Integrity only way for media

Yesterday marked 42 years since Black Wednesday. Black Wednesday saw the banning of several prominent South African newspapers, the arrest and subsequent torture of numerous editors and journalists and the banning of 19 black consciousness organisations. That day marks one of the darkest days for media freedom in the history of South Africa.

Glenda Daniels, in an article marking the 40th anniversary of Black Wednesday, wrote: “Nothing as violent as this has occurred since 1994. But today, the media is a murky, ambivalent and contested space marred by political interference, commercial imperatives and depleted newsrooms.”

Carefully chosen words, “the media is a murky, ambivalent and contested space marred by political interference, commercial imperatives and depleted newsrooms”. As with so many things in South Africa since 1994, our world has become so much more complex and the old dichotomies have broken down.

Apartheid was universally accepted as being evil and so fighting apartheid was universally accepted as good. We were guided by a singular vision of creating a nonracial, nonsexist, democratic and prosperous South Africa. We knew who was on which side of the struggle. Today, our country flounders in a volatile ocean without such a North Star.

Unfortunately, this has become the new normal. Life will never be as simple as it was during the struggle and our country may never produce leaders such as Nelson Mandela, Oliver Tambo, Walter Sisulu, Ahmed Kathrada, Helen Joseph, Lilian Ngoyi or Bram Fisher. That is a bygone era. And so in this murkiness, each of us must grapple with issues of integrity.

I do believe that in this singular term, we will find our direction again. It should become our North Star.

In many ways, the media and central banks struggle with the same dance: the need for independence balanced by the need to be accountable to society. Journalistic integrity rests on the need to be independent of political interference and commercial imperatives, and, at the same time, earn public trust through being accountable for what they say, write, publish or broadcast.

Similarly, central banks seek to be independent from political and commercial interference while earning the trust of the public through being open, transparent, impartial and accountable. Neither journalists nor central bankers are in a popularity contest. It is our responsibility to tell the truth, in all its gory detail. And hence, our social licence to operate depends not on our popularity but on our integrity.

This battle for independence and society’s trust occurs in an environment of mind-boggling complexity. There are commercial pressures, political noise and the all-important societal context we have to consider. Added to this is rapid technological change which democratises the media while simultaneously lowering standards. This technological advance makes it easier and quicker to communicate, but also makes it harder to distil the truth from fiction. And so seeking truth from facts is harder.

I think the media have a tougher job. Maintaining journalistic integrity today is harder than safeguarding an independent central bank. There is only one central bank per country and with some effort and careful institutional design, we can try to maintain our independence while still creating mechanisms for society to hold us accountable. We still require integrity, though.

In the media’s case, there are multiple platforms from print to the internet, radio to television, dozens of large media groups, hundreds of smaller ones and literally tens of thousands of individuals plying their trade, some with only the pretence of being a journalist in the truest sense of the word.

Designing the correct institutional mechanisms for independence and accountability for the media is just so much harder.

Let me set out the case for an independent central bank in our country and in our context. Central bankers deal with what we call a time inconsistency problem. That is, the actions we take have different, sometimes opposite effects today compared with the effects in the future. It is almost unique in that respect.

Actions that we take today to boost the economy may have the opposite effect in the future. Similarly, constraints imposed today may allow for higher living standards in the future.

Very few institutions have this problem. The role of the central bank in general, is a disciplining one. It brings part of the cost of borrowing from tomorrow forward in an open and transparent manner. It makes the trade-offs more stark, so that everyone can see the cost in today’s prices. This is not a popularity contest.

If central banks did not play this role, or if this role was unduly influenced by a political cycle, then we would have lower interest rates before an election and perhaps higher interest rates after.

Former Reserve Bank governer Gerhard de Kock, operating in a time without central bank independence, once lowered rates before an election, only to raise them soon after. Then US president Richard Nixon is famous for calling a central bank governor to remind him of the upcoming election and the need for some economic stimulus in the run up.

Democracy brings freedoms, but also requires disciplining institutions – organisations that tell the truth without fear or favour. This is your task too as media, to bring reality and facts to balance our freedoms.

Not all countries have independent central banks. Those without electoral democracy do not need this kind of discipline because there are no elections and politicians are not incentivised to deliver short-term gains at the expense of the long term. Don’t get me wrong. I would rather have the freedoms in our democracy than the alternative. But that, in some ways is my point.

With freedom comes a responsibility to construct institutions which limit our freedom to do as we please and to hold us to account to the public. The concept of a free and credible media enjoys widespread public support. Even if some politicians observe it only in the breach, at least they argue publicly for a free and independent media. The media is fortunate in this regard but this privilege should not be taken for granted, because it comes on the shoulders of those journalists arrested and tortured 42 years ago.

The media is not a single, homogenous entity and so it cannot be held accountable in the same manner as central banks are. Accountability to society is, by its nature, an ill-defined concept. Accountable to who, when and how? You rely, rightly so, on both internal processes, a press council and a press ombud to support this role. These institutions are working better today, but it is still not optimal. The economics of the media have changed fundamentally in the past decade. News is a commodity and, in general, freely available. How do we sustain an independent media with integrity when the economics of news and the media are changing so drastically?

With great difficulty, I assume. The economics may never justify their existence, but a combination of sales, philanthropic donations, advertising and public funding would sustain smaller but sizeable centres of excellence. Society recognises it as a public good.

I have to watch this space closely because my industry may well be similarly disrupted. At present, we derive our power from the ability to produce money. We manage a foundational piece of the national payment system and we issue licences to institutions able to take deposits of this money that we’ve produced.

But what if the production of a currency becomes as democratised as a newsfeed on Twitter? Virtual currencies, with parallel and defuse payments systems bypassing banks, could render us as central bankers completely useless. And so we can learn from the media about the disruptive effects of technology and we can learn about rapid change in the economics of an industry.

Let me conclude by going back to the issue of integrity. The cynic would say that there will always be journalists with a political or factional agenda. There will be media houses with less editorial independence than is deemed appropriate.

But the media must however rise above such cynicism and continue to advance an agenda of free speech, journalistic integrity and accountability to society. And like central banks, we’ve got to fight these fights in the court of public opinion, not just in the courtrooms or newsrooms.

Kuben Naidoo is a deputy governor at the Reserve Bank and CEO of the Prudential Authority. This is an edited version of his keynote address at the SANEF Black Wednesday event held on Friday

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