Flat White

What went wrong with The Economist?

12 January 2017

10:11 AM

12 January 2017

10:11 AM

the-economistI first encountered The Economist magazine as an undergraduate at the London School of Economics in the early 1960s. Richard Lipsey and Lord Robbins recommended it to me. It opened my eyes and I loved it.

It tried to depict the world according to economic principles in a dry scholarly way. Sometimes the ink came off on yer hand. I used it very successfully when I moved to teaching economics at Shooters Hill Grammar School and the class did very well at university entry, then a key test.

I then drifted off to Australia, to the dark side, to political science and then, sigh, Leftism after the impact of the Vietnam War sunk in. The Economist, then a supporter of the war, became a vile enemy, used indeed by supporters of the war for a crib before debates. Of which there were many.

Our alienation remained through my re-alignment to some sort of realism and contributions to The Australian in the 1980s. It was just outside my sphere of interest. I then plunged into politics where only a poseur would be seen reading a serious journal.

The magazine only came back into my life when I moved to New Zealand at century turn. I wrote a column for the NZ Business Review Weekly and found The Economist to be well informed and well focused on and within a country then beset with Tsarina Clarke’s brand of destructive and ruinous leftism.

Returning to Australia I only taught some sort of economics for my last decade of paid work. I used the very good textbooks by then available with great technical support. I read The Economist only occasionally. There is now so much on the web to compete.

In retirement, I did some irregular consulting for firms and one gave me a sub to The Economist, presumably to keep me honest and well informed. So, I became once more a weekly reader after a lapse of almost half a century.

The Economist now arrives every Friday morning on my iPad. I noticed last year that I was actually reading less and less of it. Then I stopped reading it altogether.

Sometime in this process of disengagement, The Economist sent me an opinion poll about itself, which I filled in. It was somewhere around the Brexit/US election period and I was very critical. The Economist campaigned very hard against Brexit and Trump – very hard. And it thought both would be defeated. I was of exactly the opposite view and thought both Brexit and Trump should and would win.

The Economist was started (after The Spectator of course) in 1843 to pursue then emergent liberal principles. It has run through many editors during its existence and its present one is a modern young feminist of what is now seen as being of liberal-Left persuasion, although its change pre-dates her tenure from 2014.

It is owned, and likely controlled, by a complex set up which heavily involves the UK branch of the Rothchild family, (arguably the richest family in the world, ever, one estimate at $350billion total!), gaining income from international high finance. The Agnellis, of Fiat fame, are also in there somewhere.

The magazine’s circulation has grown steadily to what is now about 1.3 million but may be much more with electronic copies. This is thought to be: over half in North America, a fifth in the UK, and the rest split around the world, concentrated in Europe. The readership is high income, high influence and management/professional strata.

In the last year that I could find, it posted a profit of over sixty million pounds. Production is by about seventy journalists, mostly out of London, who do very little actual reporting but seem, rather, to re-write data gathered from other sources. This is then processed into anonymous articles, re-written into a standardised format and viewpoint, presumably by more senior editors. The tone is elevated and sometimes condescending.

The viewpoint of the magazine is openly and quite often stated, and re-stated, to be ‘classical liberalism’. This involves a commitment to free trade and free markets, and to the free flow of goods, capital, ideas and labour between countries. It then adds on other causes, as they occur, or even at random, including global warming/climate change, single sex marriage, (third wave?) feminism, a toleration of all religions (but with a modest distaste for Christianity), anti-statism, multiculturalism and free speech (mostly).

So why have I dropped off this amazingly successful, very influential, and quite profitable production?

The most recent of its frequent statements about its principles appeared at the end of 2016:

For a certain kind of liberal, 2016 stands as a rebuke. If you believe, as The Economist does, in open economies and open societies, where the free exchange of goods, capital, people and ideas is encouraged and where universal freedoms are protected from state abuse by the rule of law, then this has been a year of setbacks. Not just over Brexit and the election of Donald Trump but also … ‘illiberal democracy’. 

This is a decent starting point for entering the ideas world of The Economist. It has misstated the reality and history of the theory of the state. The (nation) state was created to protect the masses against internal and external threat; to create the peace. It was from that origin that, later, came the rule of law, and then again much later the domination of free commerce became possible. All this was enabled by the state, which, far from being the enemy of the rule of law, was and is its sole protector.

In the real world of economic development these states – almost entirely originating in Europe – nurtured cultures of commerce, enterprise, technological innovation driven by profit, tolerant religions, science, and property rights. Without the protection of the state, the market economy could not exist. This is usually stated in the first chapter, or thereabouts, of ECON 101 textbooks of course.

One of the major criticisms of classical liberalism, by both conservative and Leftist critics, has been that it is no more than an idealised and rather unrealistic description of nineteenth-century England. And one expressed through the viewpoint of finance capitalists. Indeed, in Eighteenth Brumaire of Louis Napoleon, his history of the revolutions of 1848 and their dispatch, Karl Marx took exactly that view. An entirely free market without state intervention: the banker’s dream. But who will supply the bayonets?

Globalisation, as it got under way in the post-Cold War world of the 1990s, spurred on by Bill Clinton, was The Economist’s dream. A global market, with minimal state intervention, governed by a class of quite superior managers, educated by The Economist weekly, and committed to its principles of liberalism.

These principles were essentially economic but needed administration by those conversant with them. The Economist quickly took the viewpoint of the global finance houses and the technocrats of the financial institutions that mingled with them: IMF, World Bank, EU, OECD, Wall Street, The City of London, and their derivatives in hedge funds, private equity groups and on to NGOs that shared a commitment to an open global market of people.

The core communities espousing these principles first evolved in London and New York, the major world financial centres of the period of globalisation. The Economist became their weekly journal and The New York Times and London’s Financial Times their daily newspapers.

During the financial crisis of 2008-10, The Economist began promoting the rule of financial technical experts over the ‘mob rule’ of democratic politicians as a solution to the crisis. In Italy and Greece, the first coups by financial experts against democratic politicians occurred in modern Europe.

Thereafter, or may be already, The Economist was taking up other causes often of leftist and political origin that did no harm to international finance, but corresponded more to the emerging moral sentiments of its managers. These included, perhaps oddly, global warming/climate change, single sex marriage, free migration of whoever wanted it, laws against designated forms of  ‘discrimination’, and (mostly) free speech, multi-culturalism and the legalisation of presently illicit drugs.

So why did I drop off this splendid agenda? Let me give you three reasons.

The first and most important was that The Economist does no actual reporting. It re-writes other peoples’ stuff. And, since I’m retired, I’ve read most of it, at least a few days ago, by the time The Economist presents on Friday. This is a bit irritating.

But worse still, it re-writes it into the perspective that whoever decides the line at The Economist approves of. This is as set out above: anti-state, but pro-freedom where they like it, and only there. So, for example, it argues consistently for free migration everywhere (meaning into the EU and USA where actual people want to go) as a fairly harmonious benefit to all, while at the same time reporting a wider world of quite vicious inter-communal violence and conflict.

This model of re-writing was actually, to my best knowledge, pioneered by the Readers Digest that enabled you to read six books a week – without having to do so – by summarising them neatly for you in a form you could hang in the toilet for convenience. The Economist has been described by critics as The Readers Digest of the upper management strata.

Unfortunately it also closely resembles the very influential New Left Review, which, from premises not far away, has been underwriting the academy’s march to the extreme left for the last half a century. The model is simple: get some very clever, well-educated graduates from the top schools, and employ them to find, commission and then re-write to order the reports of other specialist authors. It may be best practice, twenty-first-century style, journal production.

The second reason has been that it took on causes that have little to do with classical liberalism, or indeed liberalism at all, but got added on because of the proclivities of the bright young things, from just a few Oxford colleges, that took over the magazine in the twenty-first century.  As I said, they are an eclectic list and none of them enjoys my pleasure: warmist cultism, same sex marriage, drug legalization, chosen restrictions on free speech, acceptance of hideous cultures and cultural practices, an excessive toleration of Islam, excessive support for Blair, Hillary and the EU, and a sustained critique of Christianity, of which I am not an adherent but whose worthy historical virtues I nonetheless admire.

But my third criticism was the one that produced the separation: The Economist’s complete mis-identification of the modern democratic state. The modern state is not primarily an impediment to the market economy; it is the only means of establishing the legal structure on which it is based. This includes the enforcement of property rights and contractual obligations.

Those powers were generated after the establishment and enforcement of the peace. The mass populations of the developed world expect those more ancient obligations of the state to be honoured, and not over-ridden by the liberal-left philosophies now espoused by the target audience of The Economist.

When these perspectives came into political conflict in 2016, most sharply over Brexit and Trump, but less visibly over Le Pen, the continuing crises in Italy and Greece, and over Merkel’s open door to immigrants, The Economist went with globalisation, and the masses went back to the state – and I went with them.

Bob Catley, who was a professor and federal Labor MP, now sails quite a lot.

Show comments