Murdoch: the network defeats the hierarchy
- 10 July 2011
- From the section Business
The Murdoch empire fractured, a Conservative prime minister attracting bets on his resignation, the Metropolitan Police on the edge of yet another existential crisis and the political establishment in disarray.
A network of subversives would have counted that a spectacular result to achieve in a decade, let alone in a single week. But it was not subversives that achieved it - the wounds are self-inflicted.
As the News of the World scandal gathered momentum, it became clear, by midnight on Thursday, that this was not just the latest of a series of institutional crises - the banks, MPs expenses - but the biggest. For this one goes to the heart of the way this country has been run, under both parties, for decades.
The strength of the Murdoch newspaper and TV empire was that it occupied the commanding heights of a kind of journalism that dispenses power, intimidates and influences politicians and shapes political outcomes.
The other rival power node is Jonathan Harmsworth's Daily Mail and General Trust - which sets the agenda for all other news media in the UK but lacks the global reach.
Conrad Black's Daily Telegraph once occupied the third peak, but in terms of influence has been a shadow of its former self in terms of influence since the old proprietor went to jail, and then - under new owners - broke the MPs' expenses scandal.
The primary function of these journalistic centres of power is to dispense approval or disapproval to politicians. A News International journalist is reported to have said to Labour leader Ed Miliband: "You've made it personal with Rebekah so we're going to make it personal with you."
That is the kind of power that, until about 1500 on Thursday, journalists in that circle could wield.
But not any more: for all the difficulties Mr Cameron had with the immediate question - of judgement over the employment of Andy Coulson; of what did he ask and when - it is clear that he intends to make a strategic break with the press barons. Likewise, Mr Miliband had already burned his bridges.
If Britain's senior politicians are serious about that break, then it will signal - without a single law being passed - a major change in the country's de-facto constitution.
In economics journalism, we have learned to study what the Financial Times writer Gillian Tett calls "the social silence": the subject that everybody at high-class cocktail parties wants to avoid.
After Lehman Brothers collapsed, we realised that the unasked question had been the most important: "on whose books do the increasingly toxic debts of the housing market stand?" The answer was "in the shadow banking system", but we only knew it existed when it collapsed.
The political equivalent of that question is the one everybody has been asking journalists and politicians this weekend: why do all politicians kow-tow to Mr Murdoch; what is it that makes them incapable of seeing the moral hazards of the relationship?
Nobody outside the Murdoch circle knows the full answer, but I suspect it is quite prosaic: like the Wizard of Oz, Mr Murdoch's power derived from the irrational fright politicians took from his occasional naked displays of it. The Kinnock "light bulb" headline was probably the signal moment. He was powerful because people believed he had the power, and that editors like Mrs Brooks and Mr Coulson probably had a file on everybody bigger than MI5's, and so you should never, ever, cross them.
Now, there is a school of social theory that has a name for a system in which press barons, police officers and elected politicians operate a mutual back-scratching club: it is termed "the manufacturing of consent".
Pioneered by Edward Herman and Noam Chomsky, the theory states that essentially the mass media is a propaganda machine; that the advertising model makes large corporate advertisers into "unofficial regulators"; that the media live in fear of politicians; that truly objective journalism is impossible because it is unprofitable (and plagued by "flak" generated within the legal system by resistant corporate power).
At one level, this week's events might be seen as a vindication of the theory: News International has admitted paying police officers; and politicians are admitting they have all played the game of influence ("We've all been in this together" said Cameron, disarmingly). The journalists are baring their breasts and examining their consciences. The whole web of influence has been uncovered.
But what challenges the theory is first, the role of the social media in breaking the old system. Large corporations pulled their advertising because the scale of the social media response allowed them to know what they are obsessed with knowing: the scale of the reputational threat to their own brands.
We do not yet know the scale of the Twitter and Facebook campaign on companies to pull their ad spend. A sense of it can be gleaned by the 150,000 submissions to Ofcom over the BSkyB takeover.
It was the present and future threat to advertising revenue and to investment that forced Mr Murdoch to kill the News of the World.
As Mrs Brooks told the journalists, she has "had sight of the future" on this: she and James Murdoch know the full scale of what is to be revealed about the NOTW, and may have judged that it would lead, inevitably, to the total collapse of its ad revenue as any criminal proceedings played out in court.
Those bemoaning the "unnecessary" closure of the NOTW ignore the market logic. Even if the guilty parties had long ago moved on, the NOTW was essentially the same product.
The current senior management of NI are having to admit to post-crime "errors of judgement" revolving around their attempts to pay hush-money to the perpetrators and failure to investigate.
Given what may now happen in the courts, it had to go as a brand to prevent gangrene to the whole of Newscorp: the Church of England's investment fund has demanded the sacking of senior NI managers with immediate disinvestment in the entire Newscorp group as the sanction.
Though Twitter played its part, as in Egypt it was the interplay between social media responses and the mainstream television networks that toppled the giant.
If the BBC, ITN and Sky had - like Egyptian state TV on 25 January - just ignored the furore, Mrs Brooks and Mr Cameron may, even now, have been sitting down to Sunday lunch somewhere in Oxfordshire.
But the UK broadcast media has - unlike in the US - effective regulation. Instead of a culture of partisanship there is a culture of impartiality. There are infuriating (for those who work here) checks and balances. And there is a regulator as well as "self-regulation".
I would add, even the most "constructed" of TV and radio journalism looks natural and spontaneous compared to the machine-written prose of tabloid newspapers: I have become convinced that the Facebook generation, when it reads such newspapers at all, does so ironically, much as it watches Big Brother. That is, even though you can make a business model out of selling scandal sheets about the famous, you cannot manufacture consent with it anymore.
In addition, even as the tabloid press has money out of the "sexploits" of the famous, mainstream TV drama - including that produced by Mr Murdoch's studios - has come to revolve around a single theme: the supposed rampant corruption of the entire political, media, police and legal systems.
Once it was only at places like the National Theatre, with plays by David Hare and Howard Brenton, where you could see such stories aired. (Hare's Pravda, about Murdoch's takeover of the Times, is worth re-reading; the script was sent by the playwright to the culture secretary as a submission in the BSkyB case.) Now it is everywhere, from the Batman movies, to The Matrix, to the Bond movies - leave aside series like State of Play.
It has been remarked (by Richard Bacon, I think) that these scandals are like The Wire, working series by series through every institution. But the last series of the Wire is five years old. We know the whole story already.
Nobody under the age of 50 is remotely surprised to see a man once trusted to run the information operation of the British government arrested, or to see the Met admit that "a small group of officers" took payment.
Finally, the political influence that was supposed to stop the system crumbling, itself has crumbled. We are told Tony Blair pleaded with Gordon Brown to call off Tom Watson MP from his crusade over the original hacking allegations. It did not work.
Tom Baldwin, Ed Miliband's spin-doctor purposely selected from the Murdoch empire to hone Labour's message in the direction of Wapping, warned Labour "not to conflate phone-hacking and BSkyB". Mr Miliband's Bloomberg speech on Friday contradicted that approach.
One part of the Chomsky doctrine has been proven by exception. He stated that newspapers that told the truth could not make money. The Guardian, whose veteran reporter Nick Davies led the investigation, is indeed burning money and may run out of it in three years' time.
But a combination of the Guardian, Twitter and the public-service broadcasters, including Sky News, proved stronger than the power and influence of Rupert Murdoch, and for now the rest of Fleet Street has joined in the kicking.
(It should be said here that the Daily Telegraph's role in the exposure of the MPs expenses scandal laid the groundwork for this moment. The Telegraph proved you can attack major sections of the political elite, who had assumed impunity, and win.)
Now three institutions stand weakened: Mr Murdoch is facing the collapse of his BSkyB bid; the Conservative Party, cut adrift from him, faces a moment of internal reappraisal; and in the cappuccino joints around New Scotland Yard there is apprehension over whether the Met can survive another systemic kicking so soon after the MacPherson report.
Of all these institutions, it is the one with least resilience among the mass of people that stands in greatest danger. The Conservative Party has branches, summer fetes, jumble sales and social roots going back centuries; the Met is, tonight, dressed in its stab vests and fuelled by stale McDonald's, dealing with traumatised victims of urban mayhem on housing estates few politicians would dare to visit after dark.
But Rupert Murdoch's resilience relies on the few handpicked lieutenants and family members holed up in London and New York. It is a classic "Weberian hierarchy" - a command structure stronger vertically than horizontally.
Six months ago, in the context of Tunisia and Egypt, I wrote that the social media networks had made "all propaganda instantly flammable". It was an understatement: complex and multifaceted media empires that do much more than propaganda, and which command the respect and loyalty of millions of readers, are now also flammable.
Where all this leaves Noam Chomsky's theory I will rely on the inevitable wave of comments from its supporters to flesh out.
But the most important fact is: not for the first time in 2011, the network has defeated the hierarchy.