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Centre for Policy Studies

Free markets, free minds?

Are free markets a necessary and sufficient condition for free minds, or do they leave us prey to over-powerful corporations?

At the Inaugural Margaret Thatcher Lecture on 22 October 2010, Rupert Murdoch praised the “iconoclastic and the unconventional" and criticised entrenched interests for curbing the enthusiasm and energy of our vigorous nation of entrepreneurs. But Murdoch's detractors might argue that his heavy-handed approach to free markets has curbed free thought by threatening to create a stranglehold on British media.

His words will surely re-enliven the age old debate between competition and regulation, untrammelled free markets and the protection of both individuals and national assets. Over to our debaters....


Henry Porter

Henry Porter is a novelist and political columnist for the Observer. Since 2005 he has been chronicling the attack on liberty and rights in Britain. Porter has written six novels. His latest title is The Dying Light, a political thriller set a few years in the future. His first children's book, The Master of the Fallen Chairs, was published in 2008. In 2005 he won the Ian Fleming Steel Dagger award for best thriller with Brandenburg, a story set against the backdrop of the fall of the Berlin Wall. He is also the UK Editor of the American magazine Vanity Fair. He lives in London.

Rupert Murdoch’s speech was a shameless attempt to consolidate his reputation by linking it to Margaret Thatcher’s legacy. Certainly they believe in many of the same things and few would disagree with his remarks about the need for fiscal discipline, his concern for educational standards or indeed his surprisingly liberal attitude to the rehabilitation of prisoners. The point where I part company with him is in the title of his lecture– Free Markets and Free minds. He said plenty about free markets, deregulation and his hatred of bureaucracy but not one word was addressed to the freedom of the media, freedom of thought or expression. And that lack tells us a lot about the true priorities of Mr Murdoch’s empire.

Part of his the lifelong narrative about himself is the idea that he is the persecuted outsider who has prevailed against the odds. It is a helpful story to tell because it casts him as the challenger to the establishment. With 37 per cent of the press and 38 per cent of BSkyB, he has long been the most powerful media player in the United Kingdom. He makes and breaks governments, not to promote his conservative ideology (how could that be true when he supported the high spending Labour government for 12 years?) but to advance his commercial interests.

He said, “I am something of a parvenu, but we should welcome the iconoclastic and the unconventional. And we shouldn’t curb their enthusiasm or energy. That is what competition is all about.  Yet when the upstart is too successful, somehow the old interests surface, and restrictions on growth are proposed or imposed. This is an issue for my company. More important, it’s an issue for our broader society”

What he is referring to is his proposal to buy the remaining 60 percent of BSkyB and create a powerful entity that merges newspapers and Sky into one company. This will allow BSkyB’s profits to subsidise his newspapers and so give him an unfair competitive advantage.  It is hardly honest of him to portray the widespread concern about this threat to real competition and plurality as old interests rising to slap down the brave upstart.

The most ardent of Lady Thatcher’s disciples surely do not believe that Mr Murdoch should be allowed to inhabit a completely unregulated world, in which his company is allowed to dominate and squeeze out the competition, and his views become the only ones that matter to a government. As things stand, his power is unequalled. One of the memoires that have recently come out of Labour administration says, "His presence was always felt. No big decision could ever be made inside No10 without taking account of the likely reaction of three men, Gordon Brown, John Prescott and Rupert Murdoch.”

This is an extraordinary position for an American businessman to occupy and we may be certain that his privileged access remains under the Coalition. He was right when he said that the BSkyB deal was an issue for broader society. We only have to look at the way his company uses its political muscle to achieve beneficial conditions for his businesses and to promote unwise policies - the principle example being his support for the Iraq war – to know that when it comes to the media, a society must take special care to regulate and preserve competition.

When Mr Murdoch talks about competition he is promoting his ambition to dominate the marketplace and reduce the number of his competitors. It is the business of every responsible government to make sure that does not happen, and I believe that Lady Thatcher would agree with that.


Fraser Nelson

Fraser Nelson is Editor of The Spectator and a columnist for the News of the World. A journalist for 15 years, he started as a business correspondent for The Times and was political editor for The Scotsman before joining The Spectator in 2006 as the magazine's Political Editor. He lives in Twickenham with his wife and son.

I start this by declaring a double interest: I'm a board member of the CPS and a News of the World columnist. But hopefully that doesn't disqualify me from asking a question after Rupert Murdoch's lecture last night: how many politicians would have dared to say the same thing? How many Conservative ministers would have declared, as he did, that it is a great compliment to be called a Thatcherite because it means faith in mankind - rather than in the forces of government? The T-word is still one our political class view with caution, which is surprising. So before responding to Henry Porter's points about Murdoch's media ownership, I'd like to say what struck me about the lecture last night.

One always hears the clearest defence for free markets from those of Murdoch's generation. This is a tragedy. Somewhere along the way, today's generation of politicians forgot how to debate about economics and stopped making the case for the open society. As Murdoch said, this problem never afflicted Thatcher. Her version of politics was to be an advocate, and try to win people around - even if it meant courting unpopularity along the way. The Old Testament prophets, she said, did not go around saying 'brothers, I want consensus!'. And so she espoused her faith in the markets - and in mankind.

The tone of Murdoch's lecture reminded me of a story I once heard about the Lady. It was about ten years ago, and a businessman came up to her and thanked her for all she did for Britain. "Thanks to you, I was able to set up a business and I now employ 800 people," he said. She looked at him, shocked. "It is I who should be thanking you," she said. "I didn't turn the economy around. It is people like you who did." As Murdoch says, this is Thatcherism: a belief in others. Murdoch struck me as entirely sincere when he spoke about the opportunities that she created in Britain. He is one of many pioneers who used these freedoms to shake up the establishment, and become powerful in their field by giving people something they had never had before.

Which brings me to Henry Porter. He says that Murdoch "has 37 per cent of the press". That's one way of putting it. Another way is to say that, each day, 37 per cent of British newspaper buyers choose titles that he owns. Why do they do so? Not from lack of competition. The choice awaiting you in a UK newsagent is broader than any in the world. Murdoch produces newspapers that people want to read. Anyone in newspapers is painfully aware that your product is 'elected' every day of the week. The idea that Murdoch has 37 percent of newspaper readers by the short and curlies is risible. I can well understand why his rivals don't like this. But anti-competitive?

I also admire how Henry slips in "38 per cent of Sky" as a comparator - Sky has about 5 percent of the UK television market. Are we to be so terrified by this? Besides, Sky Plus has empowered viewers to an extent never seen before. Result? You watch better-quality TV and fast forward through the adverts. I can well imagine how ITV doesn't like this very much - and I feel for anyone watching Downton Abbey on live terrestrial. But Sky Plus gives you the right not be force-fed adverts. And it was Sky that sent an HD camera to Afghanistan with Ross Kemp to show the conflict through the soldier's eyes - something the BBC, a public service broadcaster, did not do. Kemp's reports on Israel were more balanced and instructive than any I have ever seen on the BBC. And if you want balanced broadcast coverage of the economy or business, then there are few finer practitioners than Sky News's Jeff Randall.

I can well imagine how many people of a certain political persuasion don't welcome this. I can't share Henry's concerns about Murdoch being an American citizen and having an influence in Britain. He could be an alien from the Planet Zog: if people didn't like what his television and newspaper groups produce, he'd make no money. That's the beauty of the capitalism: it is not bigoted. It doesn't care who backs the product. Anyone, from any background, can succeed if they produce a fairly-priced product that people want. It's a wonderful principle, celebrated in this country by everyone from the Bransons to the Patels in the corner shops. Thatcher saw them as being just as important. In his biography of her, Hugo Young notes with puzzlement that she once asked a journalist why he didn't go off and "set up a small business". "She seemed to think that no job was as virtuous," he observed, "not even her own."

Young was right. To Thatcher, the heroes of the 1980s were not the powerful, or the politicians - but those who fought the battles and created jobs and wealth. Murdoch is one of those praetorians. Even now, people attack him for putting up a paywall around internet content. But most journalists will be praying that he succeeds, and finds a new business model to replace that of display advertising, which is collapsing. The power of Murdoch's press lies in its ability to appeal to the millions who buy the products each day. It's not the man that Murdoch's detractors fear - it's the popularity of what he produces.  Without it, he'd be nothing.

Murdoch's world - and Thatcher's world - is one where the power lies with the small people. To those who think that power should lie with the elites, he's public enemy number one. Many in the left think that columnists, like myself, shape opinions. I disagree. People can agree or disagree with you, but you seldom change minds. The Sun could not have given heavier endorsement to Cameron - in fact, the Tories could not have asked for better press coverage all round. And look what good that did him on election day. The public are not a blank disc that newspapers write on.

All told, Murdoch has been a force for good in public life - giving greater diversity, creating jobs, and giving people more choice. His newspapers did plenty to irritate Thatcher when she was in power. But it was fitting that my colleagues at the Centre for Policy Studies asked him to give the inaugural Thatcher Lecture. As The Lady said, the battle for the open society - free minds and free markets - needs to be fought over and over again. What Murdoch proved in that speech is that he is very much still in the fight.

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John Millington - About 2337 days ago

Surely free markets are the quintessential element of maximum competition. The industries with the highest levels of regulation are occupied by the largest monopolies and with the lowest levels of disruptive competition - so much so that we no longer question the primacy of the businesses that occupy them.

As we place higher levels of regulation on banks and financial institutions we raise the barrier to entry in those markets and ensure lower levels of competition in the future, cementing furthering of monopolies in those sectors. The surest way to overturn the fate of that industry would be to deregulate it and promote the perception that the dominant institutions in that market can be challenged. Of course this principle comes with failures, sometimes catastrophic, but isn't the principle to force the individual to be individually accountable, and consequently to apply long term thinking to their actions? Isn't the understanding that only an idiot would pay the price of their mistakes twice? Regulation defends the status quo and denies the right of passage to the truly competitive forces in the market. It reduces the accountability of the individual and passes the baton of failure to the state, ensuring a self-defeating circle of regulation to counteract the failures of existing regulation.

Our finest examples of the destruction of monopolies have emerged from highly competitive markets. Indeed, as Mr Nelson alludes to, Mr Murdoch is facing one such example of this today. I struggle to think of any examples where regulation has provided any tangible or preferable outcome.

Doesn't the principle of conservatism lie in the mandate to wield the power of the natural state of being to it's greatest success? Isn't the natural state of being a deregulated market, self-regulated by an inherent understanding of failure - an inherent understanding of what stands the test of time?

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