For much of the 19th century U.S. newspapers were public relations tools funded by politicians. Information hostile to a paper’s political views were ignored or dismissed as sophistry. Newspaper independence was rare. Fraud and corruption in 19th century America approached today’s more corrupt developing nations.
The newspaper industry underwent fundamental changes between 1870 and 1920 as the press became more informative and less partisan.
– 11 per cent of urban dailies were independent in 1870,
– 62 per cent were in 1920.
The rise of the informative press was the result of increased scale and competitiveness in the newspaper industry caused by technological progress in the newsprint and newspaper industries.
• From 1870 to 1920, when corruption appears to have declined significantly within the United States, the press became more informative, less partisan, and expanded circulation considerably.
• By the 1920s, the partisan papers no longer coupled allegations of the corruption of their party members with condemnation of the character of the person making the charge.
A reasonable hypothesis is rise of the informative press was one of the reasons why the corruption of the Gilded Age was sharply reduced during the Progressive Era.
A supply-side model suggesting that newspapers weigh the rewards of bias—politicians’ bribes or personal pleasure—against the cost of bias—lost circulation from providing faulty news.
The key predictions of the model are that, as the size of the market for newspapers rises, and as the marginal cost of producing a paper falls, newspapers will become less biased and invest more in gathering information.
Corruption declined because media proprietors discovered that they could maintain and boost circulation by exposing it. An independent press which kept a watchful eye over government and business was a spontaneous order that was a by-product of rising incomes and literacy of readers.
Politicians did not help the process along. Technological innovations and increased city populations caused a huge increase in scale.
Newspapers become big businesses; they increased readership and revenue by presenting factual and informative news. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, it is from their high regard to their own interest.
Following these incentives, newspapers changed from political tools to impartial reporting. Those newspapers that did not did not survive in competition.
HT: The Rise of the Fourth Estate: How Newspapers Became Informative and Why It Mattered by Matthew Gentzkow, Edward L. Glaeser, and Claudia Goldin in Corruption and Reform: Lessons from America’s Economic History (2006).
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