Applicants to become trainee journalists on the Scotsman group of newspapers in 1965 took a test in which they were invited to imagine themselves as editors of the Edinburgh Evening News on a day when three big stories broke. One, man lands on moon! Two, Princess Margaret gets divorce! Three, Edinburgh council rates to double! As a possibility, the third seemed far more likely than either of the first two – reader, how little we knew – but likeliness wasn't the issue at stake. The question was: to which story should the editor give top priority on the front page? Obviously the first reflected a momentous human achievement, no question, but the second would be truly shocking, this not yet being an age of royal divorce, while who could doubt that hard-pressed Edinburgh ratepayers would be most materially affected by the third? Our examiners may not have put it in such terms, but we were being asked to decide which front page would attract most attention and sell most copies.

De Botton plays a similar game in his book, reprinting headlines – real ones – and inviting the reader to consider why, for example, "Sydney man charged with cannibalism and incest" is a more attractive story than "Tenants' rent arrears soar in pilot benefit scheme". The author wonders if our dash to read the first and not the second, to prefer distant sensation to local information, shows that at heart we are "truly shallow and irresponsible" citizens, or if the blame lies with journalistic convention and its "habit of randomly dipping readers into a brief moment in a lengthy narrative … while failing to provide any explanation of the wider context", rather as if Anna Karenina (the example is De Botton's) could be expected to hold an audience if it were serialised in 100-word chunks. It is De Botton's contention that, "properly signposted" (whatever that may mean), the rent arrears report would stand revealed as "part of a hundred-year debate about whether welfare lends its recipients dignity … a single episode in a multi-chaptered narrative that might be called 'How Subsidy Affects Character' [or] 'The Psychology of Aid'". And, therefore, nearly as rewarding a read as Tolstoy.

De Botton thinks news should be more like novels, but what does he think news is? "The determined pursuit of the anomalous," he writes at one point, before deciding that he wants to leave the definition "deliberately vague". Whatever news is, he thinks, along with Hegel, that it has replaced religion as a modern society's source of guidance and authority to become its "prime creator of political and social reality". He also thinks there is too much of it and that we have become addicted – news junkies – and need to recognise its ill-effects, including the "envy and the terror" it promotes; hence what he calls his "little manual", which he hopes will "complicate a habit that, at present, has come to seem a little too normal and harmless for our own good". Other writers might have chosen "illuminate" rather than "complicate" as the verb for the book's aspiration, but as it turns out De Botton's word choice is perfect.

Complications abound. Investigative journalism, for example: the writer thinks that what he calls a "proper" conception of investigative journalism should "start with an all-encompassing interest in the full range of factors that sabotage group and individual existence", including mental health, architecture, leisure time, family structures, relationships … the list goes on, and sounds remarkably like the everyday components of modern life. Should journalism investigate modern life? Most of us believe that, for better or worse, it already does. What De Botton is attacking is journalism's propensity for easy targets, reinforcing our impression that we are ruled by crooks and idiots, while it fails to scrutinise the institutional flaws that have caused them. Of course, his attack has justice, but his verbal imprecision makes his argument hard to figure out.

The author gives a good impression of living in an older and more privileged world – he seems oblivious, for example, to the popularity of media studies in schools when he regrets that "we are more likely to hear about the significance of Matisse's use of colour than to be taken through the effects of the celebrity photo section of the Daily Mail," which is his way of describing the online Mail's "sidebar of shame". He doesn't seem comfortable with the new information age. The comment threads attached to online journalism may indeed reveal "a hitherto unimaginable level of anger in the population", as any journalist can attest (and with more vivid examples than this book provides), but journalism that has been liberated from the constraints of paper and broadcasting slots has great advantages, too. The "multi-chapter narrative" that De Botton believes news needs already exists via search engines and hyperlinks embedded in news reports. The reader can construct a narrative that will end only when his curiosity runs out; nobody else need do it for him. If "How subsidy affects character" is what he's after, the world is at his fingertips.

But De Botton isn't too interested in modern developments. He sees news as a monolith rather than something that changes from place to place, from reader to reader and time to time. The rent arrears story, for example, might play differently in the Guardian and the Sun (if it played in the Sun at all) and wouldn't be a prime example of dullness to everyone: a worried buy-to‑let landlord in Southwark could well find it more gripping even than nephew-eating in Sydney.

Apart from never quite deciding what news is, De Botton is also remarkably uninterested in who pays for its gathering and transmission, and who defines it. A kind of fluent ignorance is at work that might be innocence in disguise. He reckons that our news-checking habit arises out of dread: "the possibility of catastrophe explains the small pulse of fear we may register when we angle our phones in the direction of the nearest mast … a version of the apprehension that our ancestors must have felt in the chill moments before dawn, as they wondered whether the sun would ever find its way back into the firmament". But is dread really what we feel when we turn on the news? It may have been during the last world war, which was when broadcast news turned into a British addiction, but surely we look forward to it now mainly as a form of entertainment or distraction, to satisfy an unfocused curiosity about "what's going on".

The most dramatic and memorable news events are rarely cheerful, and De Botton is far from the first person to wonder if the news gives a distorted, disproportionately gloomy view of human affairs. "Man abandons rash plan to kill his wife after brief pause" is, as he says, the kind of headline you will never read, though not (as he implies) because newspapers have no taste for "good news" but because public events such as court trials ("Man murders wife") make news, while changes of heart, being private, do not. Still, the critic shouldn't scoff at what De Botton describes as his book's utopian project, which is to challenge our pessimistic assumptions about what news is and imagine how could it be. The British nation, he writes, "isn't just a severed head, a mutilated grandmother, three dead girls in a basement … trillions of debt". It is also "the cloud floating right now over the church spire, the gentle thought in the doctor's mind … the small child tapping the surface of a newly hardboiled egg while her mother looks on lovingly, the nuclear submarine patrolling the maritime borders with efficiency and courage …"

Humphrey Jennings could have made a documentary about this lyrical passage, which has a wartime ring to it. The quiet poetry of everyday Britain and so forth: blackbirds sing while Lancasters drone overhead. And when De Botton writes that one of news's main tasks is "constructing an imaginary community that seems sufficiently good, forgiving and sane that one might want to contribute to it", he might as well be writing for the Ministry of Information in 1944. The aim, then as now, is admirable, but at the first tap of the spoon on the egg, the first shot of HMS Imponderable butting into the waves, a little voice will tell us that we are watching the state's propaganda.

On the question of journalistic practice, De Botton is at his most interesting on the job of the foreign correspondent – "interesting" in that the same paragraph can combine a nicely expressed insight into a problem with a monstrous stupidity as its solution. As he rightly says, reporting gives us an unbalanced view of abroad, especially of countries beyond Europe and North America, because it concentrates on political crises and natural disasters, and unless we have some sense of "what passes for normality in a given location, we may find it very hard to calibrate or care about the abnormal". So how does the reporter in, say, Zambia interest his Manchester reader in the Zambian everyday? De Botton thinks it permissible for "creative writers" to adapt a fact or change a date because they will understand that "falsifications may occasionally need to be committed in the service of a goal higher still than accuracy: the hope of getting important ideas and images across to their impatient and distracted audiences".

A goal higher than accuracy? In a book about the news, even one written by an author who cannot decide what news is, there can be no more dangerous form of words.