That a free market doesn’t produce what you want isn’t a market failure. It’s just you not liking the answer that the calculating engine of that market is providing. It’s no more a failure than a calculator showing that you’re, at your current levels of spending, going to run out of wages before you run out of month.
Or, as we might put it, statements of reality are not failures:
Cairncross said that job losses at local newspapers meant there was a crisis in the coverage of democracy. “The cost of investigative journalism is great and rarely seems to pay for itself … given the evidence of a market failure in the supply of public-interest news, public intervention may be the only remedy.”
The complaint is that such journalism costs more to produce than people are willing to pay for it. That’s just the same statement as it costs more than it’s worth in those purely monetary terms. Given that the market is the calculating engine of what things cost and what they’re worth this verdict is not a failure.
The actual complaint here is about reality. Dame Frances Cairncross, along with some number of other people, thinks that we out here should all value that local and investigative journalism more highly. Which is fine, of course it is, it’s views which make a market in the first place. Yet that reality is that we don’t.
OK, we don’t value such journalism at the rate which Dame Frances thinks we should. What is the solution here?
The correct solution being that as we don’t then we don’t have to pay for it. For to be forced into paying for something we don’t value sufficiently to pay for it voluntarily is to make us poorer. Those, like Dame Frances, who do value it more highly can maximise their own utility by paying that higher price. We are all thus made as well off as current circumstances allow us to be. That Dame Frances, and those who think similarly, have the opportunity to dip into our money through the taxation system changes nothing in this argument.
We aren’t willing to pay the costs of production of this type of journalism. Therefore we shouldn’t pay for it. And that we’ll not pay for what you want is not evidence of market failure, it’s instead you disagreeing with revealed reality. To which the answer is - just as with the existence of opera, pink Ferraris and pumpkin spice lattes - you want it, we apparently don’t, so you pay for your desires not charge us.