The announcement that the Internet site of People's Daily, China Central Television, Xinhuanet and other major Chinese media are to list on the Shanghai stock exchange excited widespread comment inside and outside China. Some, such as foreign press claims that People's Daily had now embraced capitalism, were fairly ill informed – appearing not to have noticed that China has had a stock market for some time! But it raises a serious issue of what should be the economic basis of the mass media? Although it may not be immediately apparent, the media can be looked at clearly from an economic point of view, and this is essential for its development.

In any country diverse sections of society have different conditions of life by age, gender, ethnic group, interests, income, the regions they live in and innumerable other ways. Any media sector not reflecting this, which is uniform, necessarily does not reflect reality. Therefore it will be artificial and boring as it does not correspond to the character of any real section of society – society is not made up of "uniform" people but of individuals each of whom is unique.

Media must therefore necessarily be competitive. Those using the media decide by what they chose to see, read, watch etc. what corresponds to their interests. As economic analysis would predict, a media monopoly does not have to correspond to people's interests as its potential customers have no choice. As it does not have to meet its customers' needs it becomes stereotyped.

The same applies to journalists, artists and entertainers. If they are guaranteed an audience by a media monopoly their work loses its interest and edge. Competition produces innovation, initiative, and understanding of an audience's needs – in a word makes media live and interesting. Forcing greater competition between China's media, which is a fundamental idea behind the changes leading to stock market listings and similar measures, is therefore important simply at the level of media quality.

But other reasons are even more profound. For example, because every country is made up of diverse individuals and groups, developing a policy in different fields corresponding to the interests of the largest possible numbers in society can only be arrived at by synthesizing these different experiences – not by imposing uniformity. For the same reason, ideas which turn out to be correct frequently start as a minority. To take simply large scale illustrations, in Britain during the 1930s, when Churchill warned of the danger from Hitler he was in a small minority and was derided as a "warmonger." He turned out to be right and is regarded as the greatest 20th century British leader. When the Chinese Communist Party was founded in 1921 it consisted of only a few people, but in less than thirty years it formed China's government. When women, at the beginning of the 20th century, argued they should have the same political rights as men, their views were not only a minority but those struggling for this goal were brutalized, degraded and tortured. Less than 50 years ago in the U.S., African-Americans fighting for civil rights were murdered – now an African-American is president.

It is evidently preferable that ideas which turn out to be correct become a majority via peaceful debate and discussion rather than having to face violence or even civil war. Such discussion necessarily takes place via the media. Creation of uniformity in the mass media, that is the prevention of such discussion, therefore necessarily leads to great mistakes.

The creation of fake uniformity can be achieved by different forms. In the former USSR, for example, the country's leadership did not wish to hear any alternative view of its policy from either inside or outside the country. Consequently, as my Russian friends say, "it surrounded itself with an atmosphere of stupidity." Great mistakes in economic policy, or sending troops into Afghanistan, were not subject to discussion and were continued for such a period that they became key reasons for the country's collapse. In China, during the Cultural Revolution, lack of restraint on policymakers led to huge errors. China's leadership explicitly learned from this. On the economy, for example, a huge range of views are now sought out and published while decisions are taken – indeed, as noted below, economic policy discussion in China is far freer and more wide ranging than in the U.S. or Europe.

But in the U.S. and other Western countries monopolization of the media is secured by ownership. The media in the West, to use the expression, "is open to everyone – just like the Ritz hotel." That is, while formally it is open to anyone, actually it is only open to those with great concentrations of money. Therefore far from the media expressing the interests of diverse sections of society it overwhelmingly expresses only that of the rich – a theoretical understanding brought home personally and vividly in 2004 on the night of the presidential election, at a dinner with an American billionaire who explained how more than 40 papers he owned had supported George W Bush against John Kerry.

Such monopolization, as is predictable, leads to disasters. For example, opinion polls in the U.K. showed that almost half the population opposed the invasion of Iraq even before it occurred, and this rapidly became a majority. However, the newspapers in the country are owned by a small handful of media groups which supported the war, and that was the view they expressed. Now it is clear the invasion was a disaster not only for Iraq but even for the U.S. and the U.K.

Similarly, a number of US economists – Joseph Stiglitz, Dean Baker, Nouriel Roubini, Mark Weisbrot to name only a few – knew prior to 2008 that U.S. economic policies would lead to financial meltdown. But the media was controlled by companies supporting the policies being followed and such critics were entirely marginalized; Nobel Prize for Economics winner Paul Krugman described how even in academic journals articles with differing viewpoints would not be printed. The result, in 2008, was the greatest economic disaster for nearly a century.

Listing some of China's main media outlets on the stock exchange is therefore a step forward because it will encourage competition. But judging by the West's experience it will be important to introduce rules that prevent large concentrations of private media ownership of the type that have demonstrably done such damage in the U.S. and Europe.

The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/johnross.htm

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

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