Why a free news media is essential to economic prosperity

Musician Frank Zappa famously remarked that communism collapsed because people want stuff.

That is an oversimplification, clearly, because a closer look at the history of the collapse of communism in Eastern Europe shows that each country was different. Moreover, the desire for democracy rather than simply material well-being should also be considered. Yet there is an interesting lesson that should not be forgotten.

After the fall of the Berlin Wall and reintegration of Eastern European economies into the global economy, it became apparent exactly how inefficient the centrally planned economies were at producing goods that citizens actually wanted. Visitors to East Berlin could see for themselves exactly what went on within the factories behind the Iron Curtain, and it was farcical.

As the business editor for the Mail & Guardian newspaper, I interviewed in the early 1990s a consultant attached to an auditing firm who was working in Eastern Europe, introducing businesses to capitalism.

As an example of what was wrong with the communist central planning system, he said that at the hotel he was staying at in Belgrade or some other capital, none of the ubiquitous ballpoint pens worked. They were all non-functional for different reasons: the spring mechanism failed, the ink ran, or the plastic casing broke. Hence this problem was not due to a single design flaw but poor overall quality.

Under central planning the quality of the pens did not matter as much as quantity. It was sufficient to ensure that targets for output were met or exceeded, not whether the pens actually worked.

In Zen and the Art of Motorcycle Maintenance, Robert Pirsig used the metaphor of serial and parallel communication to explain the problem of central planning.

“People, like everything else, work better in parallel than they do in series … when things are organised socialistically in a bureaucratic series, any increase in complexity increases the probability of failure.”

When Pirsig was writing all personal computers had serial and parallel ports. The serial port of a PC was used to communicate information in a single stream: the parallel port sent out and received multiple streams of information, and was much faster.

Another related metaphor from Pirsig’s book Lila, is queuing in the post office.

“When information is organised in small chunks that can be accessed and sequenced at random it becomes much more valuable than when you have to take it in serial form. It’s better, for example, to run a post office where the patrons have numbered boxes and can come in to access these boxes any time they please. It’s worse to have them all come in at a certain time, stand in a queue and get their mail from Joe, who has to sort through everything alphabetically each time and who has rheumatism, is going to retire in a few years, and who doesn’t care whether they like waiting or not. When any distribution is locked into a rigid sequential format it develops Joes that dictate what new changes will be allowed and what will not, and that rigidity is deadly.”

My observation is that there is always a queue in a post office, because as soon as the assistants see that the queue is thinning they leave the counter and do something else at the back.

A paragraph from the brilliant John Allen Paulos book A Mathematician Reads the Newspaper takes this idea of serial and parallel communication to illustrate the importance of free flows of information to the economy.

“The Jeffersonian model of many parallel processors is superior to the Stalinist model of one central processor. We don’t need a controlled media and party apparatchiks who will mechanically respond to government dicta; we need an independent press and free men and women who will have to make sense of the unforeseen complexities of the twenty-first century.”

The implication is also that we need a more informed and intelligent news media to make sense of the increasing amount of raw data that modern societies produce. And that calls for journalists to educate themselves to be able to take the raw data and create intelligent journalism that attracts an audience.

And prosperity cannot only be seen in terms of income; a free flow of information is essential for informed political choice too.