Journalism After Watergate

When Readers’ Identity Became the Capital

To understand why journalism now looks the way it does, we need to stop thinking of newspapers as truth-producing institutions and start thinking of them as rent-extracting firms operating in an attention market.

Under the Rent Theory of Political Identity, this shift is not cultural or moral. It is economic.

The core change is simple:

Newspapers no longer monetise information.
They monetise the political identity of their readers.

---

From advertising to identity rents

Historically, papers like The Washington Post or The Guardian generated income indirectly.

• Journalism produced information

• Information attracted a broad readership

• Advertisers paid for access to that audience

The reader was the product, but their identity did not matter very much. What mattered was scale.

That model collapsed.

What replaced it is a system in which:

• subscriptions

• donations

• memberships

• brand loyalty

are driven by identity alignment, not informational value.

In rent-theory terms:

• political identity becomes a rent-bearing asset

• newspapers become identity intermediaries

• journalism becomes a mechanism for extracting identity rents

---

Identity as capital (this is the key move)

In classical economics:

• capital is something you invest to generate returns

In the modern media economy:

• the reader’s political identity plays that role

A newspaper does not primarily sell facts.
It sells affirmation, recognition, and moral positioning.

Which means:

• stories are selected not for truth-discovery potential

• but for rent-generation potential

In other words:

Editorial judgement now asks:
“Can this story reliably extract value from our readers’ identity?”

---

Why Watergate no longer fits the model

Watergate was economically irrational under this system.

At the start:

• there was no audience demand

• no identity alignment

• no guaranteed outrage

• no subscription upside

The investigation only became valuable after journalism had already borne massive costs.

Under an identity-rent regime:

• early Watergate stories are loss-making

• they generate no immediate identity rent

• they risk alienating parts of the audience

That kind of journalism requires cross-subsidy and patience — both now structurally unavailable.

---

Why the Farage school story does fit perfectly

Now compare that to reporting on Nigel Farage as a pupil.

The story:

• is morally legible

• activates existing political identities

• requires no new evidence discovery

• offers instant affirmation to a defined readership

For The Guardian’s audience, the story:

• confirms existing beliefs

• reinforces group boundaries

• produces emotional and moral returns

In rent-theory terms:

• the reader’s identity is the capital

• the story is the rent-extraction mechanism

• journalism’s role is to certify and legitimise, not discover

This is not cynicism.
It is optimal behaviour under the new payoff structure.

---

Process journalism as rent maintenance

Once identity becomes capital, journalism naturally shifts toward:

• testimony aggregation

• reaction reporting

• moral clarification

• process narratives

These stories:

• are cheap to produce

• legally safe

• infinitely renewable

• and reliably monetisable

They maintain identity rents without risking discovery costs.

Investigative journalism, by contrast:

• introduces uncertainty

• destabilises identities

• produces uneven returns

So it exits the equilibrium.

---

The structural conclusion

Under Rent Theory, the transformation of journalism is inevitable:

When readers’ political identity becomes the capital base, journalism must prioritise stories that yield identity rent — not stories that maximise truth discovery.

Watergate-style journalism disappears not because journalists are worse, but because it is economically mispriced.

The press has not become biased.
It has become asset-constrained.

---

Modern newspapers no longer invest in uncovering reality; they invest in extracting rent from the political identity of their readers — and choose stories accordingly.