Anglo-American journalism

The news last week that John Micklethwait, editor-in-chief of The Economist, would be moving to New York from London to take charge of the far-flung editorial operations at Bloomberg News reminded me of s politically incorrect joke from my Midwestern childhood – the one about the Norwegian who moved from Minnesota to Wisconsin, thereby raising the average IQ in both states.

To understand why that might have been funny, you only needed to believe that Minnesota thought of itself as having been populated by Swedes and Wisconsin by those of German and Irish descent. The geography of the news business takes a little more explaining than that.

First things first. Micklethwait’s move means that Londoners will be running all four top news businesses in the US.  Mark Thompson, former director general of the BBC, is president and chief executive of The New York Times, Gerard Baker, former US editor of The Times of London, is managing editor of The Wall Street Journal, and Will Lewis, former chief creative officer of Rupert Murdoch’s News Corp., is CEO of Dow Jones & Co,. Andrew Rashbass, former publisher of The Economist and chief executive of The Economist Group, is boss of Reuters, the news unit of Thomson Reuters.

Why the Brits?  That’s easy – because all have experience in organizations that have successfully accommodated themselves to the Web and, through some combination of history and necessity, established themselves among the first truly global brands.  The success of The Economist, the Financial Times, and the BBC point to the possibility that London is the center of the English-speaking world. The success of the grand old liberal Guardian– third most widely-read newspaper site in the world since going digital-first in 2011 – suggests that there is indeed something in the London air.

In science news and publishing, it is a toss-up, as far as I can tell, between the U.S. weekly Science and its British counterpart, Nature.  But otherwise the United States, with its enormous domestic market, has yet to create a marque that truly travels well. The clumsy snuffing-out of the International Herald Tribune by The New York Times is one exemplary failure; the embassy-like European and Asian editions of the WSJ are others.

Beaches are littered with the survivors of unsuccessful magazine expansions, Newsweek International and Forbes International chief among them. Maybe the U.S. will never compete with Britain as narrator of the global news, but it is America’s deeply ingrained superpower insularity that the cosmopolitan British editors have been hired to change. Much turns on the formulae they devise and the degrees to which they succeed.

What about The Economist, then?  How might the departure of Micklethwait improve its lot? Or will it?

Founded by James Wilson, in 1843, with a view to combining business intuition with the latest economic knowhow, the paper remained small but influential, mainly in Britain, for more than a century.  In 1945, its circulation was hardly more than the 6,000 it had been in 1920; Punch, the British humor magazine, would have outsold it then. By 1970, The Economist had reached 100,000, a significant portion of it in the US; by 2000, around 1 million; and 1.5 million in 2012.

It has been apparent for some time that the “newspaper,” as its staffers quaintly call it, needed new leadership. Micklethwait, 52, is an exceedingly intelligent and nimble journalist, and therefore constantly attuned to the unexpected, but he entered Magdalen College, Oxford, just as Margaret Thatcher was coming to power. For the next 20  years or so, the world seemed to embrace her vision of libertarian zeal and self-reliance. Micklethwait’s books with long-time writing partner (and The Economist’s former “Lexington,” now “Schumpeter” columnist) Adrian Wooldridge reflect that trend. In recent years their books have grown steadily more political.

They include The Witch Doctors: What the Management Gurus Are Saying and What It Means for Your Company and Your Career (1996), The Future Perfect: The Challenge and Hidden Promise of Globalization (2000), The Company: A Short History of a Revolutionary Idea (2003), The Right Nation: Conservative Power in America (2004); and God Is Back: How the Global Revival of Faith Is Changing the World (2009).

Micklethwait got the top job only in 2006, just as the world was changing decisively. The financial crisis, accelerating climate change and the rise of China demonstrated that there would be no withering-away of the welfare state of the sort they envisioned in their book last year, The Fourth Revolution: the Global Race to Reinvent the State (2014). There may be a fourth revolution of some sort, but almost certainly it does not involve the retreat from social rights and responsibilities that the book anticipates. The magazine says it hopes to choose a new editor in January. That person will find much to be done.

Now to the Bloomberg organization. Michael Bloomberg’s great good fortune was to be on the losing end of a struggle for power at Salomon Brothers in the early 1980s.  Consigned to the back office of the firm, he learned what computers could do and, striking off on his own, built a series of proprietary bond data bases into a financial information business with, on the side, an enormous news-gathering staff (around 2,400  reporters and editors in 150 bureaus worldwide).  In 2009 he bought the 80-year-old loss-making BusinessWeek magazine.

Something similarly dramatic was going on all the while at Canada’s Thomson Corp., where a series of shrewd investments enabled Kenneth and David Thomson to buy Reuters, the world’s oldest and most respected news service, with some 2,000 staffers around the globe. The result is that two news-gathering organizations now compete for attention and talent with the NYT  and the WSJ  – all dressed up but with nowhere to print, except the still highly unprofitable but much more highly-regarded Bloomberg BusinessWeek.

Enter editor-in-chief Micklethwait.  He is replacing founding editor Matthew Winkler, a former WSJ reporter who, starting in 1990, built the news service in a pell-mell rush. It is not clear that Winkler had much to do with the successful re-invention of the weekly Bloomberg BusinessWeek, a feat usually ascribed to editor editor Josh Tyrangiel, picking cherries from the vast flow of Bloomberg news.   Micklethwait’s task is to sharpen up the weak spots along the vast conveyor belt and bring some order to the whole.  His Economist experience makes him  perfectly suited to the task.

Sensibility is one thing; point of view is something else again. It was a long conversation one night in San Francisco in 1981 with British entrepreneur Antony Fisher and Milton Friedman that set Micklethwait on a course that lasted for  30  years. It is entirely possible that his encounters with his new employer, splendid in his power and wealth (more than $20 billion), will have now set him on another. Who knows?

Anyone who watched Bloomberg through his three terms as mayor of New York City will recognize that government plays a major, if imaginatively circumscribed, role in his understanding of the scheme of things. No one will mistake him for Milton Friedman. Suppose Bloomberg gradually wins over Micklethwait to his point of view, and the clever editor finds a way to make Bloomberg News more of a household word name, instead of a bitstream confined mainly to terminals on financial traders’ desks. Almost certainly it would involve finding a way to turn a profit from the news as well as the analytics. What then for news of the world?  For the world of news?

The Bloomberg-Micklethwait collaboration is only one skein in a vast panorama. Thomson Reuters, the Times, The  Wall Street Journal and The Washington Post, recently acquired by Amazon founder Jeff Bezos, presumably for his family, are all in flux. America’s story-tellers are evolving at a faster pace than ever before. The magnate-turned-mayor-turned-publisher and his still-young editor at Bloomberg News are something new under the sun.  As we say in the trade, their adventures bear watching.

David Warsh is proprietor of economicprincipals.com, an economic historian and a long-time financial journalist.

David Warsh: They want a 'Fourth Revolution' in the West

  BOSTON

When he was 18,  before entering college, John Micklethwait toured the  U.S. for a year with a friend, traveling on Greyhound buses. When they arrived in San Francisco, they spent a memorable evening with expat British businessman Antony Fisher, founder of London’s Institute of Economic Affairs, and his downstairs neighbor, Milton Friedman.

They talked about the possibilities now that Margaret Thatcher had become  prime minister and Ronald Reagan president of the United States. The conversation made a deep impression on Mickelthwait. Then it was back to Magdalen College, Oxford, and an eventual career in journalism.

Today his companion is a major general, but Micklethwait commands many more battalions as editor-in-chief, since 2006, of The Economist. His new book is The Fourth Revolution: The Global Race to Reinvent the State, written with longtime collaborator Adrian Wooldridge, management editor of the magazine. They argue that the West should complete the revolution of the ’80s that Friedman started.

It won’t be easy, the authors acknowledge. Both the welfare state and democracy itself must be reined in, the former by redefining and reducing expectations of it; the latter by consensually imposing a series of self-denying limits: global budget caps, monetary targets, earmarked taxes, co-payments, borrowing ceilings, sunset provisions and the like.

The successful construction and adoption of such a fiscal constitution would amount to a “Fourth Revolution” in the nature of government in the West, they say.  Previous revolutions they associate with three philosophers who at intervals wrote influentially on the role of the state. This catechism, a familiar device from their magazine, is designed to buttress the case for what they hope will happen next.

Thus, Thomas Hobbes described the fundamental purpose of the nation-state as the creation of law and order, thus the overwhelming force necessary to maintain  the nation-state known ever since, at least to Hobbesians, as “Leviathan.” John Stuart Mill, who lived in a more prosperous time, imagined the state as a kind of “night watchman,” dedicated to free trade, social rights (of women in particular),  and education.   And Fabian Society socialist Beatrice Webb conjured a ”welfatre state” in the 20th century in which government influence extended into every sphere of production and consumption.

The authors are then off on a round of breathless reporting: to California, which they say illustrates everything that is wrong with modern democratic government, until, miraculously, under Gov. Jerry Brown, the state begins to straighten itself out; to Singapore, to see Lee Kuan Yew, founding father of  a new model of national development, adopted in some ways by China, “that is in many ways leaner and more efficient than the decadent Western model”; to Sweden, where a wave of privatizations has reduced government spending in  20 years from 67 percent of GDP to 49 percent.

Along the way, we meet many of the usual suspects. Clayton Christensen, of the Harvard Business School, is “perhaps the world’s most respected writer on innovation,” who thinks  that the public sector will be upset by what he calls “mutants”  -- new organisms that may spin out from unexpected directions. (Their esteem is not  universally shared.) Peter Theil, a prominent venture capitalist, laments that technology has so far failed to change the public sector.

Devi Shetty, an entrepreneur, “whom American surgeons may one day remember the same way that American engineers think of Kiichiro Toyoda,” has a production line of  40  cardiologists who perform 600 operations a week in Bangalore.

There is a peroration in the book:

"The Fourth Revolution is about many things. It is about harnessing the power of technology to provide better services. It is about finding clever ideas from every corner of the world. It is about getting rid of outdated labor practices. But at its heart it is about reviving the power of two great liberal ideas.  It is about reviving the spirit of liberty by putting more emphasis on individual rights and less on social rights. And it is about reviving the spirit of democracy by lightening the burden of the state.''

One indication that history may not be tending in this direction is that the subject of climate change comes up nowhere in the book.  This is odd because the weekly Economist does such a good job of reporting on the growing scientific consensus that global warming is becoming a serious problem.

Another contraindication is to be found in the authors’ proposal to “leapfrog over the muddle of Obamacare,” borrowing equally from “Old Europe and New Asia.” Why not combine a European-style single-payer health care system, featuring an independent medical board to evaluate the cost-effectiveness of medicines, devices and procedures, with means tests and a Singapore-style stream of earmarked taxes pay for it.  That might strike Tea Party fundamentalists as socialism, they write, but  it is precisely the kind of transparency-inducing global cap that  they advocate in other connections, including Social Security.

It is not fair to place so much weight, as the authors do, on Milton Friedman’s shoulders. The Chicago economist, who was 94 when he died, in 2006, was a deeply consequential 20^th Century figure whose role is not yet well understood. He may be fruitfully compared to John Maynard Keynes. Both men were authors of clarion wake-up calls. Keynes argued that government had a role in stabilization policy that it must not shirk; Friedman, that there are many economic ways to address a problem (including, presumably, the threat of global warming). Neither man was much concerned in his day with the finer points of economic analysis,  but each commanded the attention and, ultimately, the agreement of his age.   Other theorists, notably James Buchanan and Friedrich Hayek, have been more concerned with the idea of fiscal constitution.

At one point in their roundup, the authors quote Michael Bloomberg, the billionaire financial analytics entrepreneur who served three successful terms as mayor of New York City before returning to civilian life.  Among other things,he oversees Bloomberg BusinessWeek, which he bought while he was mayor. Running a city is different  from running a business, Bloomberg says.

''People are motivated by different things and you face a much more intrusive press.  You cannot pay good staff a lot of money…. In business you experiment and you back the projects that win. The healthy bits get the money, and the unhealthy bits wither. In government the unhealthy bits get all the attention because they have the fiercest defenders.''

Doubtless so.  But that doesn’t mean that governmental processes are not being improved, mainly along the lines advocated by Micklethwait and Wooldridge.  Perhaps it is familiarity with the details that makes Bloomberg BusinessWeek so consistently interesting when it arrives along with The Economist each week.  Hardly a week passes that I don’t compare the one to the other. In coverage of the Fourth Revolution, most weeks I think that the Americans are getting ahead.

xxx

A 14-page article, The Biden Agenda: Reckoning with Ukraine and Iraq, and keeping an eye on 2016,  by Evan Osnos, in the current issue of The New Yorker, signals the vice-president’s willingness to contest the Democratic presidential nomination with former Secretary of State Hillary Rodham Clinton. For both the politician and the journalist it is an impressive outing (Osnos, recently returned from China, is author of Age of Ambition: Chasing Fortune, Truth and Fraith in the New China). The article would seem to promise a spirited campaign.

David Warsh, an economic historian and a longtime financial journalist, is proprietor of economic principals.com.