Mainstream Media vs. Upstream Media

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Recently,
I was flipping through the local TV channels. I get four stations
clearly, but none is worth watching more than once a week. I stopped
briefly at an interview. Talking head #1 was a nationally known
TV news teleprompter reader, also known as an anchorman. The other
one was unfamiliar to me. He was a print media journalist — a reporter.
The anchorman began his questioning of the journalist with this
observation. "We’re both representatives of the MSM: mainstream
media."

It
hit me. The MSM is at long last visibly on the defensive. The moment
you acknowledge that you are part of the mainstream media, you are
necessarily also acknowledging the existence of another media, which
I like to call the Upstream Media. It swims against the mainstream,
which is flowing downstream. It’s easy to flow downstream. You just
let nature take its course.

The
trouble with downstream rafting is that eventually you either hit
the rapids or go over the falls. In any movie about going over the
falls, someone in the raft asks:

"What’s
that noise?"

The
optimists say that the river will carry them to the ocean. Fine.
But if you don’t climb off the raft, you will drift out to sea and
disappear. The point is, at some point you had better get off the
raft. The mainstream will eventually kill you.

Today,
because of the Internet, hundreds of millions of people are getting
off the raft, all over the world. They grab a motorboat and head
back upstream.

There
are lots of tributaries heading back upstream. No single tributary
that is feeding into the river is getting all of the traffic. But
hundreds of millions of people are now headed in the opposite direction,
at least with respect to some important issues. Other issues will
follow. Issue by issue, readers are concluding, "We’ve been
lied to." They are correct.

The
Establishment at some point will face the implications of widespread
disbelief in everything it says. At some point, people will not
voluntarily do what they are told when they perceive their leaders
as liars. When that day comes, political consensus will disintegrate.
So will the mainstream Establishment’s control systems.

Upstream
media were not readily accessible to most people as recently as
a decade ago. The cost of locating alternative news sources was
too high. The economists’ rule held firm: "When price rises,
less of the item is demanded." Now the same rule is being applied
against the mainstream: "When price falls, more of the item
will be demanded." The Internet has changed the relative pricing
of media. This is a revolutionary turn of events.

The
price of obtaining alternative views is falling fast. In fact, the
main expense today is the value of our time. We have less and less
time for the boring, superficial, and lying mainstream media. They
know it. There is nothing they can do about it.

The
monopoly that they have enjoyed for about 5,000 years is coming
to an end. So is the free ride of political parties that rely on
the mainstream media to keep the masses in line.

NEWSPAPERS
ARE DYING

How
much time do you spend each day reading newspapers? An hour? Probably
not.

How
much time do you read on-line? More than you spend with a newspaper.

Day
by day, there are more people just like you.

A
decade ago, I subscribed to three daily newspapers and about two
dozen magazines. I also subscribed to a dozen investment newsletters.
Since 2000, I have subscribed only to half a dozen paper-based newsletters.
More and more newsletters are digital.

Instead
of reading newspapers, I visit Websites. We all do. We are in news-overload
mode. This is getting worse. Even with Google and similar search
tools, we have too much on our plates. The allocation of our reading
time has replaced the allocation of our subscription money as our
most pressing reading problem.

Year
after year, the network news departments of the three main TV networks
are watching the Nielsen numbers fall. The same thing is happening
to newspapers. They are declining in circulation. This is especially
true of local newspapers. Readers are interested in national news,
and they go to the Web for it.

This
is creating a major problem for certain retail industries, most
notably automobiles and furniture. Newspapers rely heavily on pages
of full-page ads for local cars and furniture. As newspaper readers
switch to on-line versions of local newspapers, as they are doing
by the millions, the full-page ad’s pull per dollar is fading. There
are little ads on-screen, which we have learned to ignore. There
are even PRINT THIS buttons that strip out most of the ads. When
I post a link to an article, I always link to the print-screen version.

Local
car companies and furniture stores ought to have on-line sites that
are kept up to date hourly. A car is sold. Its photo should immediately
be taken off the Website. But retailers in these industries have
not yet made the transition to the Web. They do not understand it.
Web marketing is still in its shake-out period. Yet the Web is replacing
newspapers today. The Web shake-out will not be over before hundreds
of paper-based newspapers die. Subscriptions
since 1990 have been steadily falling at 1% per year
. This has
now risen to over
5% in some cases
.

Beginning
in the late nineteenth century, large-circulation urban newspapers
shaped local public opinion in America. There were many papers,
morning and evening, and each one represented one of the two major
political parties. Then came radio and television, both regulated
by the Federal Communications Commission, which controlled frequencies
and station broadcasting power. Now the Web and for-pay satellite
TV and radio have unplugged power from the FCC. The FCC legally
regulates the content of only the no-pay airwaves. It does not regulate
the Web at all.

Politicians
in the two parties have built their power base on the basis of controlling
local media. Today, local media are dying: newspapers and local
TV stations. Broadcasting is dying; narrowcasting is replacing it.
This will force a re-structuring of American politics.

LOCALISM
IS DYING

Two
competing social forces are now moving in opposite directions. Retail
outlets along the main drag in every city are going national: Wal-Mart,
Home Depot, Office Depot, etc. Locally owned retailers of physical
stuff are disappearing. Price competition is killing them.

At
the same time, information is decentralizing. Choices are decentralizing.
These are aspects of the same trend: anti-localism. The decentralization
of information is virtual, not geographical. It is the radical decentralization
of the Drudge Report: straight into a guy’s apartment in Hollywood.
It bypasses regions, states, and townships. His apartment could
be located anywhere. When information can come from anywhere and
be delivered to anywhere at the same monetary price — zero — geography
ceases to matter. We live in an information-centered age. So, we
no longer live in a geography-centered age. This has never happened
before. We are entering uncharted social waters.

"What’s
that noise?"

Localism
is fading: local loyalties, local politics, local schools. Higher
levels of government absorb our tax money. Textbooks are produced
nationally. Local school boards are impotent. Local politics gets
the leftovers.

When
I want to buy a new product, I go onto the Web and read reviews.
Then I use the Web to find the cheapest seller. For electronics,
the seller is usually located in the northeast, probably in New
York City, and is not open on Saturdays. (The seller is not a Seventh-Day
Adventist.) What do I care? To save 20%, I’ll buy on Thursday. Besides,
I can order on-line 24×7. The phrase "24×7" is a sign
of the times. Locally owned stores are not open 24×7. Web-based
digital shopping carts are.

Regionalism
is also fading. People are mobile. They move every five years. They
do not establish local loyalties, which are costly to break. The
ties that bind no longer bind very efficiently — in housing, occupations,
regions, or marriage.

Regional
mobility has been going on in the United States ever since the earliest
days. Free land meant the move west. The kids got in a wagon and
moved away . . . forever. Opportunity in America has always trumped
regional loyalty in the long run. Regional loyalties have faded
with every reduction in transportation costs. U-Haul and Ryder have
done their work well.

The
South will not rise again. Similarly, the yankees of New England
have not visibly run the country since Jack Kennedy died. They do
it indirectly. After Lyndon Johnson, the Texas presidents have been
ersatz: both Bushes are of Connecticut stock, by way of Yale University
and Brown Brothers, Harriman, the investment banking firm. George
W. Bush bought his Crawford, Texas ranch in 1999 in preparation
for the 2000 Presidential campaign. I call it "Potemkin Ranch."
Here is a man who could afford to buy 2.5 square miles of land 25
miles from Waco — not exactly prairie dog country. The mainstream
media never bothered to point out these incongruities. That is why
they are mainstream.

When
I say that the South will not rise again, I don’t mean the old commitment
of the South: resistance to centralized government. That idea is
spreading as never before by means of the Web. It just isn’t associated
with a region any longer.

This
is not just an American phenomenon. It is becoming universal. The
gatekeepers of every national government are on the defensive. The
gates cannot easily keep out electronic digits. The gatekeepers
have lost power ever since the invention of the printing press.
They could exercise some control over printing presses, ink, and
paper. They cannot control electronic digits.

Our
political world will change, even as our retailing world has changed.
When it becomes obvious to voters that Washington, without robbing
us blind, can no longer supply the stolen money with which it has
bribed us for 90 years, mainstream politics will suffer a blow comparable
to what the mainstream media are suffering.

NEWSLETTERS
ARE MORPHING INTO WEBSITES

I
mentioned that by 2000, I had cancelled all paper-based communications
except for newsletters. They, too, are changing. They are dying
off along with their editors.

My
favorite newsletter, Otto Scott’s Compass, ceased publication
in January, 2005. Mr. Scott, now in his mid-eighties, could no longer
write it. His daughters placed him in a rest home. My second favorite
newsletter, Hilaire du Barrier’s report on European affairs, ceased
publication a year ago when the editor, age 94, died. Neither man
was famous. Both were lifelong journalists. Hilaire du Barrier was
not a well-known journalist. Yet I honestly believe that any historian
who tries to write about European affairs, 1945 to 2004, who does
not have a set of Hilaire’s newsletters will not get the story right.

Hilaire
was an upstream media man. He had been captured by the Japanese
in 1941 in French Indo-China. He had been tortured for two weeks.
He did not reveal anything about the network of French spies he
knew about. After the war, they reciprocated. He had a network of
informants like no other journalist I ever met. Yet he was always
in the upstream. Almost no one knew about him.

A
couple of years before he died, I persuaded a friend of his to put
all of his reports on a CD-ROM. At some point, this CD-ROM will
go on-line. Of this, I am sure. Then his life’s work will get the
readers it always deserved. The story of the insider’s creation
of the New Europe will then get the distribution it deserves.

The
gatekeepers have a problem. The insiders have a problem. The story
is getting out. As it gets out, political loyalties fade. The European
Union was sold to the voters by Jean Monnet and his successors on
the basis of greater economic opportunity, not the benefits of a
new political loyalty. There is still little political grass-roots
loyalty to the European Union. France will probably vote against
the new 230-page EU constitution. Anyway, I hope so.

Websites
are replacing paper-based newsletters. The flow of non-approved
information is becoming a torrent. This undermines consensus. This
process includes political consensus.

Think
of what home schooling means for the intellectual consensus. Think
of the threat to the Powers That Be. The cost of textbook production
has kept upstream interpretations away from most students. But now
home school curriculum developers can get new views to millions
of students by way of CD-ROM and the Internet. Parents who are sufficiently
upstream to have pulled their children out of America’s only established
church — the public school system — are ready to consider new interpretations.
This is driving the academic gatekeepers crazy. Their monopoly over
the media is fading. Now their near-monopoly over tax-funded education
is slipping.

CAMPUS
FOLLIES

Today,
American higher education absorbs something in the range of a third
of a trillion dollars a year, and this is rising by about 7% a year — the
sign of government-enforced monopoly. The government-supervised
college accrediting system keeps out price competition. It also
keeps upstream opinions out of most colleges. But this monopoly
is producing the familiar result: falling standards and falling
output.

The
young wife of a college professor (engineering) I know told me that
at the college, where she is finishing her bachelor’s degree in
June, several of her professors in the social sciences will not
accept as valid any citation from a Web site that does not end in
.gov. These people are crazy leftists. I mean really crazy — over
the top Democrats and statists who honestly believe that their students
are being corrupted by non-.gov political Websites. They are trying
to keep students away from non-government-approved digits. They
really are crazy. They have lost touch with reality. They are tax-subsidized
nut cases.

In
January, I visited an old friend who teaches history at an obscure
state university. He and I were teaching assistants in the Western
civilization program at the University of California, Riverside,
in the late 1960s. That was back when all college grads had to take
a class in Western civilization: dreary, long-dead days indeed.

For
35 years, I have recalled that when he could not decide what grade
to give a student exam, he would have me read it. This was always
an A/B decision. Invariably, I could not help him. I always graded
it the same way: right on the dividing line. Yet he was a New Deal
Democrat, and I thought Reagan was a sell-out. (I voted for William
Penn Patrick in the 1966 Republican gubernatorial primary.) We had
the same sense of what constituted student competence. That world
of semi-objective standards is gone — buried in waves of political
correctness.

He
told me that his students today are extremely well-versed in digital
research. They have grown up with the Internet. But, he said, there
are two major problems: (1) they cannot evaluate the truth of what
they read; (2) they are prone to submitting term papers that they
have bought on-line.

So,
we are seeing the result the triumph of official relativism in academia:
"There is no objective truth." The students have bought
the academic party line. They respond accordingly: (1) "One
opinion is as good as another." (2) "A purchased term
paper may be worth the money and risk." The Web is filled with
conflicting opinions and cheap term papers.

Problem:
in engineering and architecture, this outlook can lead to collapsing
structures.

THE
POOL OF TALENT

Year
by year, a third of the labor pool emerges with a college degree.
Most of these degrees are in the humanities and social sciences.

Meanwhile,
China produces over 450,000
college graduates a year in science and engineering
— as
many scientists and engineers as the United States has, total. Then,
next year, China will do it again.

There
are teamwork issues here. There are also cultural mindsets. If I
were an American manufacturer, I would rather employ a team of scientists
and engineers that individually graduated from American colleges
and whose members are entrepreneurial. Progress in commercial product
development is not just a matter of individual competence in surviving
formal education, based mainly on skill in mathematics. But as the
comparative supply of such graduates shrinks in the United States,
and as the American tradition of entrepreneurship invades Asia — as
it is invading — there will come a time when wage competition from
Asia will undermine the competitive advantage enjoyed today by teams
of scientists in the United States. Even if companies develop products
here, they will have them produced off shore. Only the most creative
science grads will be amply rewarded here for product development.
Civil engineers — road-builders — will have an advantage based on geography.
Electrical engineers won’t.

Until
the year 2001, Asia sent its best graduate students to study in
the United States. The post 9/11 tightening of immigration standards
(not on the border with Mexico, of course), coupled with the new
prestige of Asian technical training, has
reduced the percentage of foreign graduate students in American
universities
. This has never happened before in the post World
War II era.

CONCLUSION

Mainstream
media are losing to upstream media. This is eroding consensus among
readers and TV viewers. Cable and satellite TV are undermining the
networks. The Web is undermining the newspapers. Narrowcasting is
undermining broadcasting. Home schools are undermining the tax-funded
schools, though only at the fringes. Only the colleges seem immune,
where government control is greatest. But they are becoming a laughingstock,
even though parents still shell out far more than they need to (at
least three times more) by sending their children off to college.
Parents who know the system can get their kids through school for
under $15,000 — maybe as little as $10,000 — which means
that the kids can pay for their college educations by working part-time.
The Establishment is on the defensive even in the halls of ivy.

This
is becoming clear: price competition is now unstoppable. If you
are not in a position to sell something cheaper, you are in big
trouble. This fact is killing the mainstream media, which lost its
ability to compete after 80 years of government regulation and protection.
It is going to kill every other cozy little arrangement with the
state.

Sell
services, not stuff. Sell services locally, where Chinese college
graduates cannot compete. Sell information, where Chinese college
graduates cannot compete . . . and not many American college graduates
can, either.

This
is the era in which everything mainstream is hitting the rapids.
The mainstreamers thought they were cruising up a lazy river. They
weren’t.

"What’s
that noise?"

May
25, 2005

Gary
North [send him mail] is the
author of Mises
on Money
. Visit http://www.freebooks.com.
He is also the author of a free multi-volume series, An
Economic Commentary on the Bible
.

Gary
North Archives

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