Peeling the layers of the onion

The way the media control our politicians (and shape the way we look at the world) was laid bare by yet more stunning information thrown up by the continuing investigation in Britain of the operations of News International (the Murdoch Empire). We didn’t learn a great deal from the appearance of Murdoch and his son some months ago in front of the UK Parliamentary Committee on Culture – except perhaps that he has a beautiful young Chinese wife and suffers (as does his son) from memory lapse. But an official inquiry (Leveson ) is now looking (in public) and in detail at the behind-the scene operations of media owners, their contact with politicians and their ethics. It has revealed, for example, howthe Scottish First Minister (Alex Salmond) bought the political support of Rupert Murdoch  - the the News International (NI) newspapers suddenly, as result, switching from hostility to the nationalist cause to support. Even worse, the inquiry has laid bare the private contacts there were between News International lobbyists and the Minister who had the authority to decide whether NI would be allowed to take-over a new TV media channel. Polly Townbee has a powerful article on the story which sets out very well the political issues which are at stake. The article should be erad by everyone - 

The picture emerges of a party deciding long before coming to power to gift Rupert Murdoch a media and cultural dominance beyond anything seen yet. So much is known already: the Prime Minister made a hasty speech threatening to abolish the regulatory agency which tries to ensure competition and standards in the communication industry (Ofcom). . The relevant Minister (Hunt) rejected Ofcom's advice to refer the BSkyB bid to the Competition Commission. Cameron was completing what Margaret Thatcher began – and all for what? Fickle support from Rupert Murdoch's press.

Thatcher broke every rule, twisted every regulation and bent EU law to give Murdoch a newspaper and television dominance unthinkable in the US or most countries. We have ranted and railed helplessly over the decades, pointing our finger every time politicians of any party kowtowed to the man they feared. Democracy was bound to be suborned. That's precisely what competition law is there to prevent: monopolies are monsters. Is there anything so exceptional about Rupert Murdoch? He's canny and fly, but probably no more so than many sharp-witted businessmen who spot their chance in a flabby market.

All he has done is exactly what Adam Smith (the real one) famously said every businessman does given half a chance – corner markets and conspire against the consumer. The success of his business was built on gaining the edge by evading regulators and avoiding taxes, as all companies will unless stopped. So let's not obsess over his character.

 If you think this is a navel-gazing media story, here's a reminder of what Hunt was about to unleash on the country, with Cameron and George Osborne's approval. If Murdoch were allowed to own all BSkyB, within a year or two he would package all his newspapers on subscription or online together with his movie and sports channels in offers consumers could hardly refuse, at loss-leading prices. Other news providers, including this one, would be driven out, or reduced to a husk. His would be the commanding news voice. Except for the BBC – which his media have attacked relentlessly for years.Sky's dominance over the BBC is already looming: now past its investment phase, Sky's income is multiplying fast at £5.5bn a year, against the BBC's static £3.5bn. Sky's growing billions can buy everything, not only sports and movies, but every best series: the BBC trains and develops talent, predatory Sky will snatch it. Nor is Sky that good for the Treasury: for every £1 in Sky subscriptions, 90p flees the country, straight to News Corp and Hollywood in the US.

The BBC is remarkable value for money: Sky subscribers can pay £500 a year, the licence fee is £145 for masses more content. Sky is parasitic, as its own subscribers watch many more hours of BBC than Sky, so Sky would collapse if the BBC denied it its channels. Yet the BBC still pays £5m a year for appearing on its platform, a deal struck by Thatcher to help Murdoch.The sum was cut, but in all other countries commercial broadcasters pay national broadcasters for the right to use their content – not the other way round. The BBC should be paid a hefty fee from BSkyB to compensate for the 16% cut it suffered, partly as a result of Murdoch lobbying. The cut was pure spite, since the licence fee has no connection with Treasury deficits. Pressure persists to deprive viewers of listed national events saved to watch free on BBC: Wimbledon and the rest would go the way of Premier League football.

If it does nothing else, this scandal will stop the government daring to give anything more to Sky. Much as the Tories detest the BBC – which, like the NHS – stands as a defiant symbol of non-market success, expect no overt attacks on it for a while now. But the BBC charter comes up for renewal in 2017: a Tory victory at the next election would liberate them to follow their vengeful instincts.Jeremy Hunt was within days of giving Murdoch everything, because the government wished it. A token gesture would have put Sky News behind Chinese walls, but on all previous precedent, soon his newspapers, print, online and TV would have merged into a single newsroom. That would require repeal of the law imposing impartiality on broadcasters.

But already Murdoch's friends were softening up opinion against old-fashioned, dull TV news, unsuited to the rowdy, opinionated internet era: Fox News would soon be here. If the arrival of Murdoch's kick-arse Sun was a shock, we'd look back on it as an age of innocence compared with what Fox would do – look what it's done to US politics.Cameron has said it is his ambition to finish Margaret Thatcher's work. As she privatised nationalised industries, so he would marketise the public sector, with his NHS commercialisation and his promise to put all public services out to tender. The dismantling or shrivelling of the BBC would soon have followed. If the Guardian journalist, Nick Davies, had not exposed the hacking of a missing and murdered girl’s phone in the nick of time, all would have been lost – an odd way for the BBC to be reprieved.

The 81-year-old under scrutiny this week rambled a bit and remembered nothing to his own detriment. He was an unsatisfying villain, as most are. But the villainy here is not about one man. He stands as an Adam Smith lesson in the primacy of competition law and what happens when politicians let the free market rip to do political favours.

A famous British politician (Aneuran Bevan) once wrote a book in which he compared his search to discover where power lay in Britain to the peeling of an onion - each layer stripped, there was yet another beneath it. With the current, public inquiries in Britain, we seem to be getting to the core......

I couldn't find an appropriate painting to illustrate the title - and have used this instead this Stanio Stamatov painting which was pulled out of the Shumen archives specially for me to view.