On course to wreck the Spanish economy
In 1530, Francisco Pizarro, the illegitimate son of a Spanish Colonel crossed the Atlantic with a small force of just 180 men.
Two years later, he would overthrow the 500 year old Inca Empire, and rule a population in the millions.
How he did it is the subject of another discussion. This one is about what happened after that.
Pizarro had come to The New World, like Columbus, shamelessly seeking gold. What he found was silver. More silver than he, or anyone else, could possibly have imagined even existed on earth. In Upper Peru, at a place called Cerro Rico, he found what was literally a mountain of silver. One of the richest veins of exposed silver on the planet.
The Spanish set to work mining their find, using and killing locals and ultimately importing African slaves for the labor. They built a city, Potosi there, which at its height had a population of 200,000 people, making it one of the largest cities in the world.
When they were done, they transported more than 45,000 tons of pure silver back to Spain.
The Spanish at first thought that they had struck it rich, really rich. Silver and gold were the measures of wealth, and now silver by the ton was arriving in Seville every week. It was as though they had won the biggest lottery in the world. And in the beginning, they had.
But as the years wore on, and as the silver supply continued to pour into Spain, the Spanish economy suffered a hitherto entirely unknown phenomenon. Inflation.
As silver became more and more available, the value of an individual piece of silver began to deteriorate. It was just less rare, and so of lesser value, because worth and value are to a great extent psychological. What is the pure value of silver? Any more than lead? Or brass? Not really. What is the value of a diamond? It is just a stone. But because of rarity, and a kind of mutually agreed value, it has worth. But make it more common and the perceived value drops quickly.
The ironic result of the greatest silver mining adventure in the world was that it pretty much destroyed the Spanish economy – something no one at the time could have conceived of as possible.
All of which brings us to TV news.
In the 1950s and 1960s, television news was difficult to produce.
There were only 3 networks. With limited air time. And shooting and editing and getting film from Europe or even Washington on the same day was an extremely difficult process.
So TV News was a rare item.
There was not a lot of it. Cronkite, Huntley-Brinkley and whomever ABC had at the moment.
And as a result, TV news had a very high perceived value.
The nation stopped at 7PM when the Nightly News came on.
When Walter Cronkite said he had turned against the War in Vietnam, Lyndon Johnson said he knew he had lost the nation.
The value was not so much in the ‘quality’ of the news, but rather in its rarity, hence it’s pcrceived value. Like a diamond or silver, that which is rare is valued.
The advent of cable news, all news, all the time, 24-hours a day, began the process of devaluing the perceived value ofnews. Now, suddenly, one did not have to wait until 7PM to see the news. One could see it at any time. It was always there. So the value of the news began to be debased. Not the quality, per se, but rather the perceived value.
So cable news began to pump the perception. “Breaking news” flashed across the screen with greater and greater frequency. And each time they did that, they also debased the value or the perceived quality of ‘breaking news’. “This just in” became a punch line, in a kind of national joke.
And now comes video on the web, and a billion people around the world with cameras or blogs or vlogs and citizen journalists.
We are an information culture. We perceive value in being informed.
For us, to a great extent, information is what silver was to the Spanish. A rare item of great value.
But when we pump our society full of information, all news all the time, we do to our information society what the Spanish did to their silver society – we flood it with the commodity that we consider the most valuable based on its rarity, and in so doing, we change the fundamental equation. We debase the currency itself.
Today, the three television network news shows get fewer viewers on any given night than Walter Cronkite got alone in the 1960s. And the population is one-third greater.
It is all breaking news all the time, and so it has less perceived value.
It is not a question of ‘quality’, any more than the collapse of the Spanish ‘piece of eight’ or the German Thaler (hence dollar) was based on the quality of the coinage, though there were those who argued this point. It was that that which is common has lesser perceived value.
Small cameras, the web and cable are our own personal Peru. They flood our market with ‘news and information’. There is no turning this off. There is no going back to the days of the rarity of news.
Instead we must decouple our information economy from the flood of content just as western Europe learned, over time, to decouple their economies from silver and gold.
This will not be easy to do, and it will not happen overnight or without a great deal of blood on the floor, or without the fall of a media empire or two.