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The panel of federal judges, headed by David Bazelon, reversed the commission and vindicated Tuttle and the Hush-A-Phone.
The Catholic enforcers subscribed to a principle that legal scholars would come to call “prior restraint”–the regulation of films before production. Quigley had personally insisted on this strategy based on his experiences in 1920s Chicago, where despite the Church’s lobbying, the board of censors would permit an offensive film to be made and released.
The Catholic boycott, or at least the threat of one, was the Legion’s most lethal weapon against Hollywood.
Adolph Zukor had no censorial instincts per se. He built the Hollywood studio system, but to make bigger, better films, and to guarantee a good return on his investors’ dollar.
In fact, had Zukor and his cohorts at Warner Bros., Universal, and Fox not wiped out the independent producers, distributors, and theaters, the rule of the Production Code would not even have been possible. One can hardly imagine Lord, Quigley, and Breen gaining anything like the leverage they managed over Hollywood if industry power were still dispersed among thousands of producers, distributors, and theater owners.
As it happened, the transformation in Hollywood content was so abrupt as to be shocking, and it demonstrates a substantial vulnerability of highly centralized systems: while designed for stability’s sake, they are in fact susceptible to extremely drastic disruption.
In Lord’s terms, the ideal film was one wherein “virtue was virtue and vice was vice, and nobody in the audience had the slightest doubt when to applaud and when to hiss.”11
The story of Daniel Lord and the Legion of Decency goes to a central contention of this book: in the United States, it is industrial structure that determines the limits of free speech.
The Lord-Breen system of censorship had nothing to do with the First Amendment or the courts, for it had nothing to do with any law subject to judicial review.
But what if the figurative “marketplace of ideas” is lodged in the actual and less lofty markets for products of communication and culture, and these markets are closed, or so costly to enter as to admit only a few? If making yourself heard cannot be practically accomplished in an actual public square but rather depends upon some medium, and upon that medium is built an industry restricting access to it, there is no free market for speech.
The problem is that a “speech industry”—as we might term any information industry—once centralized, becomes an easy target for external independent actors with strong reasons of their own for limiting speech.
It was the combination of the Church and the Hollywood studio system that produced one of the most dramatic regimes of censorship in American history.
The right—by reason of patent, not constitutionality—even to make a film in the first place was in the hands of but a dozen men. And those dozen, by reason of commercial imperatives, made themselves subject to the veto of one man, Joseph Breen. We cannot claim to understand the life of free speech in America without understanding how that happened. * Despite such rhetoric, Breen’s biographer insists that by the 1940s Breen was a committed and vocal opponent of anti-Semitism. CHAPTER
In the early days, it was possible, then, for both an inventor and a businessman to inhabit the camp of radio utopianism.
his innovation would give RCA the opportunity to take radio to its full potential. It would never occur to him that the Radio Corporation of America would want to do anything less. And yet the better the tests proved FM to be, the more distant and evasive RCA’s management seemed to become.
“Yes,” said Sarnoff, “but this is no ordinary invention. This is a revolution.”4
From that day onward, over the next decade, in ways both subtle and not, Sarnoff and the rest of the AM radio industry quietly campaigned to relegate FM radio to irrelevancy.
Three important waves of innovation followed the great consolidation of broadcasting in the 1920s: mechanical television, electronic television, and FM radio transmission. And despite the importance of each technology, what is so striking is that none managed to produce an independent industry capable of challenging the dominant Radio Trust, comprising primarily RCA, NBC, and NBC’s industrial allies, CBS, General Electric, and Westinghouse.
For while Vail and Zukor consolidated industries by means of financial pressure and corporate acquisition, Sarnoff managed his empire by using government to restrict inventions, and hence the future. In pursuit of this aim, the Radio Trust perfected the art of controlling both public discourse and federal regulation to the detriment of any would-be rivals.
They grew to recognize a truth that had eluded Western Union in the 1880s: the best antidote to the disruptive power of innovation is overregulation. That is to say, the industry learned how to secure the enactment of seemingly innocuous and sensible regulations that nonetheless spelled doom for any rival.
broadcasters. If managed correctly, Armstrong realized, the adoption of FM could clear the way for many more broadcasters than the large networks dominating the AM dial. Let out of its box, there was even some possibility that FM could make the FCC less relevant, as America returned to the lightly regulated,
The campaign against FM radio in the 1930s and 1940s is a study in rhetoric as a weapon of industrial warfare. While it changed over time, the strategy pursued by Sarnoff and his allies was to belittle FM, talk it down, and generally promote a conventional wisdom that favored the AM industry. It shows, as we shall see, that perhaps the most effective way to gain power over the future is to dictate popular assumptions.
When mentioned at all, FM, lauded as theoretically interesting, was also minimized as a mostly unproven technology, experimental and of marginal utility.
Much of what is called lobbying must actually be recognized as a campaign to establish, as conventional wisdom, the “right” facts, whether pertaining to climate change, the advantages of charter schools, or the ideal technology for broadcasting.
In contrast to the early, unregulated days of AM radio, there was no way for an FM station even to get started without breaking the law. And even if one were so bold, with no radio manufacturer selling FM sets to consumers, there were no listeners. And without listeners, there was no industry.
Investors were the other target of the industry’s indoctrination program.
Only thanks to Armstrong’s tireless advocacy did the technology not die, and indeed begin to gain acceptance, including, eventually, allocation of spectrum for commercial use. He had a flair for the dramatic, and his demonstrations of FM’s wonders made headlines, undermining the efforts of the industry to suggest there wasn’t much to it.
In 1940, Armstrong had predicted that FM would supplant AM in five years. Actually, it would take until the 1970s for it to catch on, and until the 1980s to reach the popularity of AM.13 It cannot be denied that the emergence of television at the same time took some of the wind out of FM’s sails. It is likewise true that wholly replacing one technology with another does take time. But the studied efforts of the AM industry and the complicit restrictions imposed by the FCC, even if occasionally well-meaning, certainly retarded FM, preventing it from developing into anything more than AM in
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Sarnoff, understanding well the merits of Armstrong’s invention, decided to put FM receivers in RCA’s television sets. But instead of seeking the partnership of his old friend, Sarnoff and his firm decided simply to use Armstrong’s technology and wait for him to sue.
Armstrong, like Alexander Bell in the 1870s, was forced into litigation that would last the rest of his life.
The denial that Armstrong had in fact invented FM was, if not the last straw, then very nearly the last. A man’s decision to end his life is inevitably a complex one and cannot easily be blamed on any one person or event.
Enter the force that perennially has bedeviled the smooth operation of Schumpeter’s basic theory: the reluctance of the obsolete to go gently.
In the early 1930s, it was by no means obvious what television would be.
Jenkins, like his colleagues a veteran of the radio pioneer days, understood the importance of a device targeting ordinary consumers, and in the beginning, he sold a kit for $7.50, before going on to sell the first ready-to-operate television set, which he called the
revenues. And so as early as 1928 he was establishing a clear, consistent message: television is not ready for prime time.
Consider for a moment the oddness of this phenomenon in a putatively free-market economy. The government was deciding, in effect, when a product that posed no hazard to public health would be “ready” for sale. Consider, too, how incongruous this was in a society under the First Amendment: a medium with great potential to further the exercise of free speech was being stalled until such time as the government could agree it had attained an acceptable technical standard.
Acting in what it believed to be the public interest, the commission arrested the marketing of television from its invention in the late 1920s until the 1940s. It issued only a few licenses to men like Jenkins, and specified that they were for experimental purposes only—all forms of commercial television were banned. And this ban on commerce was strict enough that when Jenkins aired an announcement of his $7.50 television kits, the FCC sanctioned him.17
When Hoover headed the agency, virtually anyone was welcome to run a primitive station, an environment that the Internet pioneer Vint Cerf would later term “permissionless innovation.
Apart from keeping out foreigners, the most stultifying effect of the FCC’s television freeze was to inhibit potential investors, compounding the capital scarcity created by the Depression.
As we have already seen, time and time again, it is investors as much as inventors who decide what our future will look like, and what we call genius might better be described as smarts coupled with capital. Unable to make money or attract funding, potential American manufacturers of mechanical television would all collapse or abandon their efforts within a few years. There was simply no business model or means of support after the initial novelty wore off.
As the Hush-A-Phone affair makes plain, the conditions facing entrepreneurs determine how much innovation happens.
We fancy having in the United States the most open of markets for innovation, in contrast to the more controlled economies of other nations. In truth, however, the record is decidedly uneven, even given to excesses that would shame a socialist, with the federal government, at the behest of an entrenched industry, putting itself in charge of the future.
Like most of the key inventors in this book, Farnsworth, who conceived electronic television at the age of twenty-two, was an outsider.
He was also perhaps the first tech entrepreneur to base himself in the Bay Area.
And so, as the 1930s began, Sarnoff and his allies were simultaneously trying to discredit the Farnsworth television and to reproduce it—such was the perverse genius of the Sarnoff plan. The talk campaign was similar to the one he’d lodged against FM and Edwin Armstrong: Farnsworth’s invention, while of some scientific interest, did not work, and so his patents were invalid. The key audience for this disinformation was, of course, the investment community, and in 1935 RCA intensified the effort to keep them away from Farnsworth by means of what we now call a “vaporware” strategy.
When TV reached consumers after the war, it was, as prophesied, a replica of radio in all respects. The programming was sponsored by advertisers, most of the shows simply adaptations of existing radio programs. Sarnoff had planned it all out in The New York Times in 1928 and, one step at a time, had made it all happen.
What ever happened to Farnsworth’s patent? We might recall that in the 1870s, Bell had managed to force Western Union’s retreat from telephony by means of a patent lawsuit. By such means, too, Sarnoff himself had pushed AT&T out of the radio industry in the 1920s. Farnsworth might have done likewise to RCA in the 1930s. But in Sarnoff he was facing ruthless genius not to be cowed by any man or law.
Reprising his strategy against FM radio, Sarnoff was willing to simply break the law, gird his lawyers, and force Farnsworth to seek redress. In fact, he went further, ordering his lawyers to challenge Farnsworth’s patents and claiming audaciously that all the relevant ideas had been Zworykin’s. Like the founders of the film industry, Sarnoff understood full well that obtaining justice can be expensive and time-consuming, and, with enough adroitness, one could found an industry on law-breaking.
have the dream of domination of the Schumpeterian “private kingdom”? Absent any evidence to that effect, one tends to see him as that variety of inventor ill equipped to be a founder, and one who furthermore failed to find a champion up to doing battle with the radio industry. There was no great warrior on Farnsworth’s side, no Hubbard or Vail, and no one with the foresight to realize that the inventor had everything necessary to defeat Sarnoff.
Farnsworth’s drinking would grow more serious, and he would fall into a deep depression that nearly killed him before he abandoned the television industry altogether.
