#jcarn: Asking the right question about capitalism and journalism: What is value?

Note: This post is another installment for the Carnival of Journalism project, where people passionate about journalism are sharing ideas in the blogosphere about ways to preserve and improve the craft.

This month’s prompt:

Can a good journalist also be a good capitalist? If so, how? Or why not?

The simple answer is yes, someone can be good at doing journalism and making money. The problem is it’s the wrong question.

Umair Haque, a creative thinker and blogger who recently published the e-book “Betterness: Economic for Humans,” has it right. He urges organizations to seek arête — virtue — to “maximize human potential and minimize suffering, instead of merely maximizing near-term profit, shareholder value, or revenue.” (p. 40)

It’s a grand variation of a motto many journalists cite: Comfort the afflicted; afflict the comfortable. As journalists, we want to improve the public good through our research, investigations, and stories. The reason so many of us are so passionate about this crazy craft that consumes our lives is we believe it can change the world and elevate the human condition.

The problem with the question as stated is we’ve seen what the profit motive can do to journalism. It led to the yellow journalism of the late 19th century, when stories were fabricated and sensationalized for the sake of sales. Indeed, the Christian Science Monitor and the Missouri School of Journalism were created and the New York Times evolved under Adolph Ochs as responses to the market-driven journalism of the day.

They were pursuing a greater goal, a greater journalism beyond profits.

We are at a similar crossroads today, as publicly traded media giants contort and flounder trying to meet competitive threats from all sides.

Take Gannett Co. Inc., the nation’s largest newspaper company. Like many of our major media companies, it has focused on maximizing shareholder value, a capitalist virtue. To meet the expectations of the market, it laid off 700 employees in July — its fourth major layoff in three years.

Shortly thereafter, CEO Craig Dubow resigned from the company because of health problems and received a $37.1 million payout per his employment contract. Yet Gannett is still struggling to find its way as a journalistic enterprise.

The market-driven model does have its share of successes in today’s media environment: Pixar, Google, Apple. When Steve Jobs died in October, many drew inspiration from his quotation about success:

My passion has been to build an enduring company where people were motivated to make great products. [T]he products, not the profits, were the motivation. [Former Apple CEO John] Sculley flipped these priorities to where the goal was to make money. It’s a subtle difference, but it ends up meaning everything.

As we’ve discovered lately, though, even Jobs and Apple made some concessions to be able to manufacture millions of iPods, iPhones, and iPads to feed the technological masses (and, not coincidentally, its income statement).

Fortunately, journalists at news organizations big and small are figuring out a way beyond the traditional free markets we’ve touted for so many years:

  • NPR: National Public Radio has gradually been weaning itself from public dollars to develop self-sustaining support through grants and listener donations. Joan Kroc, the wife of McDonald’s founder Ray Kroc, donated more than $200 million from her estate and helped firm the financial footing of the nonprofit news organization.
  • ProPublica: This nonprofit website was the first online-only organization to win a Pulitzer Prize for its journalistic excellence. In three years, its donations have grown from 18 percent of total contributions in 2009 to almost half in 2011.
  • MinnPostOne of the first high-profile ventures into nonprofit online journalism, MinnPost.com made its way into the black this year.
  • WellCommons: This public-health community-journalism site, created by Jane Stevens as part of the for-profit Lawrence (Kan.) Journal-World media organization, has connected the community and a small staff to focus on health issues facing Lawrence. Stevens is now creating her own version of that model in California.

The focus in these examples is financial viability, not profitability. The income statement makes the journalism possible, and it’s this reality that inspired the original #jcarn prompt. But the driving force in these examples is the journalism, the greater public good, arête. If we focus too much on the market, on the push for profitability, the inevitable result becomes dollar signs over human beings.

Today’s list of great capitalists would have to include Warren Buffett, whose Berkshire Hathaway Inc. had more than $372 billion in assets as of third quarter 2011. But even a great capitalist such as he considers the idea of taxes in the context of society, not in terms of personal gain. As he told ABC News recently:

The question is what is fair when you have to raise multi-trillions to fund the United States of America.

It is in this context we should view Berkshire Hathaway’s purchase of the Omaha World Herald. Buffett would not have bought into the newspaper if he did not see inherent value. The question is how much profit is enough for value: Forty percent? Ten percent? One?

For Buffett, “value” includes the public good. As he said at the press conference announcing the sale:

I think newspapers . . . have a decent future. It won’t be like the past. But there are still a lot of things newspapers can do better than any other media. They not only can be sustained, but are important.

They not only can be sustained, but are important. It is here that our conversation should begin.

Bank bonuses: Recapture the outrage

JPMorgan Chase has announced profits of $11.9 billion in 2009, and the other large banks we bailed out are expected to follow.

Ah, we can heave a sigh of relief. All must be well with the financial system!

Wrong.

The bankers are prancing merrily along, returning to their derivative ways and awarding large bonuses. (JPMorgan, for example, has set aside $26.9 billion for compensation for 2009.)

Some analysts far smarter than I am have pointed out the bubble once again brewing as the financial wizards work their balance-sheet magic. What’s more appalling is that the banks do not seem interested in assisting the rest of us out of the financial mess they helped create.

My fear is we have lost the tangible moment to repair our broken financial-regulatory system. We must recapture the outrage from a year ago and continue to demand meaningful financial reform from the federal government.

Back then, the banking crisis was still fresh in our minds. Many of us were frustrated by a system consumed by greed — and the billions in taxpayer money being spent to bail out those foolhardy bankers.

Yes, we had to suffer bailout pain to prevent the global economy from spiraling downward. The key was seizing that opportunity to change the broken free-market ethos that had hijacked our economic thinking.

But efforts to overhaul the financial regulatory system — emasculated by the Financial Services Modernization Act of 1999 — stalled. The bill passed recently by the House gave new meaning to the phrase “watered down.”

Now, we are hearing reports about the billions in bonuses. Big dollars speak to people. Perhaps the outrage will be rekindled.

President Obama has tried to attack the bonuses, but that’s not enough. He should focus on the financial system.

A few suggestions:

  • Consolidate the plethora of financial agencies into one oversight body.
  • Do not allow investment houses, commercial banks, and insurance agencies to cross-breed.
  • Limit how big banks may become.

Have we not learned the lessons of the Great Depression and the S&L crisis of the 1980s/90s? In a completely free market, there are too many willing to risk it all, regardless of how many it may hurt.

Mr. President, reform now — before the momentum is lost once again. And let’s make sure the Financial Crisis Inquiry Commission (which started meetings this week) accomplishes something real, something that will actually prevent such a crisis from happening again.

(Addendum 1/16/09: The commission hearings confirm we should not listen to Wall Street, according to an excellent column by economist Paul Krugman.)

Part II: What the Dell? The saga continues

Editor’s note: When we last left our Intrepid Whiner, he had kept his Dell order and sent a frustrated e-mail to Ikjot, the first customer-service human to call our hero by name. Still, the Dell rep refused to grant an inconvenience discount.

It appears the kudos Dell has received for social media is not unwarranted.

Within hours of posting my frustrated rant on Jan. 8, @LisaG_atDell commented on my post with a sincere apology and an invitation to correspond via Twitter. I promptly did so and asked once again for my inconvenience discount.

Her response:

I wish I could do that for you & several others. At this time, there’s nothing available to offer except for a Point of Contact

She lost me at “Point of Contact.” It sounded like a subsection in the Customer Service Manual. *Sigh*

So I chalked it up to the Corporate Decline of America (taking some solace in the power of capitalization) and waited to see what would happen next.

On Jan. 11, the beginning of the next work week, I received a flier in the mail from Dell touting another sale. Apparently, my request for discount was read as “Please send me more junk mail.”

Then, this morning, Jan. 12, came the most laughable missive of all:

Mr. Dell, if I were a “valued customer,” you would have:

  • Responded to my last disappointed e-mail and assured me the computer was coming.
  • Given me my discount (or some token freebie).
  • Not set another deadline for your survey.
  • Not referred to me as a case number and an order number.

Next time: Does the computer arrive? Have the makers spit on our hero’s processor? Stay tuned…

The frightening truth: The power of ‘Network’

Courtesy of Amazon.com

When I picked up “Network” at the library recently, my only memory consisted of Peter Finch exhorting his audience to go to their windows and shout, “I’m mad as hell, and I’m not gonna take this anymore!”

I did not realize how prescient the 33-year-old film was.

Finch, as Howard Beale, could easily fit into any cable news network lineup today. His rants sound right at home alongside such anger-mongers as Michael Savage, Glenn Beck, and Mark Levin. And the media conglomeration feared by writer Paddy Chayefsky has, in large part, come to pass.

Which is why the scolding that Arthur Jensen delivers to Beale near the end of the film is not nearly so outrageous today:

There is no America. There is no democracy. There is only IBM and ITT and AT&T and Dupont, Dow, Union Carbide and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state — Karl Marx? They pull out their linear programming charts, statistical decision theories and minimax solutions and compute the price-cost probabilities of their transactions and investments just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business.

The world is a business, Mr. Beale! It has been since man crawled out of the slime, and our children, Mr. Beale, will live to see that perfect world in which there is no war and famine, oppression and brutality — one vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock, all necessities provided, all anxieties tranquilized, all boredom amused.

Booworthy: Forget about 16-0 Colts

Boo.

Yeah, I know. You bench Peyton Manning and Reggie Wayne because you want them fresh for the playoffs. You bench them because the chance of injury is too great. You bench them because you want to go to the biggest show in professional football with your top players intact.

But the top management of the Indianapolis Colts left one factor out of their corporate decision: the fans.

In the stands, one fan held a sign proclaiming “16-0 matters to us!” Boos echoed throughout the stadium as the Colts’ rookie quarterback replaced Manning with a threadlike five-point lead. And the team skittered down the path to Loserville.

From a purely rational perspective, the decision of Coach Jim Caldwell and Colts President Bill Polian makes sense. But it ignores —  even insults — the emotional investment fans have made in their team. They stuck with them during Manning’s early seasons, when he was interception-prone. They remained in the stands during the thin years. And now, quite rightly, they want their perfect season.

They want to be part of history.

News organizations could learn from this heinous display of corporatization. In this era of journalistic hand-wringing, experts have dissected and analyzed audiences, sliced and diced content, pondered and posited business models.

But the primary question should be: What are you doing to inspire emotional investment from your community?