The United Kingdom’s Parliament had it exactly wrong when its report on the News Corp. phone hacking scandal declared media mogul Rupert Murdoch unfit “to exercise the stewardship of a major international company.“
Murdoch, 81, has built one of the world’s largest and most powerful media companies, with unmatched global influence. Its holdings include such U.S. powerhouses as The Wall Street Journal, Harper Collins Publishing, Fox Broadcasting and 20th Century Fox. Worldwide, it earned just shy of $3 billion last year on revenue of $33.4 billion.
Although its financials took a tumble in 2009 – like every other major media company during the recession – News Corp. has shown nothing but solid growth over the years. If a global corporation’s primary mission is to deliver growth and profit for its owners/investors, then you can’t argue Murdoch has been anything but successful.
What Parliament really seems to mean – and what they should have said – is that Murdoch’s success was achieved in a manner incompatible with the interests of society. Specifically, it believes News Corp. has violated laws and widely accepted rules of behavior by building power through the hacking of private phone and e-mail messages, the buying and bullying of public officials and other behaviors that – legal or not – are widely consider anti-social and unethical.
These accusations are not only pointed at his now-shuttered News of the World operation, but also other global holdings. They are intended to paint his entire empire with broad strokes of conspiracy, influence peddling, and amoral greed.
Is anybody surprised by this? Murdoch is commonly described as a ruthless competitor (def.: having no pity, merciless, cruel). He sees himself as being on a mission to upend individuals and institutions with whom he disagrees, according to a 2010 profile in New York magazine. And since the 1980s, he has built his empire by toppling adversaries like so many dominoes.
Guess what? This is not unique in the corporate world.
The real point is that this is precisely why the Cult of Capitalism has it wrong.
The main theme of the Cult of Capitalism – of which Murdoch is both a respected symbol and a hands-on activist – is that the world would be more efficient and much improved if markets were unshackled from burdensome regulation.
What this episode reveals yet again is the questionable outcome when that assumption is put in practice.
If you’re OK with the Parliamentary conclusion that the social power of Murdoch’s media empire has been built on anti-social behavior, then congratulations: You’re qualified for membership in the cult.
Otherwise, the logical conclusion is that the game of capitalism – like all other games – requires some rules (and referees to enforce them) that assure corporations achieve success within a range of behaviors that are generally seen to be compatible with society.
In a message to employees, Murdoch – the embodiment of unfettered capitalism – agrees to be bounded by these rules. But don’t expect any real change from him.
If News Corp. and others choose to play safely within societal boundaries, it’s only because those boundaries are well defined and enforced by regulators. Within the Cult of Capitalism, that practice is still referred to as wasteful and job-killing government spending.