††††††††††††††††††††† SHOULD PRESS BE LIABLE OR NOT?
†††††† Recent years have increased legal accountability of producers and
††† advertisers for providing SAFE products and RELIABLE information† to
††† customers.† A† government† influences††††† a† wide† range† of market
††† operations from licensing requirements† to† contract† actions.† That
††† control announces and enforces determined norms of quality.
†††††† Each of these regulations is† designed† to protect consumers from
††† being hurt or CHEATED by defects in the goods and services they buy.
††† This† matter,† when† producers† look† to† the law rather than to the
††† market to establish and maintain new standards of quality (of† their
††† goods),† shows, that modern market has an ability of selfregulation.
††† But it also shows another unbelievable feature:† consumers are† both
††† incapable† of† rationally† assessing† risks and unaware of their own
†††††† Companies and corporations all over the world are† systematically
††† inclined† to† SHIRK† on quality and that without the threat of legal
††† liability may subject their customers or other people to serious† risk
††† of harm from their products if it could save money by doing so.
†††††† According to this point of† view,† for† most† goods and services,
††† consumers are POWERLESS to get producers to satisfy their demand for
††† safe,† high-quality† products!† The† unregulated† market lets unfair
††† producers to pass on others the costs of their mistakes.
†††††† Legal liability is ready to correct† these "market† failures"† by
††† creating†† a† special† mechanism† (feedback),† regulating† relations
††† between producers and customers. Unfair producers should be punished
††† and their exposure is increasing.
†††††† One market,however, has completely ESCAPED the imposition of legal
††† liability.† The market for political information† remains† genuinely
††† ee† of† legally† imposed quality obligations.† The electronic mass
††† media are subject to more extensive government regulation than† paid
††† media,† but† in† their† role† as† suppliers of political information,
††† nothing is required† to† meet† any† externally† established† quality
†††††† In fact, those, who gather† and† report† the news,† have no legal
††† obligations to be competent,† thorough or disinterested.† And those,
††† who publish or broadcast it, have no legal obligation to warrant its
††† truthfulness,† to†† guarantee†† its†† relevance,†† to†† assure†† its
†††††† The thing is: Should the political information they provide fail,
††† for example,† to be truthful,† relevant,† or complete,† the costs of
††† this† failure will not be paid by press.† Instead they will be borne
††† by the citizens.† Should the information intrude the privacy† of† an
††† individual†† or†† destroy†† without† justification† an† individual's
††† reputation - again, the cost will not be borne by producer of it.
†††††† This side of "activity" of† producers† of† harmful† or† defective
††† information (goods,† services, etc) practically is not acknowledged.
††† Producers of most goods and services† are† considered† worlds† APART
††† from† the† press in kind,† not just in degree.† Holding producers in
††† ordinary markets to ever higher standards of liability† is† seen† as
††† PROCOMSUMER.†† Proposing† holding† the† press† to† any† standard† of
††† liability for political information is seen as† ANTIDEMOCRATIC.† The
††† press is constitutionally obligated to check on the government.
†††††† Most of policymakers justify legal liability for harms, caused by
††† goods and services and quite limited liability for harms,† caused by
††† information. Liability for defective consumer products is PREDICATED
††† on a market failure.† As for "unfair" producers,† power of† possible
††† profits† PREVENT† consumers† from translating their true preferences
††† for† safety† and† quality† into† effective† demand.†† So,†† customer
††† preferences† remain† outside† the safety and quality decision-making
††† process of producers.† Today,† it'll be a† new† mechanism† to† force
††† producers to follow customers true preferences.
†††††† Lack of liability† for defective or harmful political information
††† can be predicated only on a different kind of supposed market failure
†††† - not a failure of†† the market to SUPPLY the LEVEL of safety that
††† customers want but its failure to supply† the† amount† of† political
††† information that society should have.† Some experts say,† that free
††† market has tendency to produce "too† little"† correct† information,
††† especially political information.
†††††† The thing is: political information is† a† public good and it has
††† many characteristics of a public good. That is a product† that† many
††† people† value† and† use† but† only† few will pay for.† Factual(real)
††† information cannot easily be restricted to direct† purchasers.† Many
††† people† benefit who do not pay for it because the market cannot find
††† the way to charge them.† As you† can† see,† providers† of† political
††† information† try to get as much profit as possible spreading it,† so
††† they HAVE TO supply "too little" info. Otherwise - the market FAILS!
††††† †Here is another reason. Some analysts consider that the market also
††† fails because of low demand. Even if suppliers could "earn all their
††† money",† they wouldn't provide the socially optimal amount of† info!
††† Private† demand† for political info will never be the same as social
††† demand. And it will never reflect its full social value.
†††††† If it† were† true,† that† political† information† was†† regularly
††† underproduced† by† the† market,† there† would† be† cause for serious
††† concern that might well justify generous sibsidies - in the form† of
††† freedom† from† liability† for the harms they cuase - for information
††† providers.† But a proper look at modern market shows that† producers
††† of political information† have† developed a wide range of strategies
††† for increasing the benefits of their efforts† to† solve† the† public
††† good problem.
†††††† The most† obvious† example† of† a† spontaneously generated market
††† solution to the public good problem† is† ADVERTISING.† By† providing
††† revenue† in† proportion† to† the† relative size of the audience (for
††† radio† &† TV)† or† the† readership† (for† magazines† &† newspapers),
††† advertisers play a SIGNIFICANT role in the internalizing process. In
††† effect,† the sale of advertising at a price that varies according to
††† the†† number†† of†† recipients†† permits† information† producers† to
††† appropriate the benefits of providing a† product† that† many† people
††† value† but few would pay for directly.† Advertising has an effect of
††† transforming information from a public into a private good. It makes
††† possible for information providers to make profits by satisfying the
††† tastes of large audiences for whose desire† to† consume† information
††† they are unable to charge directly.
†††††† Thus, customer of goods or services and citizen of any country -
††† are in the same conditions. Like customers - citizens may have (and
††† they have)† different† preferences† for political information,† but
††† citizens do not value† information† about† politics only because it
††† contributes to their ability to vote intelligently and customers do.
††† Like customers - citizens'† tastes† differ† in† many ways and† that
††† generate wide† variations† in† the† intensity† of† their demand for
††† political information.
†††††† Since it does not appear to be true, that† political† information
††† market† is† blocked† by† an† ongoing† problem† of† undersupply,† the
††† conventional justification for granting the press broad freedom from
††† legal liability for the harms it causes must give away!† It does not
††† necessarily mean that the economic case for legal sanctions has been
††† made.† Although† it† seems the market could be relied upon to supply
††† "enough" information.† So that subsidies in the form† of† protection
††† from† legal† liability† are not needed.† Personal responsibility and
††† legal accountability would be 100%† if the information market† could
††† internalize to producers not only the benefits but also the costs of
††† their activities & failures.† As for victims,† they'll get one† more
††† chance† to avoid the harms happened from the production of defective
†††††† Legal accountability for harm is† desirable† in† a† market†† that
††† systematically† fails† to† punish† "unfair"† producers for defective
††† products. This kind of failure occurs in two quite different cases:
††† 1) The first occasion has to do with the market's responsiveness† to
†††††† the† demands of consumers.† The failure occurs when customers are
†††††† unable to detect defects before purchase or to protect themselves
†††††† by† taking appropriate precautions after purchase,† when they are
†††††† unable to translate their willingness† to† pay† for† nondefective
†††††† products† into† a† demand† that† some† producers will satisfy and
†††††† profit from. It also occurs when suppliers are unable to gain any
†††††† competitive† ad-† vantage† either† by† exposing† defects in their
†††††† rivals' products or by touting the relative merits of their own.
††† 2) The second kind of market failure is an inability to† internalize
†††††† harm† to bystanders - third parties who have no dealings with the
†††††† producers but who just happen to be in the† wrong† place† at† the
†††††† wrong time when a product malfunctions.† Even when these kinds of
†††††† failures occur,† legal accountability is problematic† if† it† in
†††††† turn† entails† inevitable† error† in† application or requires the
† †††††taking† of† such† costly† precautions† that† they† cover† up† all
†††††† Conceiving of quality as† a† function† of accuracy, relevance and
††† comple- teness,† consumers of political information† are† not† in† a
††† strong† position† when† it comes to detecting quality defects in the
††† political information they receive.† Revelance may† well† be† within
††† their ken,† but since they are quite unable to verify for themselves
††† either the accuracy or the completeness of any particular account of
††† political events.† In addition,† since political information usually
††† comes bundled† with† other† entertainment† and† news† features† that
††† sustain† their† loyality to particular suppliers,† consumers are not
††† inclined† to† punish† information† producers† by†† avoiding†† future
††† patronage even when they commit an occasional gross error.
†††††† Nevertheless, competition† among journalists† and† publishers† of
††† political information tends to create† an† environment† that† is† in
††† general† more† conductive† to† accuracy than to lies or half-truths.
††† Journalistic careers can be made by† exposing† others'† errors,† and
††† they† can† be† ruined† when† a journalist is revealed to be careless
††† about truth.† These realities create incentives for journalists† not
††† to make mistakes.
†††††† Moreover, the investment that mainstream publishers and broadcas-
††† ters make in their reputations for thoroughness and accuracy attests
††† to the† market's perceived ability to detect and reward suppliers of
††† consistently high- quality information.† Information suppliers† that
††† cater† to† more† specialized† tastes play a significant role.† These
††† alternative ways of getting info are often probe apparent† realities
††† more† deeply,† interprete† events† with† greater† sophistication and
††† analyse data more thoroughly than the mainstream media are† inclined
††† to do.
†††††† In doing so, of course,† their principal motivation is to satisfy
††† their own customers.† But while pursuing this goal,† they† constrain
††† (even† if† they† do not completely eliminate) the mainstream media's
††† ability to portray falsehood as truth or† to† OMIT† key† facts† from
††† otherwise apparently compelete pictures.
†††††† The array† of† incentives† with† respect† to at least the general
††† quality of political information,† with which the† market† confronts
††† information† providers† creates† systematic† tendencies† for them to
††† provide political info that is accurate and complete.† Or perhaps it
††† would† be slightly more precise to say that the market unfortunately
††† does not appear systematically to reward producers of† falsehood† or
††† half-truth information yet,† according to their activities.† So that
††† consumers of political information don't† need† the† club† of† legal
††† liability† to† force† information† providers† to† provide† them with
††† quality information.
†††††† The analysts ought not to be read as an asserting that the reason
††† the† market for political information works well is that it provides
††† just the right kind and quality of information† to† each† individual
††† citizen† and† that each individual citizen has identical preferences
†† †for info about government.† Indeed,† the premise of this argument is
††† that† the† market† works because citizens (or customers) do not have
††† identical preferences and producers exploit† that† fact† by† finding
††† ways† to† cater† to and profit from the varying demands of a diverse
††† citizenry.†† An†† implicit†† assumption†† provides†† the†† normative
††† underpinnings for the analysis.† Obviously, the full implications of
††† this assumption cannot be worked out here.
†††††† The claim† that† the †market† in† general† "works"† shouldn't† be
††† understood as a claim that the information it generates is uniformly
††† edifying and never distorted. As you know many information producers
††† pander† to the public's appetite for scandal and still others see to
††† it.† These facts do not† warrant† the† conclusion† that† the† market
††† doesn't work.
†††††† More significantly,† it† seems† inconceivable† that any system of
††† government regulation - including† a† system† in† which† information
††† producers† are† liable† for† "defective" information - could in fact
††† systematically† generate† a† flow† of† political† information†† that
††† consistently† provided† more† citizens with the quality and quantity
††† that met their own needs as they themselves defined† than† does† the
††† competition in the marketplace of ideas that we presently enjoy.
†††††† This analysis† suggests† that† the† workings of the market create
††† situation in which consumers of political information† do† not† need
††† the† threat† of† producer† liability† to† guarantee† that† they† are
††† systematically getting a TRUSTWORTHY product.
†††††† But consumers are not the only† potential† victims† of† defective
††† information and market incentives are not always adequate to protect
††† NONCONSUMER victims from the harm of defective information. Innocent
††† bystanders,† such† as pedestrians hit by defective motorcycles,† are
††† sometimes hurt by products over whose producers they have no control
††† either as consumers or competitors. Persons, who find themselves the
††† unwitting subjects of defective information,† stand in an† analogous
†††††† For example,†† a†† story† about† sexual† assault† might† be †very
††† interesting for public and might serve well the public† interest† in
††† being† informed about the police efforts or criminal justice system.
††† But the victim's name is† NOT† NECESSARY† to† its† purpose† and† its
††† publication both invades her privacy and broke her safety.† In cases
††† like this, it's not so easy to have confidence in market incentives.
††† The† harm† from† the† defect† is† highly† concentrated on the single
††† defamed or exposed individual.
†††††† Now, it's time to ask the major question:† Should† the† press† be
††† permitted† to† externalize particularized harms?† Why should not the
††† press,† like other business entities,† be liable when defects in its
††† products† cause† particularized harm to individual third parties who
††† have few means of self-protection at their disposal?
†††††† According to the Constitution,† defamed public officials or† rape
††† victims† should† have† access† to† massmedia† for† rebuttal.† As for
††† everyday practice,† the press is not always eager to give† space† to
††† claims† that it has erred.† There are two objections,† why the press
††† shouldn't be responsible for the harm of such† kind:† accountability
††† to† a† more† demanding legal standard would compromise its financial
††† viability and undermine its independence.
†††††† These objections are too† SELF-SERVING† to† be† taken† completely
††† seriously:† The† financial† viability argument is no more persuasive
††† when the product of the press harms innocent third parties† than† it
††† is†† when†† other†† manufacturers'†† malfunctioning†† products† harm
††† bystanders.† As† press† doesn't†† underproduce†† information,†† thus
††† "freedom" from liability can't be defended as necessary subsidy. The
††† "financial viability" objection† points† toward† the† imposition† of
††† liability for harm.
†††††† The need† to† maintain† the† press's independence from government
††† does provide† support† for† the† press's† objection† that† liability
††† threatens† them† unduly.† But† it's† hard† to sustain the claim that
††† government's censorious hand would lurk behind a rule that† required
††† the† press† to† compensete† individuals.† It† is† not† obvious† that
††† enforcing a rule that simply prohibited publishing the names of rape
††† victims would signal the beginning of the end of our cherished press
†††††† Asking whether the press should be more legally accountable† than
††† it† is now for publishing defamatory falsehoods about individuals or
††† revealing rape victims' names touches a number of difficult,† highly
††† discussed questions. In spite of the fact, by recasting a portion of
††† the debate over legal accountability and by† focusing† attention† on
††† the†† disparity†† of†† legal† treatment† between† producers† in† the
††† information† market† and† those† in† other† markets† for† goods† and
††† services,† it† does† seem† possible† to gain some fresh and possibly
††† useful insight.
†††††† The reality seems to be that,† with respect to† the† quality† and
††† quantity†† of†† political†† information,† free† competition† in† the
††† marketplace of ideas performs† admirably,† with† inventive† ways† of
††† overcoming† market† failure† and† with† flexibility in adapting to a
††† countless consumers preferences.
†††††† In light of this reality it ought not to be amiss to suggest that
††† when neither the threat of increasing a supposed undersupply nor the
††† looming shadow of government censorship is implicated, the massmedia
††† should be liable for egregious errors.