1. Article written by Paul Mason Economics editor, NewsnightMurdoch: the network defeats the hierarchyThe Murdoch empire fractured, a Conservative prime minister attracting bets onhis resignation, the Metropolitan Police on the edge of yet another existentialcrisis and the political establishment in disarray.A network of subversives would have counted that a spectacular result to achieve in adecade, let alone in a single week. But it was not subversives that achieved it - thewounds are self-inflicted.As the News of the World scandal gathered momentum, it became clear, by midnight onThursday, that this was not just the latest of a series of institutional crises - the banks,MPs expenses - but the biggest. For this one goes to the heart of the way this countryhas been run, under both parties, for decades.It is like a nightmare scripted by Noam Chomsky and Slavoj Zizek: key parts of thepolitical machinery of Britain are wavering.The strength of the Murdoch newspaper and TV empire was that it occupied thecommanding heights of a kind of journalism that dispenses power, intimidates andinfluences politicians and shapes political outcomes.The other rival power node is Jonathan Harmsworths Daily Mail and General Trust -which sets the agenda for all other news media in the UK but lacks the global reach.Conrad Blacks Daily Telegraph once occupied the third peak, but in terms of influencehas been a shadow of its former self in terms of influence since the old proprietor wentto jail, and then - under new owners - broke the MPs expenses scandal.The primary function of these journalistic centres of power is to dispense approval ordisapproval to politicians. A News International journalist is reported to have said toLabour leader Ed Miliband: "Youve made it personal with Rebekah so were going tomake it personal with you."That is the kind of power that, until about 1500 on Thursday, journalists in that circlecould wield.Manufacturing consentBut not any more: for all the difficulties Mr Cameron had with the immediate question -of judgement over the employment of Andy Coulson; of what did he ask and when - it is
2. clear that he intends to make a strategic break with thepress barons. Likewise, Mr Miliband had already burnedhis bridges.If Britains senior politicians are serious about that break,then it will signal - without a single law being passed - amajor change in the countrys de-facto constitution.In economics journalism, we have learned to study what the Financial Times writerGillian Tett calls "the social silence": the subject that everybody at high-class cocktailparties wants to avoid.After Lehman Brothers collapsed, we realised that the unasked question had been themost important: "on whose books do the increasingly toxic debts of the housing marketstand?" The answer was "in the shadow banking system", but we only knew it existedwhen it collapsed.The political equivalent of that question is the one everybody has been asking journalistsand politicians this weekend: why do all politicians kow-tow to Mr Murdoch; what is itthat makes them incapable of seeing the moral hazards of the relationship?Nobody outside the Murdoch circle knows the full answer, but I suspect it is quiteprosaic: like the Wizard of Oz, Mr Murdochs power derived from the irrational frightpoliticians took from his occasional naked displays of it. The Kinnock "light bulb" headlinewas probably the signal moment. He was powerful because people believed he had thepower, and that editors like Mrs Brooks and Mr Coulson probably had a file on everybodybigger than MI5s, and so you should never, ever, cross them.Now, there is a school of social theory that has a name for a system in which pressbarons, police officers and elected politicians operate a mutual back-scratching club: it istermed "the manufacturing of consent".Pioneered by Edward Herman and Noam Chomsky, the theory states that essentially themass media is a propaganda machine; that the advertising model makes large corporateadvertisers into "unofficial regulators"; that the media live in fear of politicians; that trulyobjective journalism is impossible because it is unprofitable (and plagued by "flak"generated within the legal system by resistant corporate power).At one level, this weeks events might be seen as a vindication of the theory: NewsInternational has admitted paying police officers; and politicians are admitting they haveall played the game of influence ("Weve all been in this together" said Cameron,disarmingly). The journalists are baring their breasts and examining their consciences.The whole web of influence has been uncovered.Market logicBut what challenges the theory is first, the role of the social media in breaking the oldsystem. Large corporations pulled their advertising because the scale of the social mediaresponse allowed them to know what they are obsessed with knowing: the scale of thereputational threat to their own brands.We do not yet know the scale of the Twitter and Facebook campaign on companies topull their ad spend. A sense of it can be gleaned by the 150,000 submissions to Ofcomover the BSkyB takeover.
3. It was the present and future threat to advertising revenue and toinvestment that forced Mr Murdoch to kill the News of the World.As Mrs Brooks told the journalists, she has "had sight of the future"on this: she and James Murdoch know the full scale of what is to berevealed about the NOTW, and may have judged that it would lead,inevitably, to the total collapse of its ad revenue as any criminalproceedings played out in court.Those bemoaning the "unnecessary" closure of the NOTW ignore the market logic. Evenif the guilty parties had long ago moved on, the NOTW was essentially the same product.The current senior management of NI are having to admit to post-crime "errors ofjudgement" revolving around their attempts to pay hush-money to the perpetrators andfailure to investigate.Given what may now happen in the courts, it had to go as a brand to prevent gangreneto the whole of Newscorp: the Church of Englands investment fund has demanded thesacking of senior NI managers with immediate disinvestment in the entire Newscorpgroup as the sanction.Though Twitter played its part, as in Egypt it was the interplay between social mediaresponses and the mainstream television networks that toppled the giant.If the BBC, ITN and Sky had - like Egyptian state TV on 25 January - just ignored thefurore, Mrs Brooks and Mr Cameron may, even now, have been sitting down to Sundaylunch somewhere in Oxfordshire.But the UK broadcast media has - unlike in the US - effective regulation. Instead of aculture of partisanship there is a culture of impartiality. There are infuriating (for thosewho work here) checks and balances. And there is a regulator as well as "self-regulation".I would add, even the most "constructed" of TV and radio journalism looks natural andspontaneous compared to the machine-written prose of tabloid newspapers: I havebecome convinced that the Facebook generation, when it reads such newspapers at all,does so ironically, much as it watches Big Brother. That is, even though you can make abusiness model out of selling scandal sheets about the famous, you cannot manufactureconsent with it anymore.In addition, even as the tabloid press has money out of the "sexploits" of the famous,mainstream TV drama - including that produced by Mr Murdochs studios - has come torevolve around a single theme: the supposed rampant corruption of the entire political,media, police and legal systems.Once it was only at places like the National Theatre, with plays by David Hare andHoward Brenton, where you could see such stories aired. (Hares Pravda, aboutMurdochs takeover of the Times, is worth re-reading; the script was sent by theplaywright to the culture secretary as a submission in the BSkyB case.) Now it iseverywhere, from the Batman movies, to The Matrix, to the Bond movies - leave asideseries like State of Play.It has been remarked (by Richard Bacon, I think) that these scandals are like The Wire,working series by series through every institution. But the last series of the Wire is fiveyears old. We know the whole story already.
4. Nobody under the age of 50 is remotely surprised to see a man once trusted to run theinformation operation of the British government arrested, or to see the Met admit that "asmall group of officers" took payment.Institutions weakenedFinally, the political influence that was supposed to stop the system crumbling, itself hascrumbled. We are told Tony Blair pleaded with Gordon Brown to call off Tom Watson MPfrom his crusade over the original hacking allegations. It did not work.Tom Baldwin, Ed Milibands spin-doctor purposely selected from the Murdoch empire tohone Labours message in the direction of Wapping, warned Labour "not to conflatephone-hacking and BSkyB". Mr Milibands Bloomberg speech on Friday contradicted thatapproach.One part of the Chomsky doctrine has been proven by exception. He stated thatnewspapers that told the truth could not make money. The Guardian, whose veteranreporter Nick Davies led the investigation, is indeed burning money and may run out of itin three years time.But a combination of the Guardian, Twitter and the public-service broadcasters, includingSky News, proved stronger than the power and influence of Rupert Murdoch, and for nowthe rest of Fleet Street has joined in the kicking.(It should be said here that the Daily Telegraphs role in the exposure of the MPsexpenses scandal laid the groundwork for this moment. The Telegraph proved you canattack major sections of the political elite, who had assumed impunity, and win.)Now three institutions stand weakened: Mr Murdoch is facing the collapse of his BSkyBbid; the Conservative Party, cut adrift from him, faces a moment of internal reappraisal;and in the cappuccino joints around New Scotland Yard there is apprehension overwhether the Met can survive another systemic kicking so soon after the MacPhersonreport.Of all these institutions, it is the one with least resilience among the mass of people thatstands in greatest danger. The Conservative Party has branches, summer fetes, jumblesales and social roots going back centuries; the Met is, tonight, dressed in its stab vestsand fuelled by stale McDonalds, dealing with traumatised victims of urban mayhem onhousing estates few politicians would dare to visit after dark.But Rupert Murdochs resilience relies on the few handpicked lieutenants and familymembers holed up in London and New York. It is a classic "Weberian hierarchy" - acommand structure stronger vertically than horizontally.Six months ago, in the context of Tunisia and Egypt, I wrote that the social medianetworks had made "all propaganda instantly flammable". It was an understatement:complex and multifaceted media empires that do much more than propaganda, andwhich command the respect and loyalty of millions of readers, are now also flammable.Where all this leaves Noam Chomskys theory I will rely on the inevitable wave ofcomments from its supporters to flesh out.But the most important fact is: not for the first time in 2011, the network has defeatedthe hierarchy.