Not enough people watch Game of Thrones
That might just sound like the subjective ramblings of someone who's into blood, guts, quality drama and gratuitous nudity. But economic theory suggests that an inefficiently low number of people are enjoying George R.R. Martin's fantasy epic, along with other cultural gems such as Wolf Hall, Mad Men, and Keeping Up With The Kardashians. The BBC's current system turns its rights over to private distributors who profit from the sole right to sell it on. Instead the Corporation could act as a 'national netflix,' negotiating purchase of the UK distribution rights to content, and making it available to the public for free.
Such a radical proposal makes sense because of the strange economics of the digital age. The cost of producing an episode of Game of Thrones is high – the first season alone set HBO back $50 million. But the cost of producing an extra copy of that episode is almost nothing. There are lots of people out there to whom the episode is worth only 50p, whereas it costs $4 on iTunes.
This argument applies to a lot of digital media – to e-books, to search engines, and to blogs. Google have found a way around it by monopolising the market and raising revenue from the vapour rising off viewers' eyeballs. (Advertising). The Adam Smith Institute raises funding from wealthy, libertarian-minded donors. So far the best that TV has to offer is streaming services like iPlayer and Netflix, and the option of online piracy.
It would be anathema to suggest the government getting involved in the business of search engines. Producing the kind of unique institutional culture that Google has is very difficult for a private company to do, and almost impossible for the government. But a quality institution – the BBC – already exists. It already provides online media to millions for free, and iPlayer is an immensely successful streaming platform.
One concern might be the weakening of incentives to produce great shows. But in an age of piracy, producers are already finding innovative ways to finance projects that don't require shutting out potential viewers.
Nationalising content rights might not seem very pro-freedom. But the current copyright laws provide content producers with a monopoly, preventing people from enjoying content that costs nothing to produce. In this case, government intervention can promote freedom.
Theo Clifford is winner of the 18-21 category of the ASI's 'Young Writer on Liberty' competition. You can follow him on @Theo_Clifford, and read his blog at economicsondemand.com.
Non-payment of BBC licence fee accounts for 10% of prosecutions
The BBC is responsible for more than one in 10 criminal prosecutions. Culture Secretary Sajid Javid reports that 10% of magistrate court cases are for non-payment of the BBC licence fee. Non-payment is a criminal offence, punishable by a fine of up to £1,000. Every week about 3,000 people are fined for non-payment, and about one person a week is jailed for non-payment of the fine. Women make up about 70% of those prosecuted and convicted, and half of those jailed for not paying the fine. When people fail to pay other utilities, such as energy companies, they are guilty of a civil offence, not a criminal one, and they cannot be prosecuted and fined for falling behind with their payments. Civil action can be taken for recovery, but without fines and jail terms.
Several newspapers have had reporters visit magistrate's court to describe what goes on. They all tell harrowing stories of frightened, distressed people, mostly women, facing fines they cannot pay under threat of imprisonment if they do not. Many are single mothers, many on benefits. They have not paid the licence fee because they cannot afford to. The sum of £145.50 per year is huge for a young mother struggling to feed and clothe children. Many weep in court, unable to pay the fine for the same reason they couldn't afford the licence fee; they don't have the money.
Everyone with a TV, except the over 75s, has to pay, whether or not they watch BBC programmes. If people fail to pay for other services, such as a Sky subscription, for example, the service is withdrawn without them being taken to court and fined.
In 21st century Britain we should not be dragging helpless women through courts and fining them, or making their lives more wretched than they already are by putting them in jail for non-payment of those fines. It should be a civil, not a criminal offence, and should be dealt with by withdrawal of the service rather than by prosecution. The technology to do this is relatively simple.
The development of tiny transistor radios killed the radio licence in 1971. Now laptops, tablets and smartphones make the BBC licence fee increasingly difficult to sustain. Many watch TV on portable devices instead of TV sets. They watch programmes on Catch Up and iPlayer. Many do not watch BBC programmes at all. Clearly an alternative way of financing the BBC has to be found. That will take time, but before then non-payment of its licence should be a civil, not a criminal action, and we should stop letting the BBC hound helpless people through the courts.
President Cameron and the TV debates
David Cameron's decision on the TV debates was one of the worst of his life. No, not yesterday's 'final offer' to the broadcasters of only one 90-minute debate with seven (or eight) parties represented, and held well before the start of the 'short campaign' prior to the General Election of 7 May. Rather, it was his decision to push for TV debates five years ago, when he was Leader of the Opposition, that caused the damage. In purely 'political' terms, that decision quickly back to bite him. It gave an opportunity to the Liberal Democrat leader, Nick Clegg, to come forward as the 'Anti-Westminster' candidate, boosting that party's standing and forcing the Conservatives into coalition.
TV debates of course always help the underdog and damage the government. So now that Cameron is Prime Minister, he is facing the same calls for debates from Labour and the smaller parties, and is having to take the same criticism he launched at PM Gordon Brown last time, that he is 'frit' of defending his record.
But there are two, more fundamental problems. The first is that there is no logical way to decide which parties should be represented in TV debates. The debates are, after all, seen as a 'national event', rather than some throw-away entertainment, so it is important that they should be fairly structured. But it is impossible to include all of the dozens of parties, including pop-up parties, who contest seats in the General Election. So where does one draw the line? The Liberal Democrats may be sharing power, but they are polling little better than the Greens. UKIP has come from almost nowhere, but now out-poll the Liberal Democrats, so should they be included at the expense of the LibDems? And the Democratic Unionist Party (and Sinn Fein for that matter) may well stand only in Northern Ireland, but they are key forces there, so should they be on the platform too?
There simply is no objective way to decide. And no answer is going to suit every party. (And it is for this same reason that taxpayer funding of political parties can never work either – unless the two biggest parties simply divide the funding up between them and resist any claims from 'upstarts').
The most serious problem, though, is a constitutional issue. Britain's governmental system is not supposed to be a Presidential one. True, the Prime Minister has many of the powers that a US President has, powers that once belonged to the monarch (like initiating wars and signing treaties, without troubling Parliament overmuch). But the Prime Minister is not just an executive, but still a member of the legislature - a Member of Parliament. When British voters go to the polls, they are supposed to be electing their local MP - someone who will actually hold the government to account. They might take into account what that might mean in terms of who moves in to 10 Downing Street, but in all but one constituency, that is not who they are electing.
There is an argument that the executive in Britain has too much power, precisely because it also controls the legislature. Of 650 MPs, a hundred are on the payroll, a hundred would like to be, and two hundred on the other side are lining themselves up with the same in mind. So party leaders and offers have enormous power, and Parliament has very little restraint on them. Maybe we should be separating the executive and legislative branches. Certainly, the last thing we should be doing is deepening the power of the executive further. But this is precisely the effect of TV debates. They focus attention on just one person, boosting centralism and central power. That is not healthy for any nation. Frankly, there should be no TV debates at all.
Ending the BBC licence fee
Why should households pay a levy to support broadcasters, even if they have no television? Or even if they have a television but rarely use it? It's a broadcasting poll tax, which will impose the biggest burden on the poorest households, like the one-parent families who, already, account for the bulk of the prosecutions for non-payment.
And what's the logic of it anyway? That we need broadcasters, and the licence fee is no longer a realistic way to pay for them? Firstly, you can question the extent to which we need broadcasters. Many of us live quite happily without needing daily doses of Call the Midwife, Death in Paradise, Casualty or for that matter Premier League football: why should we subsidise those who can't? Politicians might reckon that Question Time and Newsnight are essential 'public service broadcasting', but precious few of the rest of us would mourn their passing.
Broadcasters are by no means the only people to argue that they are producing a product essential to our lives or culture, but for which it is hard to get people to pay. Newspapers are saying exactly the same: they feed us news, analysis and opinion, but we are buying fewer and fewer of their dead-tree products, picking it all up free online instead. Should we have a levy on households so that Rupert Murdoch can continue to serve us up his vital product? No, definitely not. It is up to those industries to find market ways to charge for what they produce – through advertising, for example, or through subscription mechanisms.
The BBC should do the same. Technology is pretty nifty these days, in ways it wasn't when the BBC was created in the 1930s. For folk who pride themselves on their creativity, developing a subscription service, from which non-payers can be excluded, should not be too far beyond their wit. Or even using advertising and sponsorship, as so many other perfectly reputable broadcasters do.
If the BBC did not exist, we certainly would not invent it. Today it looks rather like a bloated fixed-line network monopoly in an age of mobile phones. A lumbering dinosaur in an age of fleet-footed niche producers. So why force households to keep subsidising this sad throwback?
The BBC and the Election
It will be interesting to see how the Conservatives bear up under the relentlessly hostile BBC campaign coverage. It is not that the BBC openly praises Labour and its policies. What the BBC does do is to follow the Labour agenda of the stories they wish to focus upon. One week it is continuous coverage for several days of alleged failings and deficiencies in the NHS, perceived as a Labour issue. The next it highlights for several days allegations of "tax dodging" – a phrase they use to conceal the distinction between paying tax in accordance with the law, and criminal dishonesty in concealing earnings. Tax avoidance means organizing your affairs to lower your tax exposure in ways that the law allows and sometimes encourages. Tax evasion means not paying the tax you are required by law to pay. The words "tax dodging" and "tax dodgers" are used to conceal that distinction. Multi-millionaire Margaret Hodge wants people to pay what she thinks they ought to pay, rather than what the law requires them to pay. The BBC has given massive coverage to another area seen as a Labour issue.
The BBC also pursues a relentless anti-business campaign, highlighting what it sees as abuses by businesses, even where these, too, are within the law. Energy companies are castigated for not passing on falling wholesale prices, with never a mention of the time lag between energy companies buying wholesale and the delivery of that energy to customers. Stories focus not on the role of companies in creating jobs and wealth, but on their alleged abuse of their market position. Again, since the Conservatives are perceived to be more pro-business than Labour, the BBC is following the Labour agenda.
It is unlikely that the BBC is taking orders to highlight Labour issues every day, and much more likely that the BBC programme planners and presenters think like Labour does, and regard these issues as the important ones. There could just be some self-interest, too, with BBC planners thinking that a Labour government would probably give the BBC a more advantageous licence fee renewal deal than would a Conservative one. It will be interesting to see how effective their campaign is.
No, Britain isn't a developing country
Britain is a developing country, says Aditya Chakrabortty. He bases this largely on the fact that it is below some poor countries on a number of international rankings. (Never has an article owed so much to Wikipedia’s “List of countries by” pages.) Some of the rankings seem obscure: is Barbados's superior ‘ground transport’ system worth caring about? Does Mali beating the UK in terms of business investment tell us anything? Others rely on the reader not knowing much about the country Britain does worse than: the UK may have a worse road network than Chile, but Chile's Public-Private Partnership roads have made it a regional leader in infrastructure.
One thing that Chakrabortty is particularly concerned about is graphene, a super-strong substance first isolated in 2004 and pioneered by scientists at the University of Manchester. What worries Chakrabortty is that South Korean firms are bringing graphene to market much more quickly than British firms. This, he says, is emblematic of “a familiar pattern of generating innovations for the rest of the world to capitalise on”.
I guess that’s supposed to be a bad thing, but it doesn’t sound like it to me. It’s good when inventions spread beyond their birthplace: to use Matt Ridley’s metaphor, the ideas ‘have sex’ and mutate more quickly. Overall, the world – and Britain, if for some reason that’s all you care about – has done well from Tim Berners-Lee’s world wide web being capitalised on by non-Britons in Silicon Valley. Germans are better off that Japanese firms make cars as well as Volkswagen, and Finns are better off that Californians tried to make mobile phones better too.
Chakrabortty might object that he doesn't mind South Koreans doing well with graphene, he just wishes Britons were too. But why graphene in particular? Chakrabortty’s counterpart in Seoul could write an identical piece worrying about South Korea’s relative weakness in finance, tourism, the cultural arts, or telecommunications. When firms in different countries specialise in different areas it is pointless to look at any single product or sector to judge which country is healthy.
There’s not much point in comparing the growth of rich and poor countries – poor countries are playing ‘catch up’ and can grow quickly by applying innovations already developed elsewhere. But if Britons should be worried about something, it’s the UK’s centralised public sector, which, lacking the profit motive as a crucible for new ideas, is less innovative than international equivalents. For instance, the British health system essentially free rides on innovations in America.
Chakrabortty asks “How can any nation that came up with the BBC and the NHS be considered in the same breath as India or China?”. Good question.