The Information Market

Michael Van Winkle writes: "If Nobel Prize winning economist F.A. Hayek had been watching last week as bloggers spontaneously responded to fraudulent documents aired by the program '60 Minutes', he would've grinned in humble satisfaction."

We've all heard critics of the Internet claim that, because no one "controls" it, no one can control it from disseminating the most outrageous rumors and conspiracies. A similar critique was leveled at Hayek's arguments about markets: Sure, markets (spontaneous systems) can deliver food at reasonable prices, but advertising and marketing often mislead people about which foods they should buy.

This traditional criticism of the internet has now been aimed at the blogosphere and is embodied by big journalists like Jonathan Klein who, while defending the CBS story to The Weekly Standard remarked, "You couldn't have a starker contrast between the multiple layers of check and balances [at '60 Minutes'] and a guy sitting in his living room in his pajamas writing." Klein misses the point that it's not whether you can trust some guy in his pajamas, but whether you can trust a spontaneous system of thousands of guys in their pajamas trading information and imparting small, sometimes deceivingly insignificant, bits of information.

The media has been wrapping themselves in the First Amendment while telling us that we have to trust them because they know better than we what news is. A lot of people have noticed their bias, but their complaints are dismissed, because those people are not "journalists."

Then Roger Ailes came along. The man behind Rush Limbaugh and Fox News Channel realized that the news industry is not any different from any other. They are all market driven and those who ignore market developments are going to lose. There was and is a huge market for conservative views on current events, and Roger Ailes was the first to tap it in a big way. Paul Harvey has know this all along, which is why he is still so popular, but he never had the insight that taking it into a larger format and talking to the audience would blow huge holes in the liberal juggernaut that the media have become. Ailes did.

And the internet invented blogging, creating an almost perfect market for news and opinion, because it wasn't controlled by anybody. The reaction by Big Media has been predictable: harumphing, "standing by" the story, and more spin.

We've seen this scenario before, with Mussolini in Italy, Louis XVI in France and, ironically, with Richard Nixon in the U.S.A.