Vicious Circle

December 2, 2004 • Ethics and Quality • by

Werbewoche, Nr. 43, December, 2004

Ethics are something we have to be able and willing to pay for. Of course, that also holds true for journalism, where, in a competitive environment, a single black sheep may trigger (un)professional herd instincts.

For some time now, American economists have been trying to explain why certain types of moral failure are becoming increasingly frequent in Western societies. Andrei Shleifer of Harvard University sees the root cause of deteriorating moral standards not in individual greed, but in the very essence of the market economy: competition.

Using the examples of child labour, corruption, “excessive” executive pay, manipulation of corporate earnings, and commercial activities by universities, Shleifer shows how unethical behaviour, once morally condemned by society or seen as a criminal act, is becoming more frequent and widespread under competitive pressure. Shleifer assumes that those responsible would actually welcome ethical behaviour. (His study focuses on entrepreneurs and university presidents, but the basic principle is likely to be valid for any given professional group, and thus also for people working in the media). However, Shleifer points out that ethical behaviour is a “normal good” and thus subject to market forces in the same way as other goods.

When media companies reduce costs by breaking ethical rules and standards, prices in the market for certain media products are also lowered, thus reducing revenues for competing products as well. Because of the fall in prices, those competing with the market participant that triggered the process will find that ethical behaviour becomes more expensive – in short, unprofitable. As a result, the ethical standards required of people working in the industry deteriorate and, hence, less “ethical” journalism is produced. As competitive pressure increases, the threshold for “unethical” behaviour is lowered. A self-reinforcing process sets in and moral standards are trapped in an increasingly steep downward spiral.

According to Shleifer, however, one might take consolation in the fact that “as societies grow richer, their willingness to pay for ethical behaviour – through both government enforcement and private choice – increases as well. As a consequence, both moral and regulatory sanctions work much better in richer countries than in their less affluent counterparts.”

Given this, the question arises: are ethics in the media industry a luxury we are only able – and willing – to pay for in times of economic well-being? For many emerging markets on the verge of achieving sustainable prosperity, this may be the silver lining. In places where belt-tightening looks inevitable, however, a reverse tendency seems to be gathering pace. Dire prospects for Europe’s sclerotic societies and its media.

As the fear of job losses grows, and “outsourced” journalists struggle to make a living in a ferociously competitive “content market”, they are increasingly inclined to try to maintain their current level of income by reducing the time spent on each story (i.e. using PR material instead of doing research), or by generating additional income through writing PR material themselves. Hence, these (un)ethical market forces might further foster an “anything-goes” attitude in journalism. “First the grub, then the morals”: this fundamental principle of society, coined by Bert Brecht in the 1920s in his Threepenny Opera has not lost its relevance – indeed it is today more pervasive than ever before.

[Translation: Florian Faes]

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