Media: The Economist keeps it in the family: A journal noted for trumpeting the virtues of free-market competition is likely to appoint a new editor from within, says Maggie Brown

THE ECONOMIST, as regular readers know, loves the free market. As the Government privatises the railways, the weekly urges it to go the whole hog and embrace road pricing too. Its solution to the coal industry's agony is equally predictable: speedy privatisation.

Yet it is unlikely that the Economist will dare to expose itself to true market forces when it comes to choosing its next editor. An internal candidate is expected to replace Rupert Pennant-Rea when he moves to the Bank of England as deputy governor in July.

The magazine's top staff, however, are living up to their reputation for competitive arrogance. An ambitious band of 11, from a journalistic pool of about 50, have applied to become the next editor, compared with four internal candidates seven years ago, when Andrew Knight moved on. This is partly due to the magazine's enormous rise in circulation and influence during the Eighties, making the editor's job a highly-paid, jet-setting position. But plainly the hopefuls are not lacking in ego.

There are those who think that with so wide a field, an outsider would be the best bet. But the real choice is said to be finely balanced between two favourites: Bill Emmott, the business editor, and Nicholas Colchester, the deputy editor. The board and trustees, who will make the decision next month, are bound, through a hallowed process of consultation, to take into account the views of staff, especially the departing editor. This clubby approach is light years from the brutal exercise of proprietorial power to which most newspapers are subjected. But the Economist, 150 years old this year, has its traditions.

The smart money is on Mr Emmott. A respected 37-year-old, he conforms to another Economist tradition - editors should not just be super-bright, but also in their thirties. Mr Knight, now the multi-millionaire chairman of News International, explains why: 'You need incredible intellectual stamina.' Nor is writing talent enough. The skill to rewrite and ruthlessly condense other people's prose is highly valued.

Mr Knight adds: 'Very few people understand that the Economist is a hierarchy of editors. The editor is the highest-paid sub-editor in England. It is an anonymous paper, which puts enormous power in the editor's hands. You can write very well, but you won't get to the top unless you can sub-edit.' This is likely to rule out grand, ambassador-style candidates from outside.

One factor in Mr Emmott's favour is that women, who found the aloof Mr Pennant-Rea difficult to work with, consider him more congenial and modern.

Membership of an Oxford 'Magdalen College mafia' is another key indicator aiding Mr Emmott. The teaching of R W Johnson, the college's leading political-economist don, is cited as one of the great influences on the magazine's top writers. The Magdalen connection could also help the highly regarded Matt Ridley, heir to Viscount Ridley and nephew of the former Cabinet minister Baron Ridley, who is currently runningwhat only an Old Etonian could modestly describe as his 'farm' in Northumberland. Trained as a scientist, but a former correspondent for the magazine, he is anxious to return. Some insiders are tipping Mike Elliott, the Washington bureau chief, as a serious contender.

Based in a high-class office block in St James's, the Economist strangely mis-styles itself a newspaper: it is more accurate to describe it as an international business news magazine-cum-viewspaper with a British flavour. Its motto, staff and ex-editors say with a hint of a giggle, is: simplify, then exaggerate. Most of the staff are not primarily journalists, but academics, economists, foreign-affairs specialists and would-be politicians who happen to be natural writers or are capable of picking up the skills. A staff member who has flogged away on a regional newspaper is a rarity: detailed knowledge of human nature and grass-roots British society is not highly prized in a product largely selling abroad. Recruitment straight from university is more likely.

Some have moved on to influential jobs on national newspapers (Andrew Neil, editor of the Sunday Times; Jonathan Fenby, deputy editor of the Guardian) but there is a tendency for them to pass onwards and upwards towards non-media goals. Mr Pennant-Rea, an economist seconded to the Bank of England, was recommended to Mr Knight by the Observer's William Keegan, who had met him at the Bank. He was hired after Mr Knight asked him to submit a trial article overnight.

Whoever wins, the Economist - with a worldwide circulation of 510,000, and sales in the United States outweighing those in Britain - faces an ideological challenge. Where should such a preachy paper position itself in the Nineties?

Its tradition has been to cling to the centre while dispensing anti-conventional but (in Economist eyes) commonsense wisdom, first to Britain, then the US, now increasingly to the world.

This led it to espouse privatisation, council-house sales and sound money, while opposing budget deficits, years before these policies became reality. More recently its zealous backing for the European exchange rate mechanism, with Britain in at the wrong rate at the wrong time, has been gloriously wrong.

Bill Clinton will probably ride to the rescue. The Economist backed him for president and is already dispensing brisk advice to the man it calls 'Mr Fizz'. 'The virtues this president needs to cultivate are decisiveness and self-restraint. The first will channel his energy in definite directions. The second will hold back his populist impulses.' The Economist is never slow to give advice, whoever is at the helm.

----------------------------------------------------------------- Where the Economist sells ----------------------------------------------------------------- UK: . . . . . . . . . . . . . . . . . . . . . .101,000 US: . . . . . . . . . . . . . . . . . . . . . .225,000 Europe: . . . . . . . . . . . . . . . . . . . .108,000 Far East: . . . . . . . . . . . . . . . . . . . 53,000 Rest of the world . . . . . . . . . . . . . . . 23,000 Total . . . . . . . . . . . . . . . . . . . . .510,000 ----------------------------------------------------------------- Source: the Economist -----------------------------------------------------------------