Tuesday, July 27, 2004
Why is NPR Superior, All Things Considered?
posted by James
For someone educated in free-market economics, one particularly troubling mystery is that public radio is vastly better than privately owned radio stations. Not only is the programming more entertaining and intelligent, it also seems to do a better job of educating its listeners. This press release, from the Program on International Policy at the University of Maryland, shows that NPR listeners (and PBS viewers) are better informed about Iraq and terrorism than viewers of Fox or network news programs, even controlling for demographic factors (I originally read about the report on TAPPED).
Aside from a general mistrust of state media (which can be discounted because NPR isn't really state-run), there are other reasons to expect it to perform suboptimally. In general quality is supposed to result from the discipline of the marketplace. Private radio stations should buy high quality programming because it attracts listeners and advertising dollars; public radio seems to have no such incentive.
You might think that NPR needs high-quality programming to get donations from the public, but in fact it's unclear why anyone gives to NPR in the first place. A good is nonrival when one person's consumption doesn't diminish anyone else's ability to consume the good. Food is obviously very rival; public defense is not. A good is nonexcludable when no one can prevent anyone else from using the good. Toll roads are excludable; most roads are not. Public radio is neither rival nor excludable, so people can enjoy it without contributing. High-quality programming might draw listeners, but since they don't have to contribute, the incentive for NPR to pay for such programming is hard to identify.
It is also no answer that NPR is sheltered from market forces that would otherwise degrade it. The best cars are not made by non-profits, the best housing is not public housing, and the best movies were not funded by charitable contributions. A good answer will explain why some goods are better provided through the marketplace and others (like college educations and radio) seem not to be.
It is these problems that led Richard Posner to comment, on page 33 of Law, Pragmatism, and Democracy, "Suppose you're a strong believer on theoretical grounds in free markets, but you also consider National Public Radio far superior to any commercial radio network. If your fandom causes you to qualify your free-market ideology, you are prioritizing experience, the empirical. But if your ideology causes you to decide that you must have a screw loose in preferring NPR to commercial radio, then you are prioritizing theory." Is there a way, though, to bring reality to our theory? Can the two be reconciled?
An intriguing answer is provided in Law and Social Norms, by Eric Posner, Richard's son. Eric Posner shows how gift-giving is used to identify oneself as a "good type" of person (this means valuing the future highly relative to the present, as well as having certain characteristics such as wealth or intelligence). By giving an expensive gift, an individual shows both that she is wealthy and that she is willing to pay a high price for a deferred benefit. By choosing the recipient and the gift carefully, she can demonstrate her good taste.
Eric Posner then shows how institutions like NPR make good recipients for such gifts, and how this status gives them an incentive to provide good programming. First, the recipient must publicize its donors well so that their generosity is public knowledge. Second, the recipient must have qualities that would impress the community the donor is trying to impress. NPR achieves both qualities by airing high quality programs. The more listeners NPR has, the wider the audience to which its donors are publicized. The more culturally and intellectually elite NPR becomes, the more credit for discernment its donors get.
Now we can see why some institutions are well-suited for non-profit status. If you attain lots of publicity, and have characteristics that attract the wealthy or the intelligent, you can use your name to solicit large donations from individuals eager to burnish their reputations. As Eric Posner puts it, "The choice between non-profit and for-profit status depends on the demand for reputation, on the one hand, and the efficiency with which the non-profit can supply it, which is itself a function of the relative effectiveness of market discipline, and the institution's ability to publicize the names of donors in a way that reaches an elite audience." (page 67) It seems to be the case that universities are at this junction of publicity and intellectual credibility; so, too, is NPR.
Note that this theory requires only that rational people behave in a way that maximizes their own welfare, and that reputation is valuable in this pursuit. These assumptions are close enough to the assumptions underlying free market ideology that we can say that theory has been reconciled with observation. Richard Posner must be proud.
Aside from a general mistrust of state media (which can be discounted because NPR isn't really state-run), there are other reasons to expect it to perform suboptimally. In general quality is supposed to result from the discipline of the marketplace. Private radio stations should buy high quality programming because it attracts listeners and advertising dollars; public radio seems to have no such incentive.
You might think that NPR needs high-quality programming to get donations from the public, but in fact it's unclear why anyone gives to NPR in the first place. A good is nonrival when one person's consumption doesn't diminish anyone else's ability to consume the good. Food is obviously very rival; public defense is not. A good is nonexcludable when no one can prevent anyone else from using the good. Toll roads are excludable; most roads are not. Public radio is neither rival nor excludable, so people can enjoy it without contributing. High-quality programming might draw listeners, but since they don't have to contribute, the incentive for NPR to pay for such programming is hard to identify.
It is also no answer that NPR is sheltered from market forces that would otherwise degrade it. The best cars are not made by non-profits, the best housing is not public housing, and the best movies were not funded by charitable contributions. A good answer will explain why some goods are better provided through the marketplace and others (like college educations and radio) seem not to be.
It is these problems that led Richard Posner to comment, on page 33 of Law, Pragmatism, and Democracy, "Suppose you're a strong believer on theoretical grounds in free markets, but you also consider National Public Radio far superior to any commercial radio network. If your fandom causes you to qualify your free-market ideology, you are prioritizing experience, the empirical. But if your ideology causes you to decide that you must have a screw loose in preferring NPR to commercial radio, then you are prioritizing theory." Is there a way, though, to bring reality to our theory? Can the two be reconciled?
An intriguing answer is provided in Law and Social Norms, by Eric Posner, Richard's son. Eric Posner shows how gift-giving is used to identify oneself as a "good type" of person (this means valuing the future highly relative to the present, as well as having certain characteristics such as wealth or intelligence). By giving an expensive gift, an individual shows both that she is wealthy and that she is willing to pay a high price for a deferred benefit. By choosing the recipient and the gift carefully, she can demonstrate her good taste.
Eric Posner then shows how institutions like NPR make good recipients for such gifts, and how this status gives them an incentive to provide good programming. First, the recipient must publicize its donors well so that their generosity is public knowledge. Second, the recipient must have qualities that would impress the community the donor is trying to impress. NPR achieves both qualities by airing high quality programs. The more listeners NPR has, the wider the audience to which its donors are publicized. The more culturally and intellectually elite NPR becomes, the more credit for discernment its donors get.
Now we can see why some institutions are well-suited for non-profit status. If you attain lots of publicity, and have characteristics that attract the wealthy or the intelligent, you can use your name to solicit large donations from individuals eager to burnish their reputations. As Eric Posner puts it, "The choice between non-profit and for-profit status depends on the demand for reputation, on the one hand, and the efficiency with which the non-profit can supply it, which is itself a function of the relative effectiveness of market discipline, and the institution's ability to publicize the names of donors in a way that reaches an elite audience." (page 67) It seems to be the case that universities are at this junction of publicity and intellectual credibility; so, too, is NPR.
Note that this theory requires only that rational people behave in a way that maximizes their own welfare, and that reputation is valuable in this pursuit. These assumptions are close enough to the assumptions underlying free market ideology that we can say that theory has been reconciled with observation. Richard Posner must be proud.
Sunday, July 18, 2004
The Eternal Sunshine of the Unfree Mind
posted by James
I have just finished reading Order without Law, by Robert Ellickson. The book mainly deals with the power and efficiency of social norms as a system of social control. I think it's a very interesting book, although you might consider reading the second (theoretical) part before the first (empirical) section. The book is particularly useful as an antidote to legal centrism (the tendency to attribute greater power to the law than it actually exerts in human lives). Because of this, I imagine the book is popular among libertarians who seek to reduce the size and scope of our government. Nevertheless, close examination of the book reveals a potentially fatal defect in the libertarian account of how things ought to be.
My immediate response to libertarianism was utilitarian (or at least consequentialist). Certainly, you can imagine a "night-watchman" state that does a decent job of guarding the lives and property of its citizens, but many opportunities for social improvement would be foregone in such a state. Market failures would go uncorrected and wealth redistribution would be suboptimal (I may be repeating myself). Lest "market failure" seem a small price to pay, bear in mind that it encompasses monopolization, excessive pollution, and neglected (in the sense of under-funded) roads, vaccinations, and (depending on definitions) fire protection. This is a very incomplete list of potential market failures, so the consequentialist argument against libertarianism is strong.
Order without Law serves to undermine that argument by providing examples of social norms that arise to encourage efficient behavior seemingly outside the shadow of the law. This tendency is limited, however; norms are only efficient from the perspective of the group in which they function. A norm of loyalty within the mob might be efficient for gangsters, but it's not good for society (see Ellickson, p. 169, text accompanying note 11). Nevertheless, to the extent that norms can do the utilitarian work of law, libertarians might welcome them as desirable alternatives to the rule of law.
Or maybe not. One thing that comes across in Order without Law is just how powerful norms can be. The best argument for a large government may be that the alternative is less liberty. When the Supreme Court ruled that flag-burning is protected speech, flag-burners in Albany, Little Rock, Minneapolis, and New York were instead punished "forcefully" by non-government agents. Some in Louisiana even tried to lower the legal punishment for people who assault flag-burners (see Ellickson, p. 6, text accompanying note 12). Libertarians might argue that such retribution is out of bounds even in a night-watchman state, since the government has a monopoly on the legitimate use of violence. Other norms, though, powerfully constrain liberty in a way that would probably be distasteful to most libertarians.
One example is the use of gossip to constrain behavior. Libertarians (generally) hate the idea of government-mandated redistribution, but presumably they have little problem with private charity. What if it's the case, though, that private redistribution is actually coerced by the threat of informal punishment, as in the widespread practice of tithing (donating a tenth of your income to your church)? Is this somehow more acceptable? Tithing may not be as common as it once was, and donations may be more confidential now. Gossip is still used, however, to punish homosexuality, sexual promiscuity, drug use, and unpopular political and religious beliefs. It was once (and perhaps still is) used to punish interracial friendships.
In sharp contrast, federal law prohibits to varying degrees racism, sexism, and inquiries into sexual behavior. It goes to great lengths to avoid discrimination (except when based on relevant factors, and sometimes even then). Why, then, are we to prefer social control by norms? They may be efficient in some circumstances, but they can also intrude severely into our private lives, in ways a democratic government will not. In short, people may enjoy far greater liberties in the anonymity and privacy of a modern welfare state than they ever could in a nation governed largely by informal norms. The shadow of the law may be a surprisingly welcome sanctuary for the intellectually honest libertarian.
A final qualification is necessary, lest I overstate my case. First, people freely choose their communities and can escape particularly egregious social violations with relative ease. Note, though, that this may involve breaking family ties, and it may be very hard to find a community where, for instance, a gay vegetarian Mormon tobacco farmer will be accepted. At one point it was probably hard to find a community where any sort of homosexual was accepted. Norms such as the ones against sexual promiscuity (for females, at least) are still nearly impossible to escape. Bear in mind too that norms are far more acceptable today in part because of massive government intervention against racism (see Ellickson, p. 256, text accompanying note 62).
Second, it is not clear that norms and governments are entirely substitutes. We live in a "hybrid" society, in which law takes the primary position, but norms form a powerful complementary structure of social control (see Ellickson, p. 254). A large government might represent the worst of both worlds, with liberties constrained from above by the government and from below by society's normative underpinnings.
Still, there are clearly social practices, such as charitable giving, that can be performed either informally or in a centralized fashion. The recipients have good reason to prefer the latter; not only will it likely be more efficient, government redistribution will be blind to color and creed. In practice, a good libertarian might be a good New Deal Democrat after all.
My immediate response to libertarianism was utilitarian (or at least consequentialist). Certainly, you can imagine a "night-watchman" state that does a decent job of guarding the lives and property of its citizens, but many opportunities for social improvement would be foregone in such a state. Market failures would go uncorrected and wealth redistribution would be suboptimal (I may be repeating myself). Lest "market failure" seem a small price to pay, bear in mind that it encompasses monopolization, excessive pollution, and neglected (in the sense of under-funded) roads, vaccinations, and (depending on definitions) fire protection. This is a very incomplete list of potential market failures, so the consequentialist argument against libertarianism is strong.
Order without Law serves to undermine that argument by providing examples of social norms that arise to encourage efficient behavior seemingly outside the shadow of the law. This tendency is limited, however; norms are only efficient from the perspective of the group in which they function. A norm of loyalty within the mob might be efficient for gangsters, but it's not good for society (see Ellickson, p. 169, text accompanying note 11). Nevertheless, to the extent that norms can do the utilitarian work of law, libertarians might welcome them as desirable alternatives to the rule of law.
Or maybe not. One thing that comes across in Order without Law is just how powerful norms can be. The best argument for a large government may be that the alternative is less liberty. When the Supreme Court ruled that flag-burning is protected speech, flag-burners in Albany, Little Rock, Minneapolis, and New York were instead punished "forcefully" by non-government agents. Some in Louisiana even tried to lower the legal punishment for people who assault flag-burners (see Ellickson, p. 6, text accompanying note 12). Libertarians might argue that such retribution is out of bounds even in a night-watchman state, since the government has a monopoly on the legitimate use of violence. Other norms, though, powerfully constrain liberty in a way that would probably be distasteful to most libertarians.
One example is the use of gossip to constrain behavior. Libertarians (generally) hate the idea of government-mandated redistribution, but presumably they have little problem with private charity. What if it's the case, though, that private redistribution is actually coerced by the threat of informal punishment, as in the widespread practice of tithing (donating a tenth of your income to your church)? Is this somehow more acceptable? Tithing may not be as common as it once was, and donations may be more confidential now. Gossip is still used, however, to punish homosexuality, sexual promiscuity, drug use, and unpopular political and religious beliefs. It was once (and perhaps still is) used to punish interracial friendships.
In sharp contrast, federal law prohibits to varying degrees racism, sexism, and inquiries into sexual behavior. It goes to great lengths to avoid discrimination (except when based on relevant factors, and sometimes even then). Why, then, are we to prefer social control by norms? They may be efficient in some circumstances, but they can also intrude severely into our private lives, in ways a democratic government will not. In short, people may enjoy far greater liberties in the anonymity and privacy of a modern welfare state than they ever could in a nation governed largely by informal norms. The shadow of the law may be a surprisingly welcome sanctuary for the intellectually honest libertarian.
A final qualification is necessary, lest I overstate my case. First, people freely choose their communities and can escape particularly egregious social violations with relative ease. Note, though, that this may involve breaking family ties, and it may be very hard to find a community where, for instance, a gay vegetarian Mormon tobacco farmer will be accepted. At one point it was probably hard to find a community where any sort of homosexual was accepted. Norms such as the ones against sexual promiscuity (for females, at least) are still nearly impossible to escape. Bear in mind too that norms are far more acceptable today in part because of massive government intervention against racism (see Ellickson, p. 256, text accompanying note 62).
Second, it is not clear that norms and governments are entirely substitutes. We live in a "hybrid" society, in which law takes the primary position, but norms form a powerful complementary structure of social control (see Ellickson, p. 254). A large government might represent the worst of both worlds, with liberties constrained from above by the government and from below by society's normative underpinnings.
Still, there are clearly social practices, such as charitable giving, that can be performed either informally or in a centralized fashion. The recipients have good reason to prefer the latter; not only will it likely be more efficient, government redistribution will be blind to color and creed. In practice, a good libertarian might be a good New Deal Democrat after all.
