:
A major message in Adam Smith’s The Wealth of Nations is that the reason free markets work so well is that each participant is motivated mainly by self-interest and that people figure out that the way to get something they want is to provide something that someone else wants and is willing to pay for. Smith compared the free market to an invisible hand that created good results for society in general, even though such overall good results were no one’s intention. Similarly, competition in TV news and opinion shows will bring good results that are not necessarily intended by any of the participants. When Roger Ailes started the Fox News Channel, his intention was to make money for his boss Rupert Murdoch by catering to a niche that had been largely ignored. It has worked, and the whole news market is better for it. In the process of competing in the bigger world of ideas, Fox is showing, as if by an invisible hand, some of the weaknesses in its own views.