The Political Spectrum

There has been a lot of talk in recent weeks (actually since the infamous Janet Jackson "wardrobe malfunction" at the Super Bowl) regarding "indecency." Recently, however, this ground swell has reached epidemic proportions, including a bill, sponsored by Rep. James Moran (D-VA) , to prevent the broadcasting of erectile dysfunction ads on TV. In addition to the cat calls to regulate "broadcast television," there have been proposals floated by Commerce Committee Chairman Ted Stevens to provide the FCC with the power to regulate cable channels, and a couple of days ago, Representative James Sensenbrenner (R-Wis), in a speech given at the National Cable & Telecommunications Association’s annual conference in San Francisco, that advocated criminal penalties for indecent programming.

My question during all of this is where are all the so-called "free market" supporters? Now we can, and probably should, have a debate about what goes on television, and I know that many of the commentators here could cite all of the relevant law and Supreme Court opinions regarding the First Amendment’s protections of freedom of speech (which, by the way, do, mistakenly, in my opinion, allow for regulation of "broadcast" television, but thus far have prevented regulation of the cable industry), but I don’t even have to get to those arguments, I should be able to convince people that of all of the areas where the "free market" should be allowed to function almost unrestricted it is in the entertainment industry.

I have been hard pressed to think of another industry that is as consumer driven as the entertainment industry. Whether it is movies, music, television shows or what have you, no other market for disposable incomes is as responsive to its consumers. In other words, the industry is almost entirely elastic. To use non-economist jargon, take a simple example, the television sitcom. Since the end of some of the most successful television shows in recent memory (Seinfield and Friends) there have been numerous of failed attempts at replacing them. As my example I’ll use NBC’s attempt at remaking the British show "Coupling," which aired for only a few episodes before being cancelled. Why did the show fail? Well we can probably name a number of reasons, but I know for sure what was the proverbial nail in the coffin. The show didn’t make any money. Granted it wasn’t funny, had bad acting, poor writing and all the other major problems, but the bottom line was no matter where on the nightly schedule the show aired, people didn’t watch, therefore advertisers didn’t buy ad time and NBC didn’t make any money. Let me say that again, people didn’t watch the show, thus, it was cancelled.

This is the solution to all of the ills of the entertainment industry, don’t watch, listen, or attend and eventually the industry will respond. If you think ABC’s "Desperate Housewives" is indecent and too sexually explicit, change the channel, if you think Fox’s "24" is to violent, turn off the TV and convince others to do the same. In other words, as famed free market economist Albert O. Hirshman argued in Exit, Voice and Loyalty, consumers need to exercise their rights to "vote with their feet." There is a reason that the shows I mentioned are popular and continue to air, people like them and watch them in large numbers. Thus, they sell enormous amounts of ad time for a lot of money. In short, they are profitable. If people stopped watching, the money stream would dry up and I promise that the shows would no longer air. Regulation isn’t the answer in this setting because the free market hasn’t failed. The entertainment corporations aren’t cheating the system or gaming the public, rather they are doing exactly what they are supposed to be doing, meeting the market demand with an adequate supply.

Now I’m usually among the first to admit that many, many free markets do not function as well as this one, and in those situations government regulations may be appropriate to protect the people from the underbelly of market economics. My point is this is not one of those cases. It troubles me when politicians and other public policy experts, regardless of party affiliation, can’t differentiate between the successful markets and the failed ones. People of all political persuasions should be opposed to this proposed intrusion by government into the market, regardless of your stance on the First Amendment. As I said, I still can use that argument if I must, but I would think that consumer choice and free market principles should be enough to persuade the majority that indecency regulation is at best unnecessary and at worst overkill.