By Charlie Yang
“I'm not an economist … economists were created to make weather forecasters look good.” For the latter half of the twentieth century and the start of the 21st, Rupert Murdoch, the family patriarch of Murdoch Media, has dominated the media landscape of some of the most influential democracies in the world. With his unique brashness and unwillingness to conform to the reasonable, Murdoch has demonstrated the unparalleled ability to alter political and economic narratives as he sees fit.
Although there has been skepticism over his influence, Murdoch has helped elect and oust multiple Prime Ministers — from Tony Abbott to Margaret Thatcher — and played a large part in Donald Trump’s shock 2016 victory. By using his political leverage, Murdoch cleared the pathway to mogul status, but also maintained sway in government policies. But all this is not a secret. In fact, Murdoch’s influence in politics is so apparent that he has been condemned not only in the few papers he does not own but in the memoirs of the last three Australian Prime Ministers (excluding Abbott, a Murdoch sympathizer).
What is less readily apparent to us is the insidious influence that Murdoch, and indeed media moguls, exert upon the economic policies of Australia, the U.S, and the U.K.. In considering this, a few questions jump out at us. How, why, the implications, and most importantly: is there anything to be done?
Perhaps the best place to start is to understand Murdoch’s historical shadow over government economic policy. As a strong proponent of creative destruction — the abolition of old economic practices, however premature, for progress — to maximize profits (see the Wapping Dispute), Murdoch has been unafraid to bluntly direct his publications to forward his personal and thus inconsistent political and economic agendas. Compared with being simply conservative or progressive, this allows Murdoch to adapt to evolving economic landscapes and position his media accordingly. The most prominent example of Murdoch’s influence can be seen in the media's response over stimulus packages during times of crisis. During the 2008 GFC, the Australian Rudd government implemented a number of stimulus packages to restart the economy that the Murdoch Media criticized: reporting in the Herald-Sun (2009) that it was “Rudd’s $42 billion gamble”. Whilst at the time not being particularly impactful in changing the policy nor the government, Murdoch was able to build on this momentum by campaigning against the Minerals Resource Rent Tax, a fiscal policy targeted at taxing 30% of profits from big mining businesses to change the economic landscape of the mining industry. Ultimately, he played a role in electing a new conservative government under Tony Abbott, who successfully repealed the tax in 2014. However, in the economic response to today’s pandemic Murdoch flipped his media’s position to support the Morrison government stimulus packages that dwarf that of Rudd’s, aiding Morrison’s approval ratings to reach the highest level of any Prime Minister in the last 10 years.
Other areas where Murdoch has influenced economic policy include Carbon taxes for a greener economy and, in the U.S., Trump’s tariffs and protectionist economic outlook (which he supported). Murdoch’s presence is similarly felt in the U.K., where he played a pivotal role in ensuring Brexit, stating “When I go into Downing Street they do what I say; when I go to Brussels they take no notice.” Brexit and Trumpian economics have been the two big economic disruptors of the last decade; it is undeniable that Murdoch oozes economic influence.
But why does Murdoch and indeed the media have so much economic power? And why is this problematic? The most logical argument would simply be that the media influences public opinion, which the government panders to, thus altering economic policy and increasing economic speculation and uncertainty. This is especially true for Murdoch; Bennett and Lyengar (2008) argue that an increasingly fragmented media market limits its ability to mould public economic perceptions, leading to the conclusion that, in the case of Murdoch, monopolizing the media industry allows for consistent messaging and thus a greater ability to influence public and corporate economic perception. Which is why Murdoch’s power in the monopolized media in Australia and the U.K. is far greater than America and it’s comparatively diverse media landscape. Moreover, in many cases political influence mirrors economic influence, because the driving force behind fiscal and monetary policies is of course the government.
But even so, surely the actual state of the economy would be the greatest determinant of public economic perception? This may be true, evidenced in the public support for an Emissions Trading Scheme despite heavy resistance from News Corp. But in times of crisis such as today, when economic policy truly matters, mass media gains power. As Lishan Su (2008) states “during recessions and times of economic slowdowns, media have a more powerful effect on consumer sentiment.” It’s hard to measure how much impact the Murdoch Media has on consumer perception and the corporate landscape; although Murdoch’s power is first and foremost of a political nature it is clear that this influence seeps into the world of government economic policy.
It doesn’t take an expert to figure out why the media’s disproportionate influence on economic policy is so worrying. When determinations of economic policy are left to obscenely rich, conservative old white males, you can be sure that the majority of us will be all the worse off for it. So, what can we do to mitigate media economic influence? There is no easy answer. Until we can elect (and keep elected) a government that doesn’t cower under Murdoch and other moguls, we cannot prevent their influence in the politics of economics. But while it isn’t feasible to censor the media from discussing economics, that would be a gross violation of free speech, we can explore enacting policies that safeguard media diversity and prevent monopolization. Policies like subsidizing independent media, restricting market share, or establishing regulatory bodies must all be considered.
Rupert Murdoch’s reign over Australian, U.K., and American media is almost over, and while presumptive heir Lachlan Murdoch has raised concern over his intensely far-right, nationalistic views, only time will tell how invested he is in shaping the next period of Western economic policy.