The Australian Broadcasting Cooperation Are Just Rent-Seekers by Sinclair Davidson – Article Example

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The paper "The Australian Broadcasting Cooperation Are Just Rent-Seekers by Sinclair Davidson" is a good example of an article macro and microeconomics. This article suggests that Australian Broadcasting Cooperation (ABC) should be privatized because it is just rent-seeking. The author of this article bases its argument on the suggestion of Malcolm Turnbull who argues that ABC is not a commercial company, so its performance does not depend on its revenue. On the contrary, the performance of the public corporation depends on its ability to convince the government to increase its budget.

According to Turnbull, suggests that a commercial broadcaster can save money by preserving its program budget. On the other hand, a public broadcaster saves money by cutting programming and canceling new series and shows. This is considered to be an easy and lazy way that public broadcasters use to cut on costs.   Davidson (2014) thinks that this is correct, but he suggests that programming decisions depend on consumer preference, not management preference. In this case, if the company does not respond to its consumer demand by design it will be forced to account to taxpayers through the government.

He concludes that a public corporation should not just be accountable to the government; hence ABC should be privatized because it is completely unaccountable and a threat to democracy and market efficiency. This article is relevant to political rent-seeking, taxation, and market efficiency because ABC seeks rent from the public through taxation by the government; and is unaccountable to the taxpayers; causing market efficiency problems.

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