Rumors are circulating that Vivek Ramaswamy and Elon Musk, heads of the incoming Trump Administration’s Department of Government Efficiency (DOGE), are planning to abolish funding for PBS (the USA’s publicly-funded television network) in order to save taxpayer money.
If they try to do this, it is likely they will be opposed, not only by the rent-seekers at PBS, but also by some members of the public.
As Charlie Spiering wrote in the Daily Mail, efforts to defund PBS, ‘…typically generate widespread emotional push-back from Americans who harbour strong feelings for public programming like Sesame Street… Any attempt to cut public broadcasting would be labelled by critics as an attempt to cancel or kill lovable characters like Elmo…’
To be blunt, Elon and Vivek should kill Elmo.
Of course, that is a metaphor, as Elmo isn’t a real person, despite the fact he previously testified before Congress. Elmo, or more specifically the Sesame Street intellectual property, could easily survive in the private sector due to its lucrative merchandising and brand recognition. So clearly ‘killing Elmo’ (i.e. cutting off public funding to PBS) merely means making Elmo ad-supported. But enough semantics – let us discuss the economics of killing Elmo!
The typical economic case for public broadcasting comes from a simple ‘market failure’ argument. Certain kinds of television, typically broadcasts that convey information (such as educational children’s programming or, at the other end of the age spectrum, factual news for adult audiences) are presumed to create positive externalities and thus, in a laissez-faire market, would end up being underfunded and consequently under-produced. Ergo, the government should step in and make up for the shortfall by establishing a public broadcaster. An additional rationale for government involvement in broadcasting is that the television broadcast spectrum, just like the radio broadcast spectrum, is limited in scope and thus there is a technological limit on just how many channels there can be.
Neither of these arguments stand up to scrutiny these days. The shift to the internet as the standard method of media distribution has rendered the limitations of the broadcast spectrum an irrelevant issue. But when we approach the question of externalities (or lack thereof) things get slightly more complicated. Does children’s programming even need to be educational considering that we have a public education system which already provides this same service? Not to mention, you could argue that any television show which includes characters speaking is educational to some degree, as it teaches children language – a television program doesn’t need to be bluntly didactic to be educational.
The controversies only intensify when one looks at the subject through a Culture War lens. For one, Sesame Street has discussed transgender topics before, despite being targeted to a very young audience (conservative commentator and transwoman Blaire White reacts to and critiques this episode here. But it is when we step out of the realm of children’s programming that the real significance of public broadcasting becomes clear. The value of an highly-informed citizenry is almost always considered great, but has public news media done a good job at creating this?
The answer is quite clearly ‘no’. Even if we restrict our analysis to the Anglosphere, public news media (the ABC in Australia, BBC in the UK, CBC in Canada, PBS in the USA) is well known for having a uniform bias towards the same kind of intelligentsia-class leftism that one finds in the pages of The Guardian. Not coincidentally, this is the same political leaning that consistently endorses maintaining and even increasing government funding for public broadcasting. And even if I were to remain agnostic on questions of whether or not this political leaning were actually correct (for the record, I do not believe it is, which is one of the reasons I write for The Spectator Australia), it is clear that news coverage from this perspective is creating negative externalities rather than positive ones. An obvious example is the civil unrest that followed George Floyd’s killing in the United States and caused massive amounts of damage – the unrest was clearly exacerbated by left-leaning media’s narratives. Another example may be unnecessary medical interventions that occur in the wake of social-contagion-induced (a.k.a. Rapid Onset) Gender Dysphoria, and the consequent medical interventions often required to detransition (all of which count as social costs in the economic sense) – the lefty media have clearly played a role in turning the serious medical condition of Gender Dysphoria into a politicised fashion trend in certain subcultures. There certainly is value in having an highly-informed citizenry, but when the media encourages ideological polarisation and balkanisation the resultant violent tribal paranoia imposes significant costs.
And that’s just the news media. Public broadcasters have been no stranger to injecting their own highly partisan ideology into their entertainment products as well – the UK’s BBC is particularly notorious for doing this and has damaged their reputation (and particularly that of Doctor Who, one of its most valuable entertainment productions) in the process. For example, I struggle to think of any positive externality that comes from playing around with The Doctor’s gender (especially when the last several years have involved such ‘representation’ crusades across every prominent privately-owned intellectual property one can think of).
The simple reality is that public broadcasting is an industry that has been rendered obsolete. Most people get their news from the internet, not the television (or the radio for that matter). There is no longer a reasonable economic argument for it, outside of perhaps some very small and specific situations that could be addressed individually. There is no need for an ABC, BBC, CBC or PBS. What these outlets ultimately are is a kind of cultural welfare (and make-work program) for the leftist intelligentsia. To the extent they have created successful intellectual properties, these IPs can clearly survive without state subsidy. These outlets address no clear market failure, and they ultimately end up producing little more than the same crap you can get from the current spread.
It is time to kill Elmo.
Dr Andrew Russell is an economist, philosopher, and musician based in Brisbane. He specialises in Austrian, evolutionary, institutional, and public choice economics. His PhD at RMIT in Melbourne was a dissertation on the economics of casino gambling. His substack can be found at drcasino.substack.com.