As Billionaires Save Newspapers, Will Newspapers Return Their Generosity?
In Capitalism, Socialism and Democracy, Austrian economist Joseph Schumpeter famously expressed skepticism about the future of capitalism. He argued that the wealth and abundance wrought by the profit motive had the potential to undermine it.
Among other things, Schumpeter feared the explosion of jobs in academia, journalism, and the arts. Each profession was then and is now largely an effect of profit-motivated prosperity, and Schumpeter well understood that the individuals most prone to entering the fields mentioned were among capitalism’s greatest skeptics.
In a sense, he's been proven correct. A walk on any U.S. college campus today is a loud reminder of capitalism’s brilliance. Building after building, and stadium after stadium has on it the names of centimillionaire and billionaire business eminences. For good or bad, the superrich revel in donating their wealth, and universities are the prime beneficiaries of their largess. Despite this, as in despite the endless number of tenured jobs created at universities by generous billionaires, it remains true that within the professor class, most look askance at the wealth-creation that made their work possible.
One could say the same about the arts. Many readers are doubtless familiar with Mozart In the Jungle through Amazon Prime. It’s a very enjoyable tv show centered around New York City’s top orchestra, but what’s especially enjoyable is the book of the same name that inspired the show. In it, author Blair Tindall doesn’t shy away from the certain truth that the world of orchestras and symphonies is not remotely profitable. Absent the superrich, many orchestras would have long since disappeared. Tindall is particularly up front about how much the health of the stock market has historically lifted the fortunes of orchestras that wouldn’t exist without donations. Despite this, there’s no evidence that individuals fortunate enough to earn comfortable livings with flutes and violins in their hands have taken up the cause of reduced taxation for those whose benevolence makes their work possible.
All of which brings us to the newspaper industry. As is well known now, billionaire entrepreneur Patrick Soon-Shiong recently purchased the Los Angeles Times. Once the U.S.'s most profitable newspaper, the Times is a shadow of its former self. Its “dispirited newsroom” (as Bloomberg’s Joe Nocera described it) plainly hopes that the deep-pocketed Soon Shiong will do for it what Jeff Bezos did for the Washington Post. Since Bezos’s arrival, a newsroom population that had fallen to 500 has jumped to 800. According to Nocera, the Times' newsroom has "dwindled to 400 journalists."
More broadly, it’s no insight to suggest that journalists around the U.S. and around the world hope that billionaires like Bezos and Soon-Shiong continue to save (print journalism) what appears to be a dying form of media. The latter is a statement of the obvious mainly because Bezos and Soon-Shiong aren’t the only billionaire newspaper benefactors in our midst. John Henry purchased the Boston Globe in 2013, Glen Taylor bought the Minneapolis Star-Tribune in 2014, and then Mexican industrialist Carlos Slim rather publicly shored up the finances of a faltering New York Times in 2009.
Taking this all back to Schumpeter, his fear was that profitable newspapers would provide a perch for capitalism’s skeptics. Notable is that Capitalism, Socialism and Democracy was published in 1942. What a different world it is today.
Roughly 76 years later, newspapers are no longer the profit-machines that they once were. Whatever the reason(s) for print media’s struggles, the reality is that the best of the best have fallen on hard times. Amid the hard times, the superrich have stepped in to place a cushy chair under what’s in freefall. Schumpeter might marvel. The capitalist system has created wealth so abundant that billionaires have taken to saving newspapers not with wealth-enhancing turnaround visions in mind, but as a public service.
Where it gets truly interesting is that a modern read of newspapers like the Washington Post, the Los Angeles Times, the New York Times still reveals a pretty strong bias against the rich. To read any of the three newspapers mentioned is to detect unabashed disdain for tax cuts that supposedly favor the rich, the alleged horrors of inequality, and the need among the rich to “give back.” What’s unknown is if this obvious slant against the productive (or their heirs) will become less apparent.
All of this is worth asking mainly because the happenings in the print media space reveal a rather inconvenient truth for a left prone to dismissing entrepreneurialism, in concert with its outright hostility toward changes in the tax code meant to reduce government’s take of wealth always and everywhere created in the private sector. Stating the obvious, jobs in print media increasingly exist at the pleasure of highly generous billionaires. About the latter, there’s no argument. Unknown is how those whose jobs were saved by abundant wealth creation will approach taxes, inequality and “giving back” in the future.
Indeed, print media’s greatest brands now have to at least secretly admit that tax cuts for the rich might save their industry, that the inequality they despise might similarly save it given the correlation between great wealth and newspaper bailouts, and as for giving back….Oh well, readers know the answer. Thanks to staggering wealth, it’s no longer just non-profits and regular people (Soon-Shiong grew rich for, among other things, bringing us closer to a cancer cure) who benefit from the billionaire class. The newspaper industry is being rescued by these alleged plutocrats.
So while academics and orchestra musicians haven’t exhibited an understanding for why the work they do exists at plentiful salaries (often tenured), maybe newspaper reporters will. Figure that they promise to report the news. Ok, but the news of today is that billionaires are saving what regular market forces have been trying to kill off. Thank goodness for abundant wealth creation! What say you, reporters?
