Monday, August 22, 2016

The Pragmatarian Model For The Economist

Reply toWe are anonymous by Adam Smith


Adam Smith! Really? If Adam Smith was alive today… what recommendation would he have for The Economist? Easy! The Invisible Hand. Adam Smith would argue that your publication should make it really easy for subscribers to use their fees to communicate their interest in your articles.

Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident that it would be absurd to attempt to prove it. But in the mercantile system the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce. — Adam Smith, Wealth of Nations

When you bundle all your articles together… how can you truly know whether any specific article is promoting, or sacrificing, the interests of your customers?

General-fund financing is analogous to a market situation where the individual is forced to purchase a bundle of goods, with the mix among the various components determined independently of his own preferences. — James Buchanan, Earmarking Versus General-Fund Financing

You amputate the Invisible Hand when you bundle all your articles together. You could easily unbundle your articles simply by allowing subscribers to “earmark” their fees to the articles that most closely match their preferences. For all intents and purpose… The Economist would transition from a command economy to a market economy. Your publication wouldn’t just write about the market… it would be a market. The Invisible Hand would be free to do its job…

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. — Adam Smith, Wealth of Nations

Right now I’m trying to persuade the journalist… Jeff Jarvis… that this is a good idea…

Cross Pollination: Journalists and Economists
Jeff Jarvis’ Critique of the Pragmatarian Model

It’s one thing for Jarvis not to immediately recognize the immense benefits of applying The Invisible Hand to publications. Same thing with this website. But The Economist is going to lose so much credibility if it fails to recognize the benefits of this model. How could people trust what your publication says about the market when it becomes painfully obvious that your publication is entirely clueless about how and why the market works in the first place?

Who am I though? Does it matter? I’m certainly not Adam Smith. Since you want to pretend to be Adam Smith… then it should be really easy for you to let me know if I’m missing something. I eagerly await your reply. Or the reply of The Economist’s hive mind. Either is fine.

No comments:

Post a Comment