Political Economy of Mass Media Research Paper

This ideal continues to provide political economy with its moral touchstone positioning many of its practitioners as permanent critics of capitalism’s failure to reconcile possessive individualism with the common good. For many economic commentators however, this is an anachronistic stance, a residue of a time before economic analysis detached itself from its roots in moral philosophy and set out to become a modern analytical science. Consequently, to call oneself a political economist today is as much a declaration as a description. It announces a continuing commitment to teasing out the relations between economic dynamics and the virtuous polity and to the Enlightenment project (Garnham 2000). The political economy of mass media occupies a pivotal position in this endeavour by virtue of the communication system’s unique triple role as an essential infrastructural support for economic activity, a significant focus of economic activity in its own right, and the major force organizing the cultural resources through which people come to understand the world and their own possibilities for action.

2. Capitalism, Democracy, and Communications

It was immediately clear to many early nineteenth century observers that the emerging system of public communications, centered at that time on the daily press, had a pivotal role to play in securing a democratic social order. First, it provided the most effective way of disseminating the information and knowledge citizens needed to understand the problems facing society and how they might be tackled. Second, it offered a communal space in which alternative interpretations of the situation and competing policies could be tested against the available evidence. Third, by overcoming geographical separation it helped construct the nation-state as an imagined political community as well as an administrative apparatus.

At the same time, by the mid nineteenth century it was equally evident that communications systems also played a central role in organizing the emerging industrial forms of capitalism. First, they provided the means whereby firms could track and coordinate activities that were becoming ever more diverse and dispersed. Second, with the growth of mass production, they provided new outlets for the display advertising that was increasingly central to the task of matching supply to demand. Third, they offered enticing opportunities for capitalist enterprise in their own right. As migrants moved into the cities to work in the new factories and offices, the demand for popular reading matter and later for recorded music and cinema, grew exponentially.

The central question these developments posed for political economy was deceptively simple; ‘How did the increasing integration of public communications into a capitalist economy based on private enterprise affect the former’s ability to provide the disinterested information, plural viewpoints, open debate and communal culture required by democratic ideals?

3. A Free Market in Ideas

For the first half of the nineteenth century most commentators argued that the best guarantee of open democratic debate was a free market in ideas and arguments, in which a plurality of publishers competed for readers with minimum interference from the government. There were good reasons to identify the state as the principal enemy of press freedom. The American colonists had fought a bitter War of Independence to emancipate themselves from British rule, while in England the government had responded to increasing popular unrest by introducing an array of compulsory levies on the press (including taxes on the paper used and the advertisements carried) in an effort to make radical publications economically unviable. The battle to repeal these ‘taxes on knowledge’ (as they were known) lasted until 1869, when the last remaining provision was abolished. However, it was at exactly this point, when the nominal freedom to enter the newspaper market was extended, that the introduction of more efficient production technologies (improved presses, mechanized composition and new graphic capabilities) raised the price of market entry and began to concentrate press ownership in the hands of wealthy individuals. This development placed a sizeable question mark against the press’s ability to fulfill its promises of providing a forum for debate and acting as a watchdog on abuses of power. In their pamphlet of 1846, The German Ideology, Karl Marx and Frederick Engels had famously argued that the capitalist class’s control of economic resources allowed them to ‘regulate the production and distribution of the ideas of their age’ and manipulate public culture in their own interests. Witnessing the rise of the new ‘press barons’ even commentators who rejected revolutionary politics began to wonder if Marx might not be at least partly right. Whereas most of the old style proprietors had owned a single newspaper, which they often edited themselves, the new owners possessed chains of titles and had significant stakes in key geographical markets. Moreover, the increasing importance of advertising seemed, to many observers, to be extending the influence of capital still further. Drives to maximize readership among the urban working class had led to cuts in cover prices and the spread of the ‘penny press.’ Shortfalls in income were made up by advertising revenues, altering the previous relations between paid publicity and editorial matter. As the English commentator, Thomas Bowles, noted in 1884: ‘Newspapers … profess to sell news and give advertisements to boot. What they really do is sell publicity … and give news to boot’.

The emergence of a press system funded primarily by advertising whose ownership was increasingly concentrated in fewer and fewer hands challenged the ideal of public communications in the service of democracy in several ways. First, it raised the possibility that press proprietors might use the titles they owned to promote their own political enthusiasms or business interests while denying space to opponents and critics. Second, dependence on advertising revenue opened newspapers to editorial pressure from large advertisers wishing to promote their activities or censor unfavorable publicity. Third, the growth of advertising content privileged the speech of commerce and squeezed the space available to other voices. Fourth, because advertisers required access to either mass readerships or wealthy niche markets, publications catering to marginalized minorities or less affluent groups became ever more precarious or unviable. Surveying the situation in the United States in 1910, Edward Ross reluctantly concluded that ‘the commercial news-medium does not adequately meet the needs of democratic citizenship.’ Many of his contemporaries agreed but saw the entrenched identification of a free press with a free market as an immovable barrier to reform. As Delos Wilcox lamented in 1900; ‘The American people must dearly love the freedom of the press, or we should have heard before now much talk of government control or operation of the newspaper (Wilcox 1900).’

The growing tensions between the centrality of the communication system as a resource for capitalist development and as a support for democratic culture prompted two reactions. Some analysts set out to develop a political economy of public communication, measuring corporate performance against the requirements of democratic theory. Others, like Alfred Marshall in his Principles of Economics (1890), announced the death of political economy and birth of ‘economics.’

4. Political Economy and Economics

By dropping the adjective ‘political,’ economists measured their distance from political economy in three ways. First, whereas political economists set out to trace the general consequences of shifts in economic organization for social and cultural life, economists focus on the working of ‘the economy’ defined as a separate, bounded, sphere. Second, because economists saw economic behavior as the product of a universalistic individualist psychology rather than of socially constructed practices they generally avoided critical reflection on prevailing institutional arrangements and possible alternatives to them. They saw the economy as a set of interlinked markets, not as a system of power, focusing on the dynamics of exchange rather than the distribution of property. Third, they defined their role in technical terms and detached themselves from political economy’s engagement with moral philosophy. They were concerned with efficiency rather than justice, with individuals as consumers rather than citizens. The field of mass media research is still deeply marked by this division. Media economists are primarily interested in the peculiarities of the communications industries as industries and tend to see regulated markets as the least worst way of organizing them. In contrast, critical political economists of media have tended to focus on market systems’ failures and distortions in the cultural sphere and to champion various forms of public intervention. They begin with the possession of core forms of capital (both material and symbolic) rather than with the dynamics of exchange.

5. Institutionalizing the Public Interest

In 1808 Thomas Jefferson’s Treasury Secretary, Albert Gallatin, argued strongly for federal control of America’s developing road and canal system on the grounds that they would benefit everyone by uniting ‘the most remote quarters’ of the nation, both physically and imaginatively. Later observers saw the same potential in the telegraph and the telephone, arguing that these new media systems were ‘natural monopolies’ because a single operator was more likely than competing firms to optimize both economic efficiency and social benefits. This argument was widely accepted, but institutionalized in different ways. In the United States the task was assigned to a private company, American Telephone and Telegraph (AT&T), which was charged with providing a universal service that was both geographically comprehensive and priced at a level that made it accessible to all, regulated (from 1934) by a Federal Communications Commission (FCC). In contrast, in Europe the task of providing universal service was assigned to monopoly Post, Telegraph and Telephone organizations (PTTs) owned and operated by the State. This same division between public enterprise and federally regulated private companies also characterized the institutionalization of broadcasting.

The emergence of broadcasting in the early 1920s was profoundly shaped by two contexts. First, the British experience of managing scarce strategic resources, such as timber, in World War 1, had convinced at least some economists that public corporations were the most appropriate way of addressing the limited space in the radio spectrum available for broadcasting. Second, the social unrest that had followed the end of the War, the victory of the Bolsheviks in Russia, and the extension of the franchise to women, led many commentators to see a public monopoly as the best way of securing responsible and rational participation in mass democracy in uncertain and volatile times. Accordingly, after careful deliberation, in 1926 the British government opted to transform the commercial monopoly initially given to the British Broadcasting Company (operated by a cartel of radio manufacturers) into a public service monopoly, the British Broadcasting Corporation, forbidden to take advertising, funded by a compulsory licence fee on set ownership, and charged with providing informational and cultural resources for citizenship, as defined by political and cultural elites. In the United States, in contrast, radio was widely seen from the outset as a business opportunity. Its promise of widespread and instantaneous access to homes made it an attractive advertising medium in a context where a mass consumer system was expanding rapidly. Despite dissenting voices and a fierce rearguard action by educational and other public interest groups, broadcasting became primarily a privately owned, advertising supported system, oriented to maximizing audiences by providing popular entertainment, with the FCC allocating (and revoking) broadcast licenses and instituting backstop regulation to ensure a minimum degree of access to air-time for minority viewpoints.

These contrasted models of broadcasting as public service and commercial enterprise, communication for citizenship and communication for consumption, provided the basic templates for many other countries, though a number eventually settled for a mixed broadcasting economy, with public and commercial sectors running in tandem.

6. Consolidation and Critique

Broadcasting and telecommunications were exceptions, however. The key organizations in the other major mass media sectors—the press, cinema, recorded music, and advertising—remained mostly privately owned and minimally regulated, consolidating the potential control that corporations could exercise over the organization of public knowledge and culture. Critical observers responded by reaffirming and extending the main themes of earlier commentaries. Some, like Upton Sinclair (1920) in his attack on the American commercial press, The Brass Check, returned to the potential abuses of owner and advertiser power. Others, notably Danielian in his 1939 study, The AT&T, turned their attention to the operation of power in conditions of regulated monopoly. In Britain, Klingender and Legg, observing the monopolistic tendencies in the country’s cinema industry and the growing power of the Hollywood studios, produced the first detailed political economy of a major mass media sector, The Money Behind the Screen (1937). But the most comprehensive contribution to establishing a general political economy of media came from two German scholars, Theodore Adorno and Max Horkheimer who were strongly influenced by Marx and whose essay, ‘The Culture Industry,’ (1944, 1973) sketched out a general model of the possible relations between the increasing commodification and industrialization of cultural production and what they saw as the narrowing possiblities for creativity and critical expression in the public sphere.

Most of these early contributions came from commentators who worked either outside the universities or on the edges of academia. It was not until the expansion of the university system in the 1960s and the rapid development of communications and cultural studies as academic specialisms in their own right, that the political economy of the mass media found a secure base within the academy.

7. Political Economy and Cultural Analysis

This new institutionalization led to a significant growth in academic research, but tenured faculty did not enjoy a monopoly of insight and commentators working outside the universities continued to make important interventions in debates. Although this renewed interest in the relations between culture and economy ranged widely, it tended to coalesce around several key strands.

First, the rise of multimedia conglomerates with interests spanning a range of public communications sectors breathed new life into long-standing questions about the possible links between patterns of ownership, structures of corporate control, and the range and diversity of cultural production and produced a significant volume of research charting the new configurations. Debates around the implications of these emerging structures also found an audience outside the academy through books like Ben Bagdikian’s The Media Monopoly (1983).

Second, analysts attempted to refine the general idea of ‘the cultural industries’ by investigating the contrasting ways in which production processes were organized within major media sectors and tracing their implications for creative labor and for the range and forms of cultural output. The contributions of French scholars, Patrice Flichy (1980) and Bernard Miege and his colleagues (1986), were particularly significant in establishing this line of research.

Third, scholars returned to political economy’s central concern with the constitution of complex democracies by way of Jurgen Habermas’s influential idea of ‘the public sphere’ as a space of open debate situated between the State and capital and relatively independent of both. This led a number of critical analysts in Britain and Europe to reply to commentators calling for an enlarged market sector in television with a vigorous defence of public service broadcasting as the cornerstone of a mediated public sphere. The critique of market-driven broadcasting had developed somewhat earlier in the United States and the ideas first floated by Dallas Smythe, a former FCC economist, and other political economists in the 1950s played an important role in the successful lobby to introduce a Public Broadcasting System a decade later.

Fourth, scholars moved beyond the issues raised by the changing conditions of national media to explore the re-composition of the emerging transnational communications system. Just as the last of the former colonial territories achieved political independence and emerged as autonomous nation states, critics led by Herbert Schiller (1969) argued that they were being incorporated into a new imperial system, based not on the annexation of their territories but the colonization of their cultures by the aggressive consumerism promoted by the major American media and entertainment corporations.

Fifth, encouraged by the rapid growth of the underground press, community radio, and a range of other alternative and oppositional media from the mid 1960s onwards, critical researchers began to explore the political economy of non mainstream and radical media.

These various strands of work attracted widespread criticism from cultural analysts working in other intellectual traditions who accused political economists of reducing cultural life to economic dynamics. This criticism is misplaced. Political economy sets out to show how the underlying dynamics of economic life shape communicative practice by allocating the material and symbolic resources required for action and how the resulting asymmetries in their control and distribution structure both the conditions of creativity in cultural production and the conditions of access and participation in cultural consumption. It focuses on the ways that capitalist dynamics help to organize the playing fields on which everyday social action takes place and write the rules of the game. Epistemologically it is rooted in critical realist rather than interpretive models. It does not deny that in any particular instance the run of play is marked by creativity, improvisation, and not infrequently, opposition and contest but its principal concern is not with events but with the constitution of underlying structures and the opportunities for action they facilitate and constrain. As noted earlier, it is particularly interested in the way that asymmetries in the distribution and control of core resources for cultural action impinge on the vitality of participatory democracy.

8. Marketizing Media

In pursuing this argument, critical political economists of media start from the material and cultural resources required for full citizenship. This leads them to evaluate the performance of public communications systems against two main criteria; the promotion of cultural rights to information, knowledge, representation, and respect—and the provision of a cultural commons hospitable to the negotiation of unities that incorporate diversity. This is in marked contrast to those economists and mainstream political economists who start from the conditions required to maximize market choices and address individuals as consumers of goods rather than as participants in a moral community.

Since 1980, propelled by a revival of neo-liberal economic thinking (unencumbered by Adam Smith’s strong moral concerns with benevolence and communality) the market has increasingly become the preferred mechanism for organizing public communicative activity and the touchstone for evaluating the performance of those cultural institutions that remain within the public sector. This general process of marketization has five major dimensions.

(a) Pri atisation. Media organizations that were formerly part of the public sector and supported by public money have been sold to private investors and converted into private enterprises. Examples include BT, Britain’s former PTT and now one of the leading corporations in the national economy, and the former French public service television channel, TFI.

(b) Liberalization involves opening markets that have previously been dominated by one or two operators (monopolies and duopolies) to competition from new entrants. Examples include the liberalization of telecommunications in the USA with the break-up of AT&T and the ending of its historic monopoly, and the introduction of commercial cable and satellite television services into European broadcasting markets previously monopolized by State-funded public service channels.

(c) Re-gearing of the regulatory regimes by shifting towards ‘lighter touch’ regulation that allows private companies more freedom of action in key areas such as corporate acquisitions and the amount and type of advertising carried, and removes or weakens established public interest requirements.

(d) Corporatization involves reducing the real level of public subsidy, encouraging or compelling public institutions to raise more money from market-based activities, moving them closer to the strategies and rationales of the corporate sector. The BBC’s decisions to maximize the commercial returns on its programming, to develop new initiatives with private sector partners, and to launch its own commercial enterprises, provides a particularly good example of this process in action.

(e) Commodification. Cinema seats and paperback books and records are commodities. If someone purchases them for their personal use no one else can enjoy them at the same time. In contrast, for most of its history, broadcasting has been a public good. It has been available to anyone with suitable receiving equipment and has allowed any number of people to listen or view at the same time without interfering with each other’s enjoyment. This characteristic provided the technical underpinning for the key tenet of universality. Over recent years however, this principle has been challenged by the rapid rise of subscription broadcasting services offered over cable and satellite systems, and more recently by the introduction of payper-view events. By converting broadcasting services into commodities these innovations restructure social access linking it ever more closely to ability to pay.

Taken together these intersecting processes of marketization have had three major effects on the ecology of public communications. First, they have consolidated and extended the economic power of the major multimedia corporations by opening up new fields for enterprise. Second, they have eroded the relative countervailing power of public institutions. Third, they have progressively detached the core sectors of public communications from the project of providing everyone with the basic cultural resources required for full citizenship and moved them towards the satisfaction of plural consumer demands. As market segments have proliferated so the cultural commons has contracted.

Nor is marketization confined to the major capitalist economies. With the collapse of the Soviet Union, the increased scope for overseas investment and private enterprise in the world’s two most populous countries, China and India, and the almost universal embrace of market disciplines and opportunities in the rest of the world, it has become a defining feature of the present age and the principle dynamic underlying economic globalization.

9. Digital Convergence and Cosmopolitan Citizenship

Another pivotal process that is fundamentally transforming contemporary media systems is the new conjunction of previously separate communicative forms and sectors facilitated by the translation of writing, speech, images, data, and sound into a single universal digital code of 0s and 1s. This process of convergence has been widely credited with bringing about a revolution not simply in the communications industries but in the economy as a whole, as commentators see the ability to command and manipulate information and symbolic forms displacing industrial production at the center of capitalist production. Supporters of maximizing the scope for market dynamics celebrate the flexibility and fluidity of the new digital economy as an unequivocal gain for personal liberty and freedom of choice. Critical political economists, on the other hand, argue that because the new economic order is coalescing on ground already prepared by two decades of marketization, the appearance of novelty and change conceals some very familiar problems. They point to three in particular. First, as the merger between Time-Warner (the world’s leading ‘old’ media company) and AOL (a major Internet enterprise) suggests, the leading communications companies of the future will occupy strategic positions across all the major communications sectors, giving them unprecedented potential control over public culture. Second, they see the enlargement of the market sphere consolidating consumerism’s promise of satisfaction and self-realization through the possession of goods as the master ideology of the age. Third, they warn that making access to core informational and cultural resources dependent on the user’s ability to pay will widen inequalities of capacity, both within and between countries.

At the same time, critics of the new capitalism point to digital technology’s potential to create a new and greatly enlarged public cultural sphere, based on transnational rather than national informational and cultural flows and providing the symbolic resources for a cosmopolitan citizenship rooted in a robust defence of human rights and respect for cultural diversity. They see the problem of translating this ideal into practical policies and institutional forms as the greatest challenge facing a political economy of communications committed to striking a just balance between economic dynamism and universal citizenship. On this reading, far from being overtaken by events, as some commentators have argued, critical political economy’s greatest contributions to analysis and debate on the future of media may be yet to come.

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