Let's consider the monumental externalities in journalism and what we might do about them – Please.

Last month I was very happily surprised to actually see a piece in the economics/politics blogosphere/media dealing with the monumental externalities of the media. And it was by academic economists, no less: "Regulating for an independent media: The problems of political and commercial bias", by Matthew Ellman and Fabrizio Germano, in VoxEU.

This is something I've been banging my head against the wall about in the economics/politics blogosphere for over a year, leaving more than a dozen comments, with no traction (until just today!). Before last month's piece (and Mark Thoma today), the only person or site I have ever seen discussing the colossal externalities of the media and what government might do about them is Ezra Klein of the Washington Post. And I've spent almost two years reading or browsing over an hour a day many of the major economics and politics blogs and other online media. This includes reading at least the titles of over 90% of the links in Mark Thoma's outstanding and wide ranging Economist's View blog. But with all of this, the only one I had ever seen discuss this besides myself is Ezra Klein.

I'm not saying there's not someone else out there, but with how monumentally costly these externalities are, with the immense importance of this issue, it should not be so rare that even with the great amount of looking I've done all I've found besides last month's article (and  Mark Thoma today) is Ezra Klein. Ezra's an extremely intelligent and talented blogger, but he's still just one person.

But what about the academic economics literature?

I did an extensive search of JSTOR, a vast and well respected database of academic journal articles and other works. It covers 97 economics journals, including almost all of the top ones. The journals are usually covered over extremely long periods of time. For example, The American Economic Review 1886-2006, Econometrica 1933-2006, The Journal of Political Economy 1892-2003, The Quarterly Journal of Economics 1886-2003, and The Review of Economic Studies 1933-2005.

I searched for the following words in the abstract:

1) Media and Externalit* (The "wildcard" character, *, includes any letters after it in the search, so externalit* will make the search include externality and externalities): 1 found, but it was not the main subject of the paper:

–  "Platform Competition in Two-sided Markets", Jean-Charles Rochet, Jean Tirole, Journal of the European Economic Association, Vol. 1, No. 4 (Jun., 2003), pp. 990-1029

2) Media and Public Good*: 0

4) Journalism and Externalit*: 0

5) Journalism and Public Good*: 0

5) Press and Externalit*: 0

3)  Press and Public Good*: 0

6) News and Externalit*: 0

7) News and Public Good*: 2!

–  "News as a Public Good: Cooperative Ownership, Price Commitments, and the Success of the Associated Press News as a Public Good", Stephen Shmanske, The Business History Review, Vol. 60, No. 1 (Spring, 1986), pp. 55-80

–  "Advertising and Political Bias in the Media: The Market for Criticism of the Market Economy", Daniel Sutter, American Journal of Economics and Sociology, Vol. 61, No. 3 (Jul., 2002), pp. 725-745

So that's it, a grand total of three papers, and none of them were in top 10 economics journals. This isn't a branch of economics, it's a bud, and a bud that's been starved of nutrients and sunlight for a very long time.

Of those three papers, two dealt with the externalities between a media outlet and an advertiser. That means that in the entire vast search of JSTOR, with articles going back to the 1800's, I found just a single article that dealt with the externalities between a media outlet and a reader/viewer/listener.

And I found similar results in a search of the political science and public policy literature.

Doing the above searches for the entire text, and not just the abstract, yields many results, and you can pick through and find some that actually do discuss the externalities of the media, but this is not a subject of much serious research and of detailed remedies studied in depth. Another indication of this is that I have over twenty general macro and micro economics text books, graduate and undergraduate, and not one of them, in over 10,000 pages, says one thing about the externalities in journalism.

So, why are the externalities in journalism almost completely ignored in the economics/politics academic literature and blogosphere/media?

It's certainly not because the impact and importance are small, as I hope to show you in my next post...