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.
Comments:
Post a Comment
