The journalism industry is dying right now. Maybe you've noticed the massive layoffs by almost every major news publication in the country and the disappearance and quiet liquidation of many local and regional publications.
Many of these entities have been purchased and are now controlled by private equity, a new evolution of capitalism focused on generating profiting through the acquisition, management, and sale of companies. Private equity firms look for companies or industries that they see as inefficient and bloated with unnecessary costs that they can acquire, restructure (i.e. cut costs by gutting the labor force and previously critical functions), and sell at a profit.
Private equity firms are the financial equivalent of locusts - they find a fertile field, descend on it in their millions, and leave nothing but stalks and the odd leaf behind, having consumed for themselves the juiciest morsels. Like locusts, private equity firms transform their ripened subjects into hollowed out husk - but unlike locust-consumed fields, these hollowed out corporate husks still look and act the same on the outside, fooling the consumer into believing nothing has changed. But, in fact, something dramatic has occurred. Over the last decade, private equity firms were responsible for at least 600,000 job losses in the retail sector alone (according to The Center for Public Democracy) and a working paper from the National Bureau of Economic Research estimates that private equity ownership in the nursing home industry resulted in 20,000 (yes, 20,000) premature deaths over a 12 year period. This is happening across all sectors of the economy, including education, housing, healthcare, and more.
The most prominent recent examples in the news industry are Time Magazine and Sports Illustrated - both titans of their respective news domains now reduced to rictus grins uncannily stretched over bleached skulls. In both cases, one is reminded of the Ship of Theseus thought experiment - is a news publication the same publication as before if so many of the component parts have been replaced or destroyed? When does it cease to be the thing it still claims to be? And, if it has changed its essence, what are the implications for those onboard?
One implication is the irrelevance and death of civic virtue, a now archaic concept that has lost most of its former prominence. Historically, capitalists and even robber barons embraced civic virtue because they understood that certain individual and collective virtues were necessary for the continued existence and reinforcement of status quo power arrangements. Core to civic virtue is the necessity of an active and well-informed citizenry able to engage in good faith to advance our shared project of governance with courage, honesty, self-sacrifice, cooperation, thrift, solidarity, sincerity, humility, and, when necessary, strident critique. Civic virtue is not naturally occurring - it requires careful, intentional tending by institutional arrangements (e.g. schools, universities, journalism, 3rd civic spaces, nuclear and extended family) that do not function for the purposes of profit nor nor the production of revenue. In fact, these institutions may LOSE money - but that is a cost we have chosen to bear collectively because the fruit produced is necessary for the betterment of all in our experiment of so-called self-governance.
"A republic, if you can keep it" as Benjamin Franklin once intoned when asked what sort of government the Constitutional Convention had created.
Private equity firms are gutting, slowly and then all at once, any and all institutional arrangements designed primarily for flourishing of civic virtue,.. and then breaking them over the wheel of profit. Academic institutions, news outlets, and even our very family structures must justify their existence through the production of revenue and, ultimately, profit.
When private equity firms analyze a business venture, they typically speak of "cost centers" (which do not generate revenue) and "profit centers" (which generate revenue). As private equity roves through the economy to and fro, it seeks to consume business ventures containing bloated cost centers that can be transformed INTO profit centers. Well-paid, expert investigative journalists with an extensive network of contacts in a newsroom.. are a cost center. Well-compensated, expert humanities professors at a university.. are a cost center. Well-compensated, expert medical professionals in hospitals and nursing homes.. are a cost center. Now matter how effectively and expertly they contribute to society,.. private equity sees these as inefficiencies that can be, nay, must be transformed into profit.
And private equity firms have correctly surmised, in the short-term that these cost centers can be discarded in order to reap a massive financial benefit. The business model is fairly straightforward: (1) fire the well-compensated, experienced experts, (2) gut critical but costly services, (3) target the pleasure zones of customers, and (4) prettify the decaying husk of the zombie business.
So private equity fires the expert medical staff and ends pro bono services for unhoused folks,.. and make the hospital and nursing home waiting rooms much nicer and more comfortable while people wait - ooh, a sparkling water tap! And private equity fires the expert professors and fights the teachers unions and cuts non-revenue generating courses,.. but now the university dining hall has a Chipotle and the university pool has a big slide. And private equity fires the expert journalists with the extensive contact list and ends expensive investigative reporting efforts,... but now the magazine has bigger, more colorful pictures and includes puff pieces on what Taylor Swift's popularity says about the economy of football.
Is the product worse? Yes. Is our collective civic virtue atrophying? Yes. Will anyone notice? Maybe a few will, but most people will keep going to the University and using the Hospital and reading the Magazine without putting up any fuss because their pleasure zones are being tickled and this new political economy increasingly incentivizes them to seek their own pleasure and individual benefit over any sort of collective civic virtue. After all, isn't it preferable to comfortably accept one’s own pleasurable pacification instead of intentionally working to develop virtues that no one appreciates or rewards?
And, so, private equity, and capitalism as a whole, continues dragging us all along on its death march to subsume and transform costly, inefficient civic virtue into the one totalizing civic virtue: profit.
Thanks for putting some thoughts together around this. Journalism is changing so much, thanks to platforms like SubStack. My hope is that this new model of independent journalism will take the place of some of the conventional magazines that are being bought by private equity. I see this space as an important addition to the civic institutions that are cultivating civic virtue. Will this individual subscriber directly paying the writer help us maintain journalism? I think it has great potential if people like us are willing to pay for it. This connects to what I was saying the other night. The future workforce, hopefully, will allow more people do to the sacred work of contributing to civic life as we rely less on our labor to complete tasks that economists and capital equity firms would consider “inefficient.” Why have people doing redundant tasks when we could be pursuing real, meaningful work? The big question is how does money cycle through the economy in the future so that all people can thrive if we replace all our current non-sacred work with machines and AI?