The news: The winner of our discontent

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What's going on at BBC News? Two weeks ago I reported on the considerable internal discontent, directed largely this time not at the Director-General, Sir John Birt, but at his deputy here on earth, Tony Hall. I suggested that, far from remaining up-market from its competitors, the need to maximise audiences, in order to protect the licence fee, might drive the BBC to become more and more populist, perhaps even more so than commercial rivals without the same compelling need to maximise the sheer size of their viewership.

I summarised and commended the programme review board report, BBC News: the Future. In particular, I was impressed by the rather specific commitments not to "dumb down" the BBC's news, and by the frank recognition that viewers (and listeners) fiercely resist any such dumbing down.

I go to the United States for four days, and what do I find when I come back? BBC news staff are on strike. Only 2,500 of them, says the management; thousands, say other reports. What is the strike about? Well, many things. But certainly the poor performance of the BBC's recently acquired newsroom computer system is one cause of anger. And the "winner-take-all" salaries paid to top executives are another.

BBC unions point to the ever higher executive salaries. News staff are asked to accept a 4 per cent increase, when the Director-General gets a 9 per cent rise. Over the last ten years, in fact, the DG's salary has risen by 416 per cent to pounds 387,000. No doubt he deserves every penny, no doubt he could make more elsewhere. But it doesn't help to persuade talented journalists worrying about their mortgages to tighten their belts.

The argument about top executive salaries has had a terrific thrashing in recent years. "Insensitive! Unfair!" cries the Left; "from each according to his ability, to each according to his need." "An end to the politics of envy" echoes back the answer from the City and its friends. With Newtonian precision, the invisible hand of the market allocates to each his just reward.

Three years ago two American economists, Robert H. Frank and Philip J. Cook, published a book called The Winner-Take-All Society. They subtitled it "How more and more Americans compete for ever fewer and bigger prizes, encouraging economic waste, income inequality, and an impoverished cultural life."

They analysed the mechanisms that have caused a handful of sports and entertainment stars, surgeons, lawyers and business executives to be paid astronomic salaries, while others scarcely less talented or competent miss out relatively or altogether. There are many fascinating twists to the process. For example, the best-known lawyer in a given speciality makes far more than the second best-known, not because he is necessarily any better at his job, but because he is better-known: a board of directors is terrified that it might be sued by shareholders if it did not pick the lawyer they've heard of.

It is this process that has made the United States the most unequal society in the developed world, with Britain not far behind.

So in paying Sir John Birt and his colleagues telephone number salaries, the BBC is just going along with the managerialist culture which they have imported in other respects from the United States. That culture sets far too high a premium on saving expenditure by firing workers, casualising them or forcing down their real level of remuneration, and on rewarding the executives who undertake this unpleasant work.

In the culture of a private sector corporation, of course, such managerial behaviour, which seeks above all to maximise shareholder value, is not just defensible; it may be rational. ("May be" because even in a purely- for-profit corporation, concerned only with the shareholders' financial interests, it may be dangerous and counter-productive to allow the quality of the product or services sold to decline too far.)

But the BBC is not a private sector corporation. It does not have any shareholders except in the sense that we are all stakeholders in its fortunes. A managerial culture forged by the 1970s crisis of corporate America, with shareholder value as its chief, if not its sole, criterion, is wholly inappropriate, (Clinton-speak for "wrong") for a public-sector corporation in a public-service business.

So what are we to make of the contrast between the civilised priorities deployed in the policy document, and the stumbling incompetence that has led to one humiliation after another? Is it simply that the BBC management talks a better game than it plays. No doubt that is true. But is there some truth, too, in a deeper explanation, and one that applies far more widely in British business and society than just to the BBC? The winners, feeling understandably comfortable with a winner-take-all society, have found it tempting to appropriate from American corporate business a managerialist culture that has not solved the old problems of British institutions like the BBC, but has introduced new ones instead.