SHOULD PRESS BE LIABLE OR NOT?

       Recent years have increased legal accountability of producers and

    advertisers for providing SAFE products and RELIABLE information  to

    customers.  A  government  influences      a  wide  range  of market

    operations from licensing requirements  to  contract  actions.  That

    control announces and enforces determined norms of quality.

       Each of these regulations is  designed  to protect consumers from

    being hurt or CHEATED by defects in the goods and services they buy.

    This  matter,  when  producers  look  to  the law rather than to the

    market to establish and maintain new standards of quality (of  their

    goods),  shows, that modern market has an ability of selfregulation.

    But it also shows another unbelievable feature:  consumers are  both

    incapable  of  rationally  assessing  risks and unaware of their own

    ignorance.

       Companies and corporations all over the world are  systematically

    inclined  to  SHIRK  on quality and that without the threat of legal

    liability may subject their customers or other people to serious  risk

    of harm from their products if it could save money by doing so.

       According to this point of  view,  for  most  goods and services,

    consumers are POWERLESS to get producers to satisfy their demand for

    safe,  high-quality  products!  The  unregulated  market lets unfair

    producers to pass on others the costs of their mistakes.

       Legal liability is ready to correct  these "market  failures"  by

    creating   a  special  mechanism  (feedback),  regulating  relations

    between producers and customers. Unfair producers should be punished

    and their exposure is increasing.

       One market,however, has completely ESCAPED the imposition of legal

    liability.  The market for political information  remains  genuinely

    ee  of  legally  imposed quality obligations.  The electronic mass

    media are subject to more extensive government regulation than  paid

    media,  but  in  their  role  as  suppliers of political information,

    nothing is required  to  meet  any  externally  established  quality

    standards.

       In fact, those, who gather  and  report  the news,  have no legal

    obligations to be competent,  thorough or disinterested.  And those,

    who publish or broadcast it, have no legal obligation to warrant its

    truthfulness,  to   guarantee   its   relevance,   to   assure   its

    completeness.

       The thing is: Should the political information they provide fail,

    for example,  to be truthful,  relevant,  or complete,  the costs of

    this  failure will not be paid by press.  Instead they will be borne

    by the citizens.  Should the information intrude the privacy  of  an

    individual   or   destroy   without  justification  an  individual's

    reputation - again, the cost will not be borne by producer of it.

       This side of "activity" of  producers  of  harmful  or  defective

    information (goods,  services, etc) practically is not acknowledged.

    Producers of most goods and services  are  considered  worlds  APART

    from  the  press in kind,  not just in degree.  Holding producers in

    ordinary markets to ever higher standards of liability  is  seen  as

    PROCOMSUMER.   Proposing  holding  the  press  to  any  standard  of

    liability for political information is seen as  ANTIDEMOCRATIC.  The

    press is constitutionally obligated to check on the government.

       Most of policymakers justify legal liability for harms, caused by

    goods and services and quite limited liability for harms,  caused by

    information. Liability for defective consumer products is PREDICATED

    on a market failure.  As for "unfair" producers,  power of  possible

    profits  PREVENT  consumers  from translating their true preferences

    for  safety  and  quality  into  effective  demand.   So,   customer

    preferences  remain  outside  the safety and quality decision-making

    process of producers.  Today,  it'll be a  new  mechanism  to  force

    producers to follow customers true preferences.

       Lack of liability  for defective or harmful political information

    can be predicated only on a different kind of supposed market failure

     - not a failure of   the market to SUPPLY the LEVEL of safety that

    customers want but its failure to supply  the  amount  of  political

    information that society should have.  Some experts say,  that free

    market has tendency to produce "too  little"  correct  information,

    especially political information.

       The thing is: political information is  a  public good and it has

    many characteristics of a public good. That is a product  that  many

    people  value  and  use  but  only  few will pay for.  Factual(real)

    information cannot easily be restricted to direct  purchasers.  Many

    people  benefit who do not pay for it because the market cannot find

    the way to charge them.  As you  can  see,  providers  of  political

    information  try to get as much profit as possible spreading it,  so

    they HAVE TO supply "too little" info. Otherwise - the market FAILS!

       Here is another reason. Some analysts consider that the market also

    fails because of low demand. Even if suppliers could "earn all their

    money",  they wouldn't provide the socially optimal amount of  info!

    Private  demand  for political info will never be the same as social

    demand. And it will never reflect its full social value.

       If it  were  true,  that  political  information  was   regularly

    underproduced  by  the  market,  there  would  be  cause for serious

    concern that might well justify generous sibsidies - in the form  of

    freedom  from  liability  for the harms they cuase - for information

    providers.  But a proper look at modern market shows that  producers

    of political information  have  developed a wide range of strategies

    for increasing the benefits of their efforts  to  solve  the  public

    good problem.

       The most  obvious  example  of  a  spontaneously generated market

    solution to the public good problem  is  ADVERTISING.  By  providing

    revenue  in  proportion  to  the  relative size of the audience (for

    radio  &  TV)  or  the  readership  (for  magazines  &  newspapers),

    advertisers play a SIGNIFICANT role in the internalizing process. In

    effect,  the sale of advertising at a price that varies according to

    the   number   of   recipients   permits  information  producers  to

    appropriate the benefits of providing a  product  that  many  people

    value  but few would pay for directly.  Advertising has an effect of

    transforming information from a public into a private good. It makes

    possible for information providers to make profits by satisfying the

    tastes of large audiences for whose desire  to  consume  information

    they are unable to charge directly.

       Thus, customer of goods or services and citizen of any country -

    are in the same conditions. Like customers - citizens may have (and

    they have)  different  preferences  for political information,  but

    citizens do not value  information  about  politics only because it

    contributes to their ability to vote intelligently and customers do.

    Like customers - citizens'  tastes  differ  in  many ways and  that

    generate wide  variations  in  the  intensity  of  their demand for

    political information.

       Since it does not appear to be true, that  political  information

    market  is  blocked  by  an  ongoing  problem  of  undersupply,  the

    conventional justification for granting the press broad freedom from

    legal liability for the harms it causes must give away!  It does not

    necessarily mean that the economic case for legal sanctions has been

    made.  Although  it  seems the market could be relied upon to supply

    "enough" information.  So that subsidies in the form  of  protection

    from  legal  liability  are not needed.  Personal responsibility and

    legal accountability would be 100%  if the information market  could

    internalize to producers not only the benefits but also the costs of

    their activities & failures.  As for victims,  they'll get one  more

    chance  to avoid the harms happened from the production of defective

    information.

       Legal accountability for harm is  desirable  in  a  market   that

    systematically  fails  to  punish  "unfair"  producers for defective

    products. This kind of failure occurs in two quite different cases:

    1) The first occasion has to do with the market's responsiveness  to

       the  demands of consumers.  The failure occurs when customers are

       unable to detect defects before purchase or to protect themselves

       by  taking appropriate precautions after purchase,  when they are

       unable to translate their willingness  to  pay  for  nondefective

       products  into  a  demand  that  some  producers will satisfy and

       profit from. It also occurs when suppliers are unable to gain any

       competitive  ad-  vantage  either  by  exposing  defects in their

       rivals' products or by touting the relative merits of their own.

    2) The second kind of market failure is an inability to  internalize

       harm  to bystanders - third parties who have no dealings with the

       producers but who just happen to be in the  wrong  place  at  the

       wrong time when a product malfunctions.  Even when these kinds of

       failures occur,  legal accountability is problematic  if  it  in

       turn  entails  inevitable  error  in  application or requires the

       taking  of  such  costly  precautions  that  they  cover  up  all

       benefits.

       Conceiving of quality as  a  function  of accuracy, relevance and

    comple- teness,  consumers of political information  are  not  in  a

    strong  position  when  it comes to detecting quality defects in the

    political information they receive.  Revelance may  well  be  within

    their ken,  but since they are quite unable to verify for themselves

    either the accuracy or the completeness of any particular account of

    political events.  In addition,  since political information usually

    comes bundled  with  other  entertainment  and  news  features  that

    sustain  their  loyality to particular suppliers,  consumers are not

    inclined  to  punish  information  producers  by   avoiding   future

    patronage even when they commit an occasional gross error.

       Nevertheless, competition  among journalists  and  publishers  of

    political information tends to create  an  environment  that  is  in

    general  more  conductive  to  accuracy than to lies or half-truths.

    Journalistic careers can be made by  exposing  others'  errors,  and

    they  can  be  ruined  when  a journalist is revealed to be careless

    about truth.  These realities create incentives for journalists  not

    to make mistakes.

       Moreover, the investment that mainstream publishers and broadcas-

    ters make in their reputations for thoroughness and accuracy attests

    to the  market's perceived ability to detect and reward suppliers of

    consistently high- quality information.  Information suppliers  that

    cater  to  more  specialized  tastes play a significant role.  These

    alternative ways of getting info are often probe apparent  realities

    more  deeply,  interprete  events  with  greater  sophistication and

    analyse data more thoroughly than the mainstream media are  inclined

    to do.

       In doing so, of course,  their principal motivation is to satisfy

    their own customers.  But while pursuing this goal,  they  constrain

    (even  if  they  do not completely eliminate) the mainstream media's

    ability to portray falsehood as truth or  to  OMIT  key  facts  from

    otherwise apparently compelete pictures.

       The array  of  incentives  with  respect  to at least the general

    quality of political information,  with which the  market  confronts

    information  providers  creates  systematic  tendencies  for them to

    provide political info that is accurate and complete.  Or perhaps it

    would  be slightly more precise to say that the market unfortunately

    does not appear systematically to reward producers of  falsehood  or

    half-truth information yet,  according to their activities.  So that

    consumers of political information don't  need  the  club  of  legal

    liability  to  force  information  providers  to  provide  them with

    quality information.

       The analysts ought not to be read as an asserting that the reason

    the  market for political information works well is that it provides

    just the right kind and quality of information  to  each  individual

    citizen  and  that each individual citizen has identical preferences

    for info about government.  Indeed,  the premise of this argument is

    that  the  market  works because citizens (or customers) do not have

    identical preferences and producers exploit  that  fact  by  finding

    ways  to  cater  to and profit from the varying demands of a diverse

    citizenry.   An   implicit   assumption   provides   the   normative

    underpinnings for the analysis.  Obviously, the full implications of

    this assumption cannot be worked out here.

       The claim  that  the  market  in  general  "works"  shouldn't  be

    understood as a claim that the information it generates is uniformly

    edifying and never distorted. As you know many information producers

    pander  to the public's appetite for scandal and still others see to

    it.  These facts do not  warrant  the  conclusion  that  the  market

    doesn't work.

       More significantly,  it  seems  inconceivable  that any system of

    government regulation - including  a  system  in  which  information

    producers  are  liable  for  "defective" information - could in fact

    systematically  generate  a  flow  of  political  information   that

    consistently  provided  more  citizens with the quality and quantity

    that met their own needs as they themselves defined  than  does  the

    competition in the marketplace of ideas that we presently enjoy.

       This analysis  suggests  that  the  workings of the market create

    situation in which consumers of political information  do  not  need

    the  threat  of  producer  liability  to  guarantee  that  they  are

    systematically getting a TRUSTWORTHY product.

       But consumers are not the only  potential  victims  of  defective

    information and market incentives are not always adequate to protect

    NONCONSUMER victims from the harm of defective information. Innocent

    bystanders,  such  as pedestrians hit by defective motorcycles,  are

    sometimes hurt by products over whose producers they have no control

    either as consumers or competitors. Persons, who find themselves the

    unwitting subjects of defective information,  stand in an  analogous

    position.

       For example,   a   story  about  sexual  assault  might  be  very

    interesting for public and might serve well the public  interest  in

    being  informed about the police efforts or criminal justice system.

    But the victim's name is  NOT  NECESSARY  to  its  purpose  and  its

    publication both invades her privacy and broke her safety.  In cases

    like this, it's not so easy to have confidence in market incentives.

    The  harm  from  the  defect  is  highly  concentrated on the single

    defamed or exposed individual.

       Now, it's time to ask the major question:  Should  the  press  be

    permitted  to  externalize particularized harms?  Why should not the

    press,  like other business entities,  be liable when defects in its

    products  cause  particularized harm to individual third parties who

    have few means of self-protection at their disposal?

       According to the Constitution,  defamed public officials or  rape

    victims  should  have  access  to  massmedia  for  rebuttal.  As for

    everyday practice,  the press is not always eager to give  space  to

    claims  that it has erred.  There are two objections,  why the press

    shouldn't be responsible for the harm of such  kind:  accountability

    to  a  more  demanding legal standard would compromise its financial

    viability and undermine its independence.

       These objections are too  SELF-SERVING  to  be  taken  completely

    seriously:  The  financial  viability argument is no more persuasive

    when the product of the press harms innocent third parties  than  it

    is   when   other   manufacturers'   malfunctioning   products  harm

    bystanders.  As  press  doesn't   underproduce   information,   thus

    "freedom" from liability can't be defended as necessary subsidy. The

    "financial viability" objection  points  toward  the  imposition  of

    liability for harm.

       The need  to  maintain  the  press's independence from government

    does provide  support  for  the  press's  objection  that  liability

    threatens  them  unduly.  But  it's  hard  to sustain the claim that

    government's censorious hand would lurk behind a rule that  required

    the  press  to  compensete  individuals.  It  is  not  obvious  that

    enforcing a rule that simply prohibited publishing the names of rape

    victims would signal the beginning of the end of our cherished press

    freedom.

       Asking whether the press should be more legally accountable  than

    it  is now for publishing defamatory falsehoods about individuals or

    revealing rape victims' names touches a number of difficult,  highly

    discussed questions. In spite of the fact, by recasting a portion of

    the debate over legal accountability and by  focusing  attention  on

    the   disparity   of   legal  treatment  between  producers  in  the

    information  market  and  those  in  other  markets  for  goods  and

    services,  it  does  seem  possible  to gain some fresh and possibly

    useful insight.

       The reality seems to be that,  with respect to  the  quality  and

    quantity   of   political   information,  free  competition  in  the

    marketplace of ideas performs  admirably,  with  inventive  ways  of

    overcoming  market  failure  and  with  flexibility in adapting to a

    countless consumers preferences.

       In light of this reality it ought not to be amiss to suggest that

    when neither the threat of increasing a supposed undersupply nor the

    looming shadow of government censorship is implicated, the massmedia

    should be liable for egregious errors.