Enemies of the People: Part One, the Media


A scan of the UK and US media will identify that there is a schism between those institutions which are influenced by their owners, and those that appear to have a constitution or mandate that defines their overall stance towards world events. Therefore the BBC is mandated to take a generally neutral political position when reporting the news, and the “Guardian” newspaper is owned by a trust which is dedicated to balanced non-partisan reporting. In this case, it can be stated that the stance of the newspaper is somewhat towards a Social Market model, such as might be found in Scandinavia. Many of the US media outlets seem to have strong political biases, reflecting the many schisms that blight US society at present. There is a toxic haze of “Fake News” that makes reporting by many outlets seemingly unreliable.

To make a personal confession, my experience in business, especially with European businesses, and also my predilection for sailing in Scandinavia, has caused me to research the roots of the “Nordic” model of society- resulting in a conviction that the Social Market model has a lot to offer. Thus I find the “Guardian” a comfortable paper to read, compared with the “Daily Mail”, for example.

By comparison with the “Guardian”, the main media organisations in the UK are owned by companies and individuals, and seem to reflect the political and social views, (or obsessions) of their owners. The Daily Mail, the most read newspaper in Britain, is owned by the Viscount Rothermere, whilst the Sun is part of the Murdoch media empire, which includes the Times. The Daily Telegraph is owned by the Barclay Brothers, who live in a tax haven off the Southern coast of Britain. The “Daily Express”, soon to be sold, is owned by Richard Desmond alongside the Daily Star. Desmond is also renowned for being the past-publisher of several soft porn magazines like “Asian Babes”.

Whilst the publishers of most of the UK press cannot be described as having homogeneous political and social views, there are certain themes that resonate. For example, most can be described as having relatively, sometimes violently, right wing stances, and in general coming down against Britain’s membership of the EU. (The Mail on Sunday, Guardian and Observer are exceptions).

In the USA, “Fox News” is also owned by the Murdoch media empire. To British eyes, this “news” organ seems to have a gross bias towards right wing politics. It also seems to be very inclined towards the politics of Donald Trump.

Why make all this fuss? Well, it seems as though the populaces of the US and UK are inordinately subjected to streams of right wing views, often to the exclusion of a more nuanced view of the world and the forces shaping it. Looking more deeply at how people form and hold on to their views about the world around them, starting with their own communities and then more widely to say, Europe and the Middle East, there is some really interesting research, which resulted in a book called “Thinking, Fast and Slow”, which has been described as an accessible overview of Nobel prize-winning insights from psychologists Daniel Kahneman and Amos Tversky’ into how human intuition works.

The basic idea is simple – there are two routes to persuasion, based on two basic modes of thinking:

The powerful insight from this work is that a large part of the population is wedded to System One thinking - susceptible to strong messages from the media, which affects their views on politics and major factors like membership of the European Union; but even more important makes them susceptible to the massive torrent of advertising directed at them by hungry financial and consumer industries.

Dealing with complex issues of personal finance is often too stretching to many people, so it is hardly surprising that they are able to think through issues of national finance; and so they become susceptible to “snake oil” dispensed by politicians. For example, it is not the case that that the economics of “Austerity” were forced by the overspending of Gordon Brown’s last Labour government. It was the behaviour of the banking system that stressed the economy – and government could still have borrowed to invest in such productive strategies as infrastructure development and high technology projects. “Austerity” is based on a purely ideological dislike of public services and is self-destructive in that it reduces economic activity and growth. Yet it has become almost axiomatic to right wing governments, acting as a smoke screen for reducing the size of the public sector. (This view has been reached after careful thought and increasingly available data!)

The following piece, focusing mainly on business and political reporting, gives a good flavour of the behaviour of many in the media – which can be easily extended into other fields, such as “Brexit.


The Observer
Sunday February 3, 2008

Flat Earth News
by Nick Davies
Chatto & Windus

“Dog does not eat dog. This, as Nick Davies says, is an old Fleet Street convention. His latest book is 'a brazen attempt to break that rule'. It is a task that Davies more than fulfils, swallowing the leash and kennel for good measure. His diet sheet includes the British newspaper industry, its regulators and the PR machine that supplies it. Davies's title defines what he sees as lies, distortions and propaganda, all accepted without question”.

Before we really get under way, let us state that we respect and admire the work of quite a few business journalists, even if we disagree with some of them. The best of business journalism tends to come from feature writers and business editors.
Right! Having put down this marker, we can return to the piece.

“Its author, Nick Davies, sponsored research by Cardiff University, who surveyed 2000 UK news stories from the four quality dailies (Times, Telegraph, Guardian, Independent) and the Daily Mail. They found some very interesting things. First, when they tried to trace the origins of reported 'facts', they discovered that only 12% of the stories were wholly composed of material researched by reporters. With 8% of the stories, they just couldn't be sure. The remaining 80%, they found, were wholly, mainly or partly constructed from second-hand material, provided by news agencies and by the public relations industry. Second, when they looked for evidence that these 'facts' had been thoroughly checked, they found that this was happening in little more than 10% of cases. Davies says: "Where once journalists were active gatherers of news, now they have generally become mere passive processors of unchecked, second-hand material, much of it contrived by PR to serve some political or commercial interest. Not journalists, but churnalists."
This resonates with our experience. Mostly, when we have been involved with an organisation and are familiar with the internal reality, our minds have boggled at the distorted rubbish peddled by most business journalists. It’s not just that they fail to understand what is really happening: Much worse - most of them have not the faintest idea of how businesses work, portraying them as some kind of soap opera populated only by high profile actors. The working core of businesses, the parts that create value, are ignored because they are invisible to ignorant distant outsiders. At this point it behoves us to give some substantiated examples.....


First, most of the press tend to ascribe achievements that took hundreds, frequently thousands of people as though they were accomplished by one man.
Here is an example:

It concerns Sir Graham Wilkins, an individual known to the author, who died on July 2, 2003. Sir Graham was chairman of Thorn EMI plc at a time that I was working for that then troubled company. I would start by saying that Sir Graham was regarded personally by those who came into contact with him as a good-humoured and experienced man.
He was projected into the role of chairman from non-executive director following the sudden dismissal of Peter Laister (for whom I also worked) as chairman and chief executive, following a period of hyperactivity in which Thorn EMI (itself the result of a 1979 merger) attempted to create a merger with British Aerospace and did make the acquisition of Inmos, a semiconductor manufacturer, which proved to be a financial disaster.
However, the writer of Sir Graham's obituary says, "While his predecessor at Thorn EMI had gained an unfortunate reputation for prevarication, Wilkins was focused and decisive". How trying to engineer the biggest merger in British industrial history could be construed as 'prevarication' beggars the imagination!"
The writer goes on to say, "Recognising that there was excess capacity in the television manufacturing industry, he restructured Ferguson and cut a thousand jobs. He made management changes at Inmos, Thorn EMI's struggling semiconductor business, and supervised an overhaul of the roster of artists signed by EMI, which had become unbalanced".

The reality of the matter was that the board appointed Colin Southgate as Managing Director at the same time as Sir Graham became part-time chairman. Peter Laister was fired because of breathtaking over-activity, not prevarication.

Southgate, with a growing group of new appointees whom he and his colleagues brought into the company at corporate and business group levels, instituted an extensive and detailed review over several years of the whole range of Thorn EMI's many businesses. The key to the success of the turn-round of Thorn Emi's fortunes was very detailed operational knowledge and focused improvement and restructuring programmes, together with extensive disposals, conducted by a large cast of corporate and operating managers, led by Southgate.
Sir Graham was a million miles away from this operational and detailed knowledge. He did not understand the music industry, nor had he ever encountered an artists' roster. He did, however, provide valuable weight to a relatively inexperienced corporate team in communicating with the financial markets.


Second, the press is highly responsible for the awful tendency to lionise individual leaders seducing them to egocentric behaviour and frequently their eventual downfall. The sad case of Lord Browne, ex -CEO of BP, who for many years could do no wrong, nay even walked on water, is a good example of a collusive relationship between elements of the press and Lord Browne's PR machine. Eventually, as in the case of most superstar CEOs', the party came to an end and BP was revealed to have caused loss of life and significant environmental damage under his leadership. The sad twist in this tale was that he had to stand down because of a personal matter unconnected to his job - but such is the life of the superstar that the slightest blemish is punished.
Here is another example:

*"He was dressed casually, almost carelessly, like his troops, and he wore his hair combed off his face in the style of Hollywood producers and Wall Street financiers. He was assiduously fit; his eyes were ice blue and his gaze was steady, and he spoke in clipped, flat, supremely confidently tones. Everyone at Enron knew that Jeff was twice as smart as they were - twice as smart as they could ever hope to be - and they hung on his every word".

The subject of this eulogy was of course, Jeff Skilling, CEO of Enron, rated at one time by Fortune magazine as 'America's most innovative corporation'. Skilling was sentenced to 24 years in jail for his part in the Enron scandal. A friend recently pointed out a similar romantic attachment to highwaymen in the eighteenth century.

In such cases, visible leaders are lionised and their achievements the subjects of false attribution error, as so clearly demonstrated in the cases of Wilkins, Skillings and Browne.

*The Curse of the Superster CEO. Prof. Rakesh Khurana. Harvard Business Review, September 2002.


Third, influential parts of the business media promote dogma as though it was eternal verity. The best current example of this is the acceptance by most of the Anglo-Saxon press that free-market economics is the best philosophy for creating wealth and general prosperity. This has become almost axiomatic and certainly seems to represent the view of most newspaper proprietors. An honourable exception to this is The Guardian, which is protected from dogmatic owners because of its ownership by an independent trust.

This is not rigorously substantiated, but a rapid count of the hundreds of Institutes and Foundations pushing the free market message must also have an effect on what journalists write, if Nick Davies is to be believed.

One journal that we willingly forgive is the Economist magazine, which has an unashamed free-market bias - and articles that consistently push the free market line. At least the Economist is open about it, which allows others to agree or disagree with their line as they wish.

Postscript: Brexit.

A careful review of pretty every source of information about the effects of leaving the Single Market, and particularly the European Customs Union indicates that the British economy will take a serous hit and that overall, economic activity will be reduced. The data sources include the government’s own reviews. Those who are committed to a “Clean Break” assert that a newly invigorated UK will be able to return to the good old days when Britain dominated world trade, was “the workshop of the world”, and that the economy will benefit from this new buccaneering spirit, which has been sadly sapped by European bureaucracy. (Nasty poke: why has Germany gained such a lead over the UK when it comes to trading performance, when it is also subjected to the same bureaucratic constraints?)

A quick scan of most of the UK media (with a few exceptions) will reveal a torrent of anti-European sentiment. Readers of, for example, the “Daily Mail” will have been subjected to endless “news” about the evils of the EU. Thus the majority of commentators and politicians of all parties who have thought about Brexit, concluding that access to at least the Customs Union will minimise the damage to trade, industry and jobs are damned as “Traitors”.

But here is just one reason why Britain should continue to have close links with the European Union (and maybe why UK Conservative politicians have a “hidden agenda” about Brexit) :

It is perfectly clear that the EU is the only hope for reforming the banking system

Action should therefore be led by international bodies such as the European Union and through EU influence, the IMF. The EU is a strong economic and increasingly coherent political influence not dominated by governments, like Britain's, that bought into market fundamentalism.

Final words should be left to Mr. Davies: "An industry whose primary task is to filter out falsehood has become so vulnerable to manipulation that it is now involved in the mass production of falsehood, distortion and propaganda".

Strong words, Mr. Davies, but, alas, too often true.

The Moral of the story: Think Slow when considering important issues that could affect the lives of you and all of us. The media is no longer, if it ever was, a protector of the public interest.

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