The decline of newspapers and conflicts of interest


In case you’re not a subscriber to the excellent Economic Principals (EP), here is a little silver anniversary wisdom from its proprietor, David Warsh. His topic? The conflicts of interest that surface in substituting professionals for reporters:

Everyone knows that the newspaper business is shrinking, but the implications haven’t been sufficiently examined. To cope, papers have been eliminating beats, outsourcing coverage, and, in EP’s field, relying increasingly on economists to write rotating columns. Websites such as VoxEU, The Economists’ Voice and Project Syndicate have sprung up to showcase short op-ed-like articles. Economists’ blogs, too, have emerged as important sources of commentary and news (and Economics Roundtable to keep track of them). I love economists’ columns and blogs, but not enough attention has been paid to the fundamental differences between them and news.

Economics is a profession; news is a trade. That is to say, economists go to school to learn their business. Those who teach in universities are hired by other economists. They depend only on each other’s good opinion for advancement, and, except for extraordinary cases, on the opinion of almost no one outside their field. Apart from a rigorous and jealously regarded system of anonymous refereeing and peer review, they recognize and obey an imperative not to speak ill of another member of the guild. Economists work for one another, as do molecular biologists, doctors, lawyers and all other professionals.

Editors and reporters, on the other hand, are said to work “for the reader.” (One editor I knew used to take newly-hired reporters to lunch after six months to ask them “who’s your boss?,” persisting until he got the answer he wanted.) Newsfolk learn mostly on the job; academic attainment ordinarily plays no part in their evaluation once they have begun. Top editors are hired and sometimes fired by publishers, reporters by editors. They all have “bosses,” and about their bosses’ decisions, those in the newsroom have much to say but little to do. Publishers worry (a lot) about advertisers, and seek to keep reporters and advertisers out of each others’ way.

Conflicting loyalties can lead to very different outcomes.

A case in point is the story of Harvard University’s Russia scandal of the 1990s. No column I ever wrote cost more than “The Thing’s a Mess,” the first installment, in 2002, of many columns over the last six years about the collapse in 1997 amid charges of corruption of Harvard University’s USAID-sponsored mission to advise the government of Boris Yeltsin. I knew I was damaging several longstanding relationships with economists whom I admired by calling attention to the details of the US Justice Department’s ultimately successful attempt to recover damages in Boston’s Federal District Court.

Since then I have gotten used to it, and in more than twenty pieces, I have given a pretty good account of how Harvard professor Andrei Shleifer was found to be investing in Russia, along with his wife, deputy, and deputy’s family, in violation of his contractual obligation to provide disinterested advice, and how his close friend and mentor Lawrence Summers sought unsuccessfully to distance himself from the lawsuit, but not from Shleifer, first as Treasury Secretary and then as president of Harvard, as the matter plowed on to its ignominious conclusion. The episode was widely covered in Russia, and became part of the rich lore of Russian resentment of US policy in the aftermath of the Cold War.

But you would never have a clue that any of this had happened from three of the most widely-read economists’ blogs, the Freakonomics site, J. Bradford Delong’s Semi-Daily Journal, or N. Gregory Mankiw’s blog. Why?  Because they are economists, and not committed to “without fear or favor” news, though they deliver plenty of interesting tidbits over the course of a week. Besides, Shleifer is on the board of directors of the Becker Center on Price, where Freakonomics’ Steven Levitt teaches. DeLong, who worked under Summers at the Treasury Department, has been Shleifer’s friend since the two were college roommates. Mankiw regularly touts his colleague for a Nobel Prize.

But neither would you have known much about it from coverage in the New York Times, at least not until the bitter end; or from the Washington Post (except for a column by David Ignatius in 1999); and just barely from the Financial Times, where Summers now a star columnist; or, for that matter, would you have learned of it from Paul Krugman’s twice-weekly columns in the Times. Why the lack of interest in what was, after all, a pretty interesting story? Perhaps because newspapers are run at least partly for the benefit of their sources; editors are reluctant to bite the hand that feeds. (In contrast, the Wall Street Journal, which broke story, did an excellent job.)

The point is that EP operates in the interstices between the blogosphere and print journalism, and neither of these well-developed communities is predisposed to give it much notice. Indeed, when Institutional Investor devoted 25,000 words to the Harvard Russia story in 2006, EP wasn’t mentioned, though the weekly had reported some of its significant details first. That is not to say that EP lacks friends and allies in each community:  Mark Thoma, of the widely-read Economist’s View, frequently links it; so does William Parke’s influential Economics Roundtable; Martin Wolf of the FT recommends it as one among a dozen sites on his forum; so do Levitt and Stephen Dubner at Freakonomics. But working almost entirely for its readers, EP clearly needs to find ways to raise its profile in order to attract more of them.