The Political Economy of the Media (International Library of Studies in Media and Culture Series, vol.1

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The Political Economy of the Media Volume I

-T The Internat ional Library of Studies in Media and Culture Series Editors: Laurie Taylor Emeritus Professor of Sociology University of York

The Political Economy of the Media

Andrew Tudor Reader in Sociology University of York 1. Feminist Cultural Studies (Volumes I and Terry Lovell

Volume I m

2. The Political Economy of the Media (Volumes I and Peter Golding and Graham Murdock

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Edited by

Peter Golding Professor of Sociology Loughborough University, UK and

Graham Murdock Reader in the Sociology of Culture, Loughborough University, UK Wherever possible, the articles in these volumes have been reproduced as originally published using facsimile reproduction, inclusive of footnotes and pagination to facilitate ease of reference. For a list of all Edward Elgar published titles visit our site on the World Wide Web at : http://www.e-elgar.co.uk F

THE INTERNATIONAL LffiRARY OF STUDIES IN MEDIA AND CULTURE

63424 3 An Elgar Reference Collection Cheltenham, UK • Brookfield, US

© Peter Golding and Grimam ·Murdock 1997. For copyright of individual articles please refer to the Acknowledgements. All rights reserved. No paz:t of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior permission of the publisher.

Contents Acknowledgements Introduction by the editors: 'Communication and Capitalism'

Published !>y .. Edward Elgai: Publishing Limited 8 Lansdown Place Cheltenham Glos GL50 2...'1U UK. ..

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PART I

Edward Elgar Publishing Company Old Post Road Brookfield Vermont 05036

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Library of Congress Cataloging in Publication Data The political economy of the media I edited by Peter Golding and Graham Murdock. (International library of studies in media and culture ; 2) Includes bibliographical references and index. '· 1. Mass media. I. Golding, Peter. II. Murdock, Graham. Ill. Series. P91.25.P65 1997 302.23-dc20

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ISBN 1 85278 777 5 (2 volume set)

Printed in Great Britain by Galliard (Printers) Ltd, Great Yarmouth

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PART II 96-35918 CIP

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DEFINING POLITICALECONOMY ·.,

A catalogue record for this book is available from the British Library.

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1. Gr-aham MurdoctY and (1974), 'For a Political ~-~·--) - Peter Golding . Economy of Mass Communications', in R. Miliband and J. Saville (eds), The Socialist Register 1973, London: Merlin Press,205,-34. / 2. Qouglas'Gomeri1t989), 'Media Economics: Terms of Analysis', Critical Studies in Mass Communication, 6, March, 43-60. 3. Nicholas Garnham (1990), 'Contribution to a Political Economy of Mass Communication', in Fred lnglis (ed.), Capitalism and Communication: Global Culture and the Economics ofInformation, Chapter 2, London: Sage, 20-55. 4. Oscar H. Gandy Jr (1992), 'The Political Economy Approach: A Critical Challenge', Journal of Media Economics, Summer, 23-42. 5. Robert W. McChesney (1992), 'Off Limits: An Inquiry Into the Lack of Debate over the Ownership, Structure and Control of the Mass Media in U.S. Political Life', Communication, 13, 1-19.

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51

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COMMUNICATIONS AND CAPITALIST ENTERPRISE 6. Henry Wickham Steed (1938), 'The Finance of the Press', The Press, Chapter ill, Harmondsworth: Penguin, 81-105. 7. Royal Commission on the Press 1947-1949, Cmnd. 7700 (1949), London: HMSO, excerpts from 100-101, 103-5, 87-9, 95-8, 138-9, 140-42, 143-4, 148-50, 152-64. 8. Francis Williams ((1959), 'Mr. Elias Sells Newspapers', 'A Monolithic Press' and 'What Kind of Freedom?', Dangerous Estate: The Anatomy of Newspapers, Chapters 13, 16 and 17, London: Arrow Books, 161-77, 203-14 and 215-29. , 9. Richard Bunce (1976), 'The Conglomerate Complex', Television in the Corporate Interest, Chapter 6, New York: Praeger Publishers, 96-124. 10. The International Commission for the Study of Communication / Problems (1980), 'Concentration', Many Voices, One World, Part ll: Chapter 4, London, New York and Paris: Kogan Page, Unipub and Unesco, 96-111.

129

154

182

226

255

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11. Harold Evans (1994), 'Preface to the Third Edition', Good Times, Bad Times, London: Phoenix, xvii-xxviii. 12. Ben H. Bagdikian (1992), 'The Endless Chain', The Media Monopoly, Chapter 1, Boston: Beacon Press, 4th ed., 3-26, notes. /' 'v' 13. Graham Murdock (1990), 'Redrawing the Map of the Communications Industries: Concentration and Ownership in the Era of Privatization', in Marjorie Ferguson (ed.), Public Communication - The New Imperatives: Future Directions for Media Research, Chapter 1, London: Sage, 1-15, references. 14. Philip G. Altbach (1992), 'Publishing in the Third World: Issues and Trends for the 21st Century', in Philip G. Albach (ed.), Publishing and Development in the Third World, Chapter 1, London: Hans Zell Publishers, 1-27. 15. Joseph Turow (1992), 'The Organizational Underpinnings of Contemporary Media Conglomerates', Communication Research, 19 (6), December, 682-704. Edward S. Herman (1993), 'The Externalities Effects of Commercial and Public Broadcasting', in Kaarle Nordenstreng and Herbert I. Schiller (eds), Beyond National Sovereignty: International Communication in the 1990s, Chapter 5, Norwood, NJ: Ablex, 85-115.

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PART ID COMMUNICATIONS, IDEOLOGY AND CAPITALISM 17. Karl Marx (1974), 'The Opinion of the Journals and the Opinion of the People', The Civil War in the United States, New York: International Publishers, 123-7. (Originally published in Die Presse, 31 December 1861.) 407 18. Herbert I. Schiller (1973), 'Manipulation and the Packaged Consciousness', The Mind Managers, Chapter 1, Boston: Beacon Press, 8-31, 192-3. 412 19. Dallas W. Smythe (1977), 'Communications: Blindspot of Western Marxism', Canadian Journal o/Political and Social Theory, 1 (3), Fall, 1-27. 438 20. Graham Murdock (1978), 'Blindspots abqut Western Marxism: A Reply to Dallas Smythe', Canadian Journal of Political and Social Theory, 2 (2), Spring-Summer, 109-19. 465 21. Peter Golding and Graham Murdock (1979), 'Ideology and the Mass Media: The Question of Determination', in Michele Barrett, Philip Corrigan, Annette Kuhn and Janet Wolff (eds), Ideology and Cultural Production, Chapter 8, London: Croom Helm, 198-224, bibliography. 476

22. Leslie T. Good (1989), 'Power, Hegemony, and Communication Theory', in Ian Angus and Sut Jhally (eds), Cultural Politics in Contemporary America, Chapter 4, New York and London: Routledge, 51-64, notes. 23. Douglas Kellner (1990), 'Contested Terrain and the Hegemony of Capital', Television and the Crisis of Democracy, Chapter 1, Section 3, Boulder, CO: Westview Press, 14-22, notes and bibliography. 24. Theodor W. Adorno (1991), 'Culture Industry Reconsidered', The Culture Industry: Selected Essays on Mass Culture, Chapter 3, London: Routledge, 85-92.

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PART IV COMMUNICATION AND THE GLOBAL ORDER 25. Herbert I. Schiller (1969), 'Electronics and Economics Serving an American Century', Mass Communications and American Empire, Chapter 1, Boston: Augustus M. Kelley, 1-17. 543 26. Jeremy Tunstall (1977), 'Media Imperialism?', The Media are American: Anglo-American Media in the World, Chapter 2, London: Constable, 38-63, references and bibliography. 560 27. The International Commission for the Study of Communication Problems (1980), 'The International Dimension', Many Voices, One World, Part I: Chapter 3, London, New York and Paris: Kogan Page, Unipub and Unesco, 34-9. 588 28. Herbert I. Schiller (1981), 'Whose New International Economic and Information Order?', Who Knows: Information in the Age of The Fortune 500, Chapter One, Norwood NJ: Ablex, 1-24. 594 29. Thomas Guback and Tapio Varis (1982), Transnational Communication and Cultural Industries, No. 92, Paris: UNESCO, 5-6, 9-15, 49-50. 618 30. Cees J. Hamelink (1988), 'Cultural Autonomy Threatened', Cultural Autonomy in Global Communications: Planning National Information Policy, Chapter 1, London: Centre for the Study of Communication and Culture, 1-25. 629 31. Armand Mattelart, Xavier Delcourt and Michele Mattelart (1984), 'The New World Information and Communications Order', 'Economics and Culture: The Same Struggle' and 'From Trading Patterns to Communications Systems', Part O~e. _ . Chapters 1-3, International Image Markets: In Search of an Alternative Perspective, London: Comedia, 7-26, 112-13. 654 32. 'UNESCO Resolution 4/19- On the International Commission for the Study of Communications Problems, 21 October 1980, Belgrade', in Kaarle Nordenstreng, Enrique Gonzales Manet and Wolfgang Kleinwachter (eds) (1986), New International Information and Communication Order Sourcebook, Prague: International Organization of Journalists, Document No. 42E, 248-50. 676

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33.

Name Index

'The Declaration of Talloires of the "Voices of Freedom" Conference, 17 May 1981, Talloires', in Kaarle Nordenstreng, Enrique Gonzales Manet and Wolfgang Kleinwiichter (eds) (1986), New International Information·and Communication Order Sourcebook, Prague: International Organization of Journalists, Document No. 71, 368-70.

Acknowledgements 679 683

The editors and publishers wish to thank the authors and the following publishers who have kindly given permission for the use of copyright material. Ablex Publishing Corporation for excerpts: Herbert I. Schiller (1981), 'Whose New International Economic and Information Order?', Who Knows: Information in the Age of The Fortune 500, Chapter One, 1-24; Edward S. Herman (1993), 'The Externalities Effects of Commercial and Public Broadcasting', in Kaarle Nordenstreng and Herbert I. Schiller (eds), Beyond National Sovereignty: International Communication in the I990s, Chapter 5, 85-115. Beacon Press for excerpts: Herbert I. Schiller (1973), 'Manipulation and the Packaged Consciousness', The Mind Managers, Chapter 1, 8-31, 192-3; Ben H. Bagdikian (1992), 'The Endless Chain', The Media Monopoly, Chapter 1, 4th ed., 3-266, notes. Richard Bunce for his own excerpt: (1976), 'The Conglomerate Complex', Television in the Corporate Interest, Chapter 6, 96-124. Canadian Journal of Political and Social Theory for articles: Dallas W. Smythe (1977), 'Communications: Blindspot of Western Marxism', Canadian Journal ofPolitical and Social Theory, 1 (3), Fall, 1-27; Graham Murdock (1978), 'Blindspots about Western Marxism: A Reply to Dallas Smythe', Canadian Journal of Political and Social Theory, 2 (2), SpringSummer, 109-19.

Centre for the Study of Communication and Culture, Saint Louis University, for excerpt: Cees J. Hamelink (1988), 'Cultural Autonomy Threatened', Cultural Autonomy in Global Communications: Planning National Information Policy, Chapter 1, 1-25. Constable & Company Ltd for·excerpt: Jeremy Tunstall (1977), 'Media Imperialism?', The Media are American: Anglo-American Media in the World, Chapter 2, 38-63, references and bibliography. Croom Helm for excerpt: Peter Golding and Graham Murdock (1979), 'Ideology and the Mass Media: The Question of Determination', in Michele Barrett, Philip Corrigan, Annette Kuhn and Jan~t Wolff (eds), Ideology and Cultural Production, Chapter 8, 198-224, bibliography. Gordon & Breach Publishing Group for article: Robert W. McChesney (1992), 'Off Limits: An Inquiry Into the Lack of Debate over the Ownership, Structure and Control of the Mass Media in U.S. Political Life', Communication, 13, 1-19.

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The Political Economy of the Media I

Hans Zell Publishers, an imprint of Bowker-Saur, a division of Reed Elsevier (UK) Ltd, for excerpt: Philip G. Altbach (1992), 'Publishing in the Third World: Issues and Trends for the 21st Century', in Philip G. Altbach (ed.), Publishing and Development in the Third World, Chapter 1, 1-27.

Sage Publications Ltd for excerpts: Nicholas Gamham (1990), 'Contribution to a Political· Economy of Mass Communication', in Fred Inglis (ed.), Capitalism and Communication: Global Culture and the Economics of Information, Chapter 2, 20-55; Graham Murdock (1990), 'Redrawing the Map of the Communications Industries: Concentration and Ownership in the Era of Privatization', in Marjorie Ferguson (ed.), Public Communication- The New Imperatives: Future Directionsfor Media Research, Chapter 1, 1-15, references.

X

HMSO for excerpts (1949), Royal Commission on the Press 1947-1949, Cmnd. 7700, excerpts from 100-101, 103-5, 87-9, 95-8, 138-9, 140-42, 143-4, 148-50, 152-64. International Publishers Co. for excerpt: K.arl Marx (1974), 'The Opinion of the Journals and the Opinion of the People', The Civil War in the United States, 123-7. Journal of Media Economics for article: Oscar H. Gandy Jr (1992), 'The Political Economy Approach: A Critical Challenge', Journal of Media Economics, Summer, 23-42. Kogan Page Ltd for excerpts: The International Commission for the Study of Communication Problems (1980), 'The International Dimension', Many Voices, One World, Part I: Chapter 3, 34-9; The International Commission for the Study of Communication Problems (1980), 'Concentration', Many Voices, One World, Part II: Chapter 4, 96-111.

Herbert I. Schiller for his own excerpt: (1969), 'Electronics and Economics Serving an American Century', Mass Communications and American Empire, Chapter 1, 1-17. Speech Communications Association for article: Douglas Gomery (1989), 'Media Economics: Terms of Analysis', Critical Studies in Mass Communication, 6, March, 43-60. United Nations Educational, Scientific and Cultural Organization for the excerpt: Thomas Guback and Tapio Varis (1982), Transnational Communication and Cultural Industries, No. 92, 5-6, 9-15, 49'--50. Weidenfeld & Nicolson for excerpt: Harold Evans (1994), 'Preface to the Third Edition', Good Times, Bad Times, xvii-xxviii.

Armand Mattelart for his own co-authored excerpts: Armand Mattelart, Xavier Delcourt and Michele Mattelart (1984), 'The New World Information and Communications Order', 'Economics and Culture: The Same Struggle' and 'From Trading Patterns to Communications Systems', Part One, Chapters 1-3, International Image Markets: In Search of an Alternative Perspective, 7-26, 112-13.

Westview Press, Inc. for excerpt: Douglas Kellner (1990), 'Contested Terrain and the Hegemony of Capital', Television and the Crisis of Democracy, Chapter 1, Section 3, 14-22, notes and bibliography.

Merlin Press Ltd for excerpt: Graham Murdock and Peter Golding (1974), 'For a Political Economy of Mass Communications', in R. Miliband and J. Saville (eds), The Socialist Register 1973, 205-34.

Every effort has been made to trace all the copyright holders but if any have been inadvertently overlooked the publishers will be pleased to make the necessary arrangement at the first opportunity.

Penguin Books Ltd for excerpt: Henry Wickham Steed (1938), 'The Finance of the Press', The Press, Chapter ID, 81-105.

In addition the publishers wish to thank the Library of the London School of Economics and Political Science for its assistance in obtaining these articles.

Routledge for excerpt: Theodor W. Adorno (1991), 'Culture Industry Reconsidered', The Culture Industry: Selected Essays on Mass Culture, Chapter 3, 85-92. Routledge, Inc. for excerpt: Leslie T. Good (1989), 'Power, Hegemony, and Communication Theory', in Ian Angus and Sut Jhally (eds), Cultural Politics in Contemporary America, Chapter 4, 51-64, notes. Sage Publications, Inc. for article: Joseph Turow (1992), 'The Organizational Underpinnings of Contemporary Media Conglomerates', Communication Research, 19 (6), December, 682-704.

Introduction: Communication and Capitalism Peter Golding and Graham Murdock

Academic analysis of the mass media has been an inevitable adjunct to their rapid growth and prominence in contemporary society·. So fast has been the increasing interest in the media as an object of study and research that the trappings of a new discipline seem to have emerged almost without warning, and certainly without conscious design. That the media should become so significant in the pedagogic map is hardly surprising. In just a few decades newspapers, cinema and, subsequently, broadcasting have come to be dominant features of our social, political and economic life to a degree quite unpredictable a century ago. Attempting to make sense of this growth has proved both irresistible and perplexing. Traditional disciplines have all played their role but, in doing so, have all had to acquire new vocabularies and methodologies. Right across the social and human sciences, and also the humanities, making sense of the media has been critical in their respective intellectual evolutions. This was inevitable. The media have a unique twin role in our lives. On the one hand they create and distribute many of the symbolic and cultural resources we require to make sense of the social world we inhabit. From the language we speak to the identities and institutions which constitute our social life, the media are often primary, and rarely less than contributory, providers of the building blocks of our experience. On the other hand, however, the media are also major institutions in the economic and political fabric of our societies. They provide the vehicle for advertising which connects the world of production to that of consumption. They absorb considerable proportions of our disposable spending as we buy an ever-increasing array of hardware and software to give us access to the world of mediated communications. They are also themselves political and economic actors of some magnitude, a lesson easily illustrated by the events of the 1989 East European revolutions, or indeed by the experiences of Mr Berlusconi in Italy in the 1990s. This twin role makes the world of communications and the media a diverse and complex one. For that reason, if no other, their study invites, indeed demands, a range of intellectual and disciplinary perspectives, among the most crucial of which is political economy. This two-volume set of writings and documents is intended both to support the preceding proposition and to act as a resource for those eager to pursue its implications. Political economy has a rich intellectual history as well as some reasonable claim to be the forerunner of the modem clan of interrelated social sciences. It arose explicitly in response to the emergence of mercantilism and subsequently to fully-fledged capitalism, as an attempt not merely to understand but to maximize the potential of the new social order. For the writers who constructed this edifice, the boundaries of the new intellectual field were broad indeed; most crucially, their basic concerns were moral rather than technical.

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The growth of markets, but also of the state, posed previously unexplored problems of the. relation of the individual to the social order. Hence political economy emerged with a strong sense of and analytical attachment to both history and moral philosophy. ~dam Smith, a codifier and developer of the ideas of others as much as an original . thinker, developed his thoughts initially in his Theory of Moral Sentiments. Reviled by John Ruskin as a 'half-bred and half-witted Scotchman' who taught us 'to damn God's laws and covet our neighbours' goods', it was Smith's destiny to be misunderstood and misquoted for over two centuries. Smith studied philosophy and literature at Glasgow and Oxford, and from 1752 occupied the Chair of Moral Philosophy at Glasgow. However, it was exposure to the French 'physiocrats' in Paris and Toulouse that stimulated what became the best-selling volunie that still conventionally tops the political economy reading lists. Published with historical neatness and considerable significance in the year of the American Declaration of Independence, by 1800 Smith's Wealth of Nations had gone through nine English editions. By 1810 it had been published in Ireland and the US, and was translated into seven languages (Seligman, 1910; Deane, 1978: 6). Smith's concern was with the protection and advancement of self-interest and natural liberty. His adoption in the 20th century as a talisman for ideologues of free market principles has often attracted criticism for its narrow reading of Smith's complex and variegated understanding of capitalism, not least his antipathy to its regressive distributive consequences - a theme prominent in the work of subsequent political economists. Nevertheless, the ideas set forth in his seminal work created the foundation for the development of political economy. Rooted in a sense of labour rather than land as the source of value the new scientific discipline (as it rapidly came to understand itself and as it wished to be W:derstood) flourished in the hands of Mill, whose own major treatise was explicitly fashioned on Smith's. Also in the hands of McCulloch, of Ricardo - who so carefully tidied up the technical shortcomings as he saw them in Smith's treatment of rent, profit and wages -and of other distinguished members of the Political Economy Club, founded in 1821. One key writer who most certainly was not a member of the Club was Karl Marx though, in wrestling with what he described as 'the confounded ramifications of political economy', Marx too constructed his analysis of capitalism as an aspect of a theory of history. As part of a broader philosophy of social analysis and practice, he departed from classical political economy in his emphasis on the central role of class struggle in the dynamics of capitalist development. Frequently contemptuous of other political economists, he and Engels often used the term as a shorthand expression for much that they despised. Writing 15 years before Marx's crucial Critique of Political Economy, Engels derisively rails against 'This political economy or science of enrichment born of the merchants' mutual envy and greed' which 'bears on its brow the mark of the most loathsome selfishness' (Engels, 1970: 197). Curiously, the enormous impact of Marx's thought on the politics of the 20th century, and its much-delayed though equally powerful shaping of the development of social science, may be contrasted with his relative marginality to the evolution of mainstream political economy. This is paradoxical. While Marx subjected the moral and historical props of political economy to the most profound under-mining, these props were simply discarded by the late 19th-century transmutation of political economy into the modem and 'dismal science' of economics. In the 'marginal revolution', writers like Jevons (who initiated the disciplinary name-change from 'the old troublesome double worded name of our science'),

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Menger, W alras and later, and perhaps to a lesser extent, Marshall all largely dispensed with history in their search for the laws of equilibrium. The mathematical description of the actions of economic man was now synchronically circumscribed in an endless elaboration of the rules which determine prices in a free market in steady state: Walras' grail, for instance, was a 'physico-mathematical' science of markets. These positivist ambitions of neoclassical economics signalled a radical departure from the scope and purpose of classical political economy. .This backdrop is important for an understanding of the revival of political economy nearly a century later. For as much as anything that rediscovery was in reaction against the sterile positivist style which, by the 1950s, had become dominant in the burgeoning social sciences, especially of North American academia. Significantly, much of this revolt came from within economics and, equally significantly (as we shall see), some of the key figures in the political economy of communications were themselves trained in economics. The emergence of an intellectual new left, not unconnected with the anti-Vietnam war movement and student politicization on American campuses, began, however uncertainly, to manufacture an internal critique of the mainstream social science disciplines. Writers like C. Wright Mills led the charge in sociology, while in economics the touchstones were European writers like Mandel and 'old left' US analysts like Baran and Sweezy. Their charge against mainstream economics was that it had lost all interest in the distributional consequences of the market, especially the evidently regressive pattern of income and wealth; that it ignored the social and political factors shaping demand and supply; was obsessed with micro processes while ignorant of macro structures; and was either deliberately or unwittingly ideological in its unspoken defence of a taken-for-granted capitalist order (Lindbeck, 1977). The critique was far from uniformly Marxist, including as it did powerful non-Marxist 'institutionalist' accounts by such influential writers as Galbraith. It was against this background that the political economy of communications evolved, especially in the Anglo-Saxon world. Scholars working in sociology and economics came increasingly to recognize the significance of mass media and communications; however, in their attempts to grapple both politically and intellectually with these institutions, many found existing work unsatisfactory. That communications had become a major business was self-evident. That mass communications meant mass consumption and that the media were thus at the core of social and economic dynamics also became ever more apparent. The development of, and political conflict over, the state regulation of broadcasting brought the political dimension of communications to the fore. Yet despite all this, academic communications research seemed confined locked into a positivist quest for the scientific description of 'effects', into social psychological experimentation to uncover the minutiae of attitude change, or into unproductive analysis, largely predicated on very conservative presumptions, of the deleterious consequences of 'mass culture'. Among the first to. contest these orthodoxies and pioneer the development of what later became recognizable as the political economy of communications were Dallas Smythe and Herbert Schiller. Smythe, a Canadian economist trained in California, became the first chief economist at the Federal Communications Commission in Washington, where among other tasks he created space for educational broadcasting. As an academic at Illinois, and later back home at Regina and Simon Fraser Universities, Smythe produced a corpus of work which was to influence a generation of communication scholars (see Wasko et al.,

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1993). Among these, Schiller has been the most productive. Schiller had been influenced by the older Smythe at the University of lllinois where they had met in the Institute for Communication Research established under the less than radical figure of Wilbur Schramm. When Smythe retreated back to Canada from the inhospitable climate of McCarthyite USA, Schiller, a graduate in economics from New York, effectively replaced him. Schiller had worked on post-war reconstruction in Germany, but at lliinois used his business economics background to investigate the economics of the radio spectrum. His 1969 book Mass Communication and American Empire was a typically terse, trenchant critique of what became known as 'cultural imperialism'. Its appealingly polemical style, detailed compilation of clippings for footnotes, and deep moral and political underpinning, set the mould for a continuing series of such essays over the following decades which have been prominent markers in the hesitant forward march of the political economy of communications. Subsequent work (whose intellectual lineages are portrayed in Mosco, 1996) remained initially rooted in this political grounding. Political economy approaches to communications developed alongside the emerging nexus of work in 'cultural studies', both reacting against positivist social science and conservatively orthodox cultural analysis. In its reclamation of the popular for serious study, its insistence on the diffuse and all-embracing character of the cultural, and its self-consciously proclaimed ambitions as a 'political project', cultural studies - like political economy - was irrepressibly interdisciplinary. That neither was explicitly nor uniformly Marxist was skated over by critics, and often by practitioners too. This was a cogent and radical critique of modern media and communications. For political economy this meant three insistent characteristics (see also Golding and Murdock, 1996). First, the political economy approach was holistic: it did not abstract the economic or the political from social relations, but examined in full the interrelation of social and cultural dynamics. Second, it was historical. Not only did this imply an understanding of process and the diachronic, but more explicitly it meant an understanding that the focus of analysis was the location and role of communications in a capitalist and global setting, whose processes of change and evolving dynamics were at the heart of analysis. Third, political economy adopted a realist/materialist epistemology. For critical political economy, two additional characteristics were essential. Firstly, the moral and philosophical foundations so essential to classical political economy were retained as the starting point of analysis. The concern was not only for what is, but for what ought to be. Secondly, and again in line with its classical forebears, critical political economy of communications addresses the distributional consequences of capitalism for communications processes and institutions. This means analysing the implications of markets for patterns of cultural distribution, and of the availability of differing forms and structures of meaning. It also means a critical concern with the distribution between public and private, not least in the realm of regulation. The relative role of the state, the private corporation and the individual in communications has been at the heart of political debate about communications; it is also at the core of concerns within critical political economy. Three developments characterize the later development of the political economy approach, and each remains unresolved. Firstly, whatever the codifying ambitions of its resident scholastics, the definition of the approach became ever more diffuse. At times used vaguely as a euphemism for Marxist approaches, at others a mildly dismissive term suggesting economic reductionism among those narrowly interested in the ownership of media

corporations, the term became almost a synonym for a diffuse or insipid radicalism. As Sayer correctly notes, 'Nowadays it is often seen as the preserve of radical researchers, particularly Marxists, neo-Marxists, and post-Marxists, though neo-Ricardians, Left-Keynsians and Left-Weberians might be included too'. In such a broad church he suggests, not surprisingly, that 'by "political economy" I mean approaches which view the economy as socially and politically embedded and as structured by power relations' (Sayer, 1995: ix). Secondly, as so often, political economy tends to define its parameters in opposition to that which it is not. Where once cultural studies was a common partner in the radical critique of positivism, an often less than productive debate has seen these two approaches increasingly diverge. Where cultural studies views political economy as unduly wedded to class divisions - insensitive to differences and divisions of other kinds, and frequently downright reductionist and deterministic - political economists have sometimes seen cultural studies as excessively fascinated with the ephemeral, depoliticized by its own populism, internalized in its debates, and focused on texts to the exclusion of social, economic and political structure. Thirdly, the emergence of critiques within feminism, postmodernism and (to some extent) post-coloniality has sometimes seemed to outflank political economy on its radical wing, while offering alternative accounts of some of its key concerns. With the revolutions in Eastern Europe in 1989 and the ostensible 'end of history', the apparent triumph of the market lent credence to the redundancy of the critique of market capitalism which was so crucial to the political economy project. For political economists, this claim was itself part of the ideological mystification which was one of its objects of analysis. The field is thus a live one, in which debat@ and res~ch are extremely active. In these two volumes we have brought together key texts which play out some of these issues, by writers who have either been influential in shaping the approach or whose work provides a key resource for the political economy of communications. In Volume I we begin at the beginning, with the definition of the political economy approach to communications in a set of articles, all by card-carrying political economists, attempting to delineate and chart the field of endeavour. Part II is concerned with the capitalist enterprise. Communications do not flow from some Olympian megaphone, but emerge as the result of industrial work in organizations at the heart of the capitalist structure. These articles assess the implications of this process, both nationally and internationally, and in some cases speak at first hand of the experience of cultural labour in conglomerate settings. Part m turns to the question of ideology. For political economy what the media produce are not messages or 'information', but ideology - an alarmingly simple claim which disguises a multitude of complex debates. The articles in this section provide a range of approaches to resolving this difficult question at the core of the political economy enquiry. Part IV addresses the global reach of communications, starting with a reading from Schiller's seminal text. In recent years the UNESCO-fostered debate about a 'New World Information and Communication Order' has subsided, though not before it prompted the withdrawal from UNESCO of the US and the UK. Yet the massive global inequalities of cultural flows remain, and political economists have been prominent in keeping these questions on both the intellectual and political agenda. Volume II is concerned with the 'political' in the couplet of political economy, and most especially with ensuring the common good in the regulation and management of communications and media. We introduce these issues in more detail h"l the Introduction to that volume.

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References Deane, P. (1978), The Evolution of Economic Ideas, Cambridge University Press. Engels, F. (1970 [orig. 1844]), 'Outlines of a Critique of Political Economy', inK. Marx, Economic - and Philosophic Manuscripts of 1844, London: Lawrence and Wishart. Golding, P. and Murdock, G. (1996), 'Culture, Communications, and Political Economy', in J. Curran and M. Gurevitch (eds), Mass Media and Society (2nd edn), London: Edward Arnold. Lindbeck, A. (1977), The Political Economy ofthe New Left: An Outsider's View, New York: Harper and Row. Mosco, V. (1996), The Political Economy of Communication, London: Sage. Sayer, A. (1995), Radical Political Economy: A Critique, Oxford: Blackwell. Seligman, E.R.A. (1910), 'Introduction', in A. Smith, The Wealth of Nations, London: J.M. Dent and Sons Ltd. Wasko, J., Mosco, V. and Pendakur, M. (1993), llluminating the Blindspots: Essays Honouring Dallas W. Smythe, Norwood, NJ: Ablex.

Part I Defining Political Economy

[1] FOR A POLITICAL ECONOMY OF MASS COMMUNICATIONS Graham Murdock and Peter Golding I INTRODUCTION

The mass media impinge upon people's lives in two very important ways. Firstly, in providing the facilities with which people occupy a considerable amount of their non-work time they command an increasing proportion of discretionary spending. Average weekly household expenditure on the media and on leisure activities is higher than on clothing or on household durables, and, in 1971, over £3,000 million was spent on the media and leisure (not even including drink, travel or catering).1 Secondly, the media are the major source of information about, and explanations of, social and political processes. The mass media therefore play a key role in determining the forms of consciousness and the modes of expression and action which are made available to people. Consequently, any adequate analysis of the distribution of power and of the process oflegitimation must necessarily include an analysis of the mass media. In recent discussions of the reproduction and legitimation of class relations, the part played by the mass media is frequently referred to but seldom dealt with in detail. Whereas, the role of other agencies, particularly education systems, has been mapped in some detail, the operation of the mass media has gone largely unexamined. In one recent collection of standard writings on "Power in Britain" for example, the media did not even rate a separate mention in the index. 2 This essay is an exploratory attempt to outline some of the basic features which underpin and shape the economic context and political consequences of mass communications in contemporary Britain. It is part of a work in progress. It is not intended to provide an exhaustive analysis, but simply to suggest some directions in which such an analysis might usefully proceed. Although, for the sake of brevity and convenience, we concentrate here on the British situation, many of the processes discussed are common to advanced capitalist states per se. The present essay should therefore be regarded as a case . study. 3 The obvious starting point for a political economy of mass communications is the recognition that the mass media are first and 205

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foremost industrial and commercial organizations which produce and distribute commodities. Unfortunately however, most analyses of this process have concentrated on the situation in one particular mass media sector and have consequendy ignored the emerging linkages between sectors. The 1966 Monopolies Commission report on film exhibition provides a classic instance of this sort of myopia. The report concluded that the domination of the market by two companies, Rank and Associated British Cinemas, was not necessarily against the public interest. Since that time, however, ABC has been acquired by Electrical and Musical Industries Ltd. (EMI) an entertainment corporation with interests in every level of film production, as well as in television and records. As we shall show later, EMI's film interests are substantial, but even so, they only accounted for 15% of the corporation's total turnover in 1972. Ranks similarly have interests in a wide range of enterprises, from the mammoth Xerox information processing complex to bingo, dance halls and holiday camps, and film exhibition within Britain contributes just 13% of Ranks' turnover. On the rare occasion when these emerging patterns have been examined, however, the result has tended to be a catalogue of linkages with litde or no analysis of their relationship to the general economic context. 4 The media companies are locked into the wider economic situation, firsdy through reciprocal investments and shareholdings and interlocking directorships with other large industrial concerns, and secondly through advertising. Advertising is the principal economic base of both the press and commercial television and hence both are direcdy vulnerable to adverse changes in general economic conditions. During recessions companies are faced with two basic options: either to increase advertising expenditure in an attempt to maintain sales, or to cut back on advertising in order to reduce costs, and as the relationship between advertising and sales is problematic, they are likely to opt for the second alternative. Although publishing, the cinema, and the record industry gain litde or no revenue from advertising they are still vulnerable to a generally worsening economic situation, firsdy because it increases production co..sts and therefore sales prices and secondly because spending on luxury items such as records and cinema seats is likely to be reduced. Changes in the mass media cannot therefore be adequat~onsidered apart from more general economic changes. This in turn requires an historical ~ec tive which will locate changes in the mass media within the general context of industrialization. In addition to producing and distributing commodities, however, the mass media also disseminate ideas about economic and political structures. It is this second and ideological dimension of mass media production which gives it its importance and centrality and which

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requires an approach in terms not only of economics but also of politics. Again, however, most analyses of the ideological role of the media have tended to be both abstract and schematic. Louis Althusser, for example, simply includes the mass media in his shopping list of "ideological state apparatuses" along with religion, education, political parties, etc., and leaves it at that.s It is not sufficient simply to assert that the mass media are part of the ideological apparatus of the state, it is also necessary to demonstrate ·how ideology is produced in concrete practice. In the first part of this essay we examine the evolution of the media industries and the changing nature of their economic environment. We go on to discuss the responses within the industries to the pressures reeendy operating on them, and conclude with some implications of the political economy of the media for the information and leisure facilities they produce. II THE INDUSTRIALIZATION OF MASS COMMUNICATIONS (a) FROM DIFFERENTIATION TO CONCENTRATION

The pre~ concentrated structure of the media industries is the latest stage in a sequence of organizational changes reflecting their changing economic base. Schematically all the media have gone through a similar cycle. Firsdy, small-scale or personalized production of a cultural product expands. Distribution and selling become separated and commercialized. As new technology enters the medium, production becomes industrialized and consumption becomes largescale and impersonal. This process of differentiation is succeeded by a period in which the growth of the industry reaches saturation and is hit by a series of pressures due to rising costs, declining revenue, and a changing pattern of demand. This is the process of concentration which we consider below. The final stage in this sequence involves·a developing tension between new technological potentialities on the one hand and economic concentration on the other. Some tentative ideas in this direction are suggested at the end of this paper. Both book and newspaper publishing began as small personalized activities; until the eighteenth century publisher-printers were responsible for both. Newspapers indeed began in the form of personal hand-written news-letter services, while book production preceded printing as a handwritten activity in ecclesiastical education. As authors established greater autonomy from publishers so too the eighteenth century saw the separation of bookseller from printer. Grub Street was born and writing, as Goldsmith complained, "converted~de". Mter 1750 newspaper publisher-printers were replaced by joint-stock companies.

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The cinema split even more distinctly after its early fairground origins in the 1890s. Exhibition, based initially on the stockpiling of films by early showmen, became a differentiated arm of the industry. As film makers competed for the favours of the exhibitors the open sale of films declined, to be replaced by a hiring system, bringing with it the middle-men or renters. Growing industrialization of the media-the introduction of new technology and mass production-brings with it a demand for greater financial underpinning. Through the nineteenth century the mechanization of paper-production, the steam-printing press, and later Iinotype greatly advanced the industrialization of the print industries. For ~ooks ~ n:.:eant _the growth of differentiated distribution through the crrculatmg libranes, and fii1.ally the penny book and widespread marketing. !or newspapers rapid industrialization combined with decreasing pnces when stamp tax e1;1ded facilitated rapidly rising circulations as individual purchases replaced collective subscriptions. Gradually the press became part of that embryonic entertainment industry which included professional sport and the music hall. The "new journalism" as Arnold labelled it drew on American typographical and photographic techniques, headlines, interviews, the factual "reporting" of the news agencies, and sports news to attract a new public. The socalled Northcliffe revolution was the recognition that the members of this public were also the consumers in the retail revolution. The bigger companies produced by the 1873-94 depression recognized the enlarged national press as the ideal advertising medium for the competitive selling of branded goods. The Mail, Mirror and Express all started in the period around 1900 on this new economic base. Expansion and technological sophistication attracted capital into each medium. As exhibition boomed in the cinema, capital in the industry rose from £110,000 in 1908 to over £3 million in 19Io.s Between the wars the cinema attracted a vast new audience. High and rising rental prices and a massive growth in the number of cinemas brought, as Lord Burnham observed in 1920, "the high financiers of the world ... flocking into the cinema industry".? Nearly 1,000 cinemas were built between 1924 and 1932 and capital in the industry rose from £15 million in 1914 to £70 million in 1929. As exhibition flourished so did the chains controlling it. By 1944 a third of the cinema seats were owned by three chains, ABO (which started as a production company in 1928), Gaumont-British, and Odeon. The latter two companies were taken over by Rank in 1941, and the new chain and ABC (now part of EMI) have dominated post-war film exhibition. In the same way the expanded press attracted the attention of financiers, and by 1929 four of them, Inveresk, Rothermere, the Berry

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brothers, and Cowdray controlled roughly half the daily circulation. The ensuing battle for readers in the thirties and the massive marketing operation it generated in effect created the mass popular daily press, doubling the national daily circulation between 1920 and 1939. """ Broadcasting necessarily began as an industry requiring expensive technology and financial backing. Arriving after the industrialization of the economy the cycle of industrialization -+ commercialization -+ saturation -+ crisis has been a comparatively contracted one. The six companies which formed the British Broadcasting Company in 1922 appointed Reith as General Manager later in the same year. He spent the next four years demonstrating, as he was later to put it in his autobiography, that "whatever was in the interests of broadcasting must eventually be in the interests of the wireless trade". 8 Television did not develop substantially until the post-war period, and it did not take long for ;tinancial backing to perceive the potential of the new medium. After war-time introduction to lighter styles of broadcasting the not uncommon opposition to the BBC in the Conservative Party, allied with advertising and equipment manufacturing interests produced "perhaps the most remarkable exhibition of political lobbying this country has ever seen". 9 Commercial television opened in 1~4, and licences climbed from 3 million in that year to 8 Inillion in 1958, arriving at virtual saturation in 1~ The resulting massive change in leisure patterns produced a decline in the cinema and popular press from their peak years (in 1946 for the cinema and about 1960 for the popular press), and was a major factor in · the resulting stage of consolidation and concentra---_ tion. (b) CONSOLIDATION Concentration has taken different forms in each of the media industries, but the pattern of their increasing involvement with each other and with broader industrial enterprises is a universal response to the general problems outlined above. This latest stage is worth examining in closer detail.

(i) Publishing Most books read today are borrowed from libraries or from other people. The growth of public libraries since 1919 has been a major source of income for publishers. While 312 million library issues were registered in 1948/9, twenty years later the figure was over 600 million. 10 But as book prices have risen rapidly library budgets have failed to keep up and only account for about 10 to 15% of book sales; thus libraries are contributing proportionately more to book reading and less to sales. -

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Rising costs have terrorized the industry. Between 1966 and 1972 paper, printing, and binding costs rose by.between 73 and 80%.11 Hardback prices consequently doubled in price between 1963 and 1970, and the overall price of books rose 112% between 1965 and 1971.12 The proportion of hardback sales has not surprisingly fallen before the advance of the "paperback revolution". In the decade from 1960 to 1970 the number of paperback titles in print rose from under 6,000 to over 37,000. For a large part of the publishing industry paperback and other rights (book clubs, films, serialization) have become the main hope for profitability. Paperback publishing provides the financial cornerstone of the whole industry, and by 1972 accounted for 45% of sales revenue. 13 Yet, because paperback publishing, relying on large print runs and extensive promotion and distribution, requires largescale finance, small traditional craft-like publishers have been coalesced into groups (like Associated Book Publishers comprising Methuen, Tavistock, Eyre and Spottiswoode, Chapman and Hall, inter alia), and into the multi-media combines who control paperback publishing (Granada, Thomson, Pearson Longman, etc.). The other growth field in publishing is in educational textbooks, whose sales jumped by 65% in the period 1969 to 1972 alone. Yet here again, this is precisely a fi('!ld requiring large financial backing and, increasingly, export organization. Thus publishing has quite clearly responded to pressures 'vith massive consolidation and industrialization. The proliferation of titles in the desperate search for large-scale successes have sucked the industry into a financial expansion that has totally changed its character.

circulation, though remaining a small absolute part of the market. The problem for the populars is their high survival threshhold, given that roughly two-thirds of their income is sales revenue, while the qualities get nearly three-quarters of their income from advertising. Thus a newspaper like the News Chronicle can disappear \vith a circulation of well over a Inillion. These problems are reinforced by the problematic nature of advertising. The advertising industry grew comparatively slowly through the sixties and its proportional contribution to newspaper revenue in fact declined. In addition, commercial television, though largely creating its own new advertising revenue, reduced the share of advertising going to the national press from 34% in 1956 to 18 per cent in 1971, (though newspapers more of less held their own through the sixties by keeping rates very low). 15 The variations \vithin advertising reinforced the revenue pattern. While the advertisers of consumer goods, food, and drink switched from the national populars to television, classified advertising of jobs, property and services expanded and contributed to the comparative vigour of the quality and provincial press. Thus only three cir four of the national dailies are profitable and the spectre of closure haunts Fle~t Street despite occasional bouts of optiinism and the recent surge of the Sun. The response has been twofold. Firstly, newspapers have merged into groups, \vith each other, with provincial chains, or with other publishing interests. Secondly, in order to stay alive, they have joined diversified industrial groups able and \villing for whatever reason to support loss-making newspapers.

(ii) The Press The period since 1945 has been one of perpetual crisis for the press, littered with commissions, enquiries, and obituaries for dead newspapers. For a few years after the war, newsprint rationing kept costs low and advertising was a seller's market. But costs rose by between 70 and 140% from 1957 to 1965, especially newsprint and labour. This rise in fixed costs led to a rise in the break-even point (the recovery of "first-copy" costs) putting a preinium on high circulation to spread costs. 14 Inevitably prices reflected this cost inflation, and many national dailies doubled, or even trebled their cover price between 1959 and 1971. The resulting decline in circulations reflects both a decreasing willingness to buy two newspapers, and a growing use of television as a primary source of information and entertainment. However, the overall circulation decline (of 11% between 1961 and 1971) disguises variation within the press. While "popular" dailies have lost most sales the "qualities" have in fact steadily risen in

(iii) Broadcasting Despite the golden age when commercial television, in Lord Thornson's immortal phrase, was 'a licence to print money', broadcasting has more recently foundered in the same sea of pressures as the other media. Advertising revenue has been uneven and unpredictable, rising only slowly through the 'sixties and hardly at all in 1969-71. Depressed profits in some of those industries providing the bulk of television advertising in the late 'sixties (like food manufacturing, hit by the power of the chain supermarkets) lay behind this uncertainty. At the same time the levy on television advertising revenue was beginning to bite. Introduced in 1965 the levy immediately represented over 25% of the costs of network companies. By 1969 the levy was extracting over £25 Inillion and represented nearly 40% of costs for the big five network companies.16 The levy was reduced by the Conservative government in 1971 by £10 million. The problem of revenue was eXacerbated by the spread of television ownership. By 1968 virtual saturation point had been reached with

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over 15 million licences in operation. If there is no increase in the audience there can be no increase in advertising revenue, especially in view of the growing power of agencies to keep rates down and enforce discounts. The option is to increase broadcasting time, as duly occurred in 1972 after a resurgence in the advertising industry, increasing the demand for an extra commercial channel. The ITV audience has not just remained static, however, it has actually declined since the arrival of BBC2 in 1964 enabled BBC 1 to compete aggressively for ratings. Where ITV had something over two-thirds of the audience in the early 'sixties this figure gradually dropped to 54% by 1972.17 The final factor in this catalogue of pressures was the rapid rise in costs created by the introduction of colour, and the increased production of expensive programmes for the American market. Total costs rose by about 50% between 1965 and 1970. The BBC has been far from immune from pressures. Increased costs with the expansion of the second service, and the spread of colour have created a situation which the annual report coyly described as 'financial inhibition'. 18 Despite licence fee increases in 1965, 1969 and 1971, by 1971 the BBC's accumulated deficit was over £6 million, and despite the recent drop in this figure as more colour licences are bought, the bailing out of the BBC is now a permanent feature of its political environment.

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of television. The proportion of feature films . on the two dominant circuits which were American-financed doubled from 43% in 1962 to 88% in 1968. However, problems in the American film industry have depeleted much of this support and the proportion has fallen steadily over the last five years. (v) Records Unlike the cinema, the record industry has been a beneficiary rather than a victim of changing leisure patterns. Whereas the profitability of almost all the other media sectors declined between 1967 and 1971, the record market expanded at an annual rate of 11%. 20 This growth is due largely to the increasing importance of the youth market for pop music. In fact, the various sorts of pop account for just over 90% of the total record market. 2l Undoubtedly, the most significant recent trend in the record industry has been the rise of the long-playing record. LP's, which now account for over 60% of record production and sales, have become the industry's principal financial prop. The period since 1967 has seen some reduction in the dominance of the two "major" companies-EM! and Decca. Whereas in 1967 their joint share of the LP market was 58%, by 1970 the figure had dropped te 32% and by the end of 1972 to 27%. 22 However, this vacuum has been filled not by the independents but by other major companies. (C) THE DIMENSIONS OF CONCENTRATION

(iv) Cinema The cinema has been a major victim of changing leisure patterns. Since the peak of admissions in 1946 of 1,635 millions they have shrunk steadily and dramatically to 182 million in 1972. In the same period the number of cinemas has contracted from 4,703 to 1,510. The major villain, of course, is television, particularly after the rapid expansion of set ownership in the late 1950s. The result has been government assistance, contraction, and a reliance on American finance, as well as the concentration which we consider later. Government aid has been by legislation in the form of quotas against foreign films, by a statutory levy on seat prices, redistributed among British film producers according to box-office success, and through the National Film Finance Corporation which provided funds for domestic production, particularly by support of British Lion. However, the failure of the latter had, by 1971, prompted the Corporation to withdraw from independent support of films and instead to concentrate on financing strictly commercial films in conjunction with a private consortium. 19 The other response to contraction was the acceptance of massive American backing as the domestic market in the USA sank in the wake

The increasing concentration of control and influence in the hands of a few large companies is the outcome of three interlinked but analytically distinct processes: integration; diversification; and internationalization. (a) Integration There are two main types of integration: horizontal integration, where firms acquire additional units at the same level of production, and vertical integration where they acquire units at different levels. Both types of integration are accomplished by the familiar mechanisms of mergers and take-overs. The period 1967-70 saw a boom in both mergers and take-overs. In those four years, commercial and industrial companies spent almost £5,000m on acquisitions--considerably more than the total for the whole of the preceding sixteen years. 23 Media companies were part of this general trend. Horizontal integration enables companies to consolidate and extend their control within a particular sector of media production and to maximize the economies of scale and shared resources. The most notable example within publishing was the acquisition by reverse take-over of Penguin Books, the world's largest paperback house, by Pearson Longmans, one of

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Britain's largest publishing corporations. An important instance within the newspaper industry was the acquisition of two leading "qualities", the .Times and the Sunday Times, by the Thomson Organization, which at that time was already the world's leading newspaper corporation with almost ninety newspapers in the USA and Canada, and over fifty provincial and local papers in the United Kingdom. Vertical integration occurs when a company with interests in one stage of the production process extends its operations to other stages such as the supply of raw materials, the provision of capital equipment, and the organization of distribution and retailing. This considerably reduces the company's vulnerability to fluctuations in the supply and cost of essential materials and services and enables it to regulate and rationalize production more precisely and to increase its control over the market. The most significant instance of vertical integration occurred in 1970 when the leading British newspaper and magazine publishers IPC merged with the Reed Group Limited, an international corporation with interests in wood, pulp, papers and newsprint. The resulting company, Reed International Limited, has interests in most stages of newspaper publishing, from raw materials to retailing. Another notable example of vertical integration cocurred in the film industry when Electrical and Musical Industries Ltd. (EMI) acquired the Associated British Picture Corporation in 1969. This gave the corporation a substantial interest in both film production and exhibition. Then, in 1970, EMI acquired Anglo Amalgamated Film Distributors Ltd., which gave the group an interest in every stage of film production, from finance through production to distribution and exhibition. These, and other less spectacular moves towards vertical integration, have considerably accelerated the shift from differentiation to concentration. The overall result of these twin integrative processes has been to consolidate the control of the four or five leading companies within each media sector. The following table summarizes the current situation in selected sectors. Proportum of the Total Market Accounted for by the Fwe Leading Companies in Selected Mass Media Sectors.24 (Percentages are rounded off to the nearest whole number) 86% National Morning Newspapers:% of circulation .. 88% National Sunday Newspapers: %of circulation .. 73% Network Television: % of television homes served 86%t Paperbacks: % of domestic production (1971) 69% Mid-price long playing records:* % of market 78% Cinema Exhibition:% of admissions+ t denotes estimate

* Mid-price =

99p to £1.98p

+Top Four Companies

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Although incomplete, the above table clearly indicates that the ownership and control of the British mass media tends to be highly concentrated, with the five leading companies in each sector accounting · · for 69% or more of the market. Concentration of ownership is most marked in the national press, with the "Big Five" accounting for well over 80% of the circulation of both the national dailies and the Sundays. A more detailed account of the breakdown of market shares is given below. Proportion of National Newspaper Circulation Accounted for by the Leading Fwe Companits• (June 1972) 25 Morning Daily

Sunday

All Newspapers*

Reed International News International Beaverbrook Associated Newspapers Thomson Organization

30·0 18·0 23·3 11·9 2·4

40·5 24·6 16·1 6·8

30·3 17·6 16·5 7-3 7-3

Total Market Share

85·6

88·0

79·0

* Includes provincial press.

The national "daily" market is dominated by the four leading "populars". Heading the list and still well out in front is Reed International's Daily Mirror, followed by Beaverbrook's Daily Express, News International's Sun, and Associated's Daily Mail. The "quality" end of the spectrum is dominated by the Telegraph with 10% of the total "daily" circulation. The Times and Guardian come a poor second and third with just over 2% of the circulation each. Pearson's Financial Times accounts for just over 1%. The national Sunday market is even more concentrated, wi·th the leading three companies taking just over 80% of the circulation. Half of this is accounted for by the two Reed papers, the Sunday People and Sunday Mirror, followed by News Inter:national's News of the World and Beaverbrook's Sunday Express. The "quality" sector is convincingly headed by Thomson's Sunday Times with just under 7% of the total circulation, the remainder being split almost equally between the Observer and the Sunday Telegraph. Concentration in the provincial daily press is less marked. Nevertheless, the five leading companies in this sector still account for 60.7% of the evenings' circulation and 39.9% of the mornings'. Of the major national groups only two have a substantial share: Thomsons with a fifth of both the mornings and evenings, and the Daily Mail group with

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13.9% of the evenings and 3.3% of the mornings. The other leading provincial daily groups are United Newspapers, and the family concerns controlled by the Iliffes and the Cowdrays (Viscount Cowdray is also chairman of S. Pearson whose publishing subsidiaries include the Financial Times and Pearson-Longmans.) The initial allocation of commercial television contracts concentrated control in the hands of the four companies serving the major population centres. Associated-Rediffusion provided weekday programming in the London area, ATV served London at weekends and the Midlands during weekdays, Granada provided weekday television in the North, while ABO filled the weekend slots in the North and Midlands. The remainder of the country was divided into ten regions each served by its own company. The primary task of these smaller regional companies was to produce local news bulletins and other programmes of local interest. The rest of their air-time was filled by programmes produced by the four network companies. When the commercial television franchises were re-allocated in 1967, the number of network companies was increased from four to five. Weekday London programming was awarded to Thames and the weekend slot to London Weekend; ATV served the Midlands, while the North was split between Granada and Yorkshire Television. These five network companies together serve 73.2% of the television homes in Britain and receive around two thirds of ITV's gross revenue. In theory the pattern of contractors was originally "designed to spread responsibility for making programmes over as many companies as the expected advertising revenues would support and to provide (very roughly) equal revenue potential for each company". 26 In practice, however, network programme planning provides a functional equivalent to integration, and the five network companies produce all but a tiny handful of prime-time output. The recurrent problems of the ITA with regard to franchise allocation and the like reflect the permanent contradiction of a state regulatory agency attempting to control a commercial system. Integration in publishing has gradually split the industry into two groups. Old independent publishing houses like Faber and Faber, or Routledge and Kegan Paul, maintain their independence and survive on small steady returns on capital. Meanwhile many firms have been forced along the several dimensions of concentration to cope with the mass marketing and export methods now the lifeblood of British publishing. Associated Book Publishers are a major example ofa group ofmediumsized publishers taking advantage of joint operations, though, like many general publishers they are glad to get a return on sales of 4 or 5%. 27 The group includes Methuen, Eyre and Spottiswoode, Sweet

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and Maxwell, and Chapman and Hall. The major university presses remain secluded havens of indeterminate profitability. Concentration in publishing is generally difficult to calibrate, especially in the hardback market where it is not yet particularly important anyway. But as early as 1949 Sir Stanley Unwin estimated that "about 85% of the total book turnover is represented by the sales of at most fifty firms". 2s The Economist in 1958 estimated that the ten largest publishers issued 23% of all new titles that year. Luckham in 1969 modified this to the six largest producing nearly 30%. 29 These six were Hamlyn (purchased by IPC, itself now part of Reed International), Collins, Penguin (part of the Pearson Longman empire), A. B. P., Hutchinson, and Routledge and Kegan Paul. At the same time bookselling had also become highly concentrated; by 1965 80% of the trade was going to 10% of the booksellers. 30 The paperback publishers are integrated into groups with parent diversified companies. Pearson Longman control Longman hardbacks as well as Penguin, and Ladybird books. Granada Publishing comprises Adlard Coles, Crosby Lockwood Staples, and Hart-Davis MacGibbon, as well as Mayflower, Panther, Paladin and a substantial holding in Chatto and Windus, and Cape. Lord Thomson controls, among others, Thomas Nelson, Michael Joseph, Hamish Hamilton, Rainbird, and Sphere. Of the other major paperback imprints Pan is jointly controlled by Macmillan and Heinemann, Corgi by the American publishers Bantam (themselves part of the National General Film Corporation), and Fontana by the giant Collins publishing house. In 1968 British film production was dominated by American companies. Then in 1969 Hollywood experienced a crisis as five of the seven major companies lost a total of 180 million dollars, and as part of the resulting rationalization, investment in the British film industry was cut back by 40%. Because of the sums required, only the large companies such as EMI and Rank were in a position to step into this vacuum. The American film industry has recently undergone something of a resurgence, but in 1972 EMI continued to lead British production with nine films, followed by the Rank Organization and the Laurie Marsh group with six each. The other notable feature of the present situation is the rapid growth of independent producers, a point we shall return to later. The main trends in British film production are summarized in the table below. Between the film producer and the public stand the intermediary stages of distribution and exhibition. At the level of distribution the influence of the reciprocal arrangements and combines of the dominant groups is decisive. In 1972 for example, sixteen of the top twenty box office films in Britain were distributed by the three major coalitions; seven by the Columbia-Warner group, six by the EMI-MGM combine,

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group. 32

and three by the Fox-Rank At the exhibition level, only the large companies have the capital required to undertake the extensive alterations to cinemas necessary to attract the declining audiences. This had the effect firstly of consolidating the duopolistic doinination of the EMI and Rank chains, and secondly of driving the smaller chains into the hands of large companies such as Granada and the Laurie Marsh group, who have interests in a wide range of leisure facilities. The only other significant cinema chain is the Star group.* British Film Production in Selected Tears. 31 Number of films produced by:

1968

1972

LEADING AMERICAN COMPANIES

54%

23%

LEADING BRITISH COMPANIES

14%

31%

INDEPENDENTS ..

13%

30%

Total Number of films produced ..

81

84

Since 1968, when they accounted for half the records produced, Long Playing records have rapidly increased in importance until they now constitute over 60% of total record production and contribute the bulk of the record industry's profits. LP's can be divided into three main types on the basis of selling price; budget record (selling for under £1) Inid-price (£1-2) and full price (£2+). The budget market is dominated by two companies-the Minnesota-based Pickwick International and EMI'S Music for Pleasure. Pickwick currently claim to be running just ahead ofMFP with 40% of the market. The Inid-price market is dozninated by the two leading British "majors", EMI and Decca, whose joint market share stood at 50·6% in the last quarter of 1972.33 At the full price range, however, their joint share drops to just over a quarter (25·6%). However, this gap is filled not by the independents but by the other leading companies, most notably CBS and RCA, the two giant American corporations, and Polydor, the record subsidiary of Siemens, the German electronics combine. Recently the American marketing firms of K-Tel and Ronco have been making a significant impact, re-releasing material leased from the majors on records backed by extensive TV promotion. At the end of 1972, K-Tel's share of the full price market stood at 10·3%. Despite this increasing complexity, however, taken overall, the record market continues to be doininated by EMI. *In 1972 Rank accounted for 27% of cinema admissions, EMI for 25%. The Marsh Group for 14%, Star for 12% (Retail Business No. 177).

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(b) Diversification In addition to consolidating their position within .a particular medium through mergers and take-overs, the larger companies have increasingly diversified their interests and acquired holdings in a range of leisure and information-providing facilities. Diversification enables companies to hedge their bets and to cushion the effects of recession in a particular sector. The Associated Television Corporation Liinited (ATC) provides a good illustration of how this works in practice. ATC's operations are split into two main divisions; network television represented by A TV which serves the Midlands, and the "diversified interests". These include a film-making subsidiary ITC, Pye records, Northern Songs (which holds the rights to 200 of the Beatles' most popular songs), the Stoll Theatre group which includes the London Palladium and ten other West End theatres, Planned Music Liznited, and a merchandising company, Century 21 Enterprises. In July 1969, the levy on the turnover of the commercial television companies was increased, and in the words of ATC's Chairman, Lord Renwick, "This ... immediately produced a crisis which changed the whole financial structure of Independent Television and endangered the very existence of some companies not protected by diversified operations." 34 The post tax profits of Westward TV which serves the south-west of England, for example, dropped from 139 thousand pounds in 1969 to 64 thousand in 1970. 35 ATC however, was "protected by diversified operations" most notably its film and music interests, as the table below clearly shows, and these cushioned the effects of the Levy on the company's profitability. Proportion

of A TC' s Pre-tax Profits Accounted for by Selected Actiuities: 1969-197236 1969

1970

1971

1972

Network TV (ATV) Film Production and Distribution Records and Music

49% 22% 12%

11% 41% 32%

17·5% 32% 38%

51·5% 21% 24%

Pre-tax profits (£mill) ..

5·6

5·3

4·9

6·2

During the period of financial stringency in the television industry, the share of profits attributable to ATV dropped from around a half to under a fifth, and the gap was filled by the expansion of the record and film interests. During the summer of 1969 for example, more ATC productions were screened in "prime time" on American networks than any other single producing company with the exception of MeAUniversal. The success of the diversified activities was not entirely sufficient to maintain profits but it certainly cusioned the effects of the

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levy. Then, as the domestic television situation improved, the balance of profits attributable to -network operations and to the diversified activities evened out again to around fifty-fifty and overall profitability increased substantially. As well as providing a cushion against recession in a particular sector, diversification (whether through direct acquisition, investment or reciprocal arrangements) enables a company to capitalize on a commoditv's success in one sector by marketing spin-offs in a number of other sect~rs. Here, for example, is ATC's write-up of the success of "The Persuaders". "'The Persuaders' featuring Tony Curtis and Roger Moore, has been sold to more than 62 countries.'American Broadcasting has scheduled the re-run of 13 episodes. ... the theme, composed and recorded by John Barry, has sold more than 116,000 records in the U.K. Pan Books have sold 180,000 paper-backs based on the series." 37

Diversified activities are becoming increasingly important, and in several leading media companies they already account for more than half the annual turnover. 38 For example, although IPC is the country's leading newspaper publisher with 30·3% of the total circulation, IPC onlv accounted for 30% of Reed International's 1972 turnover. Sinrilarly, in 1972 over half the turnover of the Thomson Organization was attributable to activities other than newspaper publishing. They included book and magazine publishing and trade exhibitions (24·6%) and package holidays (27·6%). Granada and Rank provide other prominent examples of media companies with diversified leisure interests. In 1972 for example, 40% of Granada's turnover came from TV set rental, 36·2% from network TV operations, 7·9% from motorway services, 6·2% from cinemas and Bingo, and 5·6% from publishing. Similarly, 28·4% of Rank's 1972 turnover came from TV and radio-set manufacture, 19·9% from film exhibition, 15% from audio-visual equipment manufacture (notably Leak Wharfdale hifi sets), 7·7% from hotels, restaurants and motorports, and 7·2% from Dancing and Bingo. Rank also hold 37·6% of the ordinary shares of Southern TV, one of the main regional TV companies. However, undoubtedly the most spectacular example of diversification is provided by EMI, which in addition to heading the record industry and having a substantial stake in all levels of the cinema industry, holds just over 50% of the voting shares in Thames TV, the most successful network company. In 1972, records and tapes accounted for 55% ofEMI's turnover, film interests for 15%, TV interests for 7%, and electronics and TV manufacture for 23%. Recently EMI have extended their diversification policy even further with the acquisition of the "Golden Egg' restaurant chain, and investments in the Swindon Cable TV station and in the Brighton Marina complex.

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In addition to consolidating and extending their control within and across the various media sectors, the big companies are also becoming increasingly intermeshed through joint investments, reciprocal shareholdings and interlocking directorships. The pattern is immensely complex, but the following instance provide a simple illustration of the emerging network. Among the EMI directors is Lord Shawcross, who is a director of Times Newspapers in the Thomson Organization, and Chairman of Thames TV. Similarly, the ATC board includes representatives of the two leading newspaper groups, Sir Hugh Cudlipp, Deputy Chairman of Reed International, and Sir Max Aitken, Chairman of Beaverbrook. In addition EMI and ATC are linked through the Grade family. After the Second World War, the two Grade brothers, Lew and Leslie, established an actors' and artists agency, while their half-brother, Bernard Delfont, built up his own agency business. The two companies later merged to form the Grade Organization under the direction ofLeslie Grade and Bernard Delfont. In 1967 the Grade Organization was acquired by EMI, but Delfont continued as chairman and the Grade family retained its interests. Currently, Bernard Delfont is Chairman of the EMI Film and Theatre Corporation Ltd. and Lew Grade is Deputy Chairman and Chief Executive of ATC.

(c) Internationalization The third aspect of concentration is the internationalization of the media, embracing export and foreign investment as well as foreign ownership of British media companies. Exports play an increasingly important role for all media industries and most of all in publishing. Book exports rose from 29% of total sales in 1949 to 47% in 1969. Educational texts flow in growing profusion to the Third World and in 1972 made up over 20% ofBritish book exports (a proportion nearly doubling in four years). 39 The old slogan that "trade follows the book" has been outmoded by the book becoming the trade. Similarly the export of TV programmes is an ever-more important source of income for both the BBC and the larger independent companies. ATC derived 31% of its sales revenue from overseas in 1971-2 and has been a leader in the growth of the British programme export drive under the inspired control of Sir Lew Grade. The potential of TV film exports was healthy enough to encourage ATC's chairman, Lord Renwick, to announce last year an investment programme of £7 million to back it up. 40 Production for the foreign market encourages mid-Atlantic innocuity and expensively superficial slickness, as well as feeding back onto domestic production styles and resources. This is not a development that has left the BBC untouched, suffering as it has been from the permanent nightmare of "financial inhibition"

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and the impending reorganization of broadcasting. In 1971-2 the income of BBC Enterprises, the marketing wing of the Corporation, rose by 11% a11d contributed about a fifth of the total surplus on the year's working. 41 Total programme sales to nearly lOO countries amount to about £2! million. The success of BBC programme sales is a rare glimmer in a preponderantly gloomy financial atmosphere. It joins merchandising, and record sales (over 150 titles in 1972) among the extensions of the BBC's commercial activities. Go-production with Time-Life and other organizations adds to this growing nexus. Internationalization also involves overseas investment by media companies. The participation of news media in imperial expansion was crucial both as the communications arm of the empire and as a source of revenue for the media. In most colonial countries local indigenous newspapers were either started by British companies or later succumbed to competition from them (the chain of IPC newspapers in West Africa is a good example of this). Most television stations in colonial territories have been set up by British companies who continue 42 to service them with programme material, training, and equipment. Direct investment in Europe is a more recent and growing form of internationalization. The Thomson Organization have considerable interests in German newspapers, and like many media firms are preparing for the impact of entry into Europe. EMI own record companies in virtually every European country, and indeed all over the world, while Ranks have film exhibition interests in Holland and laboratories in Italy. Foreign, mainly American, ownership of British media has further consolidated the monolithic character of the industry, though with the flight of American capital from the ailing film industry, the frequent lack of success of American publishing interests in taking over British firms and the enduring insularity of most of the press (despite the Australian Murdoch and the Canadian Thomson) this aspect of internationalization is frequently overstated at the expense of other more subtle relationships. The complexity of these relationships is in part a facet of the wider face of what is frequently stigmatized as "cultural imperialism" or "the cultural offensive", in which British media are but part of a global marketing system as yet incompletely documented. American t~le vison film series dominate international programme sales, amountmg to nearly 200,000 programme hours in 1971, and providing a revenue that year of approximately 85 million dollars. 43 For all but a very few non-Communist nations television is an American medium. On the other hand the two dominant news films agencies, Visnews and UPITN, are British-based (the latter being half American). The international traffic in newsfilm (and in a visual medium this dominates

news selection) is a major part of the export of cultural material from the developed countries to the Third World, and is a more concentrated version of a similar one-way flow through the news agencies. Internationalization , then, shares with other aspects of concentration the effect of consolidating the necessary commercial constraints on cultural production. As an increasingly evident response of the media to domestic economic pressures involvement in the international market is an inevitable development of later media industrialization.

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IMPLICATIONS

To turn to the implications of these structural processes we need to avoid two common inferences. One is to condemn the wickedness of monopoly and concentration in the media per se, leaving aside the reasons for such denunciation. The second is to produce anecdotal accounts of isolated incidents of suppression or manipulation. It is far more relevant to a political economy of the media to establish the general and systematic constraints on information and leisure provision which ·result from tl1e 11ecessities of survival and profitability in the industries providing them. (a) The Constriction of Choice in Leisure and Entertainment The process of producing mass media output is a dual one. For the owners, investors and managers media products are commodities to be packaged, promoted and marketed in the same way as any others. As EMI'S Chief Executive put it: "I ... firmly believe that running a business in the leisure industry is basically no different from running any other.... the same principles of management must and do apply. . . . We in the leisure industry have to examine market potential, identify growth areas, set up a sound and imaginative marketing plan to exploit the situation. " 45 For many of the people who actually make them, however, media products are not simply commodities but media for creative expression. This balance between commodity production and creativity is a precarious one however, and one which is ultimately framed and determined by the general economic context within which production takes place. In periods of economic stringency, the criteria of cost-effectiveness are likely to be decisive with the result that production will be characterized by a systematic rejection of the unpopular and the reversion to formulae with a proven market and profit potential. An illustration from television will show this process in operation. During the pressure on television profits in the period 1969-1971, the programme companies' total costs remained constant at£64·8 mill. Direct programme cost, however, fell by £1·5 mill. indicating that companies were responding to fiancia1 pressures by originating fewer

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new programmes and relying instead on repeats of previous successes or on programme formats which are cheap to broadcast and which have proven audience appeal and therefore high revenue potential. 46 The following table gives some estimates of the relative costs and audience potential of various categories of programmes. 4 7

Saturday Feature Film American series (e.g. "Ironside") .. Studio show (e.g. "Opportunity Knocks") Situation comedy (e.g. "On the Buses") .. Documentary (e.g. "World in Action") .. Play (e.g. "Play of the Month") .. Arts programmes (e.g. "Omnibus") (N.B.

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Cost per broadcast hour in £1,000

Likely audience in millions

4 4 4

10-20 9-10 9

15 10-15 25 8

11

6 3 2·5

Costs are based on 1970 figures).

The table clearly indicates that the most profitable programmes in the sense of those that involve the minimum costs for the maximum audience and hence advertising revenue, are repeats of successful American series, old cinema films, studio shows such as give-away quizzes and talent contests, and also comedy shows. Conversely, the least profitable programmes are arts programmes, documentaries and plays. An example of this logic of profitability operating in practice is provided by the case of London Weekend Television (LWT). LWT was awarded the contract to serve the London areas between Friday night and Saturday night on the basis of a submission which stressed "respect for the creative talents of those who, within sound and decent commercial disciplines, will conceive and make the programmes". 48 Substantial innovations in the fields of documentary, drama, and arts programmes were promised. As the economic situation of the television industry worsened, however, respect for "creative talents" was increasingly subordinated to cost-benefit criteria. The programmes shown at peak viewing time on a typical weekend in August 1971, for example, included three old cinema films, three comedy shows, two quiz shows and a repeat of an American crime series. The documentaries, dramas, and arts programmes promised in the original submission had either been axed altogether, allowed to continue with substantially reduced budgets, or broadcast at non-peak viewing times, thereby restricting the range of programmes offered to repeats and revivals of past successes. In addition to the advertising revenue accruing to domestic transmissions, television companies can also boost their profits by selling

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programmes abroad. The need to produce programmes that will fit easily into the schedule of the American networks imposes certain restraints on the creative personnel. In order to accommodate the frequent advertising breaks, for example, American oriented programmes have to build around a series of dramatic peaks punctuated by fade-ins and fade-ups. In addition, the need to produce a programme that will appeal to most people in most places necessitates the deletion of any elements which are too localized or culturally specific and a reliance on international "name" stars against "jet-set" backgrounds. The resulting mid-Atlantic style is epitomized by the ATV series "The Persuaders" and "The Protectors", both of which feature an English actor paired with an American (Roger Moore-Tony Curtis and Nyree Dawn Porter-Robert Vaughan) against interchangeable penthouse-casino-yacht locales. Morcambe and Wise, the most successful British comedy team, have consistently refused offers of American series on the grounds that it would mean deleting many of the local and topical references and running jokes which characterize their humour. The high priority placed on a programme's export potential also reinforces the squeeze on documentaries as these tend to be both geographically and temporarily specific. The exclusion of the untried and the reliance on the familiar and already popular are also very evident in the cinema, where both the top two box office films of 1972 ("Diamonds Are Forever" and "The Godfather") were based on best-selling paperbacks, while four others in the top twenty were adapted from successful televison comedy series. A parallel situation is beginning to emerge in the record industry, where the success of marketing companies like K-Tel in re-releasing recent hits has forced the majors like EMI to follow suit. As a result, pop records are increasingly taking on a double economic life, first as a Top Twenty "single", and then, months later, as a track on a compilation LP. However, it is not just a question of the increasing control of the large media companies over a particular media sector or even several sectors, but also of their increasing inf:l.uence over the whole field of non-work time. In 1971 spending on the mass media and entertainment accounted for 9·3% of all consumer spending, while spending on drink, and eating out and holiday accommodation accounted for 7·2% and 5·2% respectively. 49 This fact has not been lost on the large media corporations, who have been attempting to branch out into pubs, catering and ,holidays. The Rank Organization, which already has interests in film, television, bingo, dancing and also in the Xerox Corporation, recently acquired Butlin's holiday camps and narrowly failed in its bid for Watney Mann's brewery and pub chain. In the 1972 Annual Report, the Company Chairman, Sir John

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Davis, explained the rationale behind what he called the "Rank Philosophy". "The Rank Organisation has developed its leisure interests, originally only in films, but now including hotels, entertainment centres, dancing and catering, Top Rank Clubs and motorway service areas, and many of the products which we sell are closely allied with leisure, such as television, radio and hi-fi equipment ... The addition ofWatney's with its new style Schooner Inns and the retailing outlets of International Distillery and Vintners, would have been an entirely logical step forward for the Organisation. 60

A.nother example of a multi-media company extending its interests in catering, hotels and holiday accommodation is EMI's recent acquisition of the Golden Egg chain and their investment in the new Brighton Marina complex. By the same token, companies who already have substantial interests in hotels, drink and food are moving into entertainment and media. An important instance of this is Grand Metropolitan Hotel's acquisition of the Mecca complex whose interests include bingo, dance halls, betting shops, casinos, ice rinks, bowling, the Clubman's Club, and the Miss World contest. The sugar empire ofBooker McConnell provides another example,of this movement. In this case it is the addition of an Artists' Services Division, which owns the copyright on certain works and employs artists' services, to their existing spirit and liqueur ~ufacturing interests. Included among the artists are Harold Pinter andJoseph Losey, and best-selling paperback authors Agatha Christie Georgette Heyer and !an Fleming. This increasing interpenetration of the media and general leisure industries is accompanied by increasing rationalization leading to the deletion of small units of relatively low profitability and the application of common management techniques and marketing strategies in the overall interests of corporate growth. The cumulative result of this is to increasingly restrict the variety of entertainment and leisure options on offer to the majority of people, and to standardize the content. (b) The Control of Information and the Consolidation of the Consensus In the same way that leisure facilities are restricted and regulated so too there is a limited range of information made available by the media. The range of interpretive frameworks, the ideas, concepts, facts and arguments which people use to make sense of their lives, are to a great extent dependent on media output, both fictional and non-fictional. Yet the frameworks offered are necessarily articulated with the nexus of interests producing them, and in this sense all information is ideology. To describe and explicate these interests is not to suggest a deterministic relationship, but to map the limits within which the production of mediated culture can operate. Cultural production retains a real

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autonomy derived from tradition, occupational ideologies and the genuine tolerance of the liberal consensus. Nonetheless the crux of the system is that information is a commodity, to be packaged, distributed and sold in whatever guise and context guarantee commercial survival. For the press such survival is increasingly problematic and the desperate search for readers, the right readers, demands an increasingly moderate, apolitical, entertainment-oriented press. As the editor of the London Evening Standard has admitted, "even if a newspaper consistently loses money, but enjoys the support of an indulgent publisher with profits from other successful enterprises to meet the bills, the effect of loss making is certain to be felt in the editorial operation". 51 It will mean less space, less chance for background discussion, even greater reliance on the handful of agency sources, greater passivity, less risk-taking, the evacuation of politics. News becomes a means of handling social change, a comforting reaffirmation of the existing order. Any threat is explained away at temporary, deviant or inconsequential. Underlying conflicts of interess and political process are reduced to a necessary concentration on the arresting mythologies of the superficial drama of legislative life. These limitations, as we show below, are part of the demands of commercial information production in a situation of economic pressure. The British provincial press, too, survives at the end of an evolutionary process which has left just twenty provincial dailies, and no English town with a choice oflocal morning papers. Local monopoly is indulged under the benevolent but watchful eye of local business interests, or is rendered harmless by coalition into a national chain (five chains between them control 40% of the British provincial morning circulation and 59% of the evening). Not surprisingly "what is shared by most provincial papers ... is the underlying motive of occupying the widest political field short of areas of hostility to business ideals", 52 the familiar conservative consensus of the local press. Television news has been moved to the front line in the battle for viewers. Like the press, broadcast journalism has responded to economic pressure by assuming its unavoidable role in the ratings war as an entertainment commodity. The intermittent experimentation with presentation and the need to select and present information in a visually exciting way impose their own constraints on the nature of the information portrayed. The invisible-commerce, Whitehall, Latin America, social process-gives way to the spectacle, reducing for example international relations to airport arrivals and departures and minor Third World countries to simple crisis-torn oddities. Publishers of the old school have long resented the transformation of the book. For Sir Frederick Warburg only hard-book selling is "publishing in the sense we normally attribute to this word, and the

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paperback operation is commodity selling". 53 As an increasing number of titles is issued each year smaller sales of each put a premium on rights. The number of novels has not been part of this proliferation and "it is increasingly difficult for fiction of high literary calibre from rare or unknown authors to succeed in the paperback market, roughly a third of which is controlled directly or indirectly by W. H. Smith and the paperback wholesale house Bookwise." 54 As well as controlling nearly 500 retail outlets W. H. Smiths are wholesale newsagents and have subsidiaries in advertising, road haulage and cassettes, as well as running various book clubs jointly with Doubleday and Go. We have argued throughout this paper that the relationship between the material interests controlling the media and the cultural products they provide is a complex one, not explicable in terms of conspiracy or conscious intent. The part played by the media in cementing the consensus in capitalist society is only occasionally characterized by overt suppression or deliberate distortion. If we are to explain why, in an inegalitarian society, many of those receiving least of the rewards available are willing to accept and even actually support the system which maintains their subordination, the role of the media in legitimating that system must be explored. To do that requires investigating not isolated instances of malignity but the routines of practice in the media industries. Within the economic parameters we have already sketched, the necessary contingencies of information gathering and processing produce a cultural artefact which legitimates the consensus. This, we suggest, is because the routines and beliefs which survive in occupational practice are these which satisfy or become incorporated in occupational ideologies while at the same time serving the ends demanded by the economic constraints of the industry. To illustrate this we briefly look at some component elements of the consensus and the occupational practices which support them. Firstly any consensus needs to assert that threatening opposition to the status quo is illegitimate and therefore punishable, or ephemeral and therefore not threatening. Thus the fragmentation of the consensus is not portrayed and rent strikes, "politically-motivated" strikes, squatting, alternative life~styles, and so on are ignored, condemned or denuded of political meaning. This is in large part related to the eventorientation of news, the need not to report reality but "an aspect that has obtruded itself", 55 and thus to concentrate on superficial eruptions and the dramatic, on form rather than content, so that, for example, demonstrations become happenings rather than manifestations of political process. Superficial conflict is made apparent by available overt symbolism, like race and religion, masking underlying conflicts of an unreportable nature.

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In a similar way the constant reiteration of a national interest as having greater reality than sectional interests, invoking the Dunkirk spi~t an:i its like, is part of an attempt to assert a "we-ness", a common community between medium and audience, to encapsulate the widest possible audience. At the same time it reasserts the campaigning function of journalism, turning a critical eye on scapegoats and guilty isolates. The "consent of the governed", a crucial postulate of any consensus, is commonly demonstrated by the conspicuous display of response by politicians to newspaper polls, serving the twin function of legitimating the role of the medium in the political process and exhibiting the good order of the democratic process itsel£ Secondly, the consensus includes the notion of public debate being about the means to agreed ends, about which there are no residual fundamental disagreements, merely a pressing urgency to get on with the job at hand. The limits of debate are defined as those of the existing predominant political spectrum. The ideals of impartiality and objectivity grew from the 19th-century innovations of "reporting" and the early separation of journalism in Britain from party politics and its emergence as a full-time profession. The resultant fourth estatewatchdog ideology requires allowing "both sides" to have their say, which in turn sets the agenda of public debate, locating responsibility and trutl;J. somewhere in the middle space occupied by medium and audience. In translating impartiality and objectivity into working rules they inevitably become the balanced use of "accredited spokesmen". 56 But as the chief executive of one commercial television company has explained, "due impartiality does not require putting the case for things that have already earned the disapproval of the majority consensus". Necessarily too, the emphasis on immediacy produces a fragmentation of reality; the end of ideology is made concrete in a media world where things happen but nothing really changes. A third claim of the consensus is that any residual dissent can be successfully articulated through existing channels of conflict resolution. In media practice this appears in the concentration of attention on central governmental processes, elite figures (those that seek publicity and those able to be sought) and on the metropolitan aspects of centralized industrial relations. To service this focus a vast army of lobby and other specialist correspondents has emerged both tied to and dependent on elite sources and central institutions. It is also a consequence of the easy dramatization of elections as spectacles, and indeed the greater visibility of all formalized politics. As part of the general consensual notion that such change as there is lacks threat or great substance is a fourth notion; that of Britain's role in the world. Beyond ethnocentricity and stereotyping lie two more crucial sets of factors. In the first place the history and economics of

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news-gathering have located correspondents and agencies in a limited and uneven distribution over the globe, emphasizing British interests and the doings of ex-colonies. In addition the perceived need to interest audiences in an area with which they are felt not to be concerned produces a stress on British interest and personnel. 57 Fifthly the consensus entails the idea of an open society and widespread mobility, the rags to riches mythology of the meritocracy which has fi~red prominently i~ ~e int~rview sections of business supplements m recent years. This 1s not JUSt rooted in the fascination with personalities, but in the persistent paradox that in repeatedly reporting the unusual, the news media are suggesting that such phenomena are indeed usual and routine. Finally, in asserting a shared set of values between medium and a~dience the ~onsens~al notion o_f a uniform moral community is remforced, laymg drum to what 1s generally accepted as right and proper, as well as to what is generally known. In this way reporting of t~e Fisher Report on Social Security "abuse" used phrases like "it did not need all the panoply of a government appointed committee to tell us there is enough abuse of social security to cause justified alarm" (Telegraph), or that "everybody has a shrewd idea of how much scrounging goes on in the social services" (Mail). sa Most generally news must be entertainment; it is, like all media output, a commodity, and to survive in the market-place must be vociferously inoffensive in the desperate search for large audiences attractive to advertisers. IV THE POSITION NOW-cONTRACTION OR CONTRADICTION?

While any extrapolation of our historical schema would be tentative one aspect is worth introducing. In each of the media there is an increasingly apparent opposition between the social potentialities for redifferentiation and the trends towards economic concentration. New techniques permitting. gn;ater control by the coruumer, greater fragmentatiOn and localizahon, and cheaper production are quickly being enveloped in the same economic structure as described in this article. There is, in other words, a residual contradiction in the media between the material and social relatioru of production. Such tensions in later industrial development are widely recognized. Dobb notes "the growing obsession of capitalist industry in its latest phase with the limitation of markets .... This is manifestly connected with the fact that the expansion of consumption and of opportunities for profitable investment have come to lag chronically behind the growth of the productive forces .... " 59 Some illustration from present changes in the media may illuminate this, as well as caution against

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the euphoria which often accompanies discussion of these new media technologies. Developments in broadcasting revolve mainly round three innovations: cable, cassettes, and satellites. Cable or community-antenna television permits local programme origination, a multiplicity of channels, and ultimately two-way flows of diffusion. Yet the earlv experiments in this country do not yet suggest these possibilities will be fully exploited. Most of the finance and equipment for experimental CATV has come from the large media corporations and local progrrunming has been minimal. As with local radio the problem of serving an area small enough to be a "community" in some sense yet large enough to be commercially attractive and viable looks likely to be intractable, and given the direction of ownership it will be the noncommercial goals which suffer. Video cassettes and other forms of home recording and playback bypass programming decisioru to grant the viewer control over what he views and when. Yet so far the video market has been merely an extension of existing concentrated production. ATC, which already has 30% of the pre-recorded tapes market, is a major producer of video tapes for export, and is ·well-established for exploitation of any new video market. If the American example is anything to go by the educational market (at present dominated by the large publishing corporations) and pornographers will be the twin beneficiaries of video. Satellite broadcasting contains the promise of widespread international flows of material, ultimately directly to individual receivers. Yet here again the dominance of existing structures and a pricing system whose high threshold costs prevent the active participation of smaller interests seeiiiS likely to curtail major changes in usage. 60 Television traffic only represents 2-5% of total satellite flows in the face of a pricing policy which discourages much use and leaves the system with excess capacity. The provincial and local press is the healthiest section of the newspaper industry. Provincial morning circulatioru rose 9% between 1961 and 1971 and the number of papers has actually increased. The introduction of web-offset printing, and computer and photographic typesetting, potentially encourage decentralized printing, while other developments point to direct home diffusion, the "telenewspaper" allowing selective reading of a wide range of printed material transmitted directly to individual homes. Yet much of this remains in the realm of fantasy, part of the grasping at straws of a fighting national press. Newspapers are becoming more like daily magazines, whose entertainment-orientation has bequeathed information provision to the broadcast media, and the leisure market to the proliferating and highly profitable specialist magazine sector (itself already highly

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concentrated). Further, the provicial press, as we have already noted' is predominantly a series of chains. While the cinema is largely moribund, rekindled embers are to be found in the spread of smaller cinemas and in evidence that in Italy and the USA the fall in audiences is levelling off and the number of regular attenders actually increasing. 61 There has been a marked growth in club and cineaste cinemas. The number of twin- and multicinemas increased from 39 in 1969 to 113 in 1972. Independent production using cheap methods and minimal budgets is increasing too. But here again the new possibilities are totally dependent on existing organizational arrangements. While 70% of films are financial failures recurrent production by independentfilrn-makers using new techniques requires financial backing, and this is limited to the major distributors who already dominate the market. 62 Reaction against the growth of the corporation publishers has led to the birth of many small publishers in the last few years. While there were 1,054 publishers in 1950 there were over 1,600 twenty years later, over I ,500 of whom publish less than 50 titles a year each. 63 New forms of printing technology have given birth not only to coffee-table and art books, but also to cheap methods of lithography and a willingness to accept unjustified type-setting that potentially open up the publishing industry. Distribution has on the whole resisted the process of concentration, though the acquisition of wholesale Library-suppliers by McGraw Hill may be the start in a new trend of vertical integration, as may the exclusive arrangement between W. H. Smith and Octopus Books. The other implications for books "is that publishers should diversify into the areas of non-book publishing which will match up with the market demands induced by technological development". 6 4 V CONCLUSION

FoR A PoLITICAL EcoNoMY OF

4. 5.

6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

We have tried in this essay to sketch the causes and implications of the political economy of the mass media. The complexity of power relations in capitalist society demands an analysis of the means by which these relations are legitimated. Mass communications are central to legitimation, and, we contend, can only be understood in the light of historical process and economic necessity as we have begun to delineate them here. NOTES AND REFERENCES

1. See Famify Expenditure Survey, Dept. of Employment, London, HMSO, 1972 and 1972 National Income and Expmditure (Central Stationery Office). 2. John Urry and John Wakeford eels. Power in Britain (Heinemann Educational Books} 1973. 3. For an analysis of the situation in West Germany see Helmut H. Diederichs

25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35.

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Konzentration in Den Massemedien Systematische Uberblick Zur Situation in Der BDR. (Munchen Carl Hanser Verlag) 1973. For a typical example see Friends No. 27, 5 April, 1971, special issue entitled, "Meet the Media Monster". Louis Althusser, Ideology and Ideological State Apparatuses, in Althusser, Lenin and Philosopqy and Other Essays (London New Left Books) 1971. For a similar formulation see, Stuart Christie and Albert Meltzer, The Floodgates of Anarchy (London Sphere Books} 1972, Chap. 12. R. Low, The History of the British Film 1906-1914, London, Allen and Unwin, 1949. R.Low, TheHistoryoftheBritishFilm 1918-1929, London,AllenandUnwin, 1971. J. W. C. Reith, Into the Wind, London, Hodder and Stoughton, 1949. H. H. Wilson, Pressure Group, London, Seeker and Warburg, 1961. Figures from the Municipal 'rearbook, annually. Report by Educational Publishers' Council, London, September 1972. See summary in The Author Vol. 83 (4) Winter 1972, pp. 187-8. Department of Education and Science, Library Information Series, No. 1. The Purchase of Books by Public Libraries, London, HMSO, 1972. Calculated from Board of Trade Business Monitor, Production Series, p. 75, General Printing and Publishing, London, HMSO, quarterly. See National Board for Prices and Incomes, Report No. 141, Costs and Revenues of National Daily Newspapers. Cmnd 4277 sess. 1970/l. London HMSO. See annual reports of The Press Council, and The Printing and lqndred Trades Federation, National Newspaper Industry, London, December 1972. National Board for Prices and Incomes, Report No. 156, Costs and Revenues of Independent Television Companies, Cmnd. 4524 sess. 1970/1. London, HMSO. See BBTA Bulletins. BBC Annual Report and Accounts. Cmnd. 5111, sess. 1971}2. London, HMSO. National Film Finance Corpvration, A11nual Report 1971, Cmnd. 4761, sess. 1970/1. London, HMSO, Para. 13. Special Report No. I: Gramophone Records, Retail Business, No. 159, May 1971, p.l8. Ibid., p. 28. 1967 figures from The Times, Nov. 2~, 1968, p. iv, 1970 figures from Retail Business, op. cit., p. 26, 1972 figures from Music Week, 27 Jan., 1973. Andrew Glyn and Bob Sutcliffe, British Capitalism, Wvrkers and the Prqfits Squeeze (Penguin Books} 1972, p. 143. Newspaper figures from 19th Annual Report of The Press Council1972, p. 119-121; TV figures from Independent Television Authoriry Annual Report and Accounts 1971/2 (House of Commons paper 1, sess. 1972/3), London HMSO; paperback figures are calculations from the estimates given in A. Blond, The Publishi11g Game, Jonathan Cape, London, 1971; record figures from Music Week, 17 Jan., 1973. Cinema figures from Retail Business No. 177, Nov. 1972, p. 37. Figures from Press Council 1972, op. cit. Pm Report No. 156, op. cit. Annual Report and Accounts 1972. Letter to the Economist, 15 October 1949. B. Luckham: The Market for Books, in R. Astbury (ed.); The Writer in the Market Place. London, Clive Bingley, 1969. pp. 153-176. G. E. Harris; The Book Trade in R. L. Collison (ed.}; Progress in Library Science, London, Butterworth, 1968. Calculated on the basis of figures given in Cinema TV Today, 6 Jan. 1973. Cinema TV Today, 30 Dec. 1972. Music Week, op. cit. Associated Television Corporation Limited Annual Report and Accounts 1970, p. 4. Westward TV Report and Accounts 30 April1970, p. 7.

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[2]

1973

36. This table is derived from the figi.Ires given in the ATC Annual Reports for the respective years. 37. Associated Television Corporation Ltd. Annual Report and Accounts 1972, p. 1I. 38. The figures for the proportion of ~over are calculated from figures given in the 1972 Annual Reports of the respective companies. 39. See M. Deane; United Kingdom Publishing Statistics, :Journal of the Royal Statistical Society, Vol. 114, Series A, 1951, pp. ~8-489; and Board of Trade Business Monitor Production Series, p. 75. General Printing and Publishing, quarterly returns, from which our figures are calculated. 40. Annual Report, 1972, p. 4. 41. BBC Annual Report and Accounts 1971/2. Cmnd. 5111, sess. 1971/2. London, HMSO, pp. 17-19. 42. See P. Elliott and P. Golding; Mass Communications and Social Change, paper given to 1972 British Sociological Association conference, forthcoming in conference anthology. 43. T. Varis; International Inventory of Television Programme Structure and the Flow of TV Programmes Between Nations, Research Institute, University ofTampere, 1973. 44. See H. Schiller; Mass Communications and American Empire. A Kelley, New York 1969. For Latin America see A. Wells; Picture-Tube Imperialism. Orbis Books, New York, 1972. 45. John Read, .The Leisure Market-Patterns and Prospects, The Advertising Q.uarter{y, No. 25, Autumn, 1970, p. 33. 46. PIB Report No. 156, op. cit. 47. The relative costs are taken from C. F. Pratten, The Economics .of Television (London PEP Broadsheet No. 520) 1970, p. 26. The audience figures are from B. P. Emmett, The Television and Radio Audience in Britain, in D. McQuail ed. Sociolog of Mass Communications (Penguin _Books) 1972, pp. 211-12. 48. Quoted in Open Secret (Journal of the Free Communications Group) No. 1, Summer 1969, p. 17. 49. National Income and Expenditure 1972 (Central Statistical Office) 1972, Table 22. 50. The R.ank Organisation Limited, Annual Report and Accounts 1972, p. 18. 51. C. Wintour; Pressures on the Press, London, Andre Deutsch, 1972, p. 173. 52. A. C. H. Smith; Provincial Press: Towards one big shopper, in R. Boston; The Press we Deserve, London, Routledge and Kegan Paul, 1970, p. 141. 53. Letter to the Times Literary Supplement 10/6/1965. 54. A. Blond; The Publishing Game, op. cit., p. 86. 55. W. Lippmann's classic definition in Public Opinion, Macmillan Paperbacks Edition, New York 1961. Chap. 23. 56. Stuart Hall's perceptive phrase, see for example his remarks in The Listener 16/3/1972. 57. For an extended discussion of this point see P. Elliott and P. Golding; The News Media and Foreign Affairs, in R. Boardman and A. J. R. Groom: The Management of Britain's External Relations, London, Macmillan 1973, pp. 305-30. 58. Both in editions of29/3/1973. 59. M. Dobb; Studies in the Development of Capitalism, London, Routledge and Kegan Paul, 1963. p. 357-8. · 60. SeeP. Passell and L. Ross; Communications Satellite Tariffs for Television; London, International Broadcast Institute, 1972. 61. See Cinema-TV Today 13/1/1973, but also 31/3/73 for evidence that the rebirth is not yet apparent in this country. 62. See interview with Tony Garnett in 7 Days, 12/1/1972. 63. See M. Deane; United Kingdom Publishing.Statistics, op. cit. Comparative figures calculated from The Bookseller, 22/1/1972. 64. C. Bingley; The Business of Book Publishing, London, Pergamon, 1972, p. 151.

Critical Studits in Mass Communication 6 (1989), 43-60

Media Economics: Terms of Analysis DOUGLAS GOMERY

0 -Fundamentally, the mass media in the United States are economic institutions. To properly understand their role in American culture, a framework is needed for economic analysis. This essay lays out such a framework and argues for its utility in understanding the workings of the television, motion picture, newspaper, and radio industries, as well as in evaluating appropriate public policy responses and considering historical trends. The basics of the model deal with the structure, conduct, and performance of the industry. distribution, and T presentation of radio, over-the-air and cable television, motion pictures, HE PRODUCTION,

newspapers, and magazines require great expense and frequently generate enormous profits. This raises the ire of many. Critics often complain about monopoly media making too much money and holding too much sway in community public opinion. Ben H. Bagdikian (1983, p. xviii) has mourned "the subtle but profound impact of mass advertising on the form and content of advertising-subsidized media-newspapers, magazines, and broadcasting." Year-in, year-out independent film .makers accuse Hollywood of having all the resources and dominating the screens of U.S. theaters (and, in recent years, owning them as well). Thomas Guback (1987) sees in these trends less choice for movie fans, the same handful of films playing in all the thea,ters. Guback (pp. 75-76) found that "during the 1986 Christmas holiday, the five most widely Douglas Gomery is Professor of Communication Arts and Theatre, University of Maryland.

distributed [Hollywood] films were playing in a third of all theatres in [the United States]." Furthermore, he argues that the expansion of theaters, pay television, and home videOhas not led to more new opportunities for· film makers, only more economic power in the hands of a few. The buqget cutbacks at the television network news organizations have provided reminders of the economi_s constraints inherent in news reporting. Years before those cutbacks, researchers such as Edward Jay Epstein in News From Nowhere (1973) and Herbert J. Gans in Deciding What's News {1979) argued that there ought to be a government-funded endowment for news to improve the-coverage they observed in their studies. Changes such as those made in USA Today, the television program, due to its poor ratings during its first week offer ample evidence of news as an economic good. It is commonplace to assert that the production, distribution, and presentation of the mass media in America involve vast sums of money, and thus no research in mass communication can be Copyright1989,S~

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complete unless questions of economic available products and services; business influence are addressed. But how should enterprises attempt to maximize longthis research goal be accomplished? The run profits (the difference between reveliterature on mass media economies fails nues and costs). In the United States, to provide a set of fundamental terms for corporations produce and distribute the analysis. Benjamin M. Compaine's Who bulk of goods and services (governments Owns the Media (1982) asks a simple create the rest). but fundamental question about the Industrial organization analysis, in newspaper, film, and television indus- particular, seeks to answer basic questries. But then, none of his four analysts tions about how sets of corporations (in(includin g himself) uses the same dustries) behave. It examines how profitmethod to answer this question. One maximizing business concerns interact author calls for an upheavaLof the class with market forces of supply and structure, another for governmental demand. And it not only concerns the intervention, and yet another for no production and selling of goods and servalue judgments at all. What are we to vices but also their fair distribution to make of these different conclusions about members of the society (Scherer, 1980, the mass media in the United States? pp. 1-8). Industrial organization analyWhat is an appropriate, logical, system- sis overlaps with a number of other atic way to analyze the economjcs of the specialties in the field of economics (e.g., media? (Compaine, 1982). labor economics, banking and finance, This article establishes basic terms for international trade, and governmental analysis. Since the theory and method finance). The study of media economics determines the answers obtained, it is should concentrate on the study of the important to understand the conditions organization and behavior of business of analysis. This is as true of economic enterprises, since they form the core ecostudy as it is for social, critical, or psy- nomic institutions of the mass media chological research. Economic investiga- industry in the United States. With the tion seeks to analyze the allocation of study of industrial organization economresources and distribution of products ics as the core, the analysis can be filled and services in an economy. In other out and completed by adding concerns of words, it attempts to understand how labor, international, and financial ecogoods and services are made, and then nomics. sold. It also examines how the final The industrial organization model products are distributed to members of operates on three levels. It directs attenthe society. These are the basic issues of tion to the basic structure of a set of efficiency of production and selling and profit-maximizing firms: Who are they? the equity questions of distribution and How big are they? Do some dominate? access. Media economics serves as a par- The structure directly influences the corticular subset of this study. poration's conduct or behavior: How do In particular, it is important to focus firms set prices? How do they decide to on how producers and consumers make distribute what they sell? Structure and their decisions in response to prices and conduct, in turn, dictate the performan ce quantities generated by the interplay of of that industry: Are services distribute d supply and demand. Consumers seek the fairly? How is access determined? At the maximum satisfaction available from level of performance, governmental their incomes through acquisition of intervention may be used to atfect behav-

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ior of businesses; economic considerations can lead to more informed choices and assessments of alternative consequences.

ECONOMIC STRUCTURE A set of firms creating a similar product or service constitutes an industry. Certain basic conditions of the supply and demand of raw materials define the nature of these firms. "Supply'' concerns the availability of raw materials, technological advancement, product durability, business attitudes, and the extent of unionizatimi. "Demand " deals with the flexibility of prices, rate of growth of interest in the product or service, availability of close substitutes, possible marketing strategies, and issues of seasonality. For a particular industry, conditions of supply and demand give rise to a certain number of corporations which, in turn, define its basic economic structure. The fundamental question of media economic structure is: Who owns the media? The answer might manifest itself as a monopoly (one newspaper in a city) or oligopoly (the three television networks or the seven movie studios). In general, analysis of economic structure seeks to establish the number and size of the corporations involved in an ind'i:istry, the impact of barriers to entry for possible new competitors, the effects of horizontal and vertical integration, and the consequences of conglomerate ownership. The basic data for the current economic structure of the media industry in the United States can be found in Benjamin M. Compaine's Who 07!!ns the Media? (1982), with yearly updates located in the industry trade publication Channels' Field Guide. Consider the economic structure of the television -industry and how Rupert Murdoch seeks to change it. Even with

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other means of getting signals into the home (including cable television, direct satellite transmission, and the VCR), the three television networks (NBC, ABC, and CBS) still dominate. They have significant rivals in pay television (Time Inc.'s HBO), cable television (Turner Broadcasting Service for news), and home video (virtually all the major studios). These major players try to collect and establish positions in various media industries and then have one component feed into another. This is another example of the longstanding media interest in verti~l integration. Its far-reaching implications for the network television structure can be understood through an examination of the recent activities of Rupert Murdoch's News Corporation, Ltd. and its attempt to establish a fourth television network. Entrepreneurs from all walks of life have long recognized the enormous profit and power of the three_j)'. S. television networks. In 1985, news mogul Rupert Murdoch began a serious quest to create a fourth U. S. television network. He did not initially move directly into the television industry but rather into television's source of programming, Hollywo_9d. In March 1985, Murdoch agreed to buy one half of Twentieth Century Fox, the movie and television production studio, from Denver oil man Marvin Davis for $250 million. He would buy the other half six months later. Prior to buying him out, however, Murdoch persuaded Davis to join him in purchasing the most powerful set of U. S. television stations outside those owned and operated by the three television networks. Early in May 1985, Twentieth Century Fox signed to acquire and run six independent television stations from Metromedia for nearly $2 billion. These were located in New York City (the largest U. S. television market), Los Angeles (the 2nd larg-

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est), Chicago (3rd), Dallas (8th), Washington, D.C. (9th), and Houston (lOth). In total, nearly 20% of U. S. homes with television sets are able to view one of these stations, providing a reach comparable to the stations owned by NBC, ABC, or CBS (Field Guide, 1988). Twentieth Century Fox paid more than the accepted going rate for the Metromedia stations. In the 1980s, television stations in the United States sold for 10 times the cash annually generated by operations. Twentieth Century Fox anted up ail amount 16 times the cash flow, or 60% more than the going rate. At the· end of the summer of 1985, Murdoch had completed the package and bought the remaining half of Twentieth Century Fox, accepting the more than $1 billion set of notes associated with the acquisition of the television stations (Abrams, 1985, p. 5). In less than six months, Murdoch became a significant player in the U. S. film and television business. His first move was to place Barry Diller in charge of his new empire, which he renamed Fox, Inc. Diller had the perfect background to run the new film and television corporation. He knew how the major networks operated: at ABC in the 1970s, he pioneered the successful made-fortelevision Movie of the Week series. He also knew Hollywood: working at Paramount during the late 1970s and early 1980s, he created a consistent string of box office successes. Davis lured Diller to Fox with a salary estimated to be more than $3 million per year. Diller's management skills since have served as one of the linchpins in Murdoch's quest to turn Fox, Inc. into the dominant force in the mass entertainment industry ("Rupert Murdoch's Big Move," 1985, p. 107). Murdoch and Diller have had to work fast, since the Twentieth Century Fox and Metromedia acquisitions do not rep-

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resent Murdoch's only new financial obligations. Today, Murdoch's News Corporation, Ltd. represents a $4 billion global empire that encompasses more than 150 newspaper, book, and magazine publishing operations, a satellite channel, an airline, television stations, a major stake in Reuters news service, a hotel reservation service, and even a sheep ranch in the Australian Outback. With total revenues of nearly $4 billion per annum, the United States only accounted for just over one half of Murdoch's revenues. Newspapers continue to be the dominant segment of the business, representing more than one third of net profits. Film accounts for one quarter and television one fifth, with magazines and commercial printing making up the rest (Barnes, Cieply, & Landro, 1986, p. 9). Murdoch made his boldest move into the publishing business in August 1988 with the $3 billion purchase of Waiter H. Annenberg's Triangle Publications. This added the nation's largest circulating magazine, TV Guide, plus Seventeen and The Daily Racing Forum to Murdoch's collection of magazines. With the acquisition of Triangle, the largest transaction ever in the publishing industry, News Corporation, Ltd. became the largest U.S. publisher of consumer magazines in terms of circulation. Among News Corporation, Ltd.'s other magazines are Elle, New York, The Star, and Premiere, which total 7 million in circulation (Rogers, 1988, p. 3). Murdoch does not always do well in his investments. When he took over the ailing New York Post, he applied the techniques that proved so successful with his Australian and British papers: circus layouts, lurid stories of sex and violence, and constant promotional giveaways. He succeeded in doubling the New York Post~s circulation to almost a million, but

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the new readers were not the types of folks the New York advertisers (such as department stores) wanted to reach, and so increases in revenues never matched rises in circulation. Over 11 years, Murdoch lost more than $150 million on the investment in the New York Post. His newspapers remain his most profitable operations throughout the world. News Corporation, Ltd., the parent company, has awesome market power. Its newspapers control 60% of the market in Australia and more than one third in Britain. The South China Morning Post commands a lion's share of the market in Hong Kong's English language newspaper circulation. The corporation also controls the largest set of magazine circulation and distinguished publishing houses such as William Collins Sons & Co. and Harper & Row. To meet legal requirements and ongoing debt obligations, Murdoch is supposed to sell some of his most profitable U., S. and Australian newspapers, because restrictions normally prevent ownership of a television station and a newspaper in the same market. Often he has received extensions and waivers. But an important exception occurred in 1985 when he proffered one paper, The Village Voice, to Leonard Stern, chairman of the Hartz Mountain pet food and supplies corporation, for $55 million and made a healthy profit on the deal. The Village Voice staff was not sure this forced sale was for the better. Jack Newfield, a senior editor, said, "On paper, you're not going to find a worse owner than Murdoch. In practice he turned out to be terrific for us. He gave us absolute freedom" (Meyers, 1988, pp. 19-21). But for Murdoch the future is television in the world's most profitable ~ar ket, the United States. The centerpiece of this expanded empire has become Fox,

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Inc. Murdoch is betting billions that in the long run his new film and television enterprise will · prosper to a greater degree than have any of his other media investments. To take full advantage of the film and television capabilities of Fox, Inc., he and Diller have focused on creating a fourth television network. They hope to link up the multitude of new independent television stations which have gone on line during the 1980s; the number of such stations is double that of a decade ago. A network of independent stations, reasoned Murdoch and Diller, thus could provide an adequate basis for selling national advertising time. 1 To make Murdoch's plan work, Diller has attempted to turn out attractive programming to ensure that stations will buy from Fox. He has had mixed results. After a year the ratings were less than expected; and the original, modest acceptable losses have grown far in excess of $50 million per annum. The first show on Fox was a late night talk program starring J oan Rivers, which went on the air in October 1986. With it, the Fox network delivered younger adults, aged 18 to 34, to advertisers but not in the expected numbers. The network cost Fox about $100 million to start. The service reaches 86% of the United States through 115 independent stations but works with only 120 employees to keep overhead costs low. The average rating for the first year was a 3.7, with a 7 share for Sunday night and less for offerings on Saturday night (McClellan, 1988, p. 52). The most popular attraction has been an action adventure show, 21 jump Street, followed by an offbeat situation comedy, Married ... With Children, and the critically praised comic tour de force, The Tracy Ullman Show. The Late Show, with original star Joan

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Rivers, lasted only seven months and then wobbled on with a string of less famous hosts. Fox's greatest investment came with George C. Scott in Mr. President, but few found that situation comedy very funny, and it never did well in the ratings. In 1988, Murdoch decreed that Fox could lose no more than $40 million in 1989. Programs would be kept to strict budgets and monitored closely in weekly reports. The result, most predict, will be a fourth network built around news programs and reality-based shows. But the ultimate goal remains: try to build a full seven days a week schedule by early in the 1990s. Murdoch and Diller have hedged their bets. Fox television is more than a fourth network. Twentieth Century Fox is the production company behind the hit L. A. Law on NBC, and the less successful Hooperman on ABC. Off-network syndicated shows include M*A*S*H and The Fall Guy, while first-run syndication includes Small Wonder, The $100,000 Pyramid, and 9 to 5. International sales of these programs made 1987 a record year for Fox. A bonus is that programs already in the can, long ago fully depreciated on the accounting sheets, feed Twentieth Century Fox a constant stream of pure profit. For example, Twentieth Century Fox has an agreement to provide more than 50 films from its library to the People's Republic of China for telecast. CBS-Fox Home Video continues to be a major player in the burgeoning VCR market, with more than one eighth of the market sales (Frank & Morris, 1988; "Rupert Murdoch's Big Move," 1985, p. 106; Witcher, 1988). The innovation of the fourth network symbolizes the extraordinary efforts of one entrepreneur to break into the exclusive profitable oligopoly that has long

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been U.S. network television. It would have been realistically possible only because Murdoch owns both the creator of the programs (Twentieth Century Fox) and important outlets in his core television stations. Fox broadcasting simply links those two entities (and other stations) together. Indeed, the potential for stitching these together to create an integrated corporation offers Fox an advantage no other network has. Consider that a book published by Harper & Row could be excerpted in Murdoch newspapers and magazines, recast as a Twentieth Century Fox film, done again as a television program for the network, and then syndicated around the world. The film can be reviewed in Premiere, while the television programs can be promoted in TV Guide. This is a vivid example of vertical integration. 2 In terms of economic analysis, vertical integration can be defined as the expansion of a business enterprise in gaining control of operations from the acquisi.: tion of fundamental raw materials through the sale of the final product. For film and television entertainment, a fully vertically integrated system includes the production of the program, its distribution, and its final presentation. This was long the basis of the Hollywood studio system and provided a core of the stable, long-run profits for Hollywood before the U.S. government stepped in and, through an antitrust suit, forced the studios to sell their theaters (Gomery, 1985). Two economic motivations are common to all forms of vertical integration. First, businesses desire to take full advantage of the power integration offers to reduce costs of sales and transactions. The vertically integrated corporation sells productions to "itself' and thus does not have to go through bidding procedures; it can have smaller sales and

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accounting departments. The second motivation is market control. A vertically integrated firm need not worry about being shut out of key markets. For example, in the past, Fox had to convince key stations to buy its films and television shows. Often these stations were already affiliated with a network and thus only had limited time for Fox shows. Marginal shows would fail if a television station in New York or Los Angeles, the two largest U.S. television markets, did not buy. By vertically integrating, Twentieth Century Fox need not worry about being shut out of New York, Los Angeles, or four other major U. S. media markets (Scherer, 1980, pp. 297-314). With television firmly established as the prime showcase for visual entertainment, and with the virtual elimination of FCC constraints, Fox's Hollywood rivals also have begun to purchase television stations, principally in the top U.S. markets. For example, MCA (parent company to Universal Pictures) with WWOR in New York and The Wait Disney Company with KHJ in Los Angeles surely understood these economic advantages when they purchased independent television stations for hundreds of millions of dollars. In the 1990s, other major movie corporations surely will purchase one or more television stations. Only the required millions of dollars in the purchasing price stand in their way. Indeed, it took an Australian, Rupert Murdoch, to show Hollywood that vertical integration of film and television entertainment represents the business strategy of the future. Murdoch's proposed fourth U. S. television network will cost him millions, even billions, but if successful, it will forever change the face of American television (far more than the vaulted promises of cable television or even home video have). Cable television has strug-

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gled for decades simply to enter half of the homes using television in the United States, while in one bold move Murdoch acquired access to a national market. It has taken a rich outsider, willing to pay above-market prices, to break into a tight structure of network television and to accomplish what no American corporation has been able to do: seriously offer a viable fourth U. S. television network. Murdoch has forever linked Hollywood directly to the television industry. As a consequence, Hollywood, despite the onslaught of new television technologies, has and will grow more powerful. Ten years ago, it was thought that the emerging world of cable television would cripple Hollywood. Instead, the new television technologies have enabled the major studios, through careful use of vertical integration, to acquire even more power and in the long run ever more profits.

ECONOMIC CONDUCT The industrial organization economic model posits that certain structures (monopoly, oligopoly, competitive) act in certain systematic ways. That is, the analyst examines the behavioral consequences of a particular market structure. This is referred to as the study of industrial conduct. Key variables include pricing policies, product differentiation, advertising behavior, and innovation of new technology. Indeed, the importance of market structure lies in the way it induces firms to behave: changing prices and outputs, setting the characteristics of services and products, and factoring in efforts of research and innovation. Market conduct directs attention to a firm's external behavior, both toward the market in general and toward specific rivals in particular. The industrial organization economist looks at external

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behavior, what the corporation actually operate on a more complex plane. A does in the marketplace. For media cor- monopolist has no rival behavior to conporations, the analyst ought to investi- sider; a tiny firm in a competitiv e world · gate £!ices (the fees for renting a video- cannot possibly monitor what all rivals tape versus subscribing to HBO versus are doing and then figure out how to going out to the movies) and typ~s of react accordingly. In the competitiv e service purchased (watching television, world, companies simply react to general reading the newspaper, listening to the market forces. radio, or going to live sporting events or Economic theory has a hard time with concerts). oli~opolists. Theorists often throw up Different market structures tender their hands and declare solutions to moddifferent industrial conduct. If there is a els "indeterminate." That is, there are free and open market of pure competi- too many possible outcomes, all dependtion, then there is widespread, noncon- ing on particular social, ideologica l, even centrated ownership, ease of getting into personal forces. Unlike in the competi(and out of) business, and a homogeneity tive or monopoly cases, it is impossible to of products or services offered. This type predict the behavioral implications for a of industrial market conduct is rare in general market configuration. But that the United States and nonexistent in the does not mean we cannot say something media business. about the conduct of oligopolists. To On the other end of the spectrum is the make the most possible mon~y as a monopoly, a single company constituting group, oligopolists ought to cooperate the market structure. This most concen- fully and thus behave as if a monopoly trated type of industry is very hard to were operating. That is, each of the break into as a result of some inherent members of the oligopoly could extract a advantage the monopolist has and pro- share of the maximum possible monopduces a product or service without any oly profit. The problem is how to split up close substitute. The phone company, the this profit, and that is where cooperativ e gas company, the electric company, and behavior breaks down. Still, oligop~st s indeed the cable television franchise offer frequently work together, especially constant reminders of the power of a when threatened from the outside, such local monopoly. as in a case of keeping out possible The typical market structure in the competitors. Nothing united the three media business is an olig<W<Jly, owner- television networks more than a threat ship by a few. Actually, the media busi- by the cable industry. ness consists of a set of oligopolies, sepaBut more often than not, the individrate industrial structures each dominated ual members of an oligopoly want to by a handful of large corporations. The extract a greater than average share, and essence of an oligopoly is that the num- soon cooperation breaks down. They ber of firms is small enough that all can begin to differentiate their products. The be cognizant of the actions of rivals and three television networks are constantly react accordingly. Take the case of the promoting new shows. But in the end the three networks: When NBC offers a new products they hype seem strangely alike: comedy at a particular time of a particu- situation comedies or action/adventure lar day, its rivals, ABC and CBS, coun- dramas in prime time, soap operas in the terprogram. With seven major movie afternoon, news in the early evening or companies, the behavioral dynamics immediat ely after prime time. In

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essence, all three "agree" on the rules of the competition and then seek to differentiate their products to make the most money, always knowing what their rivals are up to. The goal is the most profitable product within the rules of the game. Industrial organization economics deals with this behavior through game theory analysis (Caves, 1987, pp. 57 -58; Scherer, 1980, pp. 376-380). The complexities of market conduct for the mass media can be appreciated by looking at one particular problem: selling movies to the public. Even as late as a dozen years ago, the process of selling a theatrical feature film seemed one dimensional. A feature film played in theaters. It opened with big premieres and publicity; publicity campaigns were conducted through newspapers, magazines, and press tours. Moreover, once a feature film had played off theatrically, it was gone. A film earned the bulk of its money from play in theaters. Movie companies sought to differentiate their products, milk the most profit, and then move on to another film. The selling of movies began to change in the mid-1970s. In 1975, Universal fundamentally altered film marketing with jaws, the first major film to skillfully employ saturation advertising on network television. This use of television was considered an adventuresome, innovative marketing maneuver at the time; today it is standard practice. During the final six months of that year, this one film earned more than $100 million, easily surpassing The Godfather . as the all-time Hollywo od box-offic e champion. A serious market contender emerged in the mid-1970s. Time, Inc.'s innovation of HBO added the possibility of millions of extra dollars in a new market. HBO played feature films nearly around the clock and charged subscribe rs

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accordingly. Now a movie studio had to consider not only how rivals markete~ films on television but also how to maximize sales to HBO, The Movie Channel, or Showtime without cutting interest at the theatrical box office (Lyon, 1984, pp. 220-221). By the mid-1980s, the home video revolution further complicated the actions of a movie company selling its products. Suddenly the public could rent or own individual titles, formerly the province of the rich, well-connected, or illegal operator. A decade of underground collectors had bootlegged copies of Gone With the Wind and Vertigo. Now they could be bought or rented on tape in stores throughout the country. The major Hollywood companies have been the big winners in the world of the new television technologies because they have learned to take advantage skillfully of all the possible windows of release. They extract more and more money from their features through a careful use of price discrimination. That is, they set different prices for the "same" film. Buffs who want to buy right away pay the most, those with less interest pay smaller amounts, and many remain content to wait until it appears on "free" television. The game for Hollywood is to set the maximum possible price at each stage of release-to o high and they force customers to a cheaper level; too low and they fail to extract the maximum price. Hollywood has adjusted its behavior to a changing world of new technological possibilities of presentation. The Hollywood majors have done this so skillfully that they stand at an apex of profit and power unseen since the golden age of the 1940s.3 Feature films still begin their marketing life in theaters. The theater has turned into a make or break advertising display venue. A theatrical blockbus-

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ter frequently guarantees millions of additional dollars from the home video and pay television arenas. A bust in theaters often means minimal monies from pay television and the VCR market. That is why the major Hollywood companies work so hard to craft a hit in the theaters. But the continuing importance of theaters has become obvious only in the last few years. Consider that as the film industry entered the 1980s the consulting firm Arthur D. Little, Inc. predicted that there probably would be no need for movie theaters by 1990. Everybody could stay home and view films on the new television technologies. Instead, during the 1980s, more new movie theaters have been built, creating more theatrical screens in the United States than at any time in history. Theatrical releases require more and more theater screens, so that Hollywood can take full advantage of the economies of television advertising. Even though the cost of marketing a film can often exceed $10 million, spreading the cost over more theaters means that marketing costs per theater per film remain relatively low. The economies of scale of television advertising of theatrical features provide the foundation of the multiplex theater. A multiplex complex with 12 screens is four times more likely to locate a hit than a triplex. Once the early results set a hit in motion, the blockbuster can be shifted to the largest auditorium in the complex, while new films are introduced in smaller, adjacent viewing sites (Dekom, 1987, pp. 9-15). In the 1970s, theaters supplied more than three quarters of the revenue for an average Hollywood feature film. Today the theater situation provides less than half. Movie theaters are doing just fine, but home video is doing even better. The recent data from the home video industry

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is nothing short of astonishing. In 1980, the Hollywood majors collected some $20 million from world-wide sales of video cassettes. In 1987, the figure was over $7 billion. Ten years ago, an average film took in nothing from home video; today that share tops one third of total revenues. In the beginning, Hollywood loathed the new machine, arguing that VCRs stole precious dollars from the box office. But, during the 1980s, Hollywood found a way to exploit the new technology. During the first two years of the decade the major Hollywood studios tried to sell prerecorded movies to the public for $60 and up, thinking fans would want to accumulate tapes at home as they had with books in forming a library. But, quietly, entrepreneurs with no conn~c tions to the movie business began to buy multiple copies of prerecorded movies and offered them for rent. The terms varied, but usually up to $10 was anted up to join a "club" and then a tape rented (from a selection which might reach 5,000) for $2 per day. By the mid-1980s, stores renting video tapes seemed to be popping up everywhere. Grocery stores, drug stores, convenience chains, gas stations, dry cleaners, and, even in some locales, pizza delivery services were willing to lease tapes. Consider that in 1987 fully one sixth of all tapes were rented from grocery stores and drug stores alone. Hollywood has sought ways to participate in this rental market by establishing different prices through time. Initially, a tape is sold for close to $100, with principle buyers being video rental stores. But once that market has been milked, a "special sale" is held for about $20, aimed at individual buyers. And, make no mistake about it, a hit film can generate serious dollars through video sales. In 1986, Paramount's Top Gun brought in

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$82 million to the parent company in theatrical rentals; tape sales generated an additional $40 million (Bessman, 1987, pp. 70-72; Rosenthal, 1987, pp. 37 -39). NBC, ABC, and CBS now have to play feature films after the pay market and home video releases. With repeated showings on pay-cable and home video, the ratings for theatrical features shown on network television have fallen to a low unmatched since Twentieth Century Fox and NBC introduced Saturday Night at the i\1ouies 25 years ago. So, now Saturday Night at the Mouies (or a counterpart on another night, depending on the schedule and the season) means a series of films especially made for premiere on television, the ubiquitous "television movies." In this way, Hollywood can differentiate its product, a feature one pays for in a theater, on pay television, or through home video. A madefor.. television movie premiere is "free." These relatively low budget ($2-5 million for a 90-minute film) madefor-television movies thrive by promoting instant controversy. A $20 million feature, with an orchestrated advertising campaign, requires months, if not a full year of lead time. A television movie can turn over fully in a matter of months. If ever there was proof of product differentiation, it came on a Sunday night in February 1984 when CBS first aired Star Wars. CBS was so confident that here was a special case that it doubled its prime-time advertising rates. But to nearly everyone's surprise, Star Wars was beaten in the ratings by Lace, a steamy made-for-television movie which cost only $3 mill}on to make (Gomery, 1986, pp. 53-56). Star Wars had already been seen by millions; Lace was new. There are further changes on the horizon. Hollywood wants to establish another pay television window. It plans to collect a one-time fee for viewing a

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premiere of a blockbuster on a special pay-cable network. Such features would be shown before they reached the video store or began unreeling on HBO. This pay-per-view concept represents yet another means of presentation intended to extract even more dollars from every hit film Hollywood manages to create in the theaters. Pay-per-view services require technologically advanced addressable converters for a cable home. But as more and more American homes are wired with such devices (plus appropriate wiring for transmission linked to computers for billing), Hollywood can contract with cable operators to turn on a movie in any one home and then automatically bill the customer (Montavalli, 1987, pp. 15-17; Ziegler, 1987, pp. 1, 35). Whatever additional new television technologies appear in the future, the business of Hollywood will continue to be to seek additional ways to soak up the most possible money from any and all hit films. It will do this by trying to formulate policies for technological exploitation in order to make optimal use of the economic principle of price discrimination. Businesses seek to segment potential customers and have each group pay as much as possible for a product, in this case the viewing of a film. In the United States, this used to be done with theaters by having various runs and then charging top price for the first run, less for the second run, and even less down the line (Philips, 1983). The first run for the 1980s is the theater. Then comes pay-per-view, home video, pay television, network television, and finally independent television stations. The customer antes up less and less down the line until he or she can watch for free on network and independent television. (Of course, the viewer "pays" through advertisement costs

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added to the price of advertised products.) Hollywood seeks to maximize the revenues for each category and then move down the line. The problems that result are how best to segment the categories and how best to determine if a category has been fully exploited. Throughout the 1980s, the American motion picture industry has gained increasingly more economic power because of its skillful manipulation of the new television technologies. In the early 1~70s, there seemed to be some hope that With the advent of new technologies Hollywood would lose its long-held central place in American popular entertainment. Critics argued this would change the structure of the mass entertainment industry and hence its conduct. More and more small companies could begin to offer alternative films and television programs. This has not happened. Instead, Hollywood has gained even more power and profits. The major Hollywood studios not only control the movies for theaters but also those shown on pay television,. home video, pay-per-view, network television, and independent television stations. Hollywood controls movie presentation as never before.

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What viewers generally got were shows like Wheel of Fortune and M*A*S*H, over and over again. Generally, there are three criteria offered to judge economic performance. The first is that the industry's firms ought not waste re~urces, that they should be as efficient as possible. Those promoting free markets, in recent years associated with the administration of President Ronald Reagan, argue that a market of oligopolists acts as if it were competitive and so we can treat it as such. The quest for profit maximization guarantees efficient marketplace behavior. There is, thus, no reason to meddle with the media industries; they should be free to act as efficiently as possible. Yet, to even the most casual observer the mass media industries hardly see~ efficient enterprises. Consider their salary structures, whiCh are unlike those of almost any other industry. Waste seems inherent in excessive salaries, such as the $20 million for Sylvester Stallone for Rambo Ill or the "limousine culture perks" of the three television networks in the recent past. Millions of others want to get into the movies and television but confront few jobs. Is this an efficient use of society's resources? Many would argue no. But effi~ncy is not the sole criterion PERFORMANCE by which to e'valuate corporate structure In the end, it is the relationships of and conduct. How do they do in terms of performance that are of concern. That is, the use of technology? New technologies what are the public policy consequences should be used as soon as they are availof the structure and its behavior? For able, whether as inputs into the producradio and television, with their necessary tion or distribution processes or as licenses from the FCC, the government aspects of the final product or service. is always directly involved. In the past, Monopolies Ed strongly cooperative the FCC emphasized "localism." For oligopolies resist new technologies in example, it instituted the so-called prime order to protect their highly profitable tim~cess rule to mitigate netw~k positions. So, during the 1960s and into power and force better behavior by the 1970s, the over-the-air broadcasters requiring that "local" programs be pre- as represented by their National Asso~ sented in greater numbers in prime time. ciation of Broadcasters lobbying organi-

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zation in Washington, D.C., resist the inform. This is a complaint about conemergence of cable television. duct. Critics argue television fails to meet A test case of some complexity is the great potential of teaching the public before the film and television industries and instead provides more and more of as they move into the final decade of the the same, be it a situation comedy or a twentieth century. High Definition summary of the news, instead of inTelevision (HDTV) offers a superior depth analysis. Such critics seek governimage to the present television standards mental action to encourage alternative adopted in 1941, but most of the pro- conduct: subsidize educational programs posed HDTV systems are incompatible and discourage "run-of-the-mill" fare. A second set of grievances can be with current sets. So how does the technological transformation take place? Is labeled the wasteland complaint: televithe new image so superior that the public sion and film appeal onfy to the domican be convinced to junk the old sets and nant audience and ignore minority culbuy new ones? With what types of pro- tures and tastes. Diversity would be grams? Sold in what fashion? Techno- better. This complaint about economic logical change will continue to offer a conduct has been somewhat ameliorated difficult, ongoing set of policy issues for in recent years through the coming of anyone interested in the mass media, be cabl<:.Jdevision with its black, Spanish, it through the invention of new video and news channels, but still the majority equipment, the place of computers in of network television programs seek the news production, or the optimal use of broadest possible taste. Cable, for all its diversity, more often than not still means satellite distribution. Finally, performance is judged by how reruns of off-network programming. well an industry distributes its products Critics would have the government aud services to consumers. The mass encourage even more diversity. The final grievance lies with market media, underwritten by advertisers, have long been praised because content is structure. This is a problem of concenusually so cheap to acquire. A newspa- tration of ownership. The major film, per usually costs less than a dollar, over- newspaper, and television companies the-air television is free once a set has number so few that their power is conbeen paid, and there are even 99-cent centrated in the hands of a small number movies in most big cities. But what about of owners. The three television networks access to satellites or videotext or pay- still control the shows (e.g., the Olymcable television? These services are not pics, Super Bowl, and World Series) cheap, so policy makers have begun to which reach millions in a way no other worry about equity in terms of access by medium can. But their abuse lies in the rich and poor alike. Will the poor be shut area of news. Conservative groups rail out of a completely wired world of cable against the "liberal bias" of the coverage television in the year 2000? At ever by the three network news organizations and urge correction with governmental increasing prices, that seems probable. The media business engenders three action against the power of the three constant complaints, which can be networks. As long as the mass media retain their recrafted into economic terms. The first grumble often voiced is the cultural characteristics as oligopolists, these comissue: television shows tend to appeal to plaints shall always be present in one the base instincts and do not educate or form or another. Market structure and

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associated conduct determine performance. The limits· of this · oligopolistic behavior are most visible in two extreme cases. Radio is a medium few complain about, a medium of choice, an almost competitive situation. A big city newspaper causes many to complain because in many cities it is an oligopoly in the extreme, a monopoly.

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tacked on to the prices of goods advertised on radio. Advertisers also like radio because it offers a way cheaply to reach specialized audiences. In terms of equity, jobs are widely available, although at low wages. There are star disc jockeys who, in large markets such as New York and Los Angeles, make hundreds of thousands o£ dollars (large , but hardly the stagge ring amoun ts paid to television or movie Radio stars). The industry is technologically Radio broadcasting in the United progressive with stereo sound (Kahn, States offers a vast amount of choice. In 1984, pp. 379-384). Washington, D.C. there are nearly 50 The radio market illustrates a type local stations plus signals which can be that has been called monopolistic compereceived from nearby Baltimore, Phila- tition. It is highly competitive. Each stadelphia, and even New York City. For- tion in major urban markets is small mats include all news, religious music relative to the total market and, unlike and talk, country music, adult contempo- an oligopoly, cannot influence the behavrary music, easy listening, soul sounds, ior of most competitors. But, like monopurban contemporary music, hard rock, olists and oligopolists, radio stations do jazz, and even a bluegrass music station. offer differ entiat ed produ cts ("the As in most markets, the listeners choose sound"). Thus, unlike a purely competithe FM band for music and the AM tive company, the outputs are not the band for information. In addition, radio same. Hence the name "monopolistic stations can be received through sub- competition," not pure competition. The scription to cable television systems. radio industry is not made up of an Such diversity and choice was not infinite number of stations who offer always the rule in radio broadcasting. products which are perfect substitutes, Into the early 1950s in most U.S. mar- but it is close. The outcome is that it is kets, three network offerings dominated the rare station which is long able to the airwaves. But as television fully dif- make extraordinar y monopoly profits. fused throughout the nation, consumers Most make a normal rate of return. If switched to the new medium, and radio one station's sound gets hot, then others broadcasters began to program music immediately imitate it and the tempoand information keyed to local tastes. rary advantage and profits diminish. Millions listen to radio each day, enjoy- Thus there is the constant movement ing a wide variety of music and informa- from one format mix to another to yet tion. Thus, radio broadcasting seems to another, with the market ever digesting offer an example of an efficient use of changes in public taste (Kahn, 1984, pp. resources through competition. Most 368-378). Americans are getting a wide number of A tiny minority is not satisfied with choices, limited only by the nature of this system of monop olistic competition. scarcity of the spectrum band and their Figure a list of popular formats from 1 quest for nonurban or suburban living. through 20. Assum e some stations will The price listeners pay is very low, the duplicate the most popular formats. But cost of a cheap radio and some extra if there are 25 stations in the market,

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then it is possible, indeed probable, that some formats will be duplicated and some others will not be offered. Missing might be an all classical music station. The number of potential listeners who might value such a service might number a few thousand, but these individu~s will be unhappy missing this potential station. Our hypothetical market is clearly not working perfectly. This is the expected case for monopolistic competition and is labeled a "second best solution" because it is not far from a perfectly efficient market (Owen, 197 6; Scherer, 1980, pp. 24-29). To encourage the maximum number of stations and formats, in 1981 the FCC deregulated radio. It eliminated all restrictions on what programs could be aired, freed stations to set their own advertising schedules, and eliminated the necessity of keeping expensive records for filing with the FCC. The FCC's goal was to cut down the amount of paperwork involved and let the second best solution of monopolistic ·competition work. Radio markets do well. To work absolutely perfectly would require massive governmental intervention. An agency would have to measure relative demands, costs, and impacts and then figure the resources which ought to go to subsidize the missing formats. The agency would have to monitor the systems to change allocations as public tastes changed. Such a procedure w?uld cost more than it would benefit society. Radio broadcasting offers an example of the lack of government intervention making the marke t work very well (Campbell, 1980).

News paper s If radio broadcasting seems to work so well, the state of the daily newspaper industry is of concern to many observers. There seem to be fewer and fewer corn-

petitors in cities around t~e. ~nited States. While more than 500 cities m the United States had two or more competing newspapers in the 1920s (including more than 100 with three), by 1980 only 30 cities had competing newspapers, and the number keeps decreasing steadily. Put another way, today less than one fifth of all newspapers are in competing markets, whereas in the 1920s nearly 90% had serious rivals (Dunnett, 1988 1 pp. 78-81; Picard, 1988).4 A shock wave went through the American newspaper industry in 1981 when The Washington Star ceased publication. Here wa~ a newspaper institution which ·had served the nation's capital for more than 140 years. It seemed to be flourishing with more than 300,000 copies sold each day. And it was owned by Time, Inc., a billion dollar media corporation with skilled managers and "deep pockets." Four months later T~e Philadelphia Bulletin, a long-time Philadelphia institution with a circulation of 400,000, went out of business. Two months after that came the end of the Minne apolis Star and then the Cleveland Press (Dunnett, 1988, pp. 89-91). The monopoly newspaper business remains quite profitable. Indeed, forces seem to make it even more so. The huge economies (keeping costs down) and limitations to alternatives for mass advertisers (keeping revenues high) continue increasing. The key is the advertising. Mass advertisers such as grocery and department stores want to reach the broadest group of potential customers at the lowest possible cost per thousand. Since a newspaper's revenues come in large part from the sale of ad~ertisin~, this means that the top advertisers w1ll flock to the dominant paper and the revenues for competitors will dry up. A monopoly newspaper can tender certain limitations of economic performance. The monopoly paper can set the

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agenda for the news and has the potential for avoiding fair responsibility toward certain local issues. This means a lack of diversity and no alternative voices. Monopoly newspapers seem unwilling to report closely on the abuses of grocery or department stores' sales or product policies. To promote more daily newspapers, the Newspaper Preservation Act was passed in 1970. This permitted two "competitive" newspapers to operate jointly for their noneditorial operations and remain free of violating the nation's antitrust laws. The legislation's proponents, who carried the day, argued that two editorial voices are better than one, even if jointly operated. Indeed, in the late 1980s, there has been a call to expand the Newspaper Preservation Act so newspapers covered by joint operating agreements could enter new fields of publishing in their hometowns. But the Newspaper Preservation Act, in whatever form, operates as a subsidy to maintain the contemporary status quo. Consider the case of The Detroit News (owned by Knight-Ridder) and the Detroit Free Press (owned by Gannett). In August 1988, Attorney General Edwin Meese Ill, overturning recommendations of his own administrative law judge and the Department of Justice's antitrust division, in one of his final acts as Attorney General approved the joint operating agreement between these two newspapers, with more than 600,000 circulation and owned by two of the largest media corporations in the United States. This conversion is expected to convert losses of more than $100 million over the past decade into profits of about $100 million per year and keep two newspapers competing. In the long run, continual governmental help would be necessary to keep secondary papers alive. Subsidies co4ld

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take other forms, such as direct tax breaks. But unless the United States is willing to amend the Constitution to permit licensing and direct regulation of newspapers, monopoly newspapers will continue. What might alter this prediction is some sort of dramatic technological breakthrough to fundamentally transform the basic economic conditions and hence the structure, conduct, and performance of the newspaper business in the United States (Bagdikian, 1983, pp. 225-239).

CONCLUSION The industrial organization model of structure, conduct, and performance provides a powerful and useful analytical framework for economic analysis. Using it, the analyst seeks to define the siz<;._ and S£Ope of the structure of an industry and then go on to examine its economic behavior. Both these steps require analyzing the status and operations of the industry, not as the analyst wishes it were. Evaluatioll_Qf its performance is the final step, a careful weighing of "what is" versus "what ought to be." Ideally, the analyst ought to ask if government intewention is necessary and then rank the options from best to worst. This model is fundamentally static. To accommodate change three powerful, long-range influences need to be considered. The first is ne~chnology. The mass media are defined by their technology, and that certainly will change over time. The coming of television replaced time spent listening to the radio. But new technology does not always eat into the market for existing products. Despite dire predictions, it seems that the coming of home video and pay television have only increased interest in going out to the movies.

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A second consideration comes from the influences of the world of p_olitics. The Reagan administration loosened the FCC's supervision of the radio and television industry, and the Department of Justice has enabled the major studios to purchase chains of theaters. But the enforcement of antitrust regulations and the attitudes of the FCC seem to run in cycles, and a tightening up can be expected in the near future. No one, however, can be sure if the changes in enforcement and regulation will involve structural issues (ownership limitations or the encouragement of minority owners) or conduct issues (encouragement of children's programming or restrictions on pornography) or both. Will a new administration and Congress expand or eliminate the Newspaper Preservation Act? Surely there will be changes of some kind. Third, fundamental social ansLdemographic changes will continue. Consider

the aging or graying of America. What will be its effect on the size and shape of the media industries or their conduct toward that market? Through the 1960s and 70s, only the young used to fill the nation's movie theaters. In the 1980s, those over 30 began to flock back to theaters. Is this a permanent change? It is too early to tell. But, whatever the changes, the structure, conduct, and performance model can help to sort out the answers to these important questions. Such analysis provides a basis for evaluating whether Bagdikian is right about the power of the "monopoly media" or if independent film makers have a basis for their complaints as Guback has so often asserted. This model of analysis can provide the first step in assessing the effects of the vast sums of money inves~ed in the media industries, whether for news or entertainment, or both. D

NOTES 1To

be sure, Twentieth Century Fox is not the only entity making a try at a fourth network. On cable television the USA network and Turner Broadcasting Service's TNT (launched in Fall1988) also seek to offer a'complete network service. Being on cable, however, they reach far less a potential audience than the Fox over-the-air broadcast network (see Landro, 1988). 2To appreciate how vertical integration has long been an advantage in the television industry, see the fine case study of Pusateri (1988). 'The Hollywood majors who have been so skillful are Paramount, Disney, Warner Bros., Twentieth Century Fox, Columbia, Universal, United Artists, and MGM. •still, this degree of concentration seems slight when compared to Australia and Great Britain. In 1985, Rupert Murdoch had more than 40% of the circulation revenues in Australia and nearly that amount in Britain.

REFERENCES Abrams, B. (1985, June 21). Murdoch will sell The Village Voice to Stern of Hartz. The Wall Street journal, p. 5. Bagdikian, B. H. (1983). The media monopoly. Boston: Beacon Press. Barnes, P. W., Cieply, M., & Landro, L. (1986, February 21). Rupert Murdoch's bid to form TV network faces huge obstacles. The Wall Street journal, pp. 1, 9. Bessman, J. (1987, May). Video takes over main street. Video, pp. 70-72, 127.

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Carnpbell, A. J. (1980). The FCC's proposal to deregulate radio. Federal Communications Law . journal, 32, 233-268. Caves, R. (1987). American industry (6th ed.). Englewood Cliffs, NJ: Prentice-Hall. Compaine, B. (1982). Who owns the media? White Plains, NY: Knowledge.

PART I

METHODOLOGY AND THE MASS MEDIA

Dekom, P. (1987). The motion picture in 1987: A study in economic turmoil. American Premiere 8 ' ' 9-15. Dunnett, P. J. S. (1988). The world newspaper industry. New York: Croom Helm. Epstein, E. J. (1973). News from nowhere. New York: Random House. Frank, A. D., & Morris, R. C. (1988, February 22). Watch out Dow Jones! Here comes Rupert Murdoch. Forbes, pp. 34-35. Field Guide. (1988). Channels [entire issue].

2 Contribution to a Political Economy · of Mass Communication

Gomery, D. (1985). The Hollywood studio system. New York: St. Martin's Press. Gomery, D. (1986). Hollywood's business. The Wilson Quarterly, 10 (3), 53-56. Gans, H. J. (1979). Deciding what's news. New York: Pantheon. Guback, T. (1987). The evolution of the motion picture theater business in the 1980s. journal of ·Communication, 37 (2), 60-77. Kahn, F. (1984). Documents of American broadcasting (4th ed.). Englewood Cliffs, NJ: PrenticeHall. Landro, K. (1988, July 21). USA network aims for higher profile. The Wall Street journal, p. 19. Lyon, C. (1984). The international dictionary offilms and filmmakers. Chicago: St. Jarnes. McClellan, S. (1988, July 11). The powers that be in Hollywood. Broadcasting, pp. 43-60. Meyers, M. (1988, July 12). Murdoch's global power play. The New York Times Magazine, pp. 19-21, 36, 41-42. Montavalli, J. (1987, April 27). Hollywood executives laud PPV but decry lack of cable commitment. Cableuision, pp. 15-17. Owen, B. (1976). Regulating diversity: The case of radio formats. journal of Broadcasting 21 ' ' 315-319. Picard, R. G. (1988). Measures of concentration in the daily newspaper industry. journal of Media Economics, 1, 61-74. Philips, L. (1983). The economics ofprice discrimination. New York: Cambridge University Press. Pu.sateri, C. J. (1988). W estinghouse broadcasting and the development of integrated group operations m the broadcasting industry. In E. J. Perkins (Ed.), Essays in economic and business history (pp. 1-12). Los Angeles: Economic and Business Historical Society. Rogers, J. L. (1988, August 8). Murdoch's news corp. will buy Triangle Publications for $3 billion. The Wall Street journal, p. 3. Rosenthal, E. (1987, May 25). VCRs having more impact on network viewing, negotiation. Television/Radio Age, pp. 37-39, 68-70. Rupert Murdoch's big move. (1985, May 20). Business Week, pp. 104-108. Scherer, F. M. (1980). Industrial market structure and economic performance (2nd ed.). Chicago: Rand McNally. Witcher, S. K. (1988, March 17). Murdoch's news corp. is poised to boost its interest in Reuters. The . Wall Street journal, p. 30. Ziegler, P. (1987, June 15). 1987 ·shaping up as the year pay-per-view became a business. Multichannel News, pp. 1, 35.

The major modem communication systems are now so evidently key institutions in advanced capitalist societies that they require the same kind of attention, at least initially, that is given to the institutions of industrial production and distribution. Studies of the ownership and control of the capitalist press, the capitalist cinema.. and capitalist and state capitalist radio and television interlock, historically and theoretically, with wider analysis of capitalist society, capitalist economy and the neo-capitalist state. Further, many of the same institutions require analysis in the context of modern imperialism and neo-colonialism, to which they are crucially relevant. Over and above their empirical results, these analyses force theoretical revision of the formula of base and superstructure and of the definition of productive forces, in a social area in which large scale capitalist economic activity and cultural production are now inseparable. Unless this theoretical revision is made, even the best work of the radical and anti-capitalist empiricists is in the end overlaid or absorbed by the specific theoretical structures of bourgeois cultural sociology. (Williams, 1977: 136)

Williams's note is hidden in a book of literary theory. It is thus perhaps hardly surprising if few in media and cultural studies made the theoretical revision for which he called. Indeed, in the years since I first wrote this essay, media and cultural studies have moved ever further, not only from political economy but from notions of social determination in general, to focus on discourse within a relativist, largely ahistorical and individualistic frame of analysis. In the light of actual economic and political developments this is ironical, not to say perverse, because the need to elaborate a political economy has never been more intensely practical. It has become even more urgent and relevant since my essay was originally written, if only because governments throughout the developed world' have placed the future of their communication and information industries at the top of their political agendas in the formation of economic and industrial policy. Symptoms of these changes can be seen in the general move towards what has been dubbed 'deregulation' in the broadcasting and

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telecommunications sectors. In the UK in the 1980s we have witnessed a stream of government reports and legislation, accompanied by extensive and continuing debate, on the provision of telecommunications infrastructures and services, on over-air broadcasting, on cable TV and direct broadcasting satellites, on subscription television and spectrum allocation. Similar activity can be seen in other member states of the European Community, in the USA and Japan, and in international fora such as the ITU and GATT, as countries and regional blocks jockey for competitive advantage in a developing global information economy. At the economic level symptoms are the almost daily announcement of takeovers, mergers and strategic alliances in a process of increasing international consolidation in the publishing, audiovisual and telecommunications industries. It is easy in such a situation for the analyst to be inundated and confused by a mass of empirical data. Our only hope of understanding the process and thus intervening successfully within it is to establish a theoretical distance.

11

Before turning to concrete examples of the problems a political economy of mass communication tries to analyse, it is necessary, precisely because of the dominance of idealism within the analysis of culture and the mass media, to make an unavoidable theoretical digression in order to base subsequent discussion firmly within the necessary historical materialist perspective. In asking for a shift within mass-media research towards historical materialism, one is asserting an order of priorities which is both a hierarchy of concrete historical and material determinants in the real world as well as an order of research priorities. That is to say, we are faced with the problem of understanding an actual historical process which itself concretely exhibits structurally ordered determinants within which material production is ultimately determinant. It is this which makes our theory materialist. At the same time there are a limited ~umber ?f researchers with limited material resources (among which I mclude time) who must choose, from within the complex totality of the histo~ical social process, to examine those aspects of the process which are likely to lead to the clearest understanding of the dynamics of that process and through that understanding to its human control. It is this question of choice which underlies Marx's own mode of abstraction. Thus, in opposition to that Althusserian/Lacanian current which has been so dangerously dominant within recent British Marxist research in the ?rea of ~ass medi~, one asserts, not that the problem of subjectivity for Instance IS of no mterest, but that it is of less interest than that of class or capital accumulation. That is to repeat the axiom that the economic is determinant under capitalism. Capitalism is a mode of social organization characterized by

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the domination of an abstract system of exchange relations. Further, the particular relationship between the abstract and the concrete, or between ideas and matter, which is appropriate to historical materialism as a mode of analysis of capitalism, stems from the real relation between the abstract (exchange relations) and the concrete (individual lived experience, real labour, etc.). In a social formation in which social relations were not abstracted into a relation of exchange a different theoretical relationship between the abstract and the concrete would hold. Moreover, the abstract should not be opposed to the concrete, just as the phenomenal forms should not be opposed to the real relations. One is precisely a form of the other. The exchange relation has a concrete material reality in the form of money, bills of exchange, credit cards, banks, etc., but its mode of operation and with it the reproduction of the capitalist social formation depends upon its abstraction, the fact that it works 'behind men's backs' and thus 'can be determined with the precision of natural science'. It can only be determined with such precision so long as it is a supra-individual social process. This is both a methodological and historical postulate. The necessary condition for a capitalist social formation is the existence of a more or less universal domination of social relations by the exchange relation, i.e. a market economy. Wherever such domination is challenged (and we do not see, and never have seen, in this sense, an 'ideal' capitalist social formation) by explicit political action, by human will and reason, the logic of capital is challenged. It is for this reason that the State is a necessarily contradictory form. This leads us to the concept of ideology which so dominates our field of study and to the central problem within cultural theory, namely the base/superstructure relationship. The central postulate of historical materialism is that man as a biological organism must undertake a constant material exchange with nature and it is this exchange that is named labour. Within history the labour/nature relationship has become increasingly mediated through specific modes of production, thus making the links more difficult to analyse. Because of this difficulty the possibility of error and thus of ideology enters. But it remains a material fact that, ultimately, material production in this direct sense is determinate in that it is only the surplus produced by this labour that enables other forms of human activity to be pursued. Thus the superstructure remains dependent upon and determined by the base of material production in that very fundamental sense. Clearly, the greater the surplus to immediate physical needs the greater the autonomy of the superstructure, and indeed its greater variation and diversity within superstructural organization. In this important sense the superstructure of culture is and remains subordinate, and the crucial questions are the relationship between, on the one hand, the mode of extraction and distribution of the material surplus (class relations) and,

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on the other, the allocation of this material surplus within the superstructure, for instance the problem of public expenditure. But while, historically, the superstructure has become more autonomous, there still remain direct, narrow material constraints upon individuals even within developed, industrial societies. Everyone has to eat and sleep and be maintained at a given body temperature in determinate temporal cycles. Thus, as Marx himself noted, every economy is an economy of time, which is why labour-time is so crucial an analytical concept. Cultural reproduction is still directly governed by these material determinants in the sense that the time and resources available to those who have to sell their labour power to capital, within labour-time constraints largely imposed by capital, remain limited, and they still use the most significant proportion of their available time and material resources in order to stay alive. It is at this primary level, both theoretically and actually, that social being determines social consciousness. Thus economism, the concern for immediate physical survival and reproduction within the dominant relations of exchange, is an immediate and rational response to the determinants of social being. What E. P. Thompson has recently dubbed 'the bourgeois lumpen intelligentsia' (1978: 195) too easily forgot this, both because their material conditions of existence are often less immediately determinate and also because of a guilty conscience concerning the relationship of exploitation in which they personally stand vis-a-vis productive labour.

m No political economy of culture can avoid discussion of the base/ superstructure relationship, but in so doing it needs to avoid the twin traps of economic reductionism and of the idealist autonomization of the ideological level. The central problem with the base/superstructure metaphor, as with the related culture/society dichotomy, is that being a metaphor of polarity, essentially binary in form, it is unable adequately to deal with the number of distinctions that are necessary, in this instance between the material, the economic and the ideological. These should be seen not as three levels. They are analytically distinct, but coterminous moments both of social practices and of concrete analysis. There is a sense in which the base/superstructure metaphor always does imply a notion of expressive totality, a totality in which either the superstructure is expressive of an economic base, or in the tautological sense by which all phenomena of a social formation are expressive of that social formation. The notion of expressive totality can be used either deterministically or relationally. It is clear that the analysis in Capital is of the latter type. What is being analysed is not, as Mandel (1975) has stressed, a social formation in equilibrium but in disequilibrium: a still incomplete process of capitalist development, a development which is

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marked not by the determinacy of capitalist economic forms (an · expressive totality in that sense) but on the contrary by a series of shifting relationships between the economic and other instances, each interacting with the other in a process of uneven and contradictory development. The totality of the social formation at any historic moment is only expressive of the actual state of those shifting interrelationships. Thus the meaning of any analytical category such as base and superstructure, expressing as it does a relationship, will shift as the historical reality it is used to explain shifts. We could say that the purpose of a political economy of culture is to elucidate what Marx and Engels meant in The German Ideology by 'control of the means of mental production', while stressing that the meaning they gave to the term was quite clearly historical and therefore shifting, and was never meant to be frozen into some simple dichotomy as it has so often been in subsequent Marxist writing. Further, the political economy of mass media is the analysis of a specific historical phase of this general development linked to historically distinct modalities of cultural production. In his discussion of base and superstructure in Marxism and Literature, Williams points out that although, in stressing the determinacy of the base against bourgeois idealism, one version of Marxist cultural theory has been accused, both by bourgeois and Marxist critics, of 'vulgar materialism', 'the truth is that it was never materialist enough'. And he continues: What any notion of a 'self-subsistent order' suppresses is the material character of the productive forces which produce such a version of production. Indeed it is often a way of suppressing full consciousness of the very nature of such a society. If 'production', in capitalist society, is the production of commodities for a market, then different but misleading terms are found for every other kind of production and productive force. What is most often suppressed is the direct material production of 'politics'. Yet any ruling class devotes a significant part of material production to establishing a political order. The social and political order which maintains a capitalist market, like the social and political struggle that created it, is necessarily a material production. From castles and palaces and churches to prisons and workhouses and schools· from weapons of war to a controlled press: any ruling class, in variabl~ ways though always materially, produces a social and political ord:r. These are never superstructural activities. They are the necessary matenal production within which an apparently self-subsiste~t mode. of production c~n alone be carried on. The complexity of the process IS especially remarkable m advanced capitalist societies, where it is wholly beside th~ point to .isolate 'production' and 'industry' from the comparable matenal production of 'defence' 'law and order' 'welfare', 'entertainment' and 'public opinion'. In failing t~ grasp the mat~rial character of the production of a social and political order, this specialised (and bourgeois) materialism failed also, but even more conspicuously, to understand the material character of the production of a cultural order. The concept of the superstructure was then not a reduction but an evasion. (Williams, 1977: 92-3)

Williams's stress here on the materiality of the cultural process is a

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necessary correction to both bourgeois idealism and its post-Aithusserian Marxist variants. But this formulation also suffers from a misleadingreductionism by failing to distinguish between the material and the economic. It is in fact a materialist rather than a historical materialist formulation. The absence of this necessary distinction is contained in the apparently insignificant but crucial phrase 'in variable ways though always materially', for it is precisely the specific articulations of these variable ways that define the shifting meaning of what Marx and Engels called 'control of the means of mental productio n', shifts which it is the central purpose of a political economy of mass communication to map and analyse. Certainly a licensed press and a commercial, 'free' press are both material, but the economic differences between these two forms of 'political' control are precisely what differentiates a capitalist from a precapitalist form. Similarly, the difference between the economic structure of private and public education constitutes, within the same materiality, the substance of political struggle. While the materiality of politics, i.e. its maintenance out of the total social surplus of material production, is a general, universal phenomenon, the ways in which that surplus is extracted and distributed, and the relation of that economic form to the political, are historically distinct and specific, so that, at present, the matter of subsidies to political parties or to the press becomes an object of political struggle to change economic forms and by so doing to change political structures. Similarly, while Williams is correct to stress the materiality of all social practices it cannot be said, from an economic perspective, that it is wholly beside the point to isolate 'producti on' and 'industry' from the material production of 'defence', etc., when what is often in question when considering the relation between these various social practices is not their shared materiality, but on the contrary their significantly different economic articulation. For instance there is a sharp variance between those practices carried on by private capital for profit, such as the publication of a newspaper, and those practices carried on by the State outside direct commodity production, such as the BBC or the State education system. To collapse all this into a general category of 'material' production is precisely an 'evasion', both of the differing and developing economic articulations between various forms of material production and also of the amount of cultural production and reproduction that takes place within the industrial sphere as narrowly defined. Such reproductions occur throughout the organizations of the labour process with its industrial psychologists, its labour relations experts, its time-and-motion study experts, its production engineers and its personnel managers, in the structures of employer paternalism and in the organization of the market itself. To take one example of such an articulation, one might hypothesize that the relationship between the male predominance in newspaper readership as compared with the composition of TV audiences was not unconnected with the contrast between the culture of

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work as against the culture of home, and has important political consequences. This confusion between the material and the economic is common, and it is worth dwelling briefly on the nature of the distinction. In so far as historical materialism is materialist, it is based upon the postulate that Williams outlines. But in so far as it is historical, it is concerned to analyse the specific and shifting modes of this f~ndamental ~aterial ~el~ tion, all of which are forms of that relatton. In particular, tt ts postulated that any form of extended social relationship depends upon the extraction and distribution of material surplus, and the means by which this is achieved is thus the central determining characteristic of any social formation. Such modes of social production and exchange are cultural, hence the very real problem of making a society/culture differentiation without narrowing the definition of culture to include only those elements of social interaction which involve a secondary level of abstraction, namely the representation of concrete, material relations in symbolic forms. Thus we must distinguish two types of form. The first is a social form which is a series of material relations that, in so far as they operate unconsciously, can be abstractly analys~d and determined with the precision of natural science. The second ts a cultural form which, while it entails a material support, is not itself material and has an essentially mediated divide between these distinct formal realms, the existence of which allows ideology to enter, because it allows denial and the lie, both of which depend upon a relationship which is not determinant. However, this autonomy is bought at the cost of a loss of real or material effectivity. Cultural forms become effective only when they are translated into social forms which do have material effectivity. Thus there is a constant dialectic at the cultural level between autonomy and effectivity, and it is at the level of social effectivity that material production is ultimately determinant. However at the level of social forms, the economic is a specific historical f~rm of the social relations of production and distribution. It is the form these relations take in a social formation within which commodity exchange is dominant. Thus, it is possible to argue that the eco~omic is superstructural in relation to the material base or structure, that tt could in fact be seen as the dominant level of the superstructure. For what Marx argues in Capital is that the real historical transition to capitalism involves a move from a system of social relations and domination based upon the direct physical control of landed property and pe~ple to one based up~n increasingly indirect control through commodtty exchange and, m particular, through the exchange of the commodity of labour power, and that this real historical process is a process of social abstraction which thus requires appropriate theoretical abstraction for its analysis. It is ?ecause the economic is the most abstract and fundamental form of the soctal relation within capitalism that it is primary, but it is so as a historically specific representation of a predeterminate material relationship.

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It is the real existence of this abstract economic level of extended commodity production that allows for the development of an increasing division of labour and thus for the development of the superstructural forms of c~pitalis?I. Thus the relative autonomy of the superstructure is a real and mcreasmgly central characteristic of capitalism but it is itself determined at the level of the economic and ultimately i~ is a form at !wo levels of mediation, of a material relation which remains determi~ant m and through the economic. IV From this perspective available historical materialist theories are inadequate to deal with the practical challenges they face largely because they offer reductionist explanations which favour either a simple economic determinism or an ideological autonomy. Thus we are offered the following: I

An unproblematic acceptance of the base/superstructure model

~rawn from a partial reading of The German Ideology which, unargued, stmp.ly ~tates. that the mass media are ideological tools of ruling-class dommatton etther through direct ownership or, as in the case of broadcasting, via ruling-class control of the State. Such a position neglects both the effects of subordinating cultural production and reproduction to the gener~l .logic of .capit~ist commodity production and the specificities of the sh!~tmg re~attonshtps between economic, ideological and political le~els. Mthband, m Marxism and Politics, expresses a classic version of thts theory:

:W~ateve~ else the immense output of the mass media is intended to achieve, lt IS ~/so mtended to help prevent the development of class-consciousness in the workmg ~lass and to. reduce a~ m.uch as possible any hankering it might have for a rad1c~l alternative to capuahsm. The ways in which this is attempted are endlessly different; and the degree of success achieved varies considerably from country to country and from one period to another - there are other influences at work. But the fact remains that 'the class which has the means of material production at its ~isp,osal' does h.ave 'control at the same time of the means of menta.! production ; an~ that 1t does seek to use them for the weakening of opposition to th.e estabhshed ord~r. .Nor is the point much affected by the f~~t that the state m almost all capllahst countries 'owns' the radio and teleVISion - its purpose is identical. (Miliband, 1977: 50) 2 In partial reaction against this classic Marxist explanation of the role of the mass media, we are offered an elaboration of the relative autonoi?y of the superstructure. All such theories in their effort to reject economtsm or, as Althusser puts it, 'the idea of a "pure and simple" non-overdetermined contradiction', to a greater or lesser extent have also removed economic determinacy. In such theories 'the lonely hour of the · t ~nee " never comes' (Althusser, 1969: 113). This general posi"last ms . tiOn has nghtly developed the insights of the Frankfurt School into the

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importance of the superstructure and of mediation, while neglecting a crucial component of the Frankfurt School's original position, namely the fact that under monopoly capitalism the superstructure becomes precisely industrialized; it is invaded by the base and the base/superstructure distinction breaks down via a collapse into the base rather than, as is the tendency with the post-Aithusserian position, via the transformation of the base into another superstructural discourse. In our age the objective social tendency is incarnate in the hidden subjective purpose of company directors, the foremost among whom are in the most powerful sectors of industry - steel, petroleum, electricity and chemicals. Culture monopolies are weak and dependent in comparison. They cannot afford to neglect their appeasement of the real holders of power if their sphere of activity in mass-society is not to undergo a series of purges. (Adorno and Horkheimer, 1977: 351) The truth of this original insight is demonstrated monthly as firms in the cultural sector are absorbed into large industrial conglomerates and brought under the sway of their business logic. Indeed, the real weakness of the Frankfurt School's original position was not their failure to realize the importance of the base or the economic, but insufficiently to take account of the eco-nomically contradictory nature of the process they observed, and thus to see the industrialization of culture as unproblematic and irresistible. Those who· have come after, while criticizing the Frankfurt School for its absence of concrete class analysis, an absence stemming precisely from their insufficiently nuanced analysis of the economic level, have, in developing their theories of the effectivity of the superstructure, compounded the original error. The most distinguished exponent of the post-Aithusserian position in Britain, Stuart Hall, in his essay 'Culture, the media and the ideological effect' (1977) recognizes that there is a decisive relationship between the growth of the mass media and 'everything that we now understand as characterising "monopoly capitalism"'. At the same time he refuses an analysis of this decisive relationship, claiming that 'these aspects of the growth and expansion of the media historically have to be left to one side by the exclusive attention given here to media as "ideological apparatuses".' Murdock and Golding (1979) rightly criticize Hall and claim that, on the contrary, the ways in which mass media function as 'ideological apparatuses' can only be adequately understood when they are systematically related to their position as large scale commercial enterprises in a capitalist economic system and if these relations are examined historically. Hall's failure to do this leads him to explain the ideological effect in terms of ideologically predetermined communicators or encoders choosing from an ideologically predetermined set of codes. Hence there is a systematic tendency of the media to reproduce the ideological field of society in such a way as to reproduce also its structure of domination. That is to say, he offers the description of an ideological process, but not an explanation of why or how it takes place, except in tautological terms.

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Moreover, he is led by his mode of analysis, as his critics point out, to favour a specific and atypical instance of media practice, namely public service broadcasting, and indeed within that an atypical form, namely informational broadcasting. His mode of analysis does not allow him to deal, for instance, with an important and developing moment within the press caused by a contradiction between the crucial underpinning idea of a 'free press' and the economic pressures towards monopoly. He cannot analyse the relationship between the ideological effect of broadcasting and the fact that it is perceived by its audience to be under State control as opposed to the biased privately owned press. 3 A further elaboration of the post-Aithusserian position, popular within film studies, leads in its elaboration of a theory of autonomous discourses to an evacuation of the field of historical materialism, whatever its materialistic rhetoric, placing its determinacy in the last instance on the unconscious as theorized within an essentially idealist, indeed Platonist, problematic. Such idiocies need detain us no further. 4 Finally, Dallas Smythe (1977), identifying the excessive stress on the autonomy of the ideological level within western Marxism as its 'blind spot', redirects our attention away from the mass media as ideological apparatuses and back to their economic function within capitalism. But in so doing, he proposes an extreme reductionist theory. For Smythe, any political economy of mass media must be based upon an analysis of its commodity form, and for him the commodity form specific to the mass media is the audience. That is to say, for Smythe, the crucial function of the mass media is not to sell packages of ideology to consumers, but audiences to advertisers. Now it is undoubtedly important to focus attention upon the ways in which the mass media manufacture and sell audiences as one moment in the complex circuit of capital that structures the operation of the mass media economically. Moreover, to stress this moment as the crucial one and to concentrate on the mass media's directly functional role for capital as advertising vehicles is undoubtedly a more plausible reflection of reality in the North American context than it would be in Europe. However, Smythe's theory misunderstands the function of the commodity form as an abstraction within Marxist economic theory, and thus neglects the relationship between specific forms of the commodity, in this case the audience, and the commodity form in general. As a result his theory lacks any sense of contradiction failing to account for the function of those cultural commodities direct); exchanged, failing to account for the role of the State, failing sufficiently to elaborate the function for capital of advertising itself and, perhaps most crucially of all, failing to relate the process of audience production by the mass media to determinants of class and to class-struggle (Levant, 1978; Murdock, 1978; Smythe, 1978).

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What problems is it, then, that a political economy of mass com~unica tion attempts to analyse? The research perspective, wh~se theon;hcal and historical basis I have briefly outlined, attempts to shift attentiOn away from the conception of the mass media as ideological appara.tuses o~ the State and sees them first as economic entities with both a duect · econ~mic role as creators of surplus value through commodity production and exchange and an indirect role, through advertising, in the creation of surplus value within other sectors of commodity production. Indeed, a political economy of mass communication in part chooses its object of study precisely because it offers a ~hallenge to the AI~husser/ Poulantzas theorization of the social formation as structured mto the relatively autonomous levels of the economic, the id7ol~gical and the political. For the major institutions of mass commumcatlon, ~he p:ess and broadcasting, although displaying notable differences of a~t1c~lat~on, at the same time display close interweaving within concret: mstttu~ons and within their specific commodity forms of the econorruc, the. ~deo logical and the political. When we buy a new~pa~er we parttclp.ate ·simultaneously in an economic exchange, in subjection to or reaction against an ideological formation and often in a quite specific act of political identification. We also know from historical analysis of the development of the press that the nature of the political involvement i~, quite specifically, economically conditi~ned. Simi!arly: TV news IS econoinicaily determined within commodity productiOn .m. gener~, performs an ideological function and explicitly operates ~~thm pohtl~. While accepting that the mass media can be pobhcally and Ideologically overdetermined at many conjunctures, a political econom~, as I understand it, rests upon ultimate determination by the econo~uc (a level that itself always remains problematic and to be defined m the process of analysis). Indeed, one of the key features of the mass ~edia w!thin mo~op~ly capitalism has been the exercise of political and tdeologtc~ domm~t10n through the economic (Curran, 1977). What co~cer~s us 1~. fact Is to stress from the analytical perspective, the contmumg validity of the base/~uperstructure model while at the same time pointing to and analysing the ways in which the development of monopoly cap~t~ism .has industrialized the superstructure. Indeed Marx's own c~n~ral ms1ght I?to the capitalist mode of production stressed its generaliZmg, abstractmg drive; the pressure to reduce everything to the equivalence of exchange · 1 'fi . value. Before going on to examine the economic level and 1ts spec1 IC art1cu ations within the cultural sphere, let us look at the relationship between the material conditions of production (not, as we have seen, to be confused with the economic far less the capitalist modes of such production, which are specific forms) on the one hand and ideological forms on

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the other. !~at is to ask, how do we relate Williams's correct stress upon ~he matenaltty of _cultural production to Marx's famous distinction

betwee? the m_atenal transformations of the economic conditions of ·· whtch can be determined wt"th the prectston productton, o f natural . ~ctence.. and the legal, political, aesthetic or philosophic _ in short _ tdeolo.gtcal forms in which men become conscious of this conflict and fight tt out' (Marx, 1962). Marx u~d.erl~es the importance of the distinction between the two · upon the difference between the unconscwus focused a dtstmctton levels, . . ~ ore~ govermng matenal production 'beyond our will' etc and the ~onsctous form of i~eology. (If we follow the Althusse;ians -~nd make tdeology an unconsctous process this crucial distinction is lost.) There are here two distinctions to be made· 1 think we can l"k t en · "d 1 · 1 I eo ogtca practice to what Marx called the 'real labour process'. Looking at the process of production from its real side, i.e. as a process which ~:~th t~e~e ~~-v1~e~ by performing useful. labour with existing use values, we -ea a our process. As such Its element, its conceptually specific ~ompon~nts, are those of the labour process itself, of any labour rocess ~rresph~chttvehof the mode of production or the stage of economic devel~pmen; m w tc t ey find themselves. (Marx, 1976)

The processes of consciousness and of representation, for instance in

lan~age,_ are real processes by which human beings socially appropriate

thet_r e_nvtronment (nature), which continue to exist within specificall

cap~tal~st modes of ideological production, and indeed upon which thes~

capttaltst modes rest. h The materiality of such ideological production qua ideology rests upon t e ~act t~at. ~onsciousness is a human transformation of 'real' c expenence; It ts m that sense 'practical knowledge' · Clear!y, th ere,ore, . f the 1 f 1 h" to production ideological of instance particular any . o tp .ons a h re t e t?tal~ty of .s?ctal experience will depend upon an analysis of the the expene~ttal posttton of the human consciousness in question e on b~sedg~ as consciousness class of definition simple and conve.nttonal t~e dt~ect experience ~f a given position within the capital/labour r~la· tiOnship. .Of course. m any camp1ex soctety such direct experience b . ecomes highly medtated. But its translation into forms of representation ~s nonetheless a process of consciousness which is different from and in ~ts0 fo~~~ ~as no necessary correspondence with, the economic p~ocesses w IC ~t r~la~es or of which it is a representation. Indeed as a representatiOn It ts by definition distinct from those processes which it represents. Moreover ideological forms can never be simply collapsed into a of exc.hange. ~alues, precisely because they are concerned with 1 h erence, With dtsttnction; they are by definition heterogeneous· ' w ereas exchange value is the realm of equivalence. 1

:r.::em

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VI In order to study the connection between intellectual and material production it is above all essential to conceive the latter in its determined historical form and not as a general category. For example, there corresponds to the capitalist mode of production a type of intellectual production quite different from that which corresponded to the medieval mode of production. Unless material production itself is understood in its specific historical form, it is impossible to grasp the characteristics of the intellectual production which corresponds to it or the reciprocal action between the two. (Marx, 1959: 82)

We need to lay stress on and distinguish two distinct but related moments in a historical materialist analysis of intellectual production. Culture as a superstructural phenomenon in relation to non-cultural modes of. material production, i.e. on the one hand, the dominant or hegemonic cultural production paid for out of capitalist revenue and, on the other, a subordinate working-class or appositional culture paid for out of wages. Cultural production in this sense and its articulations with the sphere of material production involves one specific interpretation of the meaning in The German Ideology of 'control of the means of mental production', i.e. through the direct payment of ideologists and the necessary maintenance of the physical instruments of their ideological production. It is within that analytical perspective that we need to analyse the historical development of the 'historically specific needs' of the working class and their sustenance of 'organic intellectuals' and of specific instruments of cultural production such as trade unions. 2 Culture as part of material production itself, directly subordinate to or at least in a closely determined articulation with the laws of development of capital. This is both a latter historical phase, part of monopoly capitalism (the phenomenon dubbed 'the industrialization of culture') but it also lives alongside the other moment and in specific instances we need to analyse the interrelationship between these two distinct modes of intellectual production within intellectual production in general. What, in general, has been lost in Marxist studies of the mass media is the precise historical elaboration of what Marx and Engels meant in The German Ideology by 'control of the means of mental production'. In general it is clear, in The German Ideology, that Marx and Engels were concerned with the payment of ideologists, of intellectuals, and of capitalist revenue. It is this perspective that Raymond Williams picks up in the passage already cited. That is to say they rightly saw that superstn.ictural activities require a cohort of mental workers who were not directly and materially productive, and thus whose price of reproduction must be borne by the sphere of material production. Since under capitalism it was capitalists who were extracting this surplus, it was they who could redistribute this surplus into superstructural activities of their choosing, and by so doing exert direct economic pressures on the ideologists who were their hired servants.

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The creation of surplus labour on the one side corresponds to the creation of minus labour, relative idleness (or non-productive labour at best) on the other. This goes without saying as regards capital itself; but holds then also for the classes with which it shares; hence of paupers, flunkeys, lick-spittles, etc. living from the ~urplus product, in short, the whole train of retainers; the part of the servant class which lives not from capital but from revenue. (Marx 1973: 401) •

This direct relationship remains important and should not be forgotten. The working class also developed, out of its wages, a subordinate or counter-culture with its own 'organic intellectuals' such as paid trade union officials, cooperative organizers, journalists, etc., but the surplus available for this purpose was exiguous both really and comparatively, so that this direct ideological power was decisively weighted in favour of capital. It remains so. Compare a small organization like Counter Information Services with the public relations and research investment of a major company. Look at the way in which large companies manipulate the legal system by their ability to sustain expensive, long-drawn-out actions. Look at the way media research itself has been and is significantly influenced by the flow of funds from vested commercial interests. There now exists, of course, as the division of labour has developed further, a more mediated version of this employment of ideologists out of revenue. This is the object of Bourdieu's analysis: the creation of a subordinate fraction of the capitalist class who possess cultural capital (Bourdieu and Passeron, 1977). Just as younger sons of the aristocracy went into Church and army, so now a section of the capitalist class occupies key positions in the cultural sector. The class origins of ideological workers remain an important but neglected aspect of media analysis. This does not of course mean that such people necessarily reproduce ruling-class ideology (Engels and William Morris are obvious counter-examples). It does mean that there is a structural tendency to do so. Neglect of this aspect of the direct economic control of ideologists is reflected in current discussion of the ideological role of the media where there is much sophisticated discussion of professionalization, of hierarchies of discourse, of hegemonic and subordinate codes, etc., discussions which often serve to mask a reality which is ever-present to those actually working in the media: losing one's job. This reality is of course often internalized by both employee and employer in the form of the ideologies of professionalism or managerialism, but it remains no less potent for that, indeed, is the underpinning which professionalism requires. Once again, this was a fact that Adorno and Horkheimer did not make the mistake of forgetting: Under the private culture monopoly it is a fact that 'tyranny leaves the body free and directs its attack at the soul'. The ruler no longer says, 'You must think as I do, or die' .. He says, 'You are free not to think as I do, your life, your property, everythmg shall remain yours, but from this day on you are a

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stranger among us'. Not to conform means to be rendered powerless, economically and therefore, spiritually - to be 'self-employed'. When the outsider is excluded from the concern, he can only too easily be accused of incompetence. Whereas today in material production the mechanism of supply and demand is disintegrating in the superstructure it still operates as a check in the ruler's favour. (Adorno and Horkheimer, 1977)

The second moment, upon which increasingly in the actual historical development the former moment has come to depend, is the actual control by capital of the means of cultural production. This moment was underdeveloped at the time when The German Ideology was written but it is now crucial for an analysis of cultural reproduction under monopoly capitalism.2 Within the sphere of cultural production the development of specifically economic, industrial forms was in part possible because at the other moment working-class powers of cultural resistance were weakened. A good example of this is Williams's suggestion that the popular success of ITV and of the general invasion of American commercialized cultural forms was a reaction on the part of the working class to the liberating overthrow of a particular hegemonic cultural formation represented by the BBC. It is in particular on the implications of this second moment that I wish to concentrate, i.e. the effects of the imposition of capital logic upon cultural production. I have indicated there has been a tendency to see such an imposition as ideologically non-contradictory. One must stress at the outset that this is not so. Because capital controls the means of cultural production in the sense that the production and exchange of cultural commodities become the dominant forms of cultural relationship, it does not follow that these cultural commodities will necessarily support, either in their explicit content or in their mode of cultural appropriation, the dominant ideology. Indeed as Terry Lovell has noted and as, once again, Adorno and Horkheimer made clear, the cultural commodity possesses an inherent contradiction, a contradiction which may be profoundly subversive.3 Before turning to the general implications of the proposition that one definition of the control of the means of mental production is the takeover of large areas of cultural production and reproduction by capitalist commodity production, what the proposition leads one to question is that stress on intentionality which we find in theories such as that of Miliband. It is quite clear in Marx's analysis of Capital that he wished to distinguish firmly between the logic of capital and the intention of individual capitalists, even at the economic, let alone the ideological level. The fact that baking, shoemaking, etc. are only just being put on ~ capit~ist basis in England is entirely due to the circumstances that English capital cherished feudal preconceptions of 'respectability'. It was 'respectable' to sell Negroes into slavery, but it was not respectable to make sausages, shoes or bread. (Marx, 1976: 1014, footnote)

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It is perhaps worth noting in passing that this characteristic of British

capital still operates with respect to the media, which carry a certain bohemian, mountebank and marginal reputation. Hence the characteristics of the particular capitalists who started ITV, for instance, or who develop ed the British film industry in the 1930s or the role of colonial capital via Beaverbrook and Murdoch in the British press. Such attitudes still affect the Tory Party in its ambivalent reaction to commercial broadcasting. The function fulfilled by the capitalist is no more than the function of capital - viz. the valorization of value by absorbing living labour executed consciously and willingly. The capitalist functions only as personif ied capital, capital as a person, just as the worker is no more than labour personif ied. (Marx, 1976: 989)

Capitalists, for analytical purposes, are not unified subjects. A given person or group can only be described as capitalist in those momen ts when each is acting in conscious and willed accord with the. logic of capital accumulation. Thus there may well be many such conscio us, willed actions, never mind unconscious actions, that are contradictory to the logic of capital. There may therefore be a clear divergence between the functions of capital within the material process of mental product ion and the conscious, willed intentions of the capitalist or of their ideologues. We cannot predict a priori which at any time will be predominant, e.g. how long a Harmsworth, a Beaverbrook or a Thornson will keep a loss-making newspaper going for reasons of social prestige or political power, although there are always outer limits to such possibilities. There is then (and this cannot be sufficiently stressed) no necessa ry coincidence between the effects of the capitalist process proper and the ideological needs of the dominant class. On the contrary the entire thesis of capital points to the opposite conclusion. This, for instance, affects assumptions concerning the relationship between capital and the State. To take one example, the proportion of the budget of the Central Office of Information that has to be devoted to paid access to the media, i.e. the use of paid advertising for Govern ment propaganda or information, has risen in the last decade from 20 to 50 per cent. Such evidence can be interpreted in two ways. The first, that there is an observable conflict between the ideological needs of the State and the accumulation process within the media sector (leaving aside the question of whether the State is in fact the representation of capital or of the dominant class, and therefore whether such a conflict would represent a contradiction between the economic and ideological needs of that class in general, or whether it would represent a contradiction between the ideological needs of capital in general versus the econom ic needs of a class fraction who control the media sector). Alternatively, this evidence can be interpreted to show the increasing sway of capitali st logic over the political and ideological level, forcing it to work increasingly through direct exchange relations within the economic.

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This question of intentionality within ideological prod~ction is, of course central to the media debate within both the bourgeOis and Marxist pr~blematic. One argument runs the Frankfu rt School way, that the mass media are important because monopoly c~pitalism ~as m~ved from direct coercion of the working class to ideological coercton as tts preferred method of domination, and the mass media or Ideological State Apparatuses are crucial in this process. . . . But do we in fact require this shift onto the terram of tdeology m order to explain the absence of direct coercion? Marx, on th7 contrary • saw the avoidance of such coercion as central to the economic mechan ism of capitalism. That is to say the abstraction of exchange valu~, the wage-form, etc., were in themselves quite powerful en~ugh to ~xplam the dominance of capital, and indeed that this non-co.erctve dommance w~s both historically necessary and progressive. Bourdteu has developed thts general proposition. 4 Thus at the level of material production, of the life process in the the social _ for that is what the process of production is - we find realm of ~he sa.me situation that we find in religion at the ideological level, n~e!Y the. mv~TS!on of subject into object and vice-versa. Viewed historically th!s mvemon IS the indispensable transition without which wealth as such, t.e. the. productive forces of social labour, which alone can form the matenalre~entles~ a free human society, could not possibly be created by force at the ase o expense of the majority. (Marx, 1976: 990)

VII

Let us now turn back to look at intellectual production as a process ~f capitalist production and at the implications for our modes of soctal communication of the subsumption by capital of the real forms of ideological production. . . This needs to be looked at historically. Unlike the capttal logtc or capital derivation school we must not see capitalism as. a mode . of production which arrives sui generis and then sprouts a soc1~ f~rmatl On like dragon's teeth. It is rather a specific form which grew w1thi~ a preexisting social formation and is involved in a process of expanston and conquest of non-capitalist sectors, a process which is incomplete ~nd contradictory. This process of expansion involves both ~he. subsumptton of other areas of material production and pre-capttaltst forms of economic organization and also of non-economic activity under the sway of the economic in its capitalist form. . . When examining mass communication within predominantly capitali st social formations we must not make the mistake of assuming. ~hat t~e! are therefore necessarily capitalist. We cannot make the easy ehston Millband makes between those sectors controlled by private capital and those controlled by the State. Nor can we assume that all non-State ~ec~ors are in fact capitalist. Indeed the relationship between pre-capttalist and

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capitalist forms within the media sector is a significant feature both economically and ideologically, thus the relationship between notions of creative freedom, freedom of the press, the fourth channel debate, community broadcasting, etc. This relationship significantly determines the forms of the struggle within the media over the labour process. Artisanal modes of labour organization ranging from individual craft product.ion, such as the authorship of a book, to the small group, such as the mdependent film company or record producer, remain common and important within the cultural sphere. Such residues have been the focus for struggle against the logic of capital, and have produced a powerful anti-economist cultural ideology. Nonetheless in certain instances such artisanal organization may be functional for capital so long as capital controls the means of mass reproduction of the authorial product and its mass distribution, because it ensures the necessary production of a range of cultural artefacts from which capital can choose without having to bear the risks and overheads which are borne directly by labour. Indeed, the ideology of creative freedom can be used by capital to keep its labour force divided and weak, and with no control over the strategic moments of the total labour process. Thus for instance, while the Open Broadcasting Authority will be fought f~r by cultural workers under the banner of creative freedom and against the apparent interests of capital in the form of ITV, such small-scale freelance production, if it were to be realized, would be more functional for capital in general than an extension of the present structure, because it would open British broadcasting more fully to advertising and to the pressures of the international market. 5 Nor must we make the mistake of assuming an easy equation between private ownership and capitalism. Where capital still appears only in its elementary forms such as commodities . ·. . or money, the capitalist manifests himself in the already familiar character of ~he. o~ner .of money or commodities. But such a person is no more a capitalist m himself than money or commodities are capital in themselves. Th~y become translated into capital only in certain specific circumstances and their owners likewise become capitalist only when these circumstances obtain. (Marx, 1976: 976)

~hat then are these circumstances? The central characteristic of capital growth or accumulation.

IS

In itself .the sum. of m?ney ~ay ~:ml?' ~e. defined as capital if it is employed,

~pent, with the atm of mcreasmg It, If It IS spent expressly in order to increase

~t. !n the case .of the sum of value or money this phenomenon is its destiny, Its Inner law, Its tendency, while to the capitalist, i.e. the owner of the sum of money, in whose hand it shall acquire its function, it appears as intention, · purpose. (Marx, 1976: 976)

Thus to examine the specifically capitalist mode of media production we need to see the ways in which capital uses the real process of media production in order to increase. its value, and grow, and the 'barriers

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which are placed in the way of this process either by the inherent contradictions of the process itself or by external forces. In order to accumulate, capital must bring living labour into the production process by exchanging in the sphere of circulation through the wage bargain. It must combine this living labour in a determinate manner with objectified labour as a means of production (raw materials and instruments) in the production of a commodity in the exchange of which surplus value will be realized. In a fully constituted capitalist mode based upon relative surplus value and competition between capitals this process of growth requires everincreased productivity and ever-widening markets. Historically the sphere of mental production or non-material production continues to present important barriers to this process, and the forms and dynamics of the mass media can in part be understood as resulting from a continuous attempt to surmount those barriers. We thus start from the historical materialist assumption that the development of capitalism or the capitalist mode of production is a contradictory process, and not yet complete. The contradictory nature of the process is in part intrinsic. It is situated in the conflict between capital and labour, ·the conflict between capital accumulation and the socialization of the forces and relations of production, the conflict between the drive to accumulate through the extraction of relative surplus value and labour power as the creator of surplus value, a contradiction expressed in the tendency of the rate of profit to fall. In part the contradictions are extrinsic, that is to say related precisely to the relationship between developing capitalism and the non-capitalist areas of the social formation. The necessary expansion of the valorization process is not a process of automatic expansion; it comes up against social and political barriers; it needs to conquer physical barriers, e.g. communication and transport; it requires the necessary accumulation of capital. We see these contradictions in the field of mass media: 1 in resistances both actual and ideological to the industrialization of the artisanal modes of cultural production; 2 in the conflicts between national and international capitals, sometimes mediated through the State and sometimes direct, e.g. in the split in the Tory Party over the original introduction of commercial broadcasting or in the developing struggle over national versus supranational control of European satellite broadcasting - or in the existence of quotas on the importation of foreign film and TV material; 3 growing Third World demand for a New World Information Order. The problem with cultural and informational goods is that, because their use value is almost limitless (they cannot be destroyed or consumed by use) it is extremely difficult to attach an exchange value to them. They are classic public goods. What we are considering is what Marx called

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'non-material production'. Marx discusses such production in the context of a discussion of the distinction between productive and non-productive labour. In brief, Marx clearly foresaw difficulties in subsuming nonmaterial production under capitalism. He identified two possible forms of such production: (I) It results in commodities which exist separately from the producer, i.e. they can circulate in the interval between production and consumption as commodities, e.g. books, paintings and all products of art as distinct from the artistic achievement of the practising artist. Here capitalist production is possible only within very narrow limits. Apart from such cases as, say, sculptors who employ assistants, these people (where they are not independent) mainly work for merchants capital, e.g. booksellers, a pattern that is only transitional in itself and can only lead to a capitalist mode of production in the formal sense. Nor is the position altered by the fact that exploitation is at its greatest precisely in these transitional forms. (2) The product is not separable from the act of producing. Here too the capitalist mode of production occurs only on a limited scale and in the nature of the case it can only operate in certain areas (I want the doctor not his errand boy). For example, in teaching institutions the teacher can be no more than wage-labour for the entrepreneur of the learning factory. Such peripheral phenomena can be ignored when considering capitalist production as a whole. (Marx, 1976: 1047-8)

This passage would be worth lengthy analysis. At this stage I would only like to point to the following. The relevance of the first example for the debate between Marcuse and Benjamin concerning the role of the aura of a work of art and the effect on that aura of the attempt to subject culture production to the forces of capitalist production. 6 2 The need to look, with reference to the observation concerning the degree of exploitation in this field, at the evidence of the persistent low pay of cultural workers and the extent to which even the most advanced sectors of capitalist cultural production depend upon drawing relative surplus value from sectors which still operate a precapitalist artisanal mode of economic organization. 7 3 The need to examine the relationship between Marx's belief that capitalist production of cultural goods was possible only within very narrow limits, the phenomenon of Baumol's disease (Baumol and Bowen, 1976) and the ever-increasing pressure on the State to intervene in the cultural sector. 4 Similar considerations are raised by Marx's second example where the product is not separable from the act of producing, imposing strict limits to productivity and thus raising relative costs. The economic contradictions that arise from the nature of cultural commodities take different forms within different sectors of the media and at different historical moments. Five main ways have been adopted in an attempt to circumvent the problem.

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Copyright. This is in effect an attempt to commoditize information by turning the author into a commodity. But this only works if either you make the commodity scarce and stress its uniqueness (as in the economics of the art market), or if you control supply, by control of access to the means of reproduction such as printing presses and film laboratories. However, if such control is used to over-price it will encourage the development of pirating alternatives. This is now a major problem internationally for the cultural industries in records, books, films and even TV programmes. 2 Control of access to consumption through a box~office mechanism at the point of sale or through economic control of the channels of distribution, such as newspapers and cinema. The problem here is that such control is resistant to economies of scale and, as the theatre found when faced by the cinema and the cinema when faced by broadcasting, is highly susceptible to competition from more efficient technologies of reproduction and distribution. However, as broadcasting demonstrates, the massive economies of scale produced by these more efficient means of distribution by destroying the box office, and thereby making access open, create major problems at the moment of exchange. 3 Built-in obsolescence, through the manipulation of time. This was the great achievement of the newspaper which, by creating rapidly decaying information, created thereby a constant need to re-consume. But this manipulation of time has its limits, since consumption time is physically limited. (The central importance of time within the economics of the mass media is the subject of my subsequent postscript to this chapter.) 4 The creation, packaging and sale, not of cultural and informational goods to direct consumers, but of audiences to advertisers. 5 State patronage. The inherent tendency towards the socialization of cultural and informational goods has always given the State an important role in this field from the days of direct patronage of cultural workers by King, Aristocracy and Church via the early subsidy of newspapers by governments and political parties, through public libraries and public education, to the key contemporary example of broadcasting. In brief, therefore, the specific nature of the commodity form within cultural production leads to a constant problem of realization and thus to a two-way pressure either towards advertising finance or towards State finance. We find these pressures quite clearly at the moment in the growing controversy over sponsorship in sport and the arts. These pressures raise two questions: in what ways are advertising and State intervention in this sphere functional for capitalism? What are the effect of such pressures upon cultural production itself?

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vm Since all cultural forms are material in the sense that they take time which will only be available after the needs of physical reproduction are satisfied, the material requirements of the cultural process must be extracted as surplus from direct material production. As we have seen this can be done by paying for cultural production directly out of revenue. But as Marx remarked of capitalism in general it has found it more efficient as a means of control to extract surpl~ses directly by means of economic processes. Thus the developments of the capitalist mode of production and its associated division of mental and manual' labour have led to the development of the extraction of the necessary surplus for the maintenance of cultural production and reproduction directly from the commodity and exchange form. But this process will take place only to the extent that: 1 there is surplus capital searching for opportunities for valorization2 t?e a~ticipated rate ?f profit in the chosen sphere of cultural prod~ctlon Is at least as high as that available elsewhere. Where these conditions do not exist cultural processes will have to contin~e to be undertaken ~y the direct transfer of resources, i.e. by the expenditure of surplus. This may take place under the following conditions. 1 By. capitalists as individuals or groups funding such activities, e.g. the classic model of arts patronage. Such a form may be sustained within the contemporary capitalist social formation by means of tax concessions. It may be channelled through charitable foundations, etc. Such funding leads to direct ideological control, legitimated as the cultural extension of private property, namely personal taste. This can give rise to significant political battles, e.g. the debate about costs of the national heritage. ~~amples .within the •field are the direct subsidy of newspapers by political. parties or by politically ambitious individuals, e.g. Beaverbrook, Goldsrrnth, Maxwell, Morgan-Grampian. 2 Via the State. Here electronic communication is the key case. The exact mix in the field of both telephonic and broadcast communication between the State and capital needs examination state by state. As any superficial examination will show, key differences between western Europe ~nd the United Stat~ give the lie to any simple capital logic explanation of how the particular economic and institutional forms ' within which electronic communication has developed, have arisen.

~he explanation of such differences and the present conjunctural rela!Ions be~ween national capitals and the State, between states and between InternatiOnal capital and states in this area would have to take account of the following.

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l The structures of national capitals. 2 The existing State structure, e.g. the federal structures of the USA and Germany as opposed to the centralized structures of Britain and France. 3 The strategic requirements of the State, e.g. the State-inspired creation of RCA as the first step in a long history of the US government's explicit geopolitical involvement in communication, the clearest case of which is satellites, such a policy requiring intervention to restructure national capitals. 4 The balance of forces between capital and the State's assessment of both economic and strategic requirement. Thus at the foundation of the BBC we see an interaction between the needs of the nascent British electronic industry, which the State wished to foster both for strategic and economic reasons, and the industry itself, which was interested only in the sales of hardware, and was able to shift the expense and ideological problems of programme production on to the State. Furthermore, tlie State needed to take account both of the economically and politically powerful British press, which was opposed to competition for advertising and of a culturally conservative and elitist ruling-class fraction. 8 To sum up, the development of the material process known as the superstructure depended upon the availability of a surplus in the sphere of direct material production, i.e. the sphere of the extraction, shaping and consumption of nature. Historically the shape of that superstructure is determined by the social relations of production, because it is these social relations that determine the distribution of that surplus. For example, Athenian democracy as a form of political practice depends directly materially upon the slave economy that supported it by making time available for political activity to a non-productive class. Such directly material considerations remain important. In a planned economy such as the Soviet Union direct choices have to be made between (for instance) producing more shoes or the paper for more newspapers. Such considerations may be acute in the planning of media systems in Third World countries; indeed it is the influencing of such decisions in the interest not of the indigenous economy or social formation but of a foreign high surplus economy that is one of the matters at issue in the media imperialism debate. It is a less obvious form of the starvation caused in some countries by the development of industrialized agriculture serving a world market. Under capitalism the means of cultural production may be provided: either in commodity form as part of the accumulation process (e.g. records): or as part of the realization process of other sectors of the capitalist economy (e.g. advertising): or directly out of capitalist revenue (e.g. arts patronage): or through the State. Each of the above means of surplus distribution to the cultural sphere will differentially affect the ways in which the dominant class controls

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the means of cultural production. Different contradictions will come into play, contradictions which need to be specifically analysed in each case. Not only are these contradictions intrinsic to each subsidiary mode of cultural production but there are also contradictions which arise because of conflicts between them. There is conflict intrinsic to broadcasting, whether state or private, and the press, a conflict in its turn differentially mediated through competition for readers and viewers, and through competition for advertising. IX While drawing different conclusions as to the significance of the phenomenon, both bourgeois and Marxist economists agree that the current phase of capitalist development is characterized by the following key features: I Unprecedented capital concentration in all the key traditional manufacturing sectors accompanied in general by a rising surplus. 2 A resulting problem of valorization which drives surplus capital in search of other areas of investment. 3 An associated development of the so-called service sector characterized by the industrialization of sectors which were either more primitively organized or, as in the sphere of domestic labour, altogether outside the market. All I wish to do now is point out certain key aspects and examples of this tendency. This absorption of the sphere of reproduction into full-scale commodity production is characterized by the following. Increased international competition and the resulting take-over of domestic,. nation~ publishing companies, advertising agencies, private broadcastmg statiOns, etc. by multinational companies. This competition also leads to increasing penetration by international media products, particularly Anglo-Saxon ones. 9 2 A sharpening struggle within cultural production over the labour process in an attempt by capital to increase productivity in a sector notoriously resistant to such increases. This struggle has been most marked recently in the newspaper industry, with the Wapping solution being the most notorious and current example in Britain. 3 Increasingly persistent attempts to open up new markets in order to absorb excess capital. The most obvious example of this is the increasing pressure throughout western Europe to privatize public broadcasting. 4 Attempts to open up new markets for both cultural hardware and software by introducing new communication technologies, such as cable TV, satellites, Teletext, etc. Because of the huge infrastructural

44

Methodology and the mass media investments involved and the comparatively low rate of return on such investments these moves involve close alliances between capital and the State in an attempt to get the taxpayer to carry the cost of the distribution system, while private capital takes the profits from the sale of hardware and from the subsequent development of a consumer durable market in such items as teletex decoders and the products of a software market. The full development of this push into new technologies has undoubtedly been slowed down significantly by recessions in the western economies, but the long-term implications for national cultures, for class cultures and for freedom of expression of all these trends, not only in the Third World where the problem is dramatized as media imperialism, but in the capitalist heartlands, are profoundly significant.

Thus I return to where I started by reiterating tl).at the development of political economy in the cultural sphere is not a mere matter of theoretical interest but of urgent practical political priority. So long as Marxist analysis concentrates on the ideological content of the mass media it will be difficult to develop coherent political strategies for resisting the underlying dynamics of development in the cultural sphere which rest so very firmly upon the logic of commodity production. In order to understand the structure of our culture, its production, consumption and reproduction and of the role of the mass media in that process, we need to confront some of the central questions of political economy in general, the problem of productive and non-productive labour, the relation between the private and public sectors, and the role of the State in capitalist accumulation, the role of advertising within late capitalism. This is the long agenda of this book. As long ago as 1960, Asa Briggs wrote in his Fisher Memorial Lecture: The provision of entertainment has never been a subject of great interest either to economists or to economic historians - at least in their working hours. Yet in 20th century conditions it is proper to talk of a highly organized entertainment industry, to distinguish within it between production and distribution, to examine forces making for competition, integration, concentration and control and to relate such study to the statistics of national income and output, the development of advertising, international economic relations and - not least to the central economic concept of the market which, in the 20th century, is as much concerned with leisure as it is with work. (Briggs, 1960)

Three decades later that research gap remains, and there has been little coherent effort to understand the process known as 'the industrialization of culture', a process of which, as Briggs put it, 'Massive market interests have come to dominate an.area of life which, until recently, was dominated by individuals themselves' (Briggs, 1960).

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POSTSCRIPT: THE ECONOMY OF TIME The special distortions effected upon the cultural industries, treated in all their materiality as aspects of production and accumulation, come out in a historical study of time itself as a feature of the productive and the consuming processes. It is present, of course, as a central issue in Taylorization; it is much more complexly (and uncontrollably) present as cultural superstructure settles into economic base. It becomes more than a contradiction; it is a focus of struggle. Marx is quite clear in the Grundrisse ('Capital is circulating capital', p. 536) that capitalism seen from the point of view of capital is a process which is continuous, circular and through time. That is to say, capital, from the point of view of its own accumulation, is a continuous process of the production of value in a cycle within which the moment of consumption is part of the production process. 'With capital the consumption of the commodity is itself not final; it falls within the production process;. it itself appears as a moment of production, i.e. of value positing.' This is a crucial starting point for any political economy of mass communication because there is a school of thought within Marxism which, as we saw, grounds its distinction between base and superstructure or between the economic and the ideological, implicitly if often not explicitly, upon a fetishized distinction between production on the one hand (the sphere of value creation) and distribution and consumption on the other, placing determinacy within production thus narrowly defined. The opposing school, in arguing against the vulgarity of what they call economism and for the relative or even virtually complete autonomy of the ideological and political levels, adopts the same model but then turns it on its head by arguing for the non-determined nature of consumption. If one returns to Marx's central notion of process or flow such distinctions become invalid. What one wishes to examine is the V:ays in which the dynamics of this flow are determined by the differing moments t~rough which they pass and by the physical, spatial and temporal transitiOn through which capital is forced to pass in its process of selfrealization. . Wi~hin the grand cycle of capital transforming itself through productiOn mto. a .commodity and then realizing itself as money through consumptiOn m order to be retransformed into those commodities needed :or production, there is a whole series of capital circulation itself. There IS competition between individual capitals as well as the different circulating times within various sectors, some external to capital itself such as the biological cycle of labour power (nature in the form of th; cycle of seasons) or as within agricultural production, or even the much longer cycle of the replenishment of other energy sources. Marx himself constantly uses the metaphor of the human body with the differing circulating times of the skeleton, the flesh, the blood.

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It is axiomatic for historical materialism in general and political economy in particular that the dynamics of the whole process can only be understood in terms of the contradictory interaction between moments within the total process. Thus a crisis may be caused by increased difficulties and scarcity in the extraction of raw materials, by limitation of consumption, by political resistance on the part of labour within the labour process, all of which can obstruct the smooth circular flow required for reproduction and accumulation. Within this framework let us examine the problem of time. As Marx wrote in the Grundrisse, 'All economics ultimately reduces itself to economy in time. • Why is time crucial? If we assume a single economy which merely reproduces itself, it is strictly governed by natural, biological time. Generations reproduce themselves within a given time span. Food is reproduced on a seasonal cycle and labour reproduces itself through varying time cycles of energy input and output ranging from a roughly daily cycle of sleep, food and liquid intake through the cycles of biological reproduction to the cycle of life and death itself. At this level the economy is dominated by natural time. If we now move to an accumulating capitalist economy, the basic natural constraints still apply but within these cycles growth is achieved by accelerated internal cycles of production exchange and consumption paralleling accelerated cycles of biological reproduction, accelerated rates of energy exchange with nature, etc. Capital accumulation depends upon productivity which is .~ constant process of attempting to overcome these barriers, of reducing socially necessary labour time, production time and circulation time. As Marx puts it in reference to circulation time, 'Circulation time thus appears as a barrier to the productivity of labour = an increase in necessary labour time = a decrease in surplus labour time = a decrease in surplus value = an obstruction, a barrier to the self-realisation process of capital' (Marx, 1973: 539). In examining the dynamics of the accelera~ed turnover of capital in its process of self-realization we can analyse the separate moments of production (in the sense of the transformation of raw materials into a commodity) and of circulation. Within production such an analysis needs to look at the relationship between forces and relations of production. Within circulation we need to look at what Marx called the locational and temporal moments, referring to the problems both of the actual spatial extensions of the market (the physical transport of goods) and the time expended in commercial transactions (this time refers not to any labour time used in commercial transactions, but to the actual lapsed time expended in transforming a commodity into money and vice-versa, e.g. the time it takes to pass a cheque from one account to another. Costs in these areas were for Marx costs of production; thus labour time employed in these sectors was production of surplus value.) We need to look separately at time lost not in getting a commodity to market or in

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transforming a commodity into mpney, but at the process of circulation itself, that is, to time during which capital lies idle, locked up with commodities on warehouse or storage shelves. This Marx regarded as pure loss. Firstly, and clearly related to the above, we need to look at the time of consumption itself. This is the resistance offered to the flow of capital by the limited capacity of individuals or groups actually to consume the products brought to market. Marx pointed to capital's need for the constant continuity of this process, but also and at the same time to the ways in which the various phases of the cycle were actually separated in time and space and thus appear disjunctive. It is clear from everything said above that circulation appears as the essential process of capital. The production process cannot be begun anew before the transformation of the commodity into money. The constant continuity of this process, the unobstructed and fluid transition of value from one form into the other, or from one phase of the process to the next, appears as a fundamental condition for production based on capital to a much greater degree than for all earlier forms of production. On another side, while the necessity of this continuity is given, its phases are separate in time and space, and appear as particular, mutually indifferent processes. It thus appears as a matter of chance for production based on capital whether or not its essential condition, the continuity of the different processes which constitute its process as a whole, is actually brought about. (Marx, 1973: 535) Marx himself saw the development of credit as the means by which capital in general suspended this chance element. I think it is clear that another major mechanism which has been largely developed since Marx's day is advertising and, of course, State intervention. This brings me to the relationship between this general analysis of the importance of time within the cycle of capital and mass communication. In examining mass communication from this point of view we need first to analyse separately before subsequently combining: mass communication as a particular capital or capitals involved in commodity production, that is to say the effect of attempts to overcome time constraints within their own capital circuits; 2 mass communication, by means of advertising, as a mechanism of capital in general, or of certain particular capitals, for accelerating, within the moment of circulation, the turnover time of capital in general. This means first developing the methodology of Chapter I of Capital and, taking. mass communication as itself a sphere of commodity production, analysing those products in terms of cultural needs (as opposed to needs of subsistence). This has first a historical dimension. That is to say we need to look at the way in which what Marx described as 'the socially posited needs' (which communication, or symbolic cultural interaction, fulfils) were

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progressively satisfied by capital. Marx describes socially posited needs as 'those which the individual consumes and feels not as a single individual in society, but communally with others - whose mode of consumption is social by the nature of the thing' (1973: 532). Let us see cultural goods as 'socially posited needs' in this sense. Marx refers to such needs within a general discussion of the means by which societies provide means of transport. He argues that since means of transport are forces of production it is in capital's interest to develop these, but that in the early days of capitalism there was either insufficient concentration of capital to undertake the task or there might be insufficient relative return on such investment. In such situations the State either steps in as a representative of capital in general to provide the necessary infrastructure, or alternatively the State on behalf of society in general 'still possesses. the authority and the will to force the society of capitalists to put a part of their revenue, not of their capital, into such generally useful works' (1973: 531). For example, in the early days of printing we witness a dual phenomenon. On the one hand the development of a consumer market for books in order to realize the capital invested in the new technology of printing, a process accompanied by acute problems of realization and bankruptcy, on the other hand the State stepping in and effectively subsidizing a sector of the printing trade, the Stationers Company, for ideological reasons. These two aspects of the problem of the development of markets in cultural commodities as part of the realization cycle of capital invested in a new technology, as well as the tension between capital and State, remain centrally important. The second development in the sphere of printing was the newspaper, which from the start was a response of capital to problems in the sphere of circulation. Newspapers first sold commercial intelligence as a function of the development of overseas trade, and second, sold advertisements as a function of the development of internal national markets. However, we cannot look at the development of advertising as merely functional for capital in general, but also as a response within the printing sector itself to its own problems of realization. Only by selling space to advertisers could they overcome the perennial problem of cultural goods production, multiple consumption. They did so by charging advertisers for those. readers who could not themselves be persuaded to pay, and at the same time, by reducing their cover price, achieve those economies of scale which valorized capital investment in new printing technology, and in its turn reduced necessary iabour ti~e in production. However, that capital itself found it difficult to provtde the necessary forces of production is evidenced by the long transitional history, a history which in western Europe still continues, where newspapers still find it necessary to receive subsidies from the State or political parties. Marx himself appeared to foresee a process by which capital steadily took over more and more of what he described as 'the general condition

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of the process of social production'. As he puts it, The separation of public works from the state, and their integration into the domain of works undertaken by capital itself, indicated the degree to which the real community has constituted itself, in the form of capital . . . the highest development of capital exists when the general conditions of the process of social production are not paid out of deduction from the social revenue, the state's taxes - where revenue and not capital appears as the labour fund, and where the worker, although he is a free wage worker like any other, nevertheless stands economically in a different relation - but rather out of capital as capital. This shows the degree to which capital has subjugated all conditions of social production to itself, on one side; and, on the other side, hence, the extent to which social reproductive wealth has been capitalised and all needs are satisfied through the exchange form. (1973: 532)

We can see this process at work (as delineated by James Curran) in the development of the British press in the nineteenth century, a process which carried the expansion of capital into new markets and new sectors of which the so-called industrialization of culture is a part, but a process in which mass advertising joins to general capital accumulation where the urgent need of fixed capital required an accelerated turnover time. Before looking at the development of new recording and broadcasting technology, and the industries based upon them, within the general development of monopoly capitalism, let me turn now to the constraints of consumption time. For the requisite increased productivity and accelerated turnover time of monopoly capital required matching by increased consumption if the circuit of capital was to be completed. (I am not here arguing a unicausal underconsumption theory of capitalist crises, but for the importance of consumption as a moment in the total process.) There are two related constraints on consumption - time and money. While the development of capitalism has in part freed the majority of the population in industrialized countries from direct dependence upon natural cycles, nonetheless the reproduction of labour power is still closely tied to a variety of short-term cycles, from the daily ones of sleeping and eating to weekly or at most monthly financial cycles. Thus a majority of the working population needs to exchange its labour power week by week in order to reproduce itself and its dependents. Within the total cycle of production and exchange, capital's problems of realization relate closely to the time constraints within which consumption must take place. Consumption takes place in real time whether this is immediate consumption - you can only eat and digest so much food in a given time - or less immediate consumption such as socalled consumer durables which have a given Iifespan at a normal rate of usage. One of the causes of capitalist crisis is the different temporal cycles both within and between production and consumption. There is a dialectical relationship between available labour time and available consumption time. Maximum available labour time is limited within a roughly 24-hour cycle by the workers' need for rest and direct

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physical reproduction (eating, fornicating, child care) and, at a historically developed level of capitalist expansion, by the time required for other consumption activities such as shopping, leisure activities in general, media consumption in particular. Lastly, labour time is limited by those activities which are not yet completely within the sphere of exchange such as a range of social intercourse from casual chat to political or union meetings. Parallel to the development of complete time discipline within the work process itself (in order to make available to the capitalist the maximum potential labour power for a given labour time), the capitalist system also requires the imposition of similar time discipline within that moment of production devoted to consumption. This has taken several forms. There has been planned obsolescence or the accelerated turnover time of consumption. We saw this with mass communication in the development of the commodity 'news', with its imposition of a daily (or in radio, hourly) cycle of consumption. There has been the development of forms of popular cultural commodity, such as the tabloid press, much radio and TV programming that requires minimal consumption time, and may be accompanied by other consumption activities (eating, ironing, doit-yourself). These general tendencies have been reinforced by the electronic media, which operate in continuous real-time and thus create instant obsolescence. These processes have been intensified by the more efficient use of non-work time. An example of this is video in the home rather than visits to the cinema, which wastes travel time. We can notice a similar relationship between newspaper consumption and commuting; the ftlling of otherwise 'dead' consumption time. Lastly, we have seen the invasion of the private sphere by the industrialization of, for example, convenience foods, releasing women especially both for use as cheap surplus industrial labour, as well as for other consumption activities. Now the development of mass media into modes of real-time continuous consumption such as 24-hour radio, has led to one of the central contradictions in this sphere, which is an ever-sharpening competition within media and between media and other spheres for a restricted attention span. This competition is constantly raising the real cost to the consumer of each unit of media consumption because of duplication. We have radio and a hi-fi for listening to music, but as our total music consumption time cannot easily rise, then we are perhaps doubling our investment for the same consumption. The consumer resistance that results may manifest itself in various ways: licence evasion; pirating through photocopying and taping; the drift of advertisers to the most effective medium as the cost of each becomes uneconomic. This resistance leads to a polarization of provision. There ensues increased media provision at the top end of the market, where spare

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money and spare time make the higher unit costs sustainable, together with increased loss of variety at the bottom end of the market where the fight for ever-larger markets and their associated economies of scale are the only means of survival. This development leads to viewdata and pay cable TV rather than general provision of domestic telephones or adequate investment in existing public service broadcasting. It is hardly surprising that propagandists of the media industries are the leading prophets of an imminent 'leisure' society. However, what we are in fact getting is, alongside this polarized provision, structural unemployment on similar lines, which does of course make consumption time available, but since it at the same time withdraws consumption resources, is not time that capital can readily exploit for its realization. In this general context it is important to note the acute relevance of Bourdieu's work on the relationship between amounts of available free time and modes of cultural consumption. Thus elite aesthetic forms presuppose ample time and comfort for their consumption. There is also the close relationship visible in public statistics between amounts of cultural consumption in all categories and income groups, reflecting both greater availability of disposable income for expenditure on more materially peripheral forms of consumption, as well as the shorter and less intense work time enjoyed by upper-income groups. Lastly, and relating to both these points, we need to note the relevance of the quality as well as the quantity of available consumption time, or what we might term consumption power. This in turn relates to the organization of time within the work process itself where increased intensity of labour produces tired consumers. There is good evidence that the electronic media, because of their ease of consumption, partly fill up recuperation time. Thus we need, in parallel with the analysis of the work process, to analyse the consumption process in terms of consumption time, consumption power and consumption intensity and, as in analysis of the work process, look at how the mass media structure socially necessary consumption time in ways that are functional to the general reproduction of the capitalist mode of production at the economic level. We not only need to analyse the role of the mass media within consumption in general, and from the point of view of the consumption time of media products themselves, we also need to link this analysis to the cycle of capital within the media sector. Pushing against the barrier of limited media consumption time we have the pressure from particular capitals in competition with each other and in competition with other consumption time, all driving to accelerate the turnover time of their capital. As with capital in general, media capital can do this by shortening production labour time and by expanding consumption both spatially and temporally. All these histories can be written. The history of the British .press in the nineteenth century shows a

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complex dialectic relationship between developments i~ paper ma~ufac ture, in reproductive technology for both words and pictures, and m the development of a mass market with its associated distributi?n syst;m. Along with these developments the processing o~ co?tent (by J~U~~alists) also progressed along classic industrial lines, With mcreased dtvtsio~ of labour within newspaper offices resulting in an increasingly standardtzed product. . Following this long, slow development came a second technologtcal revolution which saw the rapid development of systems by means of which other symbolic forms beside the written word, such as soun?s and moving pictures, could be industrialized; the gramophone, the cmema, radio, and finally television. The gramophone followed printing, of which it is, in a sense, a. form, by producing commodities for direct sale to the consumer. The cmema, on the other hand took over the form of realization of the theatre. Instead of selling a~tual film, it sold access to performances. It did not (because it could not) increase its labour productivity at the point of production; the creation of a fictional ftlm consumes more l~b?ur. than the equivalent theatrical performance, but the gains of productlVlty m the moment of circulation were prodigious. The strips of ftlm could be endlessly and cheaply reproduced in a laboratory and were easily :md rapidly transportable to an audience. Moreover, because the margmal costs of wider circulation were small, greater profits were to be made from wider circulation than from entering another cycle of production. Once an investment has been made in cinemas, surplus value is actually created and realized at the point of consumption, and. this process can be continually repeated without further investment in production it~elf. For two commodities are produced: first, the actual film, the copynght of which can be bought and sold, and second, the actual performance. The constant reproducibility is only limited by the contradictory need within cultural consumption for novelty and difference. With cultural commodities there is a sense in which they are never consumed by each individual consumer without at once satisfying a need and at the same time creating one. Cultural consumption is of its very nature a surpa~s ing, a negation; it is the creation of unsatisfiable needs, the source of Its great attraction for capital. . Following the cinema, radio and TV represented not an tmproveme?t in productivity at the point of production, but a massive and final _gam in the speed of circulation. Circulation time was now reduced to zero. From one point of view radio and TV represented in their sphere the ultimate logic of capitalist development. . . However once TV had achieved, via global satelhte, a commodity circulation 'time which was virtually zero, together with an extension which was virtually total, reaching all consumers within the given market, the barrier to further growth within the media sector became insurmountable. This has resulted in an increasingly sharp struggle both

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between modes of cultural distribution (press and broadcasting) and within modes (TV channels) as well as between conglomerate national or

multinational media capital. These battle for a strictly limited consumption time, a competition which is rapidly increasing the unit cost of media consumption. On the side of private capital this leads to a reinforcement of general tendencies to monopolization so that a given capital can control as wide a span of this consumption time across different modes as possible, while on the part of the State it leads to an increasing need for coherent media policy in order to avoid the wasteful duplication of media investment and to ensure the optimum use of the scarce available consumption time. Notes I For a detailed discussion of this problem see Baudrillard (1972, 1975)). 2 But note Marx's own comments in the Grundrisse (1973: 532): The highest development of capital exists when the general conditions of the process of social production are not paid out of deduction from the social revenue, the state's taxes - where revenue and not capital appears as the labour fund, and where the worker, although he is a free wage worker like any other, nevertheless stands economically in a different relation - but rather out of capital as capital. This shows the degree to which capital has subjugated all conditions of social production to itself, on the one side; and, on the other side, hence, the extent to which social reproduction wealth has been capitalised and all needs are satisfied through the exchange form. (Marx's italics) -· 3 See Lovell (1980) and Adorno and Horkheimer (in Curran et al., 1977: 361): Nevertheless the culture industry remains the entertainment business. Its influence over the consumer is established by entertainment; that will ultimately be broken not by an outright decree, but by the hostility inherent in the principle of entertainment to what is greater than itself. 4 See Bourdieu ( 1971: 183-97):

It is in the degree of objectification of the accumulated social capital that one finds the basis of all pertinent differences between the modes of domination .... Objectification guarantees the permanence and cumulativity of material and symbolic acquisition which can thus subsist without agents having to recreate them continuously and in their entirety by deliberate action; but, because the profits of their institutions are the object of differential appropriation, objectification also and inseparably ensures the reproduction of the structure of distribution of the capital which, in its various forms, is the precondition for such appropriation, and in so doing, reproduces the structure of the relation of dominance and dependence. (p. 184)

5 The Open Broadcasting Authority was an early proposed form of what later became Channel 4. For a fuller elaboration of the modes of labour organization within capitalist cultural industries, see Huet et al. (1978). 6 See Benjamin (1977) for the positive view, and Marcuse (1972) for the negative view. 7 See Huet et al. (1978) for theoretical elaboration, and Krust (1977) for data. See also discussion in Owen, Beebe and Manning (1974), which shows, from a neo-classical perspective, that the so-called economic efficiency of US TV depends upon high unemployment in Hollywood. 8 For a discussion of the relationship between the French State and private capital in the

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development of the electronic audiovisual field in general, see Flichy (1978) and Huet et al. (1978). 9 It should be noted that from this point of view the UK is in a privileged position, since it is second only to the USA as a media exporter.

References Adorno, T. and Horkheimer, M. (1977) 'The culture industry' (abridged), in Curran et al. (1977).

Althusser, L. (1969) Contradiction and Over-determination London: Alien Lane. Baudrillard, J. (1972) Pour une Critique de I'Economie Politique du Signe. Paris: Gallimard. Baudrillard, J. (1975) The Mirror of Production. St Louis: Tela Press. Baumol, W. J. and Bowen, W. G. (1976) 'On the performing arts: the anatomy of the.ir economic problems', in M. Blaug (ed.), The Economics of the Arts. London: Marlin Robertson. Benjamin, W. (1977) 'The work of art in the age of mechanical reproduction', in Curran et al. (1977). Bourdieu, P. (1971) Outline of a Theory of Practice. Cambridge: Cambridge University Press. Bourdieu, P. and Passeron, J. L. (1977) Reproduction. London: Sage. Briggs, A. (1960) Fisher Memorial Lecture, University of Adelaide. Clarke, S. (1977) 'Marxism, sociology and Poulantzas's theory of the state', Capital and Class, no. 2, Summer. Curran, J. (1977) 'Capitalism and the control of the press, 1800-1979', in Curran et al. (1977).

Curran, J. et al. (eds) (1977) Mass-Communication and Society. London: Edward Arnold. Flichy, p. (I 978) Contribution a une Etude des Industries de I'Audiovisuel. Paris: lnstitut National de l'Audiovisuel. Hall, S. (1977) 'Culture, the media and the ideological effect' in Curran et al. (1977) .. Huet, A. Ion, J., Lefebvre, A., Miege, B. and Peron, R. (1978) Capitalisme et lndustnes Culturelles, Paris: University of Grenoble. Krust, M. (1977) Droit au Travail et Problemes d'Emploi du Travail/eur Culture/ du Spectacle et de /'Interpretation Musicale dans la Communaute Economique Europeenne. European Commission. Levant, P. (1978) 'The audience commodity: on the blindspot debate', Canadian Journal of Political and Social Theory. Lovell, T. (1980) Pictures of Reality. London: British Film Institute. Mandel, E. (1975) Late Capitalism, eh. I, London: New Left Books. Marcuse, H. (1972) 'Art as a form of reality', New Left Review, 74. Marx, K. (1959) Selected Writings in Sociology and Social Philosophy, ed. T. Bottomore and M. Rubel. London: Watts. Marx, K. (1962) Preface to a contribution to a critique of political economy, in K. Marx and F. Engels, Selected Works, vol. I. London: Lawrence & Wishart, p. 364. Marx, K. (1973) Grundrisse. London: Pelican. Marx, K. (1976) 'Results of the immediate process of production', in Capital, vol. I. London: Pelican. Miliband, R. R. (1977) Marxism and Politics. Oxford: Oxford University Press. , Murdock, G. (1978) 'Biindspots about Western Marxism: a reply to Dallas Smythe • Canadian Journal of Political and Social Theory, 2(2). Murdock, G. and Golding, P. (1979) 'Ideology and the mass media: the question of determination', in M. Barrett et al. (eds), Ideology and Cultural Production. London: Croom Helm.

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Owen, B., Beebe, J. and Manning, W. (1974) TV Economics. London: D. c. Heath. Smythe, D. (1977) 'Communication: blindspot of Western Marxism' Canadian Journal of ' Political and Social Theory, 1(3). Smythe, D. (1978) 'Rejoinder to Graham Murdoch', Canadian Journal of Political and · Social Theory, 2(2). Thompson, E. P. (1978) The Poverty of Theory. London: Merlin Press. Williams, R. (1977) Marxism and Literature. Oxford: Oxford University Press.

Summer1992

23

The Political Economy Approach: A Critical Challenge Oscar H. Gandy Jr. It is appropriate to begin an article that seeks to claim for political economy a unique perspective or position from which to construct an assessment of the media of information and communication, by a discussion of the origins and recent history of the label. David Whynes (1984) asks that question rhetorically as the organizing principle of an attempt to find a common thread among four quite different approaches currently wearing the title political economy: 1) the Austrian approach associated with Von Mises and von Hayek, which remains critical of neoclassical assumptions regarding equilibrium and rational choice; 2) the Institutionalist school, associated with Thorstein Veblen,J. R. Commons, and J. K. Galbraith, which gives due attention to the role of power in the economic system; 3) Contemporary or Modem Marxist schools, which contend with conceptions of class, and capital as a coercive social relation; and 4) the modern utilitarianism of the Public Choice school, which finds a market of sorts in the process of public policy formation. As a disciplinary label, political economy is experiencing something of a rebirth, becoming almost fashionable. It is not clear whether we are witnessing a fad, something in the way of a marketing ploy where shop is spelled "shoppe" to distinguish it from an ordinary store. If political economy is positioned as an oppositiona I sta nee, opposed to orthodox, mainstream, neo-classical economics, then we may have a distinction with a difference worth pursuing. As we will suggest, much of the effort of political economists is directed toward a critique of the mainstream orthodoxy. Political economists concerned with communication and information are little different. Their critiques are focused on what they see as flaws in theory and method principally demonstrated through comparisons of the ideal. with the reality. At a second level, these critiques attack the normative dimensions of the neoclassical paradigm. This critique includes a direct challenge to the normative basis of the theory as reflected in the assumption of individualistic hedonism. When competition and profit

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Journal of Media Economics

maximization are presented as rational, a critical response seeks to demonstrate that the products of such pursuits are something other than optimal. These examples generally focus on inequality in the provision of information goods and services, distortions in the tabor market, and biases in the coverage of issues of social importance. Above all, as we will suggest, the approach of political economy to the study of mass communication is uniformly critical of the status quo in theory as well as in the systems that the theory seeks to understand. The Importance of Being Critical Lee Thayer's (1983) very provocative piece "On 'Doing' Research and 'Explaining' Things," pointedly challenged some of the rationales given for academic research. Although often denied by its practitioners, in Thayer's view, the primary purpose for doing academic research is the enhancement of the academician's reputation and status. Thayer suggests that we are engaging in a form of self delusion when we equate the growth in the number of books and journals asevidenceof greater progress toward "the truth." Instead, he sees this proliferation as evidence of success within the academy in the generation of self-serving fragmentation. For Thayer, the community of scholars gains in status and security by demonstrating its progress in knowing more and more about less and less, and by pursuing that knowledge with a particular methodological apparatus that allows some to envision certain things with a clarity hitherto unavailable to them, and still not attained by those outside their narrow circles. He repeatedly challenges assertions made within the academy about the higher social purposes for which our inquiry is intended. "It is not for the purpose of satisfying a curiosity, and certainly not for the purpose of enhancing the conditions of neutrons (or even their performance in their fields), that physicists undertake to understand them, but for the purpose of control"(Thayer, 1983, p.88). Thesamemayapplytoacademicresearchers who toil under the banner of politica I economy; although claims of a commitment to improvements in the democratic system, or for a somewhat smaller group, the realization of a socialist ideal, are quite common. The claim of social relevance is frequently made quite explicitly, although the examples oftheirapplication and success are often less than compelling. For example, Step hen Res nick and Richard Wolff (1987), in their doggedly theoretical treatise, echo Marx in suggesting that the reason for interpreting the world is to change it. 'The practitioners of Marxian theory seek rather to win the struggle in theory to establish the theoretical conditions of existence for social changes they favor"(p. 280). In their view, it is clear that Marx's work remains as yet undone. And therefore, for them, the "goals remain of integrating the insights of -specifically Marxian class analyses into the social analyses and programs of complex, multifaceted movements for social change." In a recent book, which develops an institutionalist posture within a radical theory of capitalist hegemony, Douglas Kellner (1990) repeatedly binds his theoretical

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· . with the responsibility for finding ways to overcome the crisis of project th t ~ucha hegemony has produced. Kellner's personal involvement democracy a " . rare attempt t1ve V1'deo and access television represents a somewhat · · Th' · 1·n alterna d · · s to connect radical theory with radical soc1al pract1ce. IS ts by aca em1c1an . •t· · as a recognition of the circumstances that constram the entern~acnlosm · prise. 'd d Outside the Mainstream Circle Paul Attewell's(1984) review of the Ins• ean . . h . t' · the community of radical political econom1sts smce t e stx tes growt'dh m videncc . · h' of a tension between theory and practtce w1t m po l't' 1 tea 1 proV1 eys ~hat is discernable in communications as well. Radical political econom · sed economy is claimed to have a social mission, thus, ra d'tc~ 1 t heory ts suppo to be inextricably linked with radical social practice leadmg to the Iran~ formation of capitalism. Two different kinds of Marxist know_Iedge m~gh! be · · ed·"abstracttheory suchasanalysesofthelawsofmottonofcapttahsm, envtsmn . ' . led " the nature of the state ... and strategic, tactical, or apphed know ge. (Attewell, 1984, p. 257). In Attewell's assessment, the pa~t two decades have been marked by a significant expansion in Marxist theory m all these areas, but this "theoretical movement has been led largely by academics and in the absence of mass movements"(p. 259). It is his view t~at th~ culture of ~he academy explicitly "encourages the separation of strategtc, tacttc~l, an_d apphed theory from the systematic, grand or general theories. A_cademta wtll ten~ to discourage the former while supporting the latter type of mtellectual work Cp. 260). d This position, of course, may be reversed in those few program_s an institutions that make room for scholarship presented under the headmg of policy research. However, radical scholar.: are less likely ~o find support for their research from commercial firms, whtch look to pohcy researchers for argument and evidence in support of a preferred policy optio_n. I~ general however radical scholars iil the academy must meet the mstttuttonal and professi~nal demands for "scientific rigor," which general~ a _variety of defensive strategies, not all of which can be seen as contnb~tmg .to ~he advancement of a cohesive alternative theory. Indeed, the fracttonahzatton criticized by Thayer has come to characterize radical academic scholarship, and is well in evidence on the Left. Attewell suggests that some radical scholars have sought to retain their claims of legitimacy by their selection of the subjects that become the r~s or their quite rigorous and methodologically sophisticat_ed assaultso~ cap1tal~sm. Thus, we find that "Marxist economists and sociologtsts study raasm, sextsm, poverty, crime, poor health care, and mental illness. Using the data ~nd methodology of the orthodox ~ocial sciences, they attempt to dem~nst.rate m a scholarly way that these social ills are necessary products of capttahsm as a system"(Attewcll, 1984, p. 262). This attempt to join the battle on an equal

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footing with the dominant paradigm makes it less likely that radical political economy will ever develop an alternative epistemological posture. And, except for subject matter or emphasis, its contributions may soon become indistinguishable from that produced by scholars in the mainstream. This criticism has been raised with some force against the work of some of the most visible radical scholars theorizing a global economic system. Gary Howe and Alan Sica (1980) challenge the followers of lmmanuel Wallerstein (1984). They reserve special hostility for the sophisticated empiricism of Christopher Chase-Dunn(1989), which they suggest distorts Marx's political economy. Further, this work is seen to be guilty of a form of theoretical reductionism that they claim was necessitated by its reliance on the empiricist methodology of regression. Another strategic response by radical political economists has been to go on the attack and demonstrate in a forceful and compelling fashion that the dominant neoclassical paradigm is fatally flawed, lacks Iogicalconsistency,and faits its own test of falsifiability. Thus, it is argued, one can only explain the continued position of dominance that the neoclassical paradigm enjoys as a function of its status as an ideological tool of capital. In the next section we will explore the core of this critique which has implications for a political economy of mass communication. The Critique of Neoclassical Economics Seven major critiques of neoclassical economics are revealed in the work of political economists: 1. Preferences as given, stable, and comparable cannot be sustained. The primary critique of the mainstream, or neoclassical orthodoxy, is focused on the assumption of stable tastes and preferences, which are determined by forces external to the market. Critics suggest that this is a view that cannot be sustained either logically or empirically. Randall Bartlett (1989) attacks this assumption because his institutionalist critique seeks to demonstrate the presence of power within markets and in relationships that influence markets. Thus, in his view, if the neoclassical model is allowed to declare that tastes and preferences are given, or otherwise free of social influence, then orthodoxy would have successfully excluded power from the market equation. In his assault on the assumption of invariance, Bartlett asks adherents like Gary Becker of the Chicago School to explain how genetics produces such variety in other attributes, but produces such similarity in tastes and preferences(p. 25). He then proceeds to specify and exemplify six different forms of power that can operate to modify tastes and preferences of individuals over time in ways that ridicule any claims to stability. Difficulties with the intcrsubjective comparison of utility are well known(Earl, 1983). Attempts to measure individual preference and to estimate

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the relative value of goods and services involve unreliable and extremely limited exercises in ranking short lists. The "economic man" involved in the act of choosing is supposed to compare each choice as it is made today not only against present options, but against future options as well. It is simply absurd to assume that individuals make such comparisons consistently. Such a task exceeds the mental capacity of human beings. The response that choosers red ucecomp lexity by decomposing a variety of options to a si m plc dichotomous choice between MTV and everything else does not satisfy the critics. Such a position simply cannot be arrived at via the same route by each person:every time the choice is made(to say nothing about similar choices made by different people). Indeed, students of consumer behavior have identified a great variety of decision rules (Wright and Barbour, 1976)that individuals may use from time to time, and they have suggested that advertisers or others interested in influencing those decisions may try to privilege the use of one approach rather than another. Kelvin Lancaster (1981), an influential source of ideas about consumer behavior, asks us to consider the real world of consumer choice where the array of options is continually changing and where price provides only limited information about product quality. Some products have attributes that may be observed following a relativelycostlcss search, others may reveal their qualities only after purchase and use ("experience goods"), and others, "the hidden property goods," may not reveal their qualities even after consumption. The organization oft he market m a kcs access to information about experience goods costly. Thus, promotional campaigns may provide discount coupons as a way toreduccthccostsof gathering information fromexpt?l'ience. Hidden properties, especially if they are, negative, like the cancer associated with cigarette use, rarely have producers willing to facilitate consumer access to such information. We find state action requiring· warnings on labels to be a recognition of the difficulty of information search. The rational search for information about product quality that marginalist theory suggests we all pursue is not one that can be engaged in with any confidence. Far too frequently the consumer must rely upon the self-serving information provided by the producer or distributor of goods who has an interest in hiding some qualities, while placing other attributes up front and center. A similar problem occurs when we deal with information goods, including information about other economic or social choices. Because one cannot read thebookbeforebuying it, werelyuponadvertise mentsortherecomme ndations of presumably uninterested critical reviewers. Very few reviewers tend to comment upon the long term social consequences of reading about sexual violence, or screening pornographic videos. Such choices remain ill-informed by default. lt is generally recognized that individuals value their own consumption in comparison with the consumption of others. What you thought was a substan-

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tial raise is readily diminished in the face of news that your raise was below the norm. A more serious challenge to assumptions of independence and stability that adds weight to the institutionalists' emphasis on the nature of power is the quite substantial evidence that choices are highly susceptible to variations the presentation of equivalent options. The influence of "framing'' has been demonstrated in numerous experiments and surveys by Khaneman and Tversky (1986). This work suggests that objectively equivalent options became differentially preferred as a function of their presentation. The estimation of economic values appears to be linked closely with moral or ethical notions of justice and fairness-moral standards that are increasingly the targets of efforts to produce ideological change, and to generate support for particular public policies. Although the neoclassical camp has responded to challenges to the capacity of individuals to make choices under conditions of uncertainty(Hirschleifer and Riley, 1979), the response is seen to be inadequate because it ignores forces within markets that distribute ignorance in a non-random fashion. There are some actors who have good reason, and sufficient resources to influence the ways in which others perceive their present and future interests and options. The kinds of utility assessment necessary for the efficient equali7..ation of marginal values in a market are seen as being beyond human capacity, and certainly beyond the reach of empirical verification. The problems of empirical verification have much to do with gaping holes in the magic cloak of epistemological superiority, theceterisparibuscondition that never obtains but is used as the escape hatch through which neoclassicism seeks to avoid defeat. 2. Markets are anything but perfect. The recognition that markets are not perfect has led neoclassical economists to develop theories of imperfect competition. However, progress in monopoly and oligopoly theory has been anything but compelling. In the view of one well placed critic, "at present, oligopoly theory consists of a large number of stories, each one an anecdote describing what might happen in some particular ·situation"(Fisher, 1991, p. 200). This approach, not all to~her different from the methodological preference for argument through exemplification that is characteristic of much critical work in political economy, lacks generality. In Franklin Fisher's view, it tells us what may or can happen, not what must happen. "I think game-theoretic oligopoly theorists are studying the wrong thing. They are accumulating a wealth of anecdotal material about one-shot oligopoly games when what one wants to know concerns the factors that lead the collusive to be chosen in repeated games. So far as I can see, modern oligopoly theory has made little progress on that centrally important question" (Fisher, 1991, p. 206). Some communications markets arc imperfect in their creation because the regulatory infrastructure limits the number of organi7..ations that can provide service within a jurisdiction. Although arguments about the existence of

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"natural monopolies" are found wanting in the face of technological alternatives, there is unlikely to ever be a '1arge number" of suppliers of telecommunications in a particular geographic market. And, because of a continuing and perhaps structurally determined tendency toward merger and acquisition, large conglomerates seem likely to dominate the communications ind~stry. Thus because communication and information markets tend to be h1ghly conc~ntrated(Busterna, 1988) and unstable, neoclassical.scholars in this field are especially burdened by the underdeveloped state of theory. 3. Public goods, especially infonnation, generate critical distortions. Robert Babe's (1983) radical challenge to telecommunications policymakers utilized the relatively w'clfk·nown but troublesome attributes.£[information as an essence, a natural resource, a product of jabor, and perhaps ultimately, a commodity to demonstrate the difficulties its status as a public good represents for economic analysis ( Machlup, 1979). As a publicgood, information presents considerable challenges to the idealized neoclassical marketplace. Consumption of information is non-rivalrous to the extent that consumption by one does not significantly reduce the possibility of consumption by an~th~r. These ~me attributes make it difficult to exclu_Qg_non-payers from en)Oytng the d1rect benefits of consumption, especially as the ease of reproduction makes acceptable copies readily available. Indeed, because the cos~of additional copies or exposures approaches zero at some scale, and because the demands of efficiency in a fully competitive market wou Id move market price to cost, information markets without access constraints guaranteed by state action would be doomed to faiL As with a great many goods and services, the production or consumption of information goods and services may generate costs or benefits for others not part of the market transaction. We are all familiar with the example of pollution where the upstream producer is able to assign costs to the trout anglers downstream. And, because the anglers are unaware of what is causing their increasingly terrible "luck," they are unable to pay (or threaten) the polluter in order to get him to desist. Similarextemalitiesabound with regard to information goods and services. Broadcasters seeking to produce a male audience for sale to advertisers of razors and shaving cream may provide an endless supply of programs with scantily clad "damsels in distress." The social costs in terms of male perceptions, female self images, and the relations between the sexes are unlikclytobcincluded in the accounting models used bytheaudienceproducers. Benjamin Bates (1988) discusses the exteJDal or "ancillary values" as largely remaining "external to theoretical models." Yet these externalities are seen to result in an oversupply of material with negative consequences, and an undersupply of material with positive social consequences. Considering the extent to which externalities, positive and negative, represent unmeasured, indeed unconsidered influences on the valuations by rational actors (both

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producers and consumers of information), neoclassical economics is unable to recommend strategies that would produce a superior market result. Critics of the neoclassical orthodoxy arc quick to add that problems in the marketplace are. not easily corrected by tinkering. Because there is a well ordered set of requirements for the market to produce its most efficient, or Pareto optimal, outcome, the absence of any one condition may lead to a result that is actually worse than that which obtained before any intervention. Policymakers at the Federal Communications Commission (FCC) and within the Department of Commerce (NTIA) have debated the consequences of moving toward greater competition within the US telecommunications market while European competitors retain substantial state involvement (Aronson and Cowhey, 1988; Kwerel, 1984; USOfA, 1990). In their view, American firms. would becompetitivelydisadvantaged (Johnson, 1984).And, as the boundaries of the relevant market are expanded by globalism, the number of actors, public and private, with the power to influence the market increases dramatically. Efforts to establish regional trade zones, with their own regulatory regimes, complicates the problem still further. 4. Institutions, not individuals, are the dominant forces in the political economy. Another key element in the institutionalist critique is the claim that large organizations, including transnational conglomerates, rather than small entrepreneurial firms dominate the modem capitalist economy. At one level this critique is linked to the challenged assumption of autonomous individual rationality. These firms as economic actors represent decision making by committee-a process that is nowhere represented in the theory of the firm. Critical challenges to assumptions of profit maximization only begin to specify the problems of decision making that involve the identification of goals and strategies. This process is marked by conflict, agreement, and collusion between coalitions and the production of indirect influence (Stinchcombe, 1990). Recent work on coordination between firms(Badaracco, 1991) describes the ways in which information flows between firms that blurs the boundaries between them. These strategic alliances do great violence to Adam Smith's privileged concept of individualism. Indeed, Badaracco suggests that we think of "modern firms as Renaissance city states: tiny sovereign, but porous boundaried entities characterized by strategic alliances maintained by leaders like the Medici of Florcnce"(Badaracco, 1991, p. 13). This is a serious challenge to the coordination of global markets: "If a firm is a citadel, its executives can be held accountable for compliance with laws and regulations. But in a network of shared authoriiy, where, in Harry Truman's phrase, does the buck stop? Moreover,iffinnsarenotseparatespheresofmanagerialcontrol,b uteconomic, political and social complexes linked to many other bodies in society, their political power may increase, and they may claim more persuasively to reprc-

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sent the broader interests of society and not just their shareholder's financial interests. What is good for General Motors, it will be argued anew, is good for the country" (Badaracco, 1991, 153-154). We may also find similar arguments are made by firms like Time-Warner, which will justify movement toward unimagined organi?.ational scale as being consistent with maintaining the competitive position of American media in the new global market (Smith, 1991). S. There is substantial market power, the ability to influence price and supply. That there is substantial market power is rarely questioned these days. The regulatory debate now turns on questions of whether competition is even possible, whether markets arc "contestable." This is a far, far cry from the neoclassical ideal. The existence of super-profits is generally taken as evidence of market power, or at the very least, evidence of the existence of barriers to market entry that allow dominant firms to restrict supply and maintain prices above cost. The very substantial level of profit or return on capital in the communications industry in part explains the recent investor interest in communications media. For some critics, this displacement of professional ideals with a "bottom line mentality" has led to a decline in the editorial vigorof news (Hennan and Chomsky, 1988; lssacs, 1986; Lee and Solomon, 1990), and a stifling of programming innovation and a failure to realize the potential diversity that the new technologies make possible(Meehan, 1988). 6. A stable equilibrium is never achieved. The critique of equilibrium economics finds its base in the denial of key neoclassical assumptions about the rational and knowledgeable actor, but adds further that the very notion of a static equilibrium is useless in an economy that is dynamic and variable over time (Shackle, 1973). Communications markets are anything but stable. Each day brings word of a new productorservice,every other day brings news of a merger or a joint production agreement. Each of these changes, actual or merely suggested, must influence the "expectations" of economic actors, which will be reflected in supply, demand, and attempts to influence the market through the regulatory infrastructure.

J 7. The slate is not an objective , unbiased inlervenor. In the best of all worlds for neoclassical theory, the government might act as an objective guarantor of contracts, and would intervene only when absolutely necessary to correct extreme imperfections in markets, or to provide only the essential public goods like national defcnse. lt seems that the reality could not be further from the truth. Institutionalists provide a never-ending stream of examples of state involvement on behalf of particular interests. Amitai Etzioni(1988) devotes a chapter of his book on "socio-economics" to an analysis

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of political power and !!s relationship to market power. Etzioni focuses on the efforts by firms to gain or maintain market power by influencing government policy. He demonstrates that this attempt to produce influence is actually a model of utilitarian rationality, as dollars spent influencing the state produce greater returns tothe firm than similar amounts spent improving product quality, or lowering production costs. Marxist scholars argue that the sta~e really needs little pushing to get it to influence the market on behalf of domestic corporate interests. Guback (1987) has writte..!!_extensively on the efforts of the government to ensure the viability of the film and video indu~try in t~e domestic market, as well as in the international arena, where Amencan film IS thought to play a vital ideological role. Vincent Mosco (1989)covers much oft he same ground as the institutionalist arguments forwarded by Roger No11(1986) in attempting to find the best model to explain the nature of influence in the formation of telecommunications policy. Mosco privileges the influence of a dominant social class, while Noll finds constraint in the nature of the pOlicy process itself. Neither question the existence and critical force of state action on communication and information markets.lndeed, in a unique assessment of state action in Singapore, Wai-Teng Leong (1989) describes a variety of ways in which the government's efforts to improve the economic returns to tourism have resulted in the construction of national cultural identities for sale. Although the efforts of.! he state have been justified in terms of their primary orientation to the foreign consumer, there is evidence that domestic experience and understanding of culture is also distorted when the "official definitions of cultural traditionsand identity override the lived traditions and collective memory''(Leong, 1989, p. 87) of particular ethnic groups. Finding a Radical Political Economy of Communications In 1983, Dallas Smythe and Tran Van Dinh suggested that Marxist critical scholarship in communications was largely divorced from the mainstream of Marxist scholarship-a point Smythe made forcefully in his earlier contribution to the "blindspot" debate (Smythe, 1977). Only Herbert Schiller had been identified in Oilman and Vernoff's anthology (1982) of Marxist and critical scholarship being produced in American universities. A very few additional names could be added to the list by scanning Armand Mattclart and Scth Siegclaub' s import ant collection, Communication and Class Stuggle, published in 1979. Leadership in the development of a radical political economy of communication has come primarily from Europe: from the extensive writing of Armand Matellart in France, and from others more readily accessible to the American academy because they have written in English- the Marxist and neo-Marxist scholars in the UK (Becker, 1984). An early statement of position of those siding with political economy, against the rising prominence of cultural

studies and textual analysis, was presented by Graham Murdock and Peter Golding (1979). The contributions of this group to the Open University course on mass communication and society includes an important piece by Graham Murdock (1982) that explores differences within the radical critiques of capitalism, and between them and pluralist analyses of industrial society. An early statement of a claim on this terrain was offered by Nicholas Garnham (1983) in the second issue of what has emerged as one of the few journals regularly publishing a political economy of communication, Media, Culture and Society. Garnham extended this analysis and critique in his contribution to the special issue of the Journal of Communication devoted to an assessment of "Ferment in the Field"(1983). A collection of Garnham's work has been published recently by5age(1990) in a volume that includes a richly detailed piece on the economics of the US motion picture industry. This chapter extends the relatively unique perspective on the American film industry taken by Thomas Guback (1%9, 1976, 1987), and some of his students (Wasko, 1982). In addition to Media, Culture and Society, a series of volumes edited by Vincent Mosco and Janet Wasko have been a reliable source of studies taking a critical or radical approach to the study of communications. Kurt Miller and Oscar Gandy (1991) have examined the dramatic increase, between 1973 and 1977, in the number of articles in mainstream communications journals that have dealt with economic issues. Part of their analysis of Journalism Quarterly, Journal of Communication, and the Journal of Broadcasting & Eledronic Media included a comparison of the methodological approaches that characterized these articles. Significant differences were identified between journals, with the Journal of Communication(jOC) apparently favoring the critical/theoretical over the empirical tendencies characteristic of neoclassical economics. These differences, although statistically significant, do not suggest that only the JOC was receptive to political economy approaches. Further analysis is likely to suggest, however that outside the pages of Media , Culture and Society, explicitly Marxist studies of communications markets are exceptionally rare. Traditional Marxist Studies The Labor Theory of Value remains one of the principle differences between Marxist and neoclassical views, and even within the radical camp, between Marxists and radical institutionalists. Whereas the orthodox view concentrates on the individual's rational choice making, which leads to a concentration on demand, the Marxist view, reflecting its heritage in classical political economy, privileges production, and labor as the source of all value, and the capitalist relation as one that involves the exploitation of the surplus generated by that labor. Although there is considerable difficulty in establishing its basis in some objective ultimate unit, the classical view can be readily contrasted with the more subjective assessment of value presumed to underlie the differential utilities of individuals. This emphasis on the produc-

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tion side finds Marxists persuing a unique approach to evaluating the productivity of tabor. Within classical Marxist theory, a distinction can be maintained between productive and unproductive tabor, which is occasionally confused with mainstream notions of productivity. The Marxist definition has to do with the production of surplus value, that is defined as being in excess of that requir~ for the reproduction oft he la borer's capacity to work. The orthodox measure IS concerned with the relationship between output and tabor hours expended. Arguments about the correct identification of the tabor force in the emerging "information economy'' reflect the dual usage of the term (Arriaga, 1985; johnscher, 1983; Resnick and Wolff, 1982; D. Schiller, 1988). Workers who are involved in market coordination, including market research and advertising, as well as managers within the firm are classified as unproductive workers in that they make no actual contribution to an expansion of surplus. A rather unique example of the application of Marxian analyses to the study of mass media can be found in Sut jhallyand Bill Livant' s (1986) extension of Dallas Smythe's initial representation(1977) of the television audience as tabor producing surplus value for capital. Applying the fundamental Marxian notion of a labor theory of value, which emphasizes the exploitative character of capitalist relations, jhally and Livant take the metaphor of "watching as working" and use it to pursue the "valorization" of the tabor power of television audiences. Of course, Marxists are not alone in recognizing that the product of broadcasting is not the programs but the audiences that are made available to advertisers for a fee reflecting their use value. Unfortunately, jhally and Livant somewhat hurredly sidestep thedefinitional morass involved in specifying the amount of "socially necessary tabor time" and the nature of the "payments" that are exchanged against audience tabor. It is merely assumed that audiences watch programs in exchange for the pleasure, stimulation, or relaxation they derive from them. Viewing of commercials is identified as the work that IS performed by audiences in exchange for this entertainment. Exploitation of.the surplus value is said to be generated when audiences watch more commeraals than are necessary to cover the cost of program production. This view allows jhally and Livant to describe audience segmentation and targeting as modifications of the audience production process, where the amount of surplus value or the rate of exploitation is increased through greater productive efficiency. Along similar lines, it might be argued that people meters and other audience measurement technologies increase the ability of capital to monitor and discipline this tabor force (Candy, 1990). Marxists criticize the dominant orthodoxy for its a historic character. This critique is not"simply a challenge to static equilibrium analysis, but is based on a recognition that present circumstances, including individual consciousness, have a basis in the recent and historical past. It becomes important for political &onomy to take into account the circumstances that surely precondition, if not

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fully determine, the limits of human agency. This view reflects the ofH:ited reference to Marx's claim that people make their own history, but it is not made according to their own design, nor in circumstances of their choosing. T~is recognition of the importance of historical processes leads some analysts, hke Nicholas Carnham (1990), to remind us that capitalism is an economic relationship as well as a status, and it is continually being transformed. The challenge for a Marxist or materialist theory is to describe the ways in which more and more activities are incorporated i~to the capitalist sphere of production. Kevin Robins and Frank Webster(1988) provide one such analysis. Their explication of a theory of mobilization and a spread of capitalist influence into all aspects of "everyday life" has been influential in emerging critical studies of privacy and surveillance (Candy, 1989; Novek, Sinha, and Candy, 1990). lnstilutionalist Analyses of Media As we have suggested, the institutionalist critique of neoclassical economics challenges the mainstream assumption of individual autonomy, and entrepreneurial rationalism as governing the behavior of the firm. Kyun-Tae Han' s (1988) analysis of the composition of the boards ofdirectorsofmajorm ediacorporationsisan exampleofastudytha trcinforces our awareness of the constraints on autonomous choice. Han characterizes the relationship between organizations and their boards (which has broader implications for the structure of an economy governed by a network of interlocking directorates) as one of resource dependency. The composition of the corporate boards tended to reflect the economic status of the firm, where board members were selected upon the basis of their ability to assist the organization negotiate particular obstacles.lt is well recognized, however, that board members of one organi7.ation are most likely to be members of other organizations, including some of these that might conceivably be in direct competition with a particular firm. On the basis of his analysis of the composition of the boards of directors of the top 100 media firms in the US, Han concludes that traditional concerns about antitrust are too narrow given the possibility that "interlocking directorates may cause conflicts of interests in the flow of information and expression"(Han, 1988, p. 97). The question of interlocking directorates has been addressed in a long stream of studies by C. William Domhoff, his students, and followers(Domhoff, 1978, 1980). This "power structure analysis" is a form of institutionalist critiq~e that serves as a starting point for many contemporary studies of the US med1a system. The approach of power structure analysis is an examination of the processes of coordination and the production of elite influence. The focus on market concentration characteristic of the studies of Bagdikian (1987), Compaine (1979), and Bustcrna (1988) is considerably more narrow. Questions of ownership and control of media organi7.ations is at the core ofMurdock's (1982) evaluation of the four competing approaches to an analysis of corporate control. Murdock examined available data about the nature of

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control in order to address the conflict between Marxist assumptions about capitalist control and emerging theories about a managerial revolution associated with the classic studies of Berle and Means 1968). Murdock interprets his findings as supporting instrumentalists' arguments about continuing control by owners who operate their firms "in the interests of the capitalist class as a whole"{ Murdock, 1982, p. 137). The Role of Media in a Critical Political Economy The role of the mass media in a capitalist political economy represents a unique critical problem that is based in part on the dual, conflicting, and perhaps at times contradictory role of the entrepreneur. The media are seen to havean economic as weJJ as an ideological role. Although Marxist theory in its harshest statement identifies the mass media as "tools of the ruling classes," more mature theoretical discourses seek to develop a way to understand how the media can, from time to time, produce material that is highly critical of key aspects of the capitalist social order. Douglas Kellner (1991), in his version of Gramsci's theory of hegemony, emphasizes the fact that hegemony is dynamic and reflects changing response to chaJJenge and opposition. Kellner's hegemony stops short of pluralism in that these changes never depart very far from providing support of essential "truths" about human nature, markets and thedemocraticstatethatguarante es them, and form the core of the dominant ideology. It is this notion of an unchaJJenged core that allows the Marxian critique to incorporate evidence of media criticism ofbusiness. Although there is evidence that there is considerable criticism of business in general, especially with regard to environmental poJJution, we have also seen evidence that business has been able to mobilize successfuJJy to provide-a corrective that operates within the market system (Drier, 1982:). Assessing the Political Economy of Communication and lnfonnation Mark Blaug (1983) has offered his own appraisal of what he identifies as "radical economics" by applying a standard that some may deny as applicable to some forms of radical political economy. The first basis, reflecting a Popperian (Popper, 1963} heritage, is a standard offalsificationism.lt is only problematically applied in comparisons when two research programs have different variables and assumptions. For example, the orthodox view takes preferences as given, whereas the radical political economist sees preferences as dependent variables influenced by the actions of capital. Comparison is possible only in those places where theoretical domains overlap, and alternative models can be argued logically and then tested empirically. However, many radical theorists n'jcct empiricism, preferring therationalist discovery of the essence, rather than the surface appearances captured by data. Resnick and Wolff (1989; Wolff and Resnick, 1987) seek to carve out an

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epistemological space for their Marxian political economy that they charcterize as antiesscntialist, which emphasizes the overdetermined nature of social reality. They claim that their epistemology is neither empiricist nor rationalist, but an unconventional form of relativism. Almost by definition, this standard makes comparative evaluation impossible el(cept from the perspective of theorists interested in generating conditions that support the predominance of their theoretical position. Resnickand Wolfrs work to develop a Marxist theory will succeed when it displaces not only neoclassical theory but other Marxist · theories from the ontological stage. Even if we were to limit our evaluation to an empiricist mode, the only test that might satisfy competitors is one of prediction, where the non-obvious predictions from theory are evidenced in what can generaJJy be accepted as data. The difficulty here is in terms of what we might accept as evidence of successful prediction. There are no standards, other than those that develop conventionaJJy, for assessing the power ofan analytical model in predicting the outcome of a process that consistently defies rational assignment of the ceteris paribus cloak. The behavior of economic systems cannot be tested according to the rules of laboratory experimental designs. It is only random assignment to test conditions that fuJJy supports the assumption that "a)) other conditions are equal." The statistical alternative of partialling variance is an inadequate substitute because it depends upon assumptions about the sample and the completeness of the model's specification that are either not assessed or are treated as adequate given constraints. Further, the assessment of empirical support is a rubber ruler at best. For some analyses, R-squared is frequently in the range between .90 and .97; for other more complex, and thereby more theoretically interesting, systems of influence, the range between .20 and .27 is more common. Are any of these coefficients truly evidence of predictive utility and explanatory power? Should one of us be so motivated to pursue a meta-analysis of the explanatory power claimed in neoclassical and alternative economic analyses that report statistical data, what could we conclude beyond the fact that they appear to differ? At the end of the day, one can only evaluate the contributions of a radical political economy in terms of its ability to influence our construction of reality. Radical political economy is and has been a reliable source of challenges to orthodoxy as weJJ as the political status quo.It enjoys this influence most often when its analyses havethecompellingcharacteran d appearanceoftruth; when it leads those within and outside the radical camp to agree that the argument makes sense, and that the representation of reality is accurate, even if not comprehensive. Its greatest accomplishments are seen not when it produces agreement and consent, but when it disturbs consensus; when it challenges the conventional, and generates uncertainty, debate, and the search for more information.

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References Aronson, Jonathan, and Peter Cowhey. Whm Countries Talk: lntt:rnational Trade in Telecommunialtions Services. Cambridge, Mass.: Harper and Row, 1988. Arriaga, Patricia. "Toward a Critique of the Information Economy," Media, Culture and Society 7:271-96 (1985). Attewell, Paul. Rlldical Political Economy Sina the Sixties. New Brunswick: Rutgers University Press, 1984. Babe, Robert E. "Information Industries and Economic Analysis," in 0. Gandy, P. Espinosa, and J. Ordover, eels. Proceedings from the Tmth Annual Telecommunialtions Policy Research Confrnna. Norwood, N.J.: Ablex, 1983. Badaracco, Joseph. The Knowledge Link: How Firms Compete Through Strategic Allumces. Boston: Harvard Business School Press, 1991. Bagdildan, Ben H. The Meditr Monopoly. 2nd ed. Boston: Beacon Press, 1987. Bartlett, Randall. Economics and Power: An Inquiry into HumRn &/Qtions and Mlirkets. New York: Cambridge University Press., 1989. Bates, Benjamin J. "Information as an Economic Good: Sources of Individual and Social Value," In V. Mosco and J. Wasco, eds. The Politiall Eamomy of lnformRtion. Madison: University of Wisconsin Press, 1988. Becker, Samuel. "Marxist Approaches to Media Studies: The British Experience," Critiall Studies in Mass Communialtion 1: 66-80(1984). Berle, Adolf, and Gardiner Means. The Modem Corporation and PrilXIte Property. New York: Harrourt Brace, 1968. Blaug, Mark. "A Methodological Appraisal of Radical Economics," in T. W. llutchinson and A. W. Coats, eds.MethodologiallConlrovasy in Economics. Greenwich, Conn.:JAI Press, 1983.

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Domhoff, C. William. The Powers That Rt. New York: Vintage Press, 1978. Domhoff, C. William, ed. Power Structure &search. Beverly llills, Calif.: Sage, 1980. Drier, Peter. "Capitalists vs the Media: An Analysis of an Ideological Mobilization among Business Leaders," Medill, Culture and Society 4: 111-132 (April, 1982). Earl, Peter. The Economic /mRgination. TOWilrdsiZ Belllluioral AMlysisofChoice. Armonk,N.Y.: M.E. Sharpe, 1983. Etzioni, Amilai. "Political Power and Intra-Market Relations," in The Moral Dimmsion: ToWGrd 11 Ntw Economics. New York: The Free Press, 1988. Fisher Franklin M. "Games Economists Play: a Non-cooperative View," in J. Monz. ed., Jndust;illl Organiz.Gtion, Economif and the Law. Collected P11pers of Franklin M. Fisher. Cambridge, Mass.: MIT Press, 1991. Gandy, Oscar H. Jr. 'The Surveillance Society: Information Technology and Bureaucratic Soda! Control," Journal of Communication 39(3): 61-76 (Summer 1989). Gandy, Oscar H. Jr. ''Tracking the Audience," in J. Downing, A. M?hammadi, and A. Sreberny-Mohammadi, eds. Questioning the Medill. A Criticallntroductron. Newbury Park, Calif.: Sage, Inc. 1990. Garnham, Nicholas. "Contribution to a Political Economy of Mass Communication," in Gzpitalism and Communication: G/obtll Cui ture11nd the EconomicsoflnfOrmRiion. London: Sage, 1990. Garnham, Nicholas. "Contribution to a Political Economy of Mass Communication," Medill, Culture and Society 1(2): 123-146 ( 1979). Garnham, Nicholas. ''Toward a Theory of Cultwal Materialism," Journal of.Communiallion 33: 314-329 (Summer 1983). Carnham, Nicholas (edited by Fred lnglisl. Gzpitalism and Communication: Globtll Culture and the Economics of Education. London: Sage, 1990.

Busterna, John C. "Concentration and the Industrial Organization Model," in R. Picard, ]. Winter, M. McCombs, and S. Lacy, eds. Press Conantration and Monopoly: Ntw Perspectives on Newspaper Ownership and Operation. Norwood, N.J.: Ablex, 1988.

Cuback, Thomas. Tht International Film Industry. Bloomington: Indiana University Press, 1969.

Chalmers Johnson, ed. The Industrial Policy Dtbtlte. San Francisco: Institute for Contemporary Studies, 1984.

Guback, Thomas. "Government Financial Support to the Film Industry in the United States," in B. Austin, ed. Cu"ent &search in Film: Audiences, Economics and Law. Vol. 3 · Norwood, N.J.: Ablex, 1987.

Chase-Dunn, Christophcr. Global Formation: Structures of the World-Economy. Cambridge, Mass.: Basil Blackwell, 1989. Compaine, Benjamin M., ed. Who Owns the Media: Conantration of Ownership in the Mass Communications Industry. While Plains, N.Y.: Crown Publishers, 1979.

Guback, Thomas. "Government Financial Support to the Film Industry in the United States," in B. Austin, ed. Cu"ent &search in Film: Audienas, Economics, and Law. Vol 3. Norwood, N.J.: Ablex, 1987. Guback, Thomas. "Hollywood's International Market," in T. Balio, ed. The Amerialn Film

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Hcrman, Edward, and Noam Chomsky. Mllnufacturing Consmt: Th~ Politiazl Economy of th~ M115s Mtdill. New York: Pantheon Books, 1988.

Miller, Kurt, and Oscar 11. Candy Jr., "Paradigmatic Drift: A Bibliographic Review of the Spread of Economic Analysis in the Literature of Communication," Journalism Quarterly 68:663-671 (Winter, 1991).

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Mosco, Vincent . "Perspectives on the State and the Telecommunications System," in The Pay-Po- ~ty: Computers & Communiallion in the Information Age. Norwood, N.J.: Ablex, 1989.

Howe, Gary, and Alan M. Sica. "Political Economy, Imperialism, and the Problem of World System Theory," Cu"ent Pmpt!ctivts in Social Theory 1:235..286 (1980).

Mosco, Vincent. '1ntroduction: Information in the Pay-per Society," in V. Mosco and J. Wasco, eds. The Political Economy of Information. Madison: University of Wisconsin Press,

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Jonscher, Charles. "Information Resources and Economic Productivity," Information Economics and Policy, 1:13-35 (1983). Kahneman, Daniel, and Am os Tversky. "Choices, Values and Frames," in N. Smelser and D. Gersten, eds. Bthallioral and Social Sc~nu: Fifty Years of Discovtry. Washington, D.C.: National Academy Press, 1986. Kellner, Douglas. T~lt'oision and the Crisis of D~ocracy. Boulder, Colo.: Weslview Press, 1991.

Kwerel, Ewan. Promoting Competition Piecemeal in International T~lecommunications. Washington, D. C.: FCC Office of Plans and Policy. (December 1984). Lancaster, Kelvin. '1nformation and Product Differentiation," in M. Galatin and R. Leiter, eds. Economics of Information. llingham, Mass.: Martinus Nihjoff, 1981.

Lee, Martin, and Norman Solomon. Unrelillbl~ Sources:· A Guide to Detecting Bias in News Mtdia. New York: Carol Publishing. 1990. Leong. Wai-Ten g. "lhe Culture of the State: National Tourism and the State Manufacture of Cultures," in M. Raboy and P. Bruck, eds. Communication For 11nd Ag11inst D~mocr11cy. Montreal: Black Rose Books, 1989. Machlup, Fritz. "Uses, Value and Benefits of Knowledge," Knowledg~. Cre11tion, Diffusion, UtiiWition 1:62-81 (5<-ptember 1979). Mattelart, Armand, and Seth Siegelaub, eds. Communication 11nd Clllss Struggle. Vol. 1 Capitalism, Imperialism. New York: International General, 1979. Meehan, Eileen R.. "Technical Capability Versus Corporate Imperatives: Toward a

Murdock, Graham, and PeterGolding. "Capitalism, Communication and Oass Relations," inJ. Curran, M. Gurcvitch, and J. Woolacott, eds. Mllss Communiaztion and Society Beverly Hills, Calif.: Sage, 1Y79. Noli, Roger. "The Political and Institutional Context of Communications Policy," in M. Snow, ed. Mllrkt!tplaa for Telecommunications. New York: Longman, 1986. Novek, Eleanor, Nikhil Sinha, and Oscar Candy. "The Value of Your Name," Media, Culture 11nd Soc~ty 12: 525-543(1990). Oilman, Bcrtcll, and Edward Vertoff. ~ lLft Aazdemy: Mllr:rist Scholarship on Amo-ican Campuses. New York: McGraw-Hill, 1982. Popper, Kart R. Conj~ctures and Refutations: The Growth ofSc~ntific Knowledg~. New York: Harper & Row, 1963. Resnick,Stephen, and Richard Wolff. "Oassesin Marxian Theory," ReTJiewofRDdical Political Economics 13(4) 1:18 (Winter 1982). Resnick, Steven, and Richard Wolff. Knowledge 11nd Class: A Mar:rian Critique of Political Economy. Chicago: University of Chicago Press, 1989 Robins, Kevin, and Frank Webster. "Cybernetic Capitalism: Information, Technology and Everyday Life," in V. Mosco and J. Wasko, eds. The Polilical Economy of Information. Madison: University of Wisconsin Press, 1988. Schiller, Dan. "How to Think About Information," in V. Mosco and}. Wasko, eds. The Political Economy of Information. Madison: University of Wisconsin Press, 1988.

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Smith, Anthony. The Age of Behemoths: The Globalization of A-iass Media Firms. New York: Twentieth Century Fund, 1991. Smythe, Dallas. "Communications: Blindspot of Western Marxism," Canadian founllll of Poliliazl and Social Theory 1(3): 1-27 (1977). Smythe, Dallas W., and Tran Van Dinh. "On Critical and Administrative Research: A New Critical Analysis,"fournal of CommuniaJtion 33: 117-127 (Summer, 1983). Slinchoombe, Arthur L. information and Organization. Berkeley: University of California Press, 1990. Thayer, Lee. "On 'Doing' Research and Explaining' Th;ngs," fournlll ofCommuniaJtion 33: 80-91(Summer, 1983). US Office of Technology Assessment. CritiaJl Connections: Communiclltion for the Future. OTA-CIT-41J7. Washington, D.C.: USGPO(January 1990). Wallerstein,lmmanuel. "World-system Analysis: Theoretical and Interpretative Issues," in Barbara Hockey Kapian, ed. Social Change in theCIIpillllist World Economy. Beverly Hills, Calif.: Sage, 1978. Wasko, Janet MuuiesandMoney: Financing the Americmr Film Industry. Norwood, N.j .: Ablex Publishers, 1982. Whynes, David., ed. Whllt is Political Economy? New York: Basil BiackweU, 1984.

Off Limits: An Inquiry Into the Lack of Debate over the Ownership, Structure and Control of the Mass Media in U.S. Political Life Robert W. McChesney

University of Wisconsin-Madison

The corporate, oligopolistic and commercial basis of the U.S. mass media system is off-limits as a legitimate subject for political debate and analysis in U.S. political culture, despite the clear significance of these factors for the U.S. polity. Described here is the sole instance in which there was a legitimate debate over the structure of the media in U.S. history: the debate over radio broadcasting in the early 1930s. Three hypotheses are suggested to explain why no subsequent debate has entered political discourse, despite the phenomenal concentration and commercialization of the media in modem times. The article concludes that although there are powerful factors keeping media debate "off limits," the future is not cast in granite. [Keywords: Broadcasting, Communications policy, Media criticism, Social change, Media economics}

Wolff, Richard, and Steven Resnick. Economics: A-iar.rian DtrSUS Neoclllssiclll. Ballimore:johns Hopkins University Press, 1987. Wright, Peter, and Frederick Barbour. 'The Relevance of Decision Process Models in Structuring Persuasive Messages," in M. Ray and S. Ward, eds. Communicating with Consumers. Beverly, Hills, Calif.: Sage, 1976.

As the end of the Twentieth Century approaches, it has become nearly axiomatic among scholars, political activists and, indeed, the public at large that the agencies of mass communication play a very important role in modem societies. In particular, the mass media are seen as being central to the functioning of a society's polity and the development of its political culture. In many nations the very issues of how the mass media are controlled, structured and subsidized are inexorably linked with issues of free expression and participatory democracy. Hence debates over media policy are carried on in the political arena and can attract popular d!scussion. And in a period of political upheaval and rapid social change, as in present-day Eastern Europe, control over the mass media becomes an issue of the utmost importance. These observations notwithstanding, the United States has remained distinctly immune from this tendency. Despite having a media structure that has become 1

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largely concentrated in the hands of some tWo dozen enormous corporations and which earn the lion's share of their revenues from the advertising expenditures of other major corporations, American political culture has failed to question the suitability let alone the legitimacy of its media system for the development and functioning of a democratic polity (Bagdikian, 1990a). This remains the case desp)te a considerable body of evidence which suggests that the oligopolistic, commercial basis of the U.S. mass media has a pronounced impact upon the n~e of th'e messages communicated to the citizenry. Allowing for oversimplification, the modem U.S. mass media tend to reinforce the fundamental eco'nomic and social contours of U.S. society while ignoring, trivializing or demonizing social movements_which challenge the legitimacy of the status quo (Bennett, 1988; Tuchman, 1978; Herman & Chomsky, 1988; Gitlin, 1980). Accordingly, the primary, if not exclusive, style of popular media criticism in the U.S. merely presupposes the institutional basis of the media system and posits the actions of individual reporters and editors as the independent variable. This mode of analysis reaches its apogee in the works of right-wing media critics who dismiss the corporate and commercial basis of the industry as being of any explanatory value and, rather, assert that the psychological and personal attributes of professional media workers are almost exclusively responsible for any bias to be found in the modem mass media (Bozell & Baker, 1990; Lichter et al., 1986; Novak, 1974). With few exceptions, these right-wing critics serve to "harass" media employees in order to pressure them to follow the broad corporate interests of their owners and advertisers and the corporate community as a whole, rather than veer from them in exercising their professional obligations (Herman & Chomsky, 1988:22). Three hypotheses are presented here to explain why analysis of and debate regarding the basic institutional and structural arrangements of the mass media system have been and are "off limits" in U.S. political culture and why the type of criticism mentioned above proliferates. A presupposition for this discussion is the premise that a contemporary democratic society should determine the nature of its media system, and therefore the lack of such a debate is and has been a weak spot in U.S. political culture. Before that, however, the historical development of the debate regarding media policy is discussed, concentrating upon the debate over how best to structure radio broadcasting in the early 1930s. This represents the sole instance in modem times in which the corporate and commercial basis of a U.S. media system was subjected to fundamental and radical attack in legitimate U.S. political discourse. The experience of the early 1930s will be used to develop each of the three hypotheses. The article concludes with a few observations regarding the tenability of these hypotheses for keeping debate over media policy "off limits" in the coming years.

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History of the Debate Over Fundamental Media Structure and Support In reviewing U.S. communication history, instances of a debate over basic media structure and support are difficult to locate. Prior to the Twentieth Century, the mass media played a smaller role in society overall and were organized along more competitive lines. Jerome Barron (1967) has properly termed this the "laissez faire" era of U.S. communications; until the latter third of the Nineteenth Century the capital requirements to enter the media field were relatively low and competition was the order of the day (Commager, 1950:72). Hence, although government debate and actions regarding printing subsidies, the post office and the development of telegraphic communications were utterly vital to the developing media system, the issue of media control did not assume its modem proportions (Du Boff, 1984; Kielbowicz, 1986; Kielbowicz, 1983). By the second or third decade of the Twentieth Century, however, as the media came to assume a cornerstone role in society in conjunction with huge capital requirements that effectively prevented access to oligopolistic industries, the groundwork was laid for a general public debate over whether the emerging system was satisfactorily meeting the requirements of a self-governing society. Yet, in the dominant newspaper industry such a debate was not forthcoming. While an impressive number of journalists and social critics assailed the debilitating social and political consequences of the growing oligopolization and commercialization of the press, the newspaper industry remained exempt from any public debate of fundamental reform (Bent, 1927; Bent, 1928; Seldes, 1935; Seldes, 1938; Villard, 1944; Commission on Freedom of the Press, 1947). The ideology of the "free press," regulated only by the marketplace and remaining free only so long as not disturbed by the government, which had been developed during the industry's earlier "laissez faire" stage, has effectively shielded the modem press from any attempts at structural reform. Such was not the case, however, with radio broadcasting. The right and, indeed, the responsibility of the government to regulate and dictate the usage of the airwaves was accepted by virtually all corners from the outset. Due to the nature of the ether, only a limited number of channels could be effectively utilized. Hence the state would have to determine which groups would have access to the airwaves and, conversely, which groups would not. In addition, many observers argued that the ether was a public domain like the waters or the national parks. By any criteria, the manner in which U.S. radio broadcasting would be developed was a distinctly political issue. Thus the formative years of U.S. broadcasting, from 1920 to 1935, would be the logical place to find a political debate over fundamental broadcast policy; i.e., where various alternative methods were studied, debated and discussed with the end determination that the eventual for-profit, network-dominated

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and advertising-supported system would best serve the needs of the American people. The scholarship heretofore has concentrated on the period preceding 1927 and has emphasized the ease with which the major networks, the National Broadcasting Company (NBC) and the Columbia Broadcasting System (CBS), and advertisers were able to seize control of the ether with minimal public input or concern. Recent research has taken a closer look at the period between 1927 and 1935 and has discovered that as commercial broadcasting assumed its modem form at a breakneck pace, similarly an opposition to this status quo emerged which argued that the fundamental tendencies of a corporate, commercial broadcasting system were inimical to the communication requirements of a democratic society. I This opposition to the status quo was comprised in large part of displaced nonprofit broadcasters, usually associated with colleges, universities, labor organizations, civic groups and religious bodies (McChesney, 1987; McChesney, 1989:63-156). The nonprofit broadcasters were the "pioneers" of U.S. broadcasting and operated over 200 stations by the middle 1920s. By 1934 they accounted for less than three percent of all U.S. broadcasting. when amount of hours and power levels were taken into consideration (Severin, 1978; Leach, 1983; Frost, 1937; Jansky, 1932). NBC and CBS, on the other hand, which were only established in 1926 and 1927 respectively, accounted for over 70 percent of all U.S. broadcasting by 1931, using the same standard (Education by Radio, 1931:27). To the displaced nonprofit broadcasters, the Government's Federal Radio Commission (FRC) had been instrumental in encouraging the network and commercial domination of the airwaves (Perry, 1930; Perry, 1931). These displaced nonprofit broadcasters regarded the network domination of the airwaves as a matter of the gravest social concern. "As a result of radio broadcasting/' one educator stated in 1931, there will probably develop during the twentieth century either chaos or a world-order of civilization. Whether it shall be one or the other will depend largely upon whether broadcasting be used as a tool of education or as an instrument of selfish greed. So far, our American interests have thrown their major influence on the side of greed (Morgan, 1931:120-121).

"I believe we are dealing here/' he told another audience the following year, "with one of the most crucial issues that was ever presented to civilization at any time in its entire history" (Morgan, 1932:79). The leading labor activist in the fight for broadcast reform argued that thanks to the FRC "all of the 90 channels for radio broadcasting" had been "given to capital and its friends and not even one to the millions that toil" (Nockels, 1936:13). "This is the modem phase of the right of free speech/' he told an audience in 1930. "Whoever controls radio broadcasting in the future will eventually control the nation" (Nockels, 1930:414). In addition to displaced nonprofit broadcasters, this opposition movement was joined by some newspaper publishers concerned about the potential loss of adver-

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tising revenue and readers to the fledgling broadcasting industry, as well as civic groups and individuals with no particular material stake in the outcome (McChesney, 1989:157-198). The American Civil Liberties Union (ACLU), for example, was so inundated by complaints of censorship by commercial broadcasters against nonmainstream opinions that, in 1933, it established a Radio Committee including Morris Emst and Norman Thomas to deal with "the restrictions on broadcasting inherent in the American system." The purpose of the Radio Committee was to develop a "practical plan" to recast the U.S. broadcasting set-up to better meet the free expression requirements of a democratic society (McChesney, 1988a; McChesney, 1991). The response of the ACLU to the emergence of the status quo mirrored the broader response of the U.S. intelligentsia to network, commercial broadcasting. One observer noted in 1933 that it was impossible to find any intellectual in favor of the status quo unless that intellectual was receiving either money or air time from a commercial broadcaster (Morgan, 1933:82). And, indeed, the preponderance of evidence indicates that the initial response of the public-at-large was somewhat negative as well, at least by ~ny subsequent standard (McChesney, 1989:282-287). Accordingly, the networks and the National Association ofBroadcasters (NAB), the trade association of the commercial broadcasters, devoted considerable resources to "explaining" the superiority of commercial broadcasting to any alternatives (National Association of Broadcasters, 1933; McChesney, 1989:241-249). In short, in the era preceding 1935 commercial broadcasting was far from sacrosanct in legitimate political discourse. This opposition movement generated a substantial critique of commercial broadcasting. Three themes underscored the entirety of the opposition movement's critique.2 First, it argued that the airwaves should be regarded as a public resource and broadcasting as a public utility. By this reasoning, the opposition movement argued that turning broadcasting over to a relative handful of private broadcasters so they could satisfy selfish goals was a scandalous misuse of resources, an "incredible absurdity" as one college president put it (Crane, 1935:118-119). Moreover, the process by which the FRC had establi~ed the existing system had been largely outside of public view, much to the approval of the commercial broadcasters (McChesney, 1991a; McChesney, 1990). Second, the opposition movement argued that a network-dominated , for-profit, advertising-support ed system would invariably shape its programming to defend the status quo and that it would never give fair play to unpopular or radical opinions. It would be nearly impossible to exaggerate how much of the opposition movement's critique revolved around this insight. Third, the opposition movement criticized the nature of broadcast advertising and the limitations of advertising-supported programming, particularly in regard to the lack of cultural, educational and public affairs programming that the system seemed capable of producing. Moreover, the opposition movement was insistent in its belief that increased

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regulation of the existing commercial system could not produce the desired social results; the "large companies" would invariably triumph in any regulatory scheme that left the ownership and support mechanisms of the industry unaltered (Morgan, 1931:121; McChesney, 1988b). As such, this was distinctly radical criticism. "Ownership of the facilities is the crux of the matter/' one reformer said. "Whoever controls the facilities is bound to control their uses" (Alexander, 1934:118). "The system of support and how it affects the program," stated another activist, "is the heart of radio" (Coltrane, 1933:32). Armed with this critique and perspective the opposition movement advocated numerous plans to recast U.5. broadcasting, but two in particular received the most attention in the early 1930s. One plan was to have the government set aside a fixed percentage of the channels, generally either 15 percent or 25 percent, for the exclusive use of nonprofit broadcasters. This solution was problematic because it failed to address how these nonprofit broadcasters could subsidize their programs without recourse to dreaded advertising. The second plan was for the establishment of a series ofnoncommercial government stations on a regional, state and national basis to be operated in the manner of public universities and to supplement, not replace, the major existing commercial stations. Interesting, the notion of eliminating commercial broadcasting in its entirety was never forwarded seriously, although there was considerable philosophical support for the idea among the opposition movement, if only for pragmatic reasons. One reformer, Arthur Morgan, the Chairman of the Tennessee Valley Authority (TVA), even argued that all of the mass media should be operated on a nonprofit and noncommercial basis, although few others went that far (A. Morgan, 1934). The opposition movement failed in its campaign to recast U.5. broadcasting. The reformers were unable to generate popular momentum for their campaign and the allies of the commercial broadcasters on Capitol Hill successfully kept the reform proposals from receiving more than a token amount of consideration in Congress. The debate over broadcast policy in Washington D.C. culminated in the passage of the Communications Act of 1934, which was a smashing triumph for the commercial broadcasters. "When we read it," the NAB's chief lobbyist later commented, "we found that every major point we had asked for was there" (Bellows, 1934:618). The opposition movement quickly unraveled as the ante for admission to any further debate was the acceptance of the corporate commercial domination of the ether as non-negotiable. In the years following the passage of the Communications Act, commercial . broadcasters, in the words of historian Philip Rosen, became enshrined in the dominant culture as "the purveyors of the unqualified truth, a sort of holy grail, if you will of good judgment and sound vision" (Rosen, 1980:180). The opposition movement was accordingly written out of the history of the period, to be replaced with the notion that the status quo had not been selected from various alternatives as much as it had been the only, conceivable system available to a freedom-loving pea-

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ple. In short, the status quo had been adopted through consensus rather than conflict. The next section will discuss three long-term factors that undermined the activities of the opposition movement in the 1930s and which have remained operative in subsequent years. In addition, the opposition movement was hampered by two specific short-term factors. First, the depression dominated the politics of the period and made it very difficult for the opposition movement to draw attention to its cause aDd to generate funds to subsidize its efforts. In addition, throughout the relevant period Congress was preoccupied with the need to deal with the economic crisis. "Were it not for the disturbing economic situation," a relieved trade publication noted in 1931, "Congress might blunder into the political radio morass camouflaged by these lobbying factions" (Taishoff, 1931:5). Second, the elements of the opposition movement were inept at coordinating their activities to work for the same program at the same time. To some extent divisions in the ranks of the opposition movement were skillfully manipulated by the commercial broadcasters, who very carefully monitored the reformers' activities. More important, in terms of tactical skill as well as resources, this was a decided political mismatch with the commercial broadcasters vastly superior in each regard. In any case, by the end of the decade the very notion that the public had the right to determine through study and debate whatever type of broadcast system it deemed in its interest was off limits. As Paul Lazarsfeld concluded in his classic study of broadcasting, the American people appeared to approve of the for-profit and commercial basis of the industry. "People have little information on the subject," he added. "They have obviously given it little thought" (Lazarsfeld, 1946:89). The words ring no less true today.

Three Hypotheses for the Lack of Debate Over Fundamental Media Structure Before proceeding to the three hypotheses which account for why basic media issues are off limits in U.5. political culture, it is necessary to mention the most frequently offered "casual" hypothesis for this state of affairs. This is, quite simply, that Americans don't care, not simply about media policy but about traditional political issues whatsoever. This is a very important observation and an examination of this condition is arguably the single most importantissue facing U.5. social scientists in the late 20th century. However, this observation is at best a description of a situation; it really explains nothing. Indeed, it begs a number of critical intellectual questions. Most notably, the apathy, cynicism, and ignorance that have typified U.5. politics for some time can hardly be explained as some aspect of "human nature" or the innate "American" instinct. The preponderance of international, historical and anthropological research argues to the contrary. Hence, the "apathy"

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thesis is only useful if it initiates vital research and debate. When offered as the final word on this subject, or any subject for that matter, one has left the realm of explanation and entered the domain of apologetics. The first hypothesis is that the inability to publicly debate the capitalist basis of the mass media is a function of the general inability to make fundamental criticism of capitalism itself in U.S. political culture. Capitalism has been off limits as a topic of political discussion since at least the First World War and arguably as far back as the 1890s. As one historian has noted hyperbolically, "After World War I, capitalism was made a part of the constitution."3 In the case of the broadcasting reformers, it was probably easier to criticize capitalism in the early 1930s than at any other time since World War I, particularly in intellectual circles, but this point is often exaggerated (Meszaros, 1989:399-400). It was still far from legitimate in political debate to question the capitalist basis of the political economy as was evidenced by the deference to the principle of private property elicited by most members of the opposition movement. It lies outside the scope or capacity of this discussion to explain why capitalism became off limits for critical discussion by the second decade of the century; suffice it to say that this coincided in broad historical terms with the maturation of corporate capitalism as the reigning political economic model and, moreover, with the ascension ofU.S. capitalism to its position as the dominant force in the world economy (Sklar, 1988; Kolko, 1967). In addition, this removal of capitalism from the range of legitimate debate corresponded to the elimination of the left as a viable factor in U.S. political life since World War I (Buhle, 1987; Lasch, 1969; Weinstein, 1967; Weinstein, 1975). And this removal of capitalism from the range of legitimate debate has made it that much more difficult for a left critique of U.S. society to reemerge in subsequent years. For the most part, the left has struggled to maintain an identity and presence on the margins of the academe, divorced from any popular base, with all the pitfalls that entails for radical social theory and analysis (Jacoby, 1987). The absence of a viable left has proven to be a critical factor accounting for the lack of debate over the control and structure of the mass media. In much of Western Europe, for example, the groups that have tended to politicize the media often have been groups that tend to take a critical stance toward capitalism such as the Labour Party in Britain and the Social Democrats in Scandinavia (Berm & Heffer, 1986). These groups have tended to recognize that concentrated private control and reliance upon advertising have, in effect, meant control by members of the capitalist class, which was inimical to their notion of a socialist democracy. This comparison should not be applied categorically, however; there is also a strong tradition for media policy to become resolved less on ideological lines than simply along logistical lines, as evidenced by the French Socialist "privatization" of broadcasting in the 1980s on the belief that the state system had been dominated by Gaullist party sympathizers. In any case, the United States has not had any broad-based left political

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force since the demise of the Socialists after World War I that would, by definition, be hostile to the suitability of a capitalist media set-up. Beyond this lack of any agency which has been organized to fundamentally challenge the prerogatives of capital, this inability to criticize capitalism has translated into two specific ideological problems for those inclined to bring the legitimacy of the corporate media structure into the political arena. First, capitalism's being off limits means, almost by definition, that the propriety of private control for selfish purposes of society's productive resources, in general, is unassailable. In the debate over broadcasting in the 1930s, for example, the opposition movement was willing to challenge the private controi of radio but not the private control of society; the reformers were willing to accept the marketplace as a satisfactory social arbiter elsewhere but not in the realm of broadcasting. Although their distinction was quite logical, it put them in a bind when they encountered the arguments of the commercial broadcasters. If the private marketplace was essentially good and democratic elsewhere, why not in radio? To all but some committed reformers this may have seemed an arbitrary distinction. The same dilemma has haunted the efforts of would-be reformers ever since. Second, to the extent that capitalism has been removed from critical public evaluation, it has been characterized in the dominant culture in a highly sanitized fashion. The legitimate vision of capitalism, is not that of an economic system that rests on a highly skewed class basis and that, in fact, recreates a class system by its very operations (Heilbroner, 1985). Rather, the sanitized and accepted version of capitalism is one of free and equal individuals voluntarily entering into exchange in the marketplace. This is not an entirely inaccurate description of capitalism; rather it is merely incomplete and therefore misleading when presented as the whole picture. Conspicuously absent is an acknowledgment of the class basis of production which is the heart of the system, as even neo-classical economic theory acknowledges in the form of presupposition (Hall, 1979:323). It was a sanitized vision of capitalism that was emphasized by the commercial broadcasters in their ideological campaign in the 1930s. They were able to successfully attach commercial broadcasting to the ideological wagon that equated capit~l ism with the free and equal marketplace, the free and equal marketplace With democracy, and democracy with "Americanism." Hence the status quo easily became the" American Plan," where the public interest was assured, as it always was, by the machinations of the marketplace. Challengers to the efficacy of the marketplace in broadcasting drew the raised eyebrows of the dominant culture as malcontent "special interests," incapable of meeting the public's needs in the marketplace and therefore dispensers of essentially worthless "propaganda." This was the powerful logic staring at the opposition movement in the 1930s. As Rosen concluded:" Any attempt to challenge or criticize the arrangement [commercial broadcasting] represented a direct assault on the larger society as well as a rejection of the nation's past" (Rosen, 1980:181)~ Thus the inability, if not unwillingness,

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to present an alternative vision of capitalism and American society left the opposition movement in a tenuous position. This is not to say a "radical" approach to the debate would have been successful; rather, that a "mainstream" approach by definition was in the contradictory position of having to accept dominant ideological mores that seriously handicapped any reform efforts. In particular, an argument that private commercial radio undermined democracy necessitated an understanding of U.S. capitalism as a class system to be effective. This contradiction has plagued all subsequent efforts to politicize the issue of media control in the United States. The second hypothesis for the lack of debate over the control and structure of the media is that the corporate media have actively cultivated, with considerable success, the ideology that the status quo is the only rational media structure for a democratic and freedom-loving society. The corporate media have encouraged the belief that even the consideration of alternatives was tantamount to a call for totalitarianism. In the 1930s, the proponents of commercial broadcasting spared no expense or effort to popularize this position, and with the demise of the opposition movement it quickly became unchallenged (and unchallengeable) in the dominant discourse. As David Samoff, president of the Radio Corporation of American, commented in 1936: I believe that a free radio and a free democracy are inseparable; that we cannot have a controlled radio and retain a democracy; that when a free radio goes, so also goes free speech, free press, freedom of worship, and freedom of education (Samoff, 1937:154).

The implications of this were not always left unspoken. "He who attacks the American system" of broadcasting, CBS president William Paley informed a meeting of educators in 1937, "attacks democracy itself" (Pauley, 1937:6). A few years earlier a similar statement would have attracted outright derision. In the 1930s the commercial broadcasters worked incessantly and successfully to grab hold onto the ideological coattails of the newspaper industry, which had built up a largely impenetrable ideological armor to protect its role in U.S. society. The depth of this "laissez faire" ideology which prevents public discussion of, examination of, al\d intrusion into the affairs of the newspaper industry is staggering. The fundamental argument used by the commercial broadcasters to demand deregulation-in the late 1930s through today-is that despite the physical scarcity of the ether, broadcasting is in fact more competitive than the largely monopolistic newspaper industry. They argue, therefore, that there is no longer any meaningful justification to single out broadcasters for regulation in the public interest (McChesney, 1991a). Barron and others have taken this acknowledgment that the competitive market is no longer an accurate description for the newspaper industry to what, on the surface, would seem to be a logical conclusion: that since the "laissez faire" model based on access in a competitive market was no longer appropriate, and the marketplace was therefore an ineffective regulator, the state has a right to intervene as it

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has in broadcasting to assure that the press system act in the best interests of a democratic polity. Barron's effort to promote this idea was dismissed categorically (Barron, 1967; Carter, 1984). Indeed, proponents of the status quo will even acknowledge the legitimacy of Barron's arguments, but simply refuse to countenance any alteration of the "laissez faire" ideology, regardless of the empirical evidence (Powe, 1987:248-256). Even media critic Ben Bagdikian, whose work has been germinal in bringing attention to the anti-democratic implications of the corporate, commercial media system, simply presupposes the superiority of a capitalist media set-up, despite all his evidence to the contrary (Bagdikian, 1990a:223). The "laissez faire" media ideology has been internalized to such an extent that it has become an article of faith for anyone committed to democracy. Furthermore, given the oligopolistic basis of the modem media industries, an additional problem has presented itself to the commercial broadcasters and the major media corporations. They need not merely establish the capitalist media set-up as the best possible system, but, moreover, they must establish that, unlike any alternative, the status quo is innately non-partisan and committed to the truth rather than any sort of ideological.axe-grinding. This is a critical point that must be established by a highly concentrated media system, capitalist or otherwise; unless it can establish social neutrality the very legitimacy of the system as a primary dispenser of political information is quickly, and rightfully, suspect. Hence in the early 1930s the commercial broadcasters placed great emphasis on establishing their social neutrality and debunking the opposition movement's charges of "private censorship" (National Broadcasting Company, 1935). The major media corporations have found two invaluable allies as they go about their ideological chores. The first ally is found in the hundreds of departments and schools of journalism and communications that have sprung up over the past few generations in colleges and universities across the nation. These departments were frequently established at the behest of commercial media and rely upon maintaining close and cordial relationships with the commercial media. Even the most hard-hitting of criticism tends to pull punches when the legitimacy of the corporate media is challenged. As one media educator recently acknowledged in a trade publication: We all know, whether we're candid enough to acknowledge it or not, that the advertising, news and public relations industries that provide employment for our students-plus other benefits-expect us to follow the 'company line' on issues involving the special interests of mass communication (DeMott, 1990:9).

These departments of journalism have had little difficulty, until quite recently, and then only in a handful of instances, accepting the corporate line that attacks on a corporate media system are attacks on a free press. Generations of students have been and are being trained that this is the best possible and only conceivable media system available to the U.S. people. The issue is generally not even open to contemplation. The second ally is found in the ideology of professional journalism which, re-

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gardless of its merits, is indispensable for the legitimation of an oligopolistic media system. It is not entirely coincidental that professional journalism emerged precisely as the newspaper industry was becoming a mature and concentrated industry (Schudson, 1988). Moreover, despite the ostensible claim that the ideology of professional journalism protects the news product from the pressures of advertisers and media owners attempting to cast undue influence over the news, the ideology of professional journalism clearly internalized the commercial dictates of the newspaper enterprise as it developed, in addition to internalizing the class structure and values of the emerging modem capitalist political economy. Professional journalism was far more a complementary than antagonistic development to the emergence of the modem capitalist media set-up and modem capitalism itself (Gans, 1979). Professional journalism serves as a critical agent for legitimation as it shifts responsibility for media performance from the broader economic context to the specific conduct of reporters and editors following a set of professional standards and operating within a presupposed broader context. Indeed, the logic of the ideology is such that the actual ownership and support mechanisms become incidental to explaining news media performance. Interestingly, not only does the ideology of professional journalism exempt media corporations from public scrutiny, it exempts the journalists themselves. Beneath a shallow cover, professional journalists often exhibit contempt for public criticism of their conduct, regarding it as "uninformed" (Isaacs, 1986:1-24). Criticism of professional journalists can, in the final analysis, only be made by other trained professionals, those fortunate enough to be familiar with journalistic canons ( Carey, 1978; Soloski, 1989). Furthermore, journalists need not question their own professional conduct as long as they adhere to these journalistic canons. Paradoxically, as far as any form of media criticism is palatable to professional joumnlists, it is that from the right, which receives ample play in the mainstream press (Herman & Chomsky, 1988:23). Arguably, this is due to the flattering manner in which right-wing media criticism stresses the autonomy and power of the journalists and editors over the news product. More important, the criticism of the press as being too disrespectful of authority-as the right routinely charges-is necessary for the legitimation of the profession. The alternative of a press corps being roundly praised by conservatives for their subservience to the powers-that-be would hardly meet even the rudimentary standards for a profession, and would cast the legitimacy of the entire media structure into doubt. In this sense, those like Chomsky (1989) have a point when they argue that journalists would have to invent right wing criticism if it did not already exist. A similar open-mindedness toward criticism does not extend to those questioning the very legitimacy of media institutions. To some extent this may be due to the relative powerlessness left media critics ascribe to individual reporters and editors, seen mostly as hostages to their institutions, sources and professional ideologies. In

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any case, professional journalists, despite long-standing and deep-seated conflicts with corporate media management, have accepted the corporate line that attacks on the corporate control of the industry are the equivalent to attacks on free speech and a free press as well as their professional prerogatives. In the 1930s, for example, the Newspaper Guild, unlike many if not most labor unions and newspaper-rela ted industries at the time, showed no interest in the debate over radio policy. However, it did pass a resolution denouncing one clause in the Communications Act of 1934 which permitted the president the right to censor the news during a national emergency (McChesney, 1989:505). The balance of the debate over broadcasting apparently had nothing to do with free speech issues, at least to the trained professionals in America's newsrooms. The third and final hypothesis for the lack of legitimate debate regarding the ownership, structure and control of the media in U.S. political life owes to the nature of the corporate media themselves. Here the reference is not to the political and economic muscle that accompanies any powerful industry in the U.S.; rather the reference is to two additional benefits the media corporations enjoy beyond those generally enjoyed by other wealthy and powerful institutions. Indeed, in the following respects, the corporate media are no doubt the envy of the balance of the corporate community. First, given the media's control over the flow ofinformation, few politicians have any desire to antagonize the media industry as a whole, with the conceivable repercussions that might entail for their political careers and agendas. "Politicians fear the media," Bagdikian (1990b) commented regarding the manner by which media firms were able to circumvent business regulations with greater ease than other firms, "and the bigger the media, the greater the fear." How telling it is that the two recent U.S. presidents who created the greatest furor attacking the "liberal" bias of the press, Nixon and Reagan, were the same two presidents who did the most to encourage the further consolidation and profitability of the media. Need it be added that these two presidents received overwhelming support from the nation's media at election time? (Bagdikian, 1990a:90-101). Attacking the liberal bias of journalists is permissible; attacking the corporate, commercial basis of the mass media is political suicide, at least as politics has been practiced in the U .S. in modem times. This was an important factor accounting for the demise of the opposition movement in the early 1930s. One reformer estimated that 70 percent of the Senate and 80 percent of the House favored broadcast reform legislation in 1931. "Were it not for a little group of reactionary leaders in both branches of Congress," he states, reform "legislation would have passed by this time" {Nockels, 1931:2). The commercial broadcasters carefully cultivated their relationships with the relevant congressional committee chairmen, such that much of the opposition movement abandoned any hope for congressional action by 1933 and directed its attention to President Franklin D. Roosevelt. Indeed, there was reason for optimism in this regard as many key members of the New Deal, including TVA Chairman Arthur

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Morgan, mentioned above, were outspoken critics of commercial broadcasting and proponents of sweeping reform of the status quo. Nevertheless, Roosevelt was not interested in antagonizing the commercial broadcasters, particularly when he had to deal with the largely Republican newspaper industry. He ignored the opposition movement and cooperated in toto with the legislative agenda of the commercial broadcasters. NBC and CBS provided Roosevelt with unimpeded access to the ether, which he exercised more than 50 times in his first year in office, far surpassing any previous president (McChesney, 1987; McChesney, 1988b). "The big broadcasting chains are very strong with the administration," one ACLU lobbyist noted. "The whole radio picture looks very sad" (McChesney, 1989:448). Second, and related to the first part of this hypothesis, the corporate media are in an ideal position to control the public perception, or lack thereof, of any possible debate regarding the control and structure of the mass media. The media have shown two basic responses to efforts to challenge their legitimacy. First, they simply ignore the issue or provide it minimal coverage. This is standard operating procedure. Second, the corporate mass media distort the issues to suit their own purposes. Hence challenges to the corporate media, which are generally predicted upon the desire to open up the channels of communication, are invariably framed not as challenges to corporate rule, but as threats to free speech, democracy and The Rights of Man. This was a central dilemma for the broadcast reformers of the early 1930s. Facing an entrenched industry which had no incentive to publicize the debate over its existence, the reformers needed to receive ample and, hopefully, sympathetic coverage in the print media to generate popular momentum for their cause. As it was, the debate received minimal coverage and what there was was skewed tremendously toward the proponents of the status quo (McChesney, 1991b). Indeed, the newspaper industry, which in other nations had forcefully led the fight to decommercialize broadcasting, quickly became defenders of the commercial broadcasters as their corporate brethren, and opposed broadcast reform with only a handful of exceptions. One of the leading activists for broadcast reform, the ACLU's Morris Emst (1946:126-141), would go so far as to argue that reform of the status quo had been and would continue to be impossible because "the cohesion of business sentiment of the press and radio has never allowed these ideas to filter out to a forum of public discussion or wide consideration." Given the lack of debate over the media since the 1930s, there have been precious few instances where this thesis could be tested subsequently. However, even related issues, like the titanic mergers of the 1980s have been covered by the press with kid gloves and mostly as business stories (Herman, 1989a:ll). As for the implications for democracy and free expression of this consolidation of the media industry, Bagdikian notes that "the mainstream media, despite pious insistence that they never select their output for self-serving reasons, are close to absolute in their selfcensorship on the subject" (Bagdikian, 1990a:ix). Perhaps the most interesting case

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studies of recent times have been C. Anthony Giffard's (1988) and Edward S. Herman's {1989b) respective studies of the U .S. press coverage of the period leading up to the U.S. withdrawal from UNESCO in the early 1980s. The U.S. press criticized UNESCO unmercifully and with near unanimity, largely due to UNESCO's support for a New World Information and Communication Order {NWICO), which the U.S. press regarded as a distinct threat to its modus operandi overseas. The press coverage was totally one-sided; it would have been virtually impossible for a U.S. media consumer to generate any conception of why the United States might wish to remain in UNESCO. Moreover, the NWICO was blown all out of proportion as an aspect of UNESCO's other activities, of which there was virtually no mention. In addition, no effort was made to present the Third World position on the matter, which, whatever the merits of their case, had little to do with their desire to smash free speech and a great deal to do with their desire to exercise greater control over their media services, which were increasingly controlled by Western corporations and news services. Rather, the U.S. press characterized the NWICO as a callous effort by second-rate hacks to manipulate the news and interfere with a free press. The fundamental questions of who controls the news and the role of large corporations seeking profit, so important to the Third World position on the NWICO, disappear~d entirely from the U.S. press accounts. Rather, it became a classic battle for free speech reminiscent of John Peter Zenger and James Franklin. In sum, the press defended its corporate interests to a tee, and the public was woefully misinformed. The corporate media rattled their sabers over what was clearly a less than lifethreatening challenge in the case of the NWICO. It should not require great imagination to conceive of the obstacles in store for any potential media reformers in the way of media coverage should they begin to question the very legitimacy of the corporate domination of the media.

Conclusion Although these hypotheses are intended to explain the lack of debate over the control and structure of the media in U.S. political life and, further, to assist in explaining the plight of the opposition movement in the early 1930s, they are not intended as gloomy forecast that any alteration of existing conditions will be forever impossible. While these are extremely powerful factors that account for the present situation, there may be countervailing forces on the horizon that may eventually signal a shift in the status of the debate over the fundamental contours of the U.S. media system. First, and more important, the "American Century" is literally and figuratively nearing an end and the halcyon days of a bustling capitalism may well be in America's past. Eventually, this may undermine the inability to criticize capitalism in U.S.

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political culture. This is dearly a decisive factor; if no other lesson emerges from the early 1930s let it be that any viable campaign to reconstruct the media system must be part of a broad-based mass movement that is attempting to reform the basic institutions of U.S. society (Schiller, 1989:157-174; Chomsky, 1989:136). Without this "radical" or, at the least, "non-mainstream" political foundation, any effort at media reform will quickly be washed up on the same shores that received the opposition movement in the early 1930s. And the centerpiece of any viable alternative political movement in the U.S. must be the shared belief that contemporary capitalism is working effectively for only a minority of the citizenry and, moreover, that its core tendencies are frequently at odds .with democratic ideals. This may well be a working definition for any social movement which could possibly revitalize U.S. democracy: it would have to put those central social institutions that have been off limits for at least the past 70 years back on the political agenda, precisely where they belong. Politics must begin addressing core issues that directly affect the way people's lives are led. Second, there has been a quantum leap in the quantity and quality of media criticism produced over the past generation. The dominant myths, mentioned in the second hypothesis above, have been held up to scrutiny and, for the most part, they have not fared well. The anti-democratic implications of the present media set-up are recognized in communications circles in a manner unfathomable a generation earlier, although critical scholarship remains a minority phenomenon. This scholarship is vital if society is to learn to regard its media system in a critical manner, rather than as an unalterable "given." Moreover, U.S. political culture is awash in a crisis of cynicism, ignorance and apathy-almost universally recognized-in which the corporate media system is culpably implicated. This is a crisis that shows no sign of disappearing of its own volition. Although there is no reason to anticipate a radical transformation of the status quo in the near future, this is no time for critical scholars to throw in the proverbial towel and abandon any hope of qualitatively transcending the existing situation. The system is far from healthy. Now, as always, scholars must be willing to make a "ruthless criticism of everything existing," which "must not be afraid of its own conclusions, nor of conflict with the powers that be" (Marx, 1972:8). "The future is still open," one scholar reminds those disinterested in viewing the present historically. "It is still to be lived" (Amin, 1989:152).

Notes 1. For a detailed discussion of this historical episode see my dissertation (McChesney,1989). For a more cursory overview see McChesney, 1990. A much revised version of my dissertation will be published by Oxford University Press in 1993 or 1994. It is tentatively titled The Battle for the Control of U.S.

Broadcasting, 1928-193S. 2. A much longer discussion of this critique may be found in my dissertation (McChesney, 1989:199-235). For a specific treatment of the critique, see Robert W. McChesney, "An Almost In-

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credible Absurdity for a Democracy." Journal of Communication Inquiry, 15:1 (Winter 1991): PP· 89--114. 3. Comment of the late Professor William E. Ames, University of Washington, Seattle.

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Assembly oftlze National Advisory Council on Radio Education, 1931, ed. L. Tyson, Chicago: University of Chicago Press, 120-136. Morgan,Joy Elmer (1932). "The Radio in Education." Proceedings ofllze 17th Annual Convention oftlze Na-

tional University Extension Association1932, Volume 15. Bloomington: Indiana University Press, 74-84. M organ, Joy Elm er (1933). "The New American Plan for Radio." A Debate Handbook on Radio Control and Operation, eds. B. Aly and G. T. Shively, Columbia, MO.: Staples Publishing Company, 81-111. National Association of Broadcasters (1933). Broadcasting in the United Stales. Washington D.C.: National Association of Broadcasters. National Broadcasting Company (1935). Broadcasting. Volumes I-IV. New York: National Broadcasting Company. Nockels, Edward N. (1930). "The Voice of Labor." American Federalionist, 37(April), 414-419. Nockels, Edward N. (1931). ''Labor's Rights on the Air." Federation News, (February 7), 2. Nockels, Edward N. (1936). Public Interest, Convenience, and Necessity, and the Last oftlze Public Domain. Washington D.C.: 1936. Novak, Robert D. (1974). "The New Journalism." The Mass Media and Modem Democracy, ed. H. M. Clor, Chicago: Rand McNally. Paley, William S. (1937). "The Viewpoint of the Radio Industry." Educational Broadcasting 1937, ed. C. S. Marsh, Chicago: University of Chicago Press, 6-13. Perry, Arrnstrong (1930). "The Status of Education by Radio in the United States." Education on the Air; First Yearbook of the Instil ut!! for Education by Radio. ed. J. H. MacLatchy, Columbus: Ohio State University, 79-89. . Perry, Armstrong (1931). "The College Station and the Federal Radio Commission." Education on the Az:; Second Yearbook of the Institute for Education by Radio. ed. J. H. MacLatchy, Columbus: Ohio State Uruversity, 33-46. . . . Powe, Jr., Lucas A. (1987). American Broadcasting and the First Amendment. Berkeley: Umverstty of Cahfornia Press. Rosen, Philip T. (1980). The Modem Stentors: Radio Broadcasting and tlze Federal Government, 1920-1934, Westport, CT: Greenwood Press. Sarnoff, David (1937). "Broadcasting in the American Democracy." Educational Broadcasting 1936, ed. C. S. Marsh, Chicago: University of Chicago Press, 146-155. Schiller, Herbert I. (1989). Culture Inc. New York: Oxford University Press. Schudson, Michael (1988). "The Profession of Journalism in the United States." Professions in American History, ed. N. 0. Hatch, Notre Dame, IN: Notre Dame University Press, 145-161. Seldes, George (1935). Freedom of the Press. New York: Bobbs-Merrill. Seldes, George {1938). Lords of the Press. New York: Juliann Messner. Severin, Werner J. (1978). "Commercial vs. Non-Commercial Radio During Broadcasting's Early Years." Journal of Broadcasting, 20(Fall), 491-504. Sklar, Martin J. (1988). The Corporate Reconstruction of American Copita/ism, 1890-1916. New York: Cambridge University Press. Soloski, John (1989). "News reporting and professionalism: some constraints in the reporting of news." Media, Culture and Society, 11, 207-228. Taishoff, Sol (1931). "Session of Radio-Minded Congress Nears." Broadcasting (December 1), 5. Tuchman, Gaye (1978). Making News: A Study in the Construction of Reality. New York: The Free Press. Villard Oswald Garrison (1944). The Disappearing Daily. New York: Alfred A. Knopf. Weinst~, James (1967). The Decline of Socialism in America: 1912-1925. New York: Monthly Review Press. Weinstein, James (1975). Ambiguous Legacy: The Left in American Politics. New York: New Viewpoints.

Partii Communications and Capitalist Enterprise

J

[6] THE FINANCE OF THE PRESS EARLY in the year 1895 a controversy arose in France upon the best constitutional means of safeguardi~ public liberties and of combining the essentials of freedom with stable institutions. A President of the Republic had resigned because he alleged that the French Constitution gave him inadequate powers to act as the supreme moderator of national affairs. At that moment an eminent historian, Professor Charles Seignobos of the Sorbonne, published in the Revue de Paris a study upon Montesquieu's famous theory of the "separation of powers " in the State as a· safeguard of freedom. He traced its history and showed how far the notions of Montesquieu were fallacious, and what the experience of the nineteenth century had proved to be the true safeguards of public liberties. Even to-day the study has some bearing upon the problem presented by the "Newspaper Industry," for it raises points that need to be fairly met. Montesquieu formulated the theory of the separation of powers in the chapter of his Esprit des Lois " On The English Constitution." The idea itself was not quite new. Locke as well as Swift and Bolingbroke had distinguished between the various powers in the State and the two latter had spoken of a" balance of power" which would prevent either of them from becoming predominant. But, Seignobos argued, civilised societies had been transformed so rapidly in the nineteenth century" by the progress of science, of material production, of education 81

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and the Press, that they have tended to burst the political institutions with which former Governments clothed them " ; and after an acute analysis of the fate of M ontesquieu's theory-that the executive, legislative and judicial " powers " should be rigidly separated from each other-Seignobos concluded:

of these journals might curtail their independence and act as a drag upon the faithful discharge of their stewardship for public freedom. In France the Press cannot be said to have preserved its independence of influences, official and industrial, to such an extent as to render it a bulwark of public liberties or a constant purveyor of precise information. Nor have the majority of French journals gained, in the recent past, a reputation for sturdy incorruptibility. But in France it is still possible for any citizen who is ready to risk the loss of a few thousand pounds to start at least a "journal of opinion " and to find for it eager readers who will welcome its independent criticism of men and things. In this country we have no similar safeguard. The amount of money to be risked in starting a daily newspaper with any. hope of attracting serious attention or gaining a national circulation, would probably exceed £1,000,000. The well-informed author of a series of articles upon "The Newspaper Industry," which appeared in The Economist during January, 1937, suggested that " a sum of the order of £2,000,000 had to be spent" before the last corner among national newspapers, the Daily Herald, "reached a self-supporting position. There are very few industries," he added, "which impose an entrance fee as high as this." It was not always thus. When, after a preliminary experiment with what had been a bankrupt evening paper, the Evening News, the late Alfred Harmsworth started his Daily M all in the 'nineties of last century he neither disposed of nor spent upon his enterprise anything approaching even £100,000. According to one estimate it was less than £15,000. Moreover his venture made a profit from the outset. But some years later an attempt to found a London morning journal of a more " serious " type, the Tribzme, cost its proprietor nearly £600,000. When the greater part of that sum had been spent he lost heart though, in

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Against the authoritarian tendency of all executive agents, against abuses of power on the part of officials and even against the intrigues of legislative assemblies, the history of the nineteenth century reveals only two effective means of resistance. Both have been born in this century and could not be foreseen by Montesquieu. The one is a people politically educated, accustomed to precise information, demanding much of its representatives, obliging them to render account of what they do, and to take account of the people's will, but resolved to support them, if need be, against the Government and by every means. The other is an active Press, informed of everything, determined to search out, to publish, to criticise all the doings of men in power, a Press too independent of all officials and even of judges to have silence imposed upon it, and too rich or too numerous to be altogether corruptible. With such a people and such a Press a State would be guaranteed against all kinds of despotism.

If Montesquieu could not foresee the changes that would come over the public life of civilised societies in the nineteenth century, none but a prophet could have descried in 1895 the conditions that would arise in Europe during the third and fourth decades of the twentieth century. When Seignobos defined, as one of the safeguards of public freedom, a Press too rich or too numerous to be altogether corruptible, he failed to foresee the ·possibility that economic and financial influences might so reduce the number of newspapers as to give the owners of survivingjournals a virtual monopoly, or that the financial magnitude if not the actual wealth

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THE PRESS the opinion of some shrewd judges, the paper was then on the point of making ends meet and of earning a profit. While it is conceivable that another journalist with the peculiar genius needed to establish a successful newspaper may at some future time catch the tide as Moses Levy caught it in the eighteen-fifties with the Daily Telegraph or as Alfred Harmsworth caught it in the 'nineties, it remains broadly true that nowadays the amount of money which would have to be risked in adding to the number of British daily newspapers is so large as to save present newspaper owners from fear of effectual competition. Directly and indirectly, Alfred Harmsworth (or Lord Northcliffe) and his younger brother, Harold Harmsworth (afterwards Lord Rothermere) were responsible for the change that has come over the financing of British newspapers during the past generation. Their enterprises, too, hastened, though they did not actually begin, the transformation of the Press into "the newspaper industry." I shall not attempt to record in figures all the transactions since the Daily Mail was taken over in 1905, together with the Evening News and the ~Veekly Dispatch, by a company registered as " Associated Newspapers, Limited," and since the foundation in the same year of the Anglo-Newfoundland Development Company, Limited," by the Harmsworth interests. Rather shall I seek to illustrate the general tendency of newspaper finance by these and subsequent examples; including the operations that attended the liquidation of the Northcliffe estate after Lord Northcliffe's death in August, 1922. There is no finality in such matters as buying and selling of newspapers. Statistics accurate to-day may be inaccurate to-morrow. But enough is publicly known and recorded to warrant a general description of the tendencies at work and to justify doubt whether an undertaking so heavily capitalised and, in some instances, so over-capitalised as the British Press

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now is can be entirely free to discharge its mission as a warden of the public conscience. The beginning of the Harmsworth's venture into daily journalism was marked by their purchase in 1894 of a London evening paper, the Evening News, for the sum of £25,000. This evening journal had been started in 1881; and though it had been heavily subsidised by Conservative party funds, it had got into such low water that its affairs had to be put into the hands of a receiver. A wide- awake- though impecunious journalist, the late Mr. Kennedy Jones, is said to have received as a gift a packet of 12,000 worthless shares in the Evening News. Armed with them he attended a meeting of creditors and persuaded the receiver to grant him an option on the purchase of the paper. Then, so runs the story, he induced Alfred Harmsworth, who had made some profits out of a weekly magazine called Answers, which he had started in 1887, to provide the £25,000 to buy the Evening News which had cost its former proprietors the better part of £500,000 since its foundation. The paper bought, Alfred and Harold Harmsworth with Kennedy Jones began drastically to overhaul its finances. At that time it was printing 15 or 16 columns of racing and sporting news daily; while its principal rival, the Star, was printing even more. Alfred Harmsworth and his associates began by cutting down the racing news to six or seven columns and by broadening the paper's appeal in ways which they thought likely to attract popular attention. They were helped by a sensational murder; and thanks to their exploitation of public interest in it and to their promptness in publishing ahead of their rivals the result of the trial at the Chelmsford Assizes the circulation of the Evening News increased by 40,000 copies in a few months. At the end of the first year they found it had made a suh-

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stantial profit. Two years later they decided to risk this profit and some other capital in· starting the Daily Mail. One episode in Alfred Harmsworth's handling of the Evening News is too amusing not to be related. He had instructed his sub-editors to brighten the paper inexpensively by reprinting jokes and satirical paragraphs from American comic papers. One such paragraph referred to a mythical Jew on Broadway who was supposed to have condoled with another Jew upon a disastrous fire in his premises " last week," and to have expressed the hope that the premises were insured. "Not last week, you fool, next week!" was the alleged answer. As ill-luck would have it a Jewish tradesman in Shoreditch, bearing the same name as that given to the mythical Jew in the American comic paper, had claimed insurance for a fire in his London premises. He promptly issued a writ for libel against the Erening News. In vain did Harmsworth protest that he was totally unaware of the British Jew's name and of the fact that the premises in Shoreditch had been burned. He had either to run the risk of a libel action or to compensate the plaintiff in cash. Harmsworth chose the latter course and paid £600 indemnity-whereupon he received a grateful letter from the British Jew, who informed him that a small syndicate which had been formed to "run" the action against the Evening News would be giving a little dinner to celebrate its triumph and would be very happy if Mr. Alfred Harmsworth would· attend it !

• However small may have been the original capital of the Daily Mail, its profits were reinvested in the paper again and again until they were so large that its capital value could be fixed at more than £1,000,000 when it was taken over in 1905 by "Associated Newspapers

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87 THE FINANCE OF THE PRESS Limited." At the end of the first year (1906) this Company paid 8 per cent. on its 1,600,000 shares, 10 per cent. from 1909 to 1910, 12 per cent. from 1911 to 1913, 17 per cent. in 1914, and as much as 20 per cent. from 1918 to 1920. In September, 1920, there was, besides a distribution of £250,000 in bonus shares, one

new share for every two deferred ordinary shares previously held, and a dividend of 5 per cent. free of tax was paid on the enlarged capital. Thus in the sixteen years of the Company's existence the profits of an original deferred ordinary share (which alone had full voting power) amounted to 207! per cent., while the nominal value of the shares had increased 50 per cent. Of the 750,000 deferred ordinary shares, 441,000 belonged to the Harmsworth family in June, 1921. In the same year as the foundation of "Associated Newspapers Limited" the Anglo-Newfoundland Development Company Limited was formed to acquire large tracks of forest (3,400 square miles in all) for the purpose of manufacturing paper, the bulk of the share capital being held by the other Harmsworth companies which were thus assured of a continuous supply of " newsprint" independently of paper merchants. Four years later they set up the Imperial Paper Mills Limited at Gravesend with extensive wharfage at which steamers, bringing the wood pulp from Newfoundland, could berth. Within ten years the output of this mill was 600 tons of paper per week. [n this company the Amalgamated Press Limited held a controlling interest. The Amalgamated Press began with Alfred Harmsworth's Answers, was registered in 1896 · as "Harmsworth Brothers Limited." and gradually increased its publications until it controlled some seventy-five weekly and monthly periodicals. rts paid-up capital was £1,065,000 made up of 515,000 ordinary shares, which alone had voting rights, and

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550,000 5 per cent. cumulative preference shares. At the end of 1913 there was a distribution of bonus shares at the rate of three ordinary shares for every ten ordinary shares previously held. Very high dividends were paid on the ordinary shares for the twenty years between 1901-2 to 1920-21. The lowest was 35 per cent. in 1903-4; in every other year the dividend was 40 per cent. exclusive of the bonus shares issued in 1913. For some years after 1918 half the dividend was taxfree. This made the actual dividend equal to more than 48 per cent. Indeed this Company's total profits in the nine years from 1913 to 1921 W6re £4,142,190. or near1y four times the original capital of £1,065,000. After the death of Alfred Harmsworth (Lord Northcliffe) in August, 1922, his holdings in his various newspaper companies were liquidated, or were taken over mainly by his brother, Harold Hannsworth (Lord Rothermere). In 1926 the Amalgamated Press passed under the control of the Berry Brothers with Sir William Berry (Lord Camrose) at their head. Its issued capital is now some £7,200,000, including £1,500,000 of 3t per cent. 1st Mortgage Debenture Stock. It continued to make large profits and to pay high dividends on its £1,200,000 of ordinary share capital, though the practice of issuing bonus shares seems to have been dropped under Lord Camrose's management. In 1931 its profits were £706,507 and the dividend earned on its ordinary capital was 37.7 per cent. Of this percentage only 15 per cent. was paid to shareholders, a large balance being put to general reserve. During the years 1932 to 1937 the earned dividends were only once below 20 per cent., the dividends actually paid to shareholders being, however, limited to 11 per cent. In addition to its ownership of more than one hundred magazines and other publications, the Amalgamated Press controlled two large papermaking companies which provided nearly all the paper used by its publica-

tions as well as newsprint for several of the leading London and provincial newspapers.

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If the profit-making of the Amalgamated Press under Lord Camrose's management was thus controlled ~n somewhat conservative fashion, its earlier record m money-making was beaten by that of another Harmsworth company which was formed in 1910. This was known as " The Pictorial Newspaper Company Limited." It took over the Daily Mirror which Harold Harmsworth had acquired from his brother Alfred in 1914. In 1915 it started the Sunday Pictorial as a Rothermere venture ; and in March 1920 the Company was reconstructed as " Daily Mirror Newspapers Limited." From 1911 to 1914 the dividend on the 100,000 deferred ordinary shares of the Pictorial Newspaper Company Limited ranged from 15 per cent. to 20 per cent., but from 1915 to 1919 they were 60 per cent. In the year 1919-1920 the dividend was 55 per cent. free of tax. Upon reconstruction in March, 1920, the holders of 5 per cent. preference shares in the old company received a new 8 per cent. share in exchange; for each 7 per cent. preference share a new 8 per cent. share plus 2s. 6d. in cash. The holders of the 100,000 deferred shares received seven new ordinary shares for each deferred share. On these a dividend of 5 per cent. was paid, with a further distribution of dividends from the Sunday Pictorial, which became a separate company after the reconstruction. The holder of a deferred share from 1910 onwards thus received 450 per cent. of his investment and the nominal value of his holding was multiplied by seven. In 1908 Lord Northcliffe acquired a large fina.ncial interest in The Times. The complicated ownership ~f that great journal-a result of the first John Walt~r s division of the property into sixteenths as somethmg

I38

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THE PRESS 90 distinct from the Waiter printing business-had ended by producing conditions with which a majority of the proprietors were highly dissatisfied. The circulation of the paper, which had touched -68,000 at the price of 3d. in the days of its second great editor, Delane, had fallen to not more than 38,000, and its income had seriously decreased. In these circumstances Mr. Arthur Fraser Waiter, second son of John Waiter HI, arranged to amalgamate The Times with the Standard-a journal even less prosperous than The Times-and to appoint Mr. C. Arthur Pearson (afterwards Sir Arthur Pearson) as its Managing Director. Hearing of this arrangement, Northcliffe came into touch with prominent members of The Times staff and with some of· its other proprietors. In agreement with them he put forward an offer so much more satisfactory to the other proprietors, who had taken legal proceedings against Mr. A. F. Waiter, that they were able to persuade the Court to prefer it to the Walter-Pearson arrangement. The Times newspaper was then taken over by " The Times Publishing Company" with an authorised capital of £750,000, which was increased in 1920 to £1,000,000. Though Northcliffe did not hold a majority of the controlling ordinary shares included in this capital he secured an undertaking that . the voting power of the Waiter shares should be at his disposal during his lifetime. Thus from 1908 onwards he held effective control of The Times, though he only acquired full control of it in his own right a few months before his death, when he bought the entire Waiter holding from Mr. John Waiter· IV, son and successor of :Mr. A. F. Waiter. Upon Northcliffe's death in August, 1922, his estate, amounting to some £5,000,000, had to be liquidated under his will; and a series of remarkable financial transactions followed.

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With all his faults, which were many, and with all his

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qualities, which were not few, Northcliffe was a journalist through and through. He was not primarily a financier or even an industrialist. If he made a large fortune out of newspapers and the newspaper industry, it was for " the Press " and its influence that he chiefly cared. In matters of high policy his sense of public trusteeship was keen. Before him newspapers had been bought and sold-sometimes with little care for the convictions or the rights of those who had helped to make them valuable " properties." But these transactions had been rather in the nature of private " deals" than essays in "high" finance. After his death it was found that he had bequeathed a considerable proportion of his fortune to the staffs of his various undertakings ; just as during his life, he had helped to raise the wages of printers and the salaries of working journalists to higher levels than they had ever reached before. His brother, Lord Rothermere, had, on the contrary, always been primarily a financier. His instinct for moneymaking amounted almost to genius. Nor did he apply it only to newspapers. He " went into " businesses of many kinds, such as cattle-farming and fruit-growing. Few men could ever boast that they had got the better of him in a " deal," and everything he touched seemed to turn if not into gold at least into a profitable investment. But he cherished one ambition that remained unfulfilled. He longed to own The Times. In the spring of 1921 Northcliffe's health began to fail. Rothermere then offered to lighten his brother's burdens by buying all the Northcliffe holding in the ordinary and preference shares of The Times. After some hesitation Northcliffe consented to sell, and informed a director of The Times Publishing Company of his decision. Means were then found to persuade him to change his mind before the "deal" was concluded-much to Rothermere's disappointment. At that time Northc1iffe's control of The Times was

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THE PRESS still based upon the agreement which had been concluded with the Waiters in 1908 that he should dispose of the voting power of the Waiter holding. In return for this agreement, and in order to safeguard the traditional Wa1ter interest in The Times, Northcliffe undertook that on his death the head of the Waiter family should be entitled to buy back the Northcliffe shares at par or at a price to be fixed by arbitration on the basis of the last three years' dividends on the ordinary shares. As there had been no dividends on ordinary shares for some years, this arrangement-had it lasted-would have enabled Mr. John Waiter IV to buy the Northcliffe holding at not more than par after Northcliffe's death in August, 1922. But in June, 1922, Mr. John Waiter sold to Northcliffe all the Waiter shares in T/ze Times, a transaction which nullified the previous agreement ; and the only prospective interest which Mr. John \Valter retained in the future of The Times was a clause in Northdiffe's wiH to the effect that Mr. Waiter should have an option to buy Northcliffe's entire holding in The Times at whatever price the highest bidder might offer. On Northcliffe's death it became a matter of importance to know what the highest bid would be, Lord Rothermere was still eager to buy The Times, and others were equally eager that he should not buy it. His representatives conveyed the impression that he would bid up to £1,000,000 for his late brother's holding but not more-a price more than double the amount Mr. John Waiter would have needed to raise had he not sold his shares to Northcliffe two months earlier. But when the sale under Northcliffe's will came before a Judge in Chambers, it was found that Lord Rothermere's bid was at least one-third higher than £1,000,000. This contingency had been foreseen ; and Major the Hon. John Jacob Astor authorised Mr. Waiter's representatives to equal the Rothermere bid.

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Thus the control of The Times passed into the hands of Major Astor, who presently formed a holding company with a special charter designed to prevent the future sale of The Times to any purchaser save with the assent of a body of trustees consisting of the Lord Chief Justice of England; the Warden of All Souls College, Oxford; the Governor of the Bank of England; the President of the Royal Society and the President of the Institute of Chartered Accountants. Under this Charter shareholders in The Times can only sell their holdings unconditionally to Major Astor or to Mr. John Waiter, all other sales being subject to the assent of the trustees. In this way it was hoped to remove the danger that The Times might fall into the hands of purchasers whom the trustees might think undesirable. Admirably designed though this arrangement appears to be as a means of safeguarding the future independence of the leading British newspaper, there is some danger that it may tend subtly to deaden the militant spirit which characterised The Times under its great editors, Barnes and Delane, and may lead its staff to think themselves caretakers of a national institution rather than journalists whose paper must stand or fall on its or their merits. No charter could avail to preserve the influence and the value of The Times, even as a national institution, were it to lag behind in the journalistic race or to be worsted either in respect of dynamic quality or in soundness of policy by rivals which appeal to the same public. At its price of 2d., and with a circulation of roughly 200,000 copies, The Times has now to face the competition of the Daily Telegraph and Morning Post at the price of Id. and with a circulation of more than 650,000 copies. Should the Daily Telegraph develop a sturdy " soul " of its own-and during the international crisis of September, 1938, its "soul" compared very favourably with that of The Times-as distinguished from newspaper-making ability, The Times might need to

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invoke the shade of Thomas Barnes or, perhaps, even that of Northcliffe, in order to hold its ground.

Newspapers belonged to the "Daily Mail Trust." In the year 1922-23 the profits of Associated Newspapers were £680,209 as compared with £224,123 in 1921-22, so that the " Daily Mail Trust's " portion of the profits was about £360,000, of which the interest on its 7 per cent. debentures absorbed only £112,000. The dividend actually declared was 35 per cent., and a capital bonus of 33! per cent. was given, yielding to the Trust £140,000 in cash and £133,333 in bonus capital in the year of the debenture issue. In 1923-24 the profit of the "Daily Mail Trust" was £910,408. The dividend was raised to 40 per cent. and two more capital bonuses-of 25 per cent. and 20 per cent. respectively-were paid. From these figures it would seem that while the public provided most of the money to buy the Northcliffe holding it got less than half, and Lord Rothermere and his friends (as holders of £160,000 in paid-up ordinary shares) more than half the profit. It is true that the public were given a " debenture " at 7 per cent., the " debenture " being secured upon the deferred shares of Associated Newspapers, the uncalled capital of the "Daily Mail Trust , and upon a guarantee from the Daily Mirror and Sunday Pictorial newspapers. But what the public was really given was a limited interest in a newspaper equity under the guise of a debenture, for a debenture on a newspaper company is not a debenture at all except in so far as its value is covered by physical assets, real property, such as machines, buildings or other realisable wealth. The rest is mainly a psychological asset called "goodwill, ; .and it has been well said that newspaper finance is mainly a question of capitalising goodwill. Nor was this all. When dealings began in the deferred shares of Associated Newspapers Limited in November, 1922-a month after the issue of the " Daily Mail Trust" debentures-the opening price was £6 5s. per share, as compared with the £4 per share that Lord

94

After being defeated a second time in his attempt to buy The Times, Lord Rothermere turned his attention · to his late brother's other newspaper properties. In September, 1922, the following announcement was issued:The late Lord Northcliffe, who held the majority of the deferred shares in Associated Newspapers, Limited, was thereby the principal proprietor of the Daily lvfail, Evening News, Weekly Dispatch and Overseas Mail. The 400,000 deferred shares which he held have now come under the control of his brother, Viscount Rothermere. The 400,000 deferred ordinary shares, in which the control of these newspapers was vested~ were bought by Lord Rothermere at £4 each for a total of £1,600,000. Thereupon Lord Rothermere formed " The Daily Mail Trust," which acquired from him these 400,000 shares in return for ordinary shares of the Trust. The capital of the Trust was fixed at £1,600,000 in ordinary shares of £1 each, of which 2s. per share, or £160,000, was paid up. The " Daily Mail Trust " also created £1,600,000 of 7 per cent. Guaranteed fifteen-year first mortgage debenture stock. This stock was heavily advertised, offered to and subscribed for by the public at 99 per cent. In other words, the public provided £1,440,000 of the £1,600,000 required to pay for Lord Northcliffe's shares, and Lord Rothermere and his friends paid only £160,000 for their shares though these shares entitled them to the whole of the equity in the 400,000 Associated Newspaper shares after 7 per cent. had been paid on the debentures. At that time the total number of deferred shares in Associated Newspapers Limited was 750,000; and after payment of the preference and ordinary dividends (£67,000) more than one-half of the profit of Associated

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THE PRESS 96 Rothermere had agreed to pay for them; and the value of these shares was afterwards nearly doubled by the issue of a capital bonus amounting to more than 78 per cent. of the original total. Besides, under Lord Rothermere's skilful financial management, the profits of Associated Newspapers continued to expand. In the year ended March 21, 1935, they were £917,046, and a 40 per cent. dividend was again paid on the deferred shares in which the "Daily Mail Trust's" holding had by that time become 800,000 instead of 400,000. In the autumn of 1923 Lord Rothermere extended his operations. He bought the whole of the late Sir Edward Hulton's newspaper interests for £5,000,000. At the same time he sold to E. Hulton and Company the "Associated Scottish Newspapers "-Lord Rathermere's Scottish interests-for £1,000.000. The "Daily Mail Trust " then appeared on the scene. It bought the Hulton Newspapers and the Rothermere Scottish papers for £6,000,000, and sold to Lord Beaverbrook for £250,000 a 51 per cent.interestin theEveningStandard, which Sir Edward Hulton had owned. Again the public subscribed the necessary money. The "Daily Mail Trust " issued to the public £8,000,000 of 7 per cent. debentures at the price of 99, enough to pay for these operations, and to redeem, at a premium of 10 per cent., the first " Daily Mail Trust " debenture issue of £1,600,000. Meanwhile, as I have said, the " Daily Mail Trust " holding of Associated Newspaper deferred shares had risen to 800,000. It owned also 918,056 ordinary shares in E. Hulton and Company and sundry other investments; and the only addition made to the Trust's ordinary paid-up capital was £40,000, which brought the total up to 200,000 at 2s. per share, the authorised capital being raised at the same time from £1,600,0JO to £2,500,000. Again the "debentures" were guaranteed by Lord Rothermere's two picture

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papers, and again the issue was heavily advertised and heavily oversubscribed. The " Daily Mail Trust " then proceeded to make a big profit on the Hulton operation. Early in 1924 the Trust sold to the Sunday Times-owned by the Berry group-the Manchester publications of the Hulton Company(excluding the Daily Sketch and the Illustrated Sunday Herald) for £5,500,000. Together with the £250,000 received for Lord Beaverbrook's share of the Evening Standard, it thus made a profit of £750,000, plus the value of the Daily Sketch and the Illustrated Sunday Herald. With the proceeds the "Daily Mail Trust " repaid £4,000,000, or one half of its debentures, at 110. The Daily Sketch and the Illustrated Sunday Herald were then formed into a separate company which issued £1,600,000 of 6-! per cent. debentures at 92 and, out of the proceeds, £1,200,000 were applied to the redemption of a further sum of " Daily Mail Trust " debentures. Thus the profit on the Hulton purchase was raised to £2,350,000, plus the whole of the equity in the Daily Sketch and Illustrated Sunday Herald. In these circumstances it is not surprising that the 2s. paid-up shares of the " Daily Mail Trust " were soon sold and bought on the Stock Exchange at over 50s. each. The later operations of the " Daily Mail Trust "now called the " Daily Mail and General Trust Limited " -are less easy to trace. In 1929 its net profits {after deduction of tax) were £387,822, a total never since exceeded ; and its ordinary dividend was 17t per cent. tax free. ln 1936 its net profits were £306,403, but it paid a tax-free dividend of lit per cent. and distributed a capital bonus of 10 per cent. in ordinary shares, or one share for every ten ordinary shares at the price of 50s. In 1932 it had also issued one share for every eight ordinary shares at the price of 25s., but in that year its net profits had fallen to £173,283 and its tax-

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THE PRESS free dividend to 8! per cent. The actual liability of its ordinary shareholders for calls upon capital authorised but not paid up is hard to determine because-according to a Banker's Investment Guide-the following bonuses in reduction of uncalled liability on partly-paid shares have been distributed: 275 per cent. in 1925, 33t per cent. in 1926, 50 per cent. in 1927 and 33! per cent. in 1928. Seeing that only 2s. per share or 10 per cent. was originally paid-up on the ordinary capital of the Trust, it would seem that Lord Rothermere and his fellow-shareholders have been very handsomely rewarded for their venture in newspaper finance.

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•

Nor was Lord Rothermere alone in perceiving how profitable newspaper " properties," as distinguished from journalism, could be. The sons of the late Alderman John Mathias Berry, of Merthyr Tydfil, South Wales -usually known as the "Berry Group," of whic.h Lord Camrose, formerly Sir William ·Berry, was the most prominent member-were hardly less skilful than he. While the eldest of the Berry brothers was closely associated with the mining and other interests of the late Lord Rhondda, the second (now Lord Camrose) began life as a working journalist, and in 1901 founded the Advertising World. From 1915 onwards he became Editor-in-Chief of the Sunday Times, and afterwards chairman . or deputy chairman of several newspaper and publishing companies which the Berry interests controlled. These companies included the Sunday Times, the Financial Times, the Daily Telegraph (which was bought from the late Lord Burnham and has since absorbed the Morning Post), the Graphic publications, Kelly's Directories and more than one printing company, besides a number of provincial newspapers. After the Sunday Times, or the Berry Group, had bought the Hulton newspapers from the "Daily Mail

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99 Trust" for £5,500,000 it sold them, together with the copyright and goodwill of the Sunday Times, to a new company called "The Allied Newspapers Limited" for a total price of £7,900,000. Of this price £4,400,000 was payable in cash, £1,500,000 in debenture stock and £2,000,000 in ordinary shares. The capital of " Allied Newspapers Limited " was fixed at £2,000,000 ordinary shares, £4,750,000 of 8 per cent. cumulative preference shares, and £1,500,000 in 9 per cent. debentures. A commission of 7! per cent. in cash, together with 510,000 ordinary shares, was payable to the firm which subscribed for the preference shares and sold them to the public. The profits of the various newspapers bought by " Allied Newspapers Limited," which were only £285,704 in 1919, were as high as £855,199 in 1923. After some falling off in 1931 and 1932 they rose again to £721,367 in 1935 and to £742,525 in 1936. Meanwhile the Berry Group did another great stroke of business. It formed a Company called the •• Allied Northern Newspapers " to buy the whole of the capital of the Associated Scottish Newspapers which Lord Rothermere had sold to E. Hulton and Company. It also bought several newspaper interests in Scotland and Northern England for £2,042,000 in cash and £85,000 in shares. The Company thereupon issued to the public £2,300,000 of 6t per cent. First Mortgage Guarantee " debentures " at 98 per cent. on the security of preference and ordinary shares and a second debenture. The total ordinary capital was £1,000,000 and the whole of it was issued to "Allied Newspapers Limited," with the exception of seven shares of the 85,000 already mentioned, in return for a guarantee of the interest and principal of the debentures of " Allied Northern Newspapers Limited." This guarantee of the parent company enhanced the value of the H Allied Northern Newspapers " debentures. The average profits of the ne~s papers bought had not been so spectacular as to promise D 2

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large dividends after the interest on debentures had been paid. The "Berry Group" acted as a unit until January, 1937, when its various interests were divided under three controls. Lord Camrose kept the Daily Telegraph and Morning Post, the Financial Times and the Amalgamated Press. His brother, Lord Kemsley, took control of the group's provincial newspaper interests together with the Sunday Times and the Daily Sketch of LondOii; and Lord Iliffe took the companies which publish Kelly's directories and a number of trade and technical periodicals. Thus the "Berry Group," as such, ceased to exist, and its component parts stood alongside other " groups " of newspaper interests, like the " Cadbury Group," which controls the News-Chronicle and the Star in London, the "Odhams Group," which owns a number of periodicals and controls the Daily Herald, and the" Beaverbrook Group," of which the Daily Express, the Sunday Express and the Evening Standard are the chief publications. The principal London and provincial journals that are independent of " groups " are The Times, the Manchester Guardian, the Glasgow Herald and the Yorkshire Post, while four Sunday newspapers, including the Observer, are also independently owned. None of these papers has been the object, or the subject, of conspicuous "newspaper finance."

risk they would only have themselves to blame in the event of loss-were it not for one consideration which bears upon the standing of the Press as a whole rather than upon the investments of individuals. This consideration is whether the vendors of newspaper shares and" debentures," who are at the same time newspaper proprietors with means of advertising their own issues of shares and stocks, are likely fully to discharge in regard to them the proper journalistic function of offering impartial criticism in the public interest. If this question cannot be answered affirmatively, it would seem that modern newspaper finance tends to affi.ict the Press and the public with a potential evil for which it is hard to foresee the cure. Of this evil there are several symptoms, some of which relate to methods of increasing the circulation of newspapers so that they may gain larger revenues from advertisements. But the most serious symptom, and the most menacing to the health of what Socialists call " capitalist society," may well be the reluctance of newspapers which are themselves units in vast money-making concerns to examine searchingly the affairs of other money-making concerns and public companies that advertise reports of their annual meetings in the columns of those newspapers. The high rates paid for the publication of " company reports " by newspapers may quicken those newspapers' understanding of the proverb that they who live in glass houses should not throw stones. If it be argtied that the distribution of newspaper shares among the investing public ought to act as a corrective to this state of things, inasmuch as it is a form of public ownership of public enterprises, the answer is that public ownership of shares in newspapers does not imply public control, since control is usually vested in a category of shares not largely held by the public. The real owners of newspapers are those who hold a majority of these controlling shares and, with

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Some twelve years ago I drew attention to the peculiar characteristics of newspaper finance in a study entitled " The Disease of the Press." This disease, as I see it, consists in the use of the Press as a source of pecuniary profit beyond the point needed to ensure the political, moral and financial independence of journalism. Whether or not the public, who subscribe most of the money for the operations of newspaper financiers, burn their fingers or get cash to burn may be a matter of minor moment. If investors or speculators like to run the

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THE PRESS them, the power of securing for themselves, directly and indirectly, a high proportion of the profits. Besides, ordinary investors whose holdings carry with them no power of control are apt to look upon newspapers merely as business undertakings, and tacitly to approve of any policy that may seem likely to increase the market value of their holdings. If only for these reasons the public marketing of newspaper shares is not necessarily a healthy proceeding and may be very much the reverse.

102

The problem of maintaining a healthy Press, financially and economically independent enough to enable it to withstand official or other interested pressure, would still be difficult if newspapers stood alone instead of being the pivots of a great industry. Nowadays the Press is the centre of a large number of co-ordinated industrial undertakings which are not exclusively controlled by men who look upon the production of newspapers as involving a moral stewardship for the public. Taken together with the production of periodicals, the " newspaper industry " gives more employment than either brick-making or brewing and nearly as much as the spinning and weaving industries. In 1935 it ranked, as an employer of labour, above the heavy industries of shipbuilding and the smelting and rolling of iron and steel. In London Manchester and Glasgow it is now one of the most important of all industries; and so rapidly has it expanded that the numbers of people employed in it increased by more than 40 per cent. in the decade between 1921 and 1931, that is to say, from 56,488. to 79,458. These figures are independent of the paper-making or newsprint industry and of the 100,000 or more persons employed in distributing newspapers or in canvassing for subscribers. It stands to reason that the business men who manage or control interests of this magnitude can scarcely look

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103 THE FINANCE OF THE PRESS upon journalism proper with the same respect as they would if their livelihood or their fortunes depended solely upon the skill and character of journalists. In what is becoming, if it has not already become, a " totalitarian " enterprise the tendency of the industrial magnates who control it is naturally to lump journalists together with the other personnel of the industry and to allow them just enough initiative and freedom to keep the public from perceiving that the Press is no longer free. Business men are apt to assess the importance of any item in their balance sheets by its actual cost; and the cost of original journalistic work in the production of a popular newspaper with a large circulation is hardly more than one-sixth of the whole outlay. The Report on The British Press, recently published by the group of investigators known as P.E.P. (Political and Economic Planning), compares the estimated balance sheets of two imaginary daily papers with the figures published by Lord Beaverbrook in September, 1937, for the Daily Express, and shows that its estimates were very near the mark. Taking the actual figures of the Daily Express it appears that (out of a total yearly outlay of £5,025,000) paper and ink cost £1,375,000, or nearly 36 per cent.; the wages of mechanical workers, £700,000, or 18.3 per cent.; distribution (including railway charges), £650,000; and editorial expenses (including the cost of news), only £600,000. But there is nothing to show what proportion of these editorial expenses is actually paid to journalists in the form of salaries. It is probably far less than the cost of canvassing for subscribers and advertising the paper, which is put at £400,000. Thus it will be seen that journalism proper cuts a poor figure in a newspaper balance-sheet. Business men may, therefore, be disposed to under-estimate its value and to judge the work of journalists mainly from a " business " standpoint. And when in the exercise of their true vocation-which, in the words of the

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THE PRESS pronouncement by The Times on February 7, 1852, is " To seek out truth, above all things, and to present to readers not such things as statecraft would wish them to know but the truth, as near as they can attain to it " -journalists trouble markets or offend statesmen or potentates whose favour the magnates of the newspaper industry may wish to cultivate or to retain, such journalists are likely to have a sense of their relative unimportance in the " industry " duly impressed upon them.

105 THE FINANCE OF THE PRESS care can be too great and no safeguard too stringent to preserve the independence of broadcasting. In so far as· the press prostitutes to the business of moneymaking its mission of instructing and educating the people, that mission should be carried on by other means. Care for their own pockets may then invigorate the consciences of newspaper proprietors. After all, the health of the public mind is at stake ; and it is of vital importance, in the true sense of that hackneyed term, that the mind of the community should not be subject to any preponderating control. The essence of democratic freedom is that there should be checks and balances to prevent lopsidedness of political and social influence. At present the influence exercised by the British press under the control of its financial magnates is not well balanced. Nor have those magnates always been shrewd even from the standpoint of their own interests. It is not merely that the conduct of their financial operations, the " watering " of their capital by bonus shares and other devices, have supplied Socialists and Communists with much ammunition for their campaign against capitalism, but that they have persistently encouraged or palliated methods of lawless violence abroad on the assumption that those methods were sanctified by being used, ostensibly, in defence of capital and property. The obtuseness of " business minds" in matters of high public policy and of individual freedom can rareiy have been more strikingly shown than in their shortsighted encouragement of violence abroad. From the writings they have authorised, and the policies they have recommended, it would be easy to glean an anthology of maxims to justify violent interference with their own properties if ever the pendulum of public feeling should swing against that "capitalist system" which their financial practices have tended to discredit.

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For the present condition of newspaper finance it is not easy to suggest a remedy. There is certainly no single remedy, no panacea. Even if all newspapers were placed under safeguards similar to those which Major the Hon. J. J. Astor instituted for the purpose of preserving The Times as a national institution the disease would not be cured. Sheltered seclusion from rough winds would not foster virility in the Press as a whole. The remedy or remedies may lie in other directions. One corrective may be found in British broadcasting, which brings the news, without advertisement, into millions of homes and, to that extent, gives a news service on cheaper terms and with a wider range than any newspaper can offer. Another remedy, painful but wholesome, may come through a gradual deflation of newspaper finance, and in the development of a type of newspaper, or news-letter, appealing to a bettereducated public, and independent of advertisers because more economically produced. But the chief remedy must come from leaders and trustworthy educators of public opinion. Public men are no longer quite at the mercy of the newspaper Press. They can speak to millions direct through the broadcasting microphone. They can help to build up standards of taste and judgment to which the pressure of public feeling would compel the controllers of newspapers to conform. No

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[7] Excerpt from Royal Commission on the Press 1947-1949. This article has been abridged by the editors.

The Press as an instrument of information ·and instruction 361. The Press may be judged, first, a.S the chief agency for instructing the ·public on the main issues of the day. The importance of this function needs no emphasis. 362. The democratic form of society demands of its members an active and intelligent participation in the affairs of their community, whether local or national. It assumes that they are sufficiently well informed about the [100] · issues of the day to be able to form the broad judgments required by an election, and to maintain between elections the vigilance necessary in those whose governors are their servants and not their masters. More and more it demands also an alert and informed participation not only ii:J. purely political processes but also in the efforts of the community to adjust its social and economic life to increasingly complex circumstances. Democratic society, therefore, needs a clear and truthful account of events, of their background and their causes ; a forum for discussion and informed criticism ; and a means whereby individuals and groups can express a point of view or advocate a cause. 363. The responsibility for fulfilling these needs unavoidably rests in large measure upon the Press, that is on the newspapers and the periodicals, which are the main source from which information, discussion, and advocacy reach the public. In recent years this function has been .shared with the radio ; but the impermanence of broadcasting, together with the limitations on the quantity and character of controversial material which can be diffused over the air, still leaves the Press in a central position. A useful service is being rendered on a small scale by the factual publications of ·specialist societies and learned bodies, such as the Royal Institute of International Affairs and the British Society for International Understanding:. and a number of newsletters of differing value supply information and comment to subscribers ; but any shortcomings of the Press in this field are unlikely to be adequately [101] made good by any other agency.

The Press as an industry 371. The third standard by which the Press may be judged regards the Press less as a public service than as a great industry concerned with the collection and diffusion of news. 372. The idea of what constitutes news varies from office to office : a paper's standard of news values is one of the most distinctive facets of its personality. There are, however, certain elements common to all conceptions of news. To be news an event must first be interesting to the public, and the public for this purpose means for each paper the people who read that paper, and others like them. Second, and equally important. it must be new, and newness is measured in newspaper offices in terms of minutes. This follows partly from the notion that the public is more interested in what occurred last night than in what occurred yesterday morning, and partly from the fact [103]

that a newspaper is created afresh every day. Each issue is designed as something separate and distinct from every other issue and tends inevitably to concentrate on what has occurred since the last was published and to avoid repeating what has already been said. 373. If news must be both new and interesting, which of the new events occurring every day are held to be of the greatest and most general interest? The replies to a question to this effect in our questionnaire suggest that the answer is : those concerning sport, followed by news about people, news of strange or amusing adventures, tragedies, accidents, and crimes, news, that is, whose sentiment or excitement brings some colour into life. Mr. Francis Williams, an ex-editor of the Daily Herald, said: " ...• over the large field of readership of newspapers there is a demand for something bright and interesting, a sort of ' cocktail ' before the meal rather than the solid meal ";* and a sub-editor on the Daily Express added: " ... we as newspapers are not concerned with what will appear important to posterity. What we have to do is to produce something which will seem, if not important, at least interesting to the man in the street, and to the man in the street the daffodils in Regent's Park are often more important ... than a massacre in Chungking. "t 374. The replies to the questionnaire did not rate interest in public affairs very high, though many undertakings thought that it was increasing, partly as a result of education, but mainly because of the increased impact of politics, and particularly of Government activity, on the lives of ordinary people. The latter point suggests that interest in public affairs is intermittent and varies in intensity with the range of the reader's experience and the relevance to his own affairs of a given event. Explaining the great prominence given in the Daily Mail to an announcement of an increase in the price of coal and the paper's comparative lack of interest in the causes of the increase, the editor of the Daily Mail said: "I think what would be in the mind of the sub-editor would be this : the public to whom he is selling his newspaper, his readers, are more interested in the fact that the price of coal is going up than that the cost of production is getting more and more difficult."t The public's taste in news of public affairs to some extent reflects, or is thought to reflect, its taste in news generally, and the exciting and exceptional features of affairs are considered to have a higher news value than the normal daily events and the background which gives them meaning.§ 375. The reader's taste in political news js affected by his own political opinions, especially if they are strong. Members of a political party are naturally more interested in the speeches of their own leaders than in those of the opposing party, and most readers probably prefer news which confirms their own opinions to news which does not. The Co-operative Press Ltd. said in reply to our questionnaire : "If a newspaper does not reflect the limitations and prejudices of at least a considerable section of the public, it will soon cease to exist, for it will find no buyers."ll 376. Newspapers are not guided entirely in their conception of news by what the majority wants : most of them feel some obligation to report matters which they believe to be important, even if these interest only a minority. But their judgment, like the reader's, is affected by political opinion. *Q. 532.

tQ. 1480.

!Q. 10,546.

§An interesting example of this was the lack of interest displayed by the popular Press ·n the Pan-American Conference at Bogota until it was interrupted by a Colombian revolution. 1 JIMemoranda of Evidence, vol. 3, p. 65.

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Opponents of the Government will think it important that the public should be informed of the Government's shortcomings, while its supporters will with equal honesty think it more important to inform the public of the Government's achievements.

The standard to be applied 377. In our view no standard of judgment can be wholly relevant which fails to take some account of the bases both of the first of these standards and of the third. The Press is not purely an agency for the political education of the public, much though democratic society may need such an agency. On the other hand, it cannot be considered purely as an industry: the inescapable fact that it is the main source of information, discussion, and advocacy imposes upon it responsibilities greater than those resting on an industry which does not deal in information and ideas. 378. The first standard fails to allow for the fact that the primary business of a newspaper undertaking is to sell newspapers. Only by selling newspapers can such an undertaking maintain its existence. Given a free choice people will buy only newspapers which interest them, and a newspaper must consequently either gauge accurately what the public wants and supply it, or persuade the public to accept something different. The latter can be done only slowly and within narrow limits, and while most newspapers do contain material of minority interest, they are bound to cater for the most part for what they believe-on the basis of considerable study-to be the tastes of the majority. 379. If, however, public demand plays so large a part in determining what a newspaper publishes, it is apparent that a newspaper catering for a mass public will be led to adopt a concept of news nearer to that indicated in paragraphs 372-3 than to the clear and truthful account of events and their background and causes which our first standard demands. 380. The first standard is not, therefore, wholly relevant ; but if it is set too high, the third may be set too low. Though a newspaper is a commercial enterprise it does not follow that it need necessarily pursue commercial advantage without limit A newspaper whose financial position is precarious will, it is true, be compelled to concern itself almost entirely with moneymaking ; but a successful undertaking seldom aims exclusively at profit ; it is also interested in its own conception of success, and that conception may include a regard for the responsibilities imposed on the Press by the part which it plays in the life of the community. 381. The statements of the proprietors assume that the acceptance of certain public responsibilities is compatible with the successful conduct of a newspaper as a commercial undertaking. We believe that a standard by which the Press can reasonably be judged can be based on this assumption ; but that the standard enunciated by the Press itself is somewhat idealised in relation to practice and tends to make too little allowance for the fact that the Press is an industry. 382. It follows from what we have said about public demand that not all newspapers can perform the same degree of public service, or be expected to ob~erve the same sta~dards. How each paper can best tell the public what 1t ought to know will depend both on the tastes and education of the particular section of the public to which it is addressed and on the character of the paper itself. If a paper's public looks to it almost entirely for entertainment, the amount of serious information it can communicate is small. 105

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Are tbe daily and Sunday newspapers too few to afford adequate channels of information and opinion? 311. National morning newspapers.-Qf the nine national morning newspapers now in being, two are quality papers (one Conservative, the other non-party), two are tabloid picture papers (one Conservative, the other leftwing), and five are popular papers to which pictures are incidental. Of these five, two are closely associated with mutually antagonistic left-wing parties, one expresses generally the Liberal point of view, one the Conservative, and one a point of view which is in the main Conservative, though diverging from the party on certain issues. If the papers are considered in this way the choice is not so large as their numbers would suggest, and it has been represented to us that considerable currents of opinion find no expression through the national morning papers. Politics apart, ther~ is a considerable [87] similarity in the popular papers. Their values, their taste, their appeal vary only within narrow limits. They are designed for much the same class of reader with much the same tastes, interests, and education ; and it has been suggested that there might usefully be one or more national morning papers intermediate between the popular and the quality papers. 312. With this suggestion we agree, but for reaso.ns connected wi~ the Th1s we quality of the existing papers rather than with therr number. shall discuss more fully later.* We do not consider that the present number of national morning papers is so small as to prejudice ei~er the free ~x pression of opinion or the accurate presentation of ~ews. .Smce all the nme circulate throughout the country, the range of cho1ce which they represent is fully available everywhere ; and since each is in separate ownership that range includes nine separate points of view. These nine reflect the broad divisions of political opinipJ?-. and they ar:e about as many as a re!lder wanting a conspectus of opiDlon can convemently study. We see. no_ VirtUe in mere multiplicity, and it does not seem to us that the public mterest requires that smaller schools of thought. shoul~ fil?.d expres~io~ through national newspapers. So long as there 1s a d1vers1ty of penod1cals, and they are reasonably cheap to start and maintain, opinions and policies not advocated in the national newspapers can be advocated by this means ; and if these divergent opinions are of any importance their existence will be news and will be reported as such in the newspapers. 313. We do not therefore see cause for alarm in the decrease of the number of national morning newspapers from 12 in 1921 to 9 in 1948 ; but while the number is not alarmingly inadequate it is not so large that any further decrease could be contemplated without anxiety. [88]

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Is the present degree of concentration in the provincial Press inimical to the free expression of opinion and the accurate presentation of news?

The difficulty of starting new newspapers 317. It has been represented to us that the cost of starting new daily newspapers is too high and ought to be reduced. The question whether the difficulty in starting new papers which undoubtedly exists is so great as to be contrary to the public interest depends partly on the answer to the question whether daily newspapers are at present too few, and partly on the likelihood of new papers being started, in spite of the cost, in the future. We do not think the present numbers so low that the public is seriously ill· served ; and the plans already being made indicate that the cost is not so great as to prevent altogether the establishment of new papers. It is nevertheless high enough to make it more likely that new dailies will be started by those already in the industry than by new-comers to it. We think it desirable that new-comers, possibly with fresh ideas or with a point of view not elsewhere expressed, should be able to enter the industry ; and to facilitate this we should like to see the cost of establishing new daily papers reduced.

89

342. This question resolves itself into a discussion of the merits and demerits of newspaper chains. Chains were severely criticised both in the House of Commons debate of 29th · October, 1946, and by the mover and seconder of the motion when they gave evidence before us. Much of the criticism was of chains as such: some of the witnesses indeed showed a marked inability to illustrate their thesis by reference to the shortcomings of any particular chain. On the other hand we have heard much of the advantages of chain organisation. 343. The points made on both sides of this con~oversy may be summarised as follows : 1 (a) Chains, it is suggested, are inimical to local independence and local diversity. A chain paper does not identify itself as closely as an independent paper with local interests. It gives more space to national and less to local news. The provincial members of a chain are cast in the same mould and express the same opinions, with the result that error or prejudice at the centre is reproduced and amplified. The principal posts throughout the chain are naturally filled by men who are in broad agreement with the chief proprietor, and the papers consequently reflect his policies, rather than policies based on the interests and opinions of the localities they serve. The proprietor is thus provided with a number of mouth-pieces scattered throughout the country which enable him to represent as a series of independent local opinions what is in fact the opinion of an individual or a group in London. This misleads both the local reader and the student of affairs seeking to obtain a conspectus of opinion in the country ; and it gives the chain proprietor undue influence. (b) On the other hand it is said that chains preserve the local character of their papers as jealously as independent undertakings and for the same reason: because the papers' survival depends upon it. A paper which neglects local news and fails to take a local standpoint in discussing national affairs loses its advantage over national papers circulating in its area and is exposed to the full blast of their ·competition. Chain papers cannot afford to sacrifice local news to national, or to disregard local opinion. In local affairs an editor of character and ability can follow his own line and may enjoy greater practical independence than one whose proprietor is always on the spot. Not only does he escape the detailed supervision of a local proprietor, but his association with a larger organisation enables him to withstand other forms of local pressure.

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While there is broad agreement among members of a chain on policy, this does not amount to uniformity, and such influence as control of a chain confers is no greater than that exercised by the proprietor of a ma~s circulation national newspaper. The daily- papers in the Kemsley cbam, the largest of the five, had an aggregate daily pegged circulation of 3.480,692, which was less than the circulation of either the Daily Express or the Daily Mirror alone, and of this aggregate over a third was accounted for by evening papers which are relatively non-political. 2 (a) "It is dangerous," said Mr. Michael Foot, M.P., "that a chain paper should be able to invade a provincial town and by virtue of its greater financial resources crush the local or independent paper out of existence."* Chains, it is said, have not merely bought up and extinguished rival papers in the past, but by reason of their financial strength are a potential threat to independent papers in the future. They have thus curtailed or threaten to curtail the public's free choice of a newspaper. (b) On the other hand it is urged that chains have preserved papers which could not have survived on their own resources ; that provincial dailies in a chain are better able to withstand the competition of the national dailies ; and that consequently for some provincial papers chain ownership offers the best chance of survival. 3 (a) It is suggested that a large organisation is not necessarily more ·economical than a small, and does not necessarily produce better papers. The provincial quality papers are. independent. It is possible for independent papers by co-operating with one another to obtain some at least of the advantages of chain organisation-for example, by sharing the cost of maintaining foreign correspondents or of authoritative feature articles. Provincial evening papers do not in any case need an elaborate foreign service. The journalist may be thrown out of work if he is on a paper taken over by ·a chain ; and if for any reason he is dismissed from, or cannot work happily on, one member of a chain he is excluded from employment on all the others. This may be particularly serious for a man who by knowledge and experience is best fitted to work in an area where all the papers belong to one chain. (b) On the other hand, it is said that chain ownership is not merely free from the objections made against it but has marked advantages. The association of a number of papers, and particularly of national with provincial papers, spreads the financial risks and gives greater stability. By organising central purchasing, advertising, news-gathering, and other services a chain effects economies which enable it to produce better newspapers. It can spend more on foreign news, features, salaries, and equipment. Its widespread organisation gives its readers a better service of home news than papers standing on their own can provide. As a result, papers acquired by chains have improved in quality. To the journalist the chain, by reason of its size, can offer good pay and conditions, better facilities than a small undertaking for training, more varied experience, and better prospects of promotion. 344. We have studied the arguments on both sides against the background of the detailed ev.idence submitted to us and of the history of the chains during the last 27 years. We have reached the conclusion that the case against chains has been overstated. This is especially so of the predatory habits which we were invited to condemn. The chains have not habitually

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invaded provincial towns and crushed independent competitors out of existence. As we indicated in paragraphs 240-1 the only places where anything of this nature can be said to have occurred are Bristol, Exeter. and Newcastle, and of the seven newspaper deaths in which the activity of chains, or chains-to-be, may have been a major factor, all but two were due not to competition between a chain paper and an independent paper, but to the bitter "war" between the principal chains. This struggle showed, not that a chain paper would destroy an independent rival, but that unrestrained competition between two chains was as damaging to them as to any independent paper that happened to be involved. The lesson has apparently been learned, and with the exception of two papers whose lack of success could be attributed to other causes, no independent daily competing with a chain daily has ceased publication since 1932. 345. On the other side of the account, chains have undoubtedly preserved and for a time run at a loss papers which otherwise would presumably have ceased publication. 346. We do not think that the tendency to uniformity among the members of a chain is as great as has been suggested. The critics overlooked the wide differences between the five principal chains, and, having in mind particularly one of them, attributed to chains as such the shortcomin~ which they believed they detected there. In fact, however, chain ownership does not necessarily produce uniformity or even similarity in the papers: it does not have this ~ffect, for example, in the papers belonging to the Provincial chain, which have little in common but their proprietor. Nor do chain papers necessarily pay less attention to local affairs or reflect local opinions less adequately. Here again much depends on the organisation developed by the chain. A highly integrated chain can in theory impose a central policy on its members, but unless in forming its policy it takes account of local interests and opinions it may by doing so jeopardise the survival of the papers. We were impressed by the importance which the chains attached to maintaining the local tradition of their papers and by the degree of practical independence, particularly in local affairs, which the chain editors who gave evidence appeared to enjoy. 347. While it is not axiomatic that a large unit is more profitable than a smaller, we believe that a chain with highly developed common services can produce newspapers with a wider range of news and features and possibly with greater technical and mechanical efficiency than independent undertakings publishing newspapers of comparable standing and relying solely on their own resources and on news agencies. The independent quality papers are evidence, however, that it is possible to produce newspapers of a standard as high or higher without the advantages of chain organisation.

"Q. 1747.

348. We do not consider that chain ownership of newspapers is necessarily undesirable, but we conceive that in certain circumstances it might become so. It is inevitable, and it has not been denied, that the chief proprietor of a chain can ensure that all the papers belonging to the chain adopt broadly the same policy on national issues and consider local issues from broadly the same point of view. He may not exercise this power, but if he does, however wisely. its exercise limits the expression of spontaneous local opinion and, in proportion to the size of the chain, reduces the number of diverse points of view finding expression through the Press.

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For the reason given in paragraph 314, we attach importance to the preservation of newspapers which are not, to however limited a degree, the mouthpiece of policies formulated in London and broadcast through a number of papers scattered over the countrj. Given a reasonable level of service, diversity may be of more value than efficiency. 349. In our view therefore chains are undesirable if they are so large and so few that they unduly limit the number and variety of the voices speaking to the public through the Press. The only class of newspaper in which the chains have a proportion of either the total number or the total circulation so high that it might have the effect of imposing an undesirable limitation is the provincial dailies. In this field there are 41 separate proprietors. The five largest, the chains, have 44 per cent. of the morning papers and 44 per cent. of the evening, 63 per cent. of the morning circulation and 44 per cent. of the evening. The largest single chain, Kemsley Newspapers, has 24 per cent. of the morning papers and 12 per cent. of the evening, 50 per cent. of the morning circulation and 20 per cent. of the evening. These proportions are high, but in terms of numbers the concentration has not increased significantly since 1929 and in terms of circulation it decreased between 1937 and 1947. It is highest among the morning papers and here there are some compensating factors. The morning circulation figures are inflated by the very high circulations of the Manchester Daily Dispatch and the Glasgow Daily Record. These papers, which contribute two-thirds of the provincial morning circulation of the Kemsley chain, are in a class by themselves in that both in character and in distribution they resemble the national popular papers rather than the bulk of the provincial papers. Both meet very strong competition in the towns in which they are published. All the provincial morning papers, unlike the evening papers, face the competition of the national papers and to this extent the effect of the high concentration of ownership in this class is reduced. 350. In the provincial Press as a whole there is nothing approaching monopoly and we see no strong tendency towards monopoly. The degree of concentration in the provincial Press is considerable, but not in our view so great as in itself to prejudice the free expression of opinion and the accurate presentation of news, or to be contrary to the best interests of the public. We should not be alarmed by an increase in the number of relatively small chains ; but we should deplore any tendency on the part of the larger chains to expand, particularly by the acquisition of further papers in areas where they are already strong.

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Specific instances of advertising influence on the treatment by the Press of particular topics 511. Direct influence.-We were given a few examples, mostly trivial, of direct pressure by advertisers to secure the suppression of particular items of news or opinion. We were told that advertisers involved in legal proceedings occasionally tried to have their names kept out of the newspapers-as did people who were not advertisers ; and that the usual result was to secure more publicity than there would otherwise have been. Four editors of provincial dailies told us of isolated complaints about the publication of matter which an advertiser considered detrimental to his interests. They were men of long experience and clearly regarded these instances as exceptional. The protests were either ignored or rejected, but one of them is worth quoting because it throws some light on statements which we received from other sources to the effect that the smaller provincial newspapers do not publish film criticisms for fear of losing valuable cinema advertisements. It was a letter addressed to the editor of the Liverpool Evening Express by a local cinema proprietor who was a considerable advertiser : My attention has been drawn to your entertainment page last Saturday. Your critic says of the film showing at the above theatre this week, "The Woman in the Hall" : "I enjoyed this film up to the last ten minutes". I wonder if you would tell him in future to leave personal pronouncements out of it when he is writing about films to be played at our cinema. Week after week it is "I like this" or "I do not like this". If he would confine himself to stating the name of the film and the cast he would be assisting us in selling our entertainment and not, as at present, making it more difficult. t

The editor told us that he " did not even inquire " whether the advertisements were withdrawn. 512. Two cases of direct pressure on London newspapers which were reported to us afford an interesting indication of how the belief that advertisers influence newspapers may take root. We were told by Mr. Hannen Swaffer that " a man called Belfrage, a film critic of the Sunday Express or the Daily Express . . . got in wrong with Wardour Street over film criticism, and he went ".t The general manager of London Express Newspaper Ltd. told us that the facts were as follows :-In October, 1932.Mr. Cedric Belfrage, who was then on the staff of the Daily Express and writing film criticism also for the Sunday Express, referred in the course o~ a broadcast talk to " an oligarchy of rapacious Jews stepping on the potential film artists of England and America". The following week all the West End cinemas withdrew their advertisements from the Sunday Express and informed [138] the paper that they woUld not be re-inserted until Mr. Belfrage was dismissed. The paper stood firm. the advertisements ceased, and Mr. Belfrage was excluded from the cinemas. After six weeks the advertisements were restored and Mr. Belfrage re-admitted. He retained the post of film critic of the Daily Express until 1936. when he resigned.* [139] tQ. 10,224.

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+Q.599.

•Q. 4938.

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513. We were informed by Mr. Michael Foot. M.P., who was a leaderwriter on the Evening Standard at the time, that an article on the Oxford Group which appeared in t?at paper on 3rd Sep~ember, 1938, was wi~dra~ from later editions at the mstance of Mr. Austin Reed. We were given m evidence a letter from Mr. Frank Owen, who was then acting editor of the Evening Standard. He stated that Mr. Austin Reed telephoned to him from: Switzerland about 11 a.m. asking him to withdraw the article, on the ground that it was biased against the movement. Mr. Owen refused to withdraw the article, but offered to publish a letter from Mr. Reed commenting upon it. Mr. Owen's statement continued : " The article remained in the paper until the afternoon editions, when it was withdrawn to make room for later news. This was the daily routine on the Evening Standard with regard to Mr. Gelding's articles. . . ."t We satisfied ourselves by an examination of the first and last editions of the Evening Standard on other days that this was in fact the practice. 514. We received evidence not only from newspapers but from advertisers and advertising agencies that representations from advertisers are resisted. For example, Sir Miles Thomas, then vice-chairman of the Nuffield Organisation, wrote : " The writer's experience, extending over some twenty years, is that an advertiser's interests have no influence on the editorial policy of a paper, or on its selection of the news or opinions to be published. . . Our .experience is, and has been, that any mention of advertising was a deterrent rather than a help to getting sympathetic editorial treatment."t 515. Indirect infiuence.-The National Union of Journalists said in written evidence : "Generally, it is not a question of the advertisers saying : 'Do this ' or 'don't do that' ' or we shall take our advertising away'. The influence is negative rather than positive, a recognition that it is 'against policy ' to do anything or report extensively any comment which may be considered detrimental to the interests of the big advertisers."§ Mr. T. E. N. Driberg, M.P., speaking of his experience as a columnist on the Daily Express, said that he was instructed by the advertising manager or the editor to "give a good show to this or that event or incident which was connected with the advertising interest "11 and to refrain from expressing an unfavourable opinion. As an example he recalled being forbidden to report an unfavourable opinion on a new clock erected outside Selfridge's because " Selfridge's were very big advertisers and had, indeed, stood by the Daily Express in difficult times when the Express was not nearly so prosperous a concern as it later became ; therefore, it was the view of the Express that Selfridge's should not be in any way criticised or attacked."~ The witness added : "one could certainly not make any general attack on any powerful advertisers".** The editor of the Daily Express denied that the paper refrained from attacking advertisers. He said: "We are constantly opposing monopolies, cartels, and combines in trade, and we have in the course of my career attacked Boots', the cash chemists, Woolworths', the chain stores, and Lever Brothers. We have also attacked the Co-operative Society very [139] vigorously"; and the general manager added: "We have carried on very violent campaigns against the banks and against the Bank of England. . . ."• [140] *Q. 4857. tQ. 4946. §Memoranda of Evidence, vol. 1, p. 11.

!Memoranda of Evidence, vol. 5, p. 251. !IQ. 11, 449. 'lfibid. **Q. 11, 457.

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521. Editorial " puffs ''.-It was suggested to us that newspapers not merely refrained from criticising advertisers but would, on their own motion or on that of an advertiser or his agent, insert news or comment reflecting favourably on the firm. Mr. Michael Foot, M.P., said : "When I first went on to the [Evening] Standard you could see that the advertiser not only had his advertising space but had an article in the news columns as part of the bargain. There are still chunks of it in some other newspapers but I think most newspapers have cleaned that situation up and most of the proprietors are strongly opposed to that kind of thing."~ The general manager of London Express Newspaper Ltd. told us that Mr. Foot's statement was true in respect of special supplements devoted to particular industries, but not in respect of the paper's normal news columns. We have had evidence from a number of sources, and it is common knowledge, that before the war newspapers frequently published not only supplements of this kind but also special pages devoted, for example, to books or fashions or Christmas shopping, in [141] which the editorial material was designed to comment on and create interest in the advertisements. These supplements or pages were distinguishable from the ordinary news c;olumns of the newspapers and there is no reason to Sl:!P· pose that they misled the public: indeed Hovis Ltd. told us that the prll;ctlce of producing supplements " was never particularly welcome among advertiSers, perhaps because a l~ge section of the publi.c reap.sed that the edit?rial matter did not always spnng from the customarily high standard of mdepend~nt jud!mlent ".* Some of these productions, on the other hand, were of a high sta~dard and contained information of considerable interest to the public to whom they were addressed. 522. Mr. J. P. W. Mallalieu, M.P., told us that it was" standard practice" both in offices in which he had worked and in others for companies advertising on the City page to be mentioned in the City editorial colu~s. He said: " Every day in the City office we had a list of the <:ompames which were advertising, and however tight space was or however un1mportant the company, we had to give a mention. It was never specifically sta~ed to me, 'It must be a favourable mention', but I do not remember ever m my experience an unfavourable mention being given of a company that was going to advertise. "t In reply to a: subsequent question he said: "An advertisement manager or his assistant would come round and say, 'So-and-so's meeting is next week. Here are the accounts. We want to get the meeting.' It would be treated as a sort of joke but the implication would be there:"t Two of the Beaverbrook group's City editors, on whose papers Mr. Mallalieu had worked, informed us that lists of the companies advertising on the City page were received. One added that they were supplied by junior members of the advertising staff who " naturally seek editorial comment. favourable if possible, for their advertisers". Both editors said that their discretion [142] was entirely unfettered. *Memoranda of Evidence, vol. 5, p. 250. tQ. 855. tQ. 859. 'liQ. 1926.

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528. As long as newspapers are sold to the public for less than they cost to produce, they will need a supplementary source of income. Of the various possible sources of income, the sale of their space to advertisers seems to us to be one of the least harmful. The income to be feared is that which comes from a concealed source and can be earned only by the sale of the editorial columns. Revenue received from a known source in payment for a recognised commercial service stands on an entirely different footing. Its receipt creates a relationship both remote and impersonal, and [143] lays newspapers open to no more influence than they are able and willing to resist. The publication of advertisements should not be regarded, moreover, as a departure, under pressure of economic necessity, from the proper function of a newspaper. It is an essential part of the service which the newspaper renders to the community, valuable alike to commerce and industry and to the general public. [144]

CONCLUSIONS ON THE PERFORMANCE OF THE PRESS 547. . Earlier we stated as the standard by which we proposed to judge newspapers individually and the Press collectively two essential requirements: truth and absence of excessive bias in the recording of public affairs, and a sufficient variety of newspapers for the Press as a whole to give ~n opportunity for all important points of view to be effectively presented m terms of th~ varying standards of taste, education, and political opinion among the prmcipal groups of the population. In this chapter we shall consider how far these two requirements are met, summarise the causes of any falling short of them, and draw some final conclusions. Before doing so, we think it appropriate to call attention to the achievements of the Press and to dispel certain fears and suspicions which are in our judgment unfounded. [148]

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The achievements of the Press 548. It is generally agreed that the British Press is inferior to none in the world. It is free from corruption: both those who own the Press and those who are employed on it would universally condemn the acceptance or soliciting of bribes. 549. We have had evidence also that the direct influence of advertisers on the policy of newspapers is negligible. We have had no evidence at all that advertisers are able to influence the treatment of public questions in the Press; on the contrary, we are convinced that the Press is alert to any such attempts by advertisers and ready on all occasions to repulse them. It is undoubtedly a great merit of the British Press that it is completely independent of outside financial interests and that its policy is the policy of those who own and conduct it. Further, there is in the main no difficulty in learning who they are. All but one of the national daily newspapers, and the majority of ·the provincial ones, are owned by joint-stock companies, and though the capital structure is often complicated, it can be disentanged by any competent investigator. In any case where there may be doubt about the beneficial ownership, the facts can be ascertained by Board of Trade inquiry. The public can, therefore, dismiss from its mind any misgiving that the Press of this country is mysteriously financed and controlled by hidden influences, and that it is open to the exercise of corrupt pressure from self-seeking outside sources. There would still be danger to the public interest if we had found marked monopolistic or quasimonopolistic tendencies in the organisation of the Press. Certain large concentrations do undoubtedly exist, and are known to exist. But over the field as a whole we have found no such trends. 550. These may be thought to be negative virtues. On the positive side, it is obvious from the enormous circulations which have been achieved by certain newspapers that those who conduct them are skilful in gauging the public taste and are meeting successfully a wide public demand. It is true that the newspapers with the largest circulation are not necessarily those most deserving of praise, but readers would not buy the mass-circulation papers unless they enjoyed them: it is clear, therefore, that these papers do make a positive appeal. 551. Two of the most obvious of their merits are cheapness and readability. The penny newspaper, even in its abbreviated form of to-day, is remarkable value for money. We can think of no other product, equally expensive to produce, which is sold for so small a sum. The readers of the penny newspaper clearly find in it something that satisfies their reading needs. They find a brightly coloured kaleidoscopic picture of the world day by day. They find exciting incidents at home and abroad ; they find pathos and tragedy mingled with sentiment and comedy ; they find personal gossip about the great or the notorious and about people in the news who are neither great nor notorious but have caught the popular imagination for the moment ; they find well-produced photographs of people or places. Great affairs of national or international importance may not always get the space or the dispassionate treatment that is their due, but they are not neglected, nor are serious features lacking, even if the lighter predominate. In the quality Press important questions, whether national or international, are handled seriously, and if the presentation of events and the treatment of personalities are not *See paragraph 612.

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untinged with partisanship, these newspapers do succeed on ti:ne whole in conveying to their readers a clear picture of the conflict of issues ~ the world today. A mass of material upon which considered judgment: on crucial problems, national and international, can be built up will be fct:::nd in their pages, and if such papers are few in number, it is open to 6.:: public to increase their circulation.

The second reqnirement--snfficient variety to present all important points of view in terms of the varying standards of taste, education, and political opinion

552. Both the quality and the popular Press are the products C1f a remarkably complex organisation working to a series of very fine time schedules. Every 24 hours for six days in the week the daily newspaper puts an entirely new issue in the hands of its readers. It gathers in news from e-r;;ery part of the inhabited globe, it sifts and collates every day many thousands of separate messages ; it selects what it considers the more important or more interesting for publication ; it trims them or amplifies them, and puts on hea,.::Jines to tell the story in a few words. Out of the mass of edited material it fi.::lally selects the contents of a single issue, prepares the pages for the rotary :rresses and prints up to several million copies in a few hours ready for disC-:toution by road or rail to every part of the British Isles. Only an industrial organisation working at a high pitch of efficiency could successfully accompliSh such a task day by day and week by week.

561. We consider that the Press does adequately provide for a sufficient variety of political opinion. But we think it desirable that it should cater ~or a gre~ter vari~ty of intellectu~ levels. The appeal of the popular papers 1s not entirely uniform, but the differences are not great. The appeal is very largely to the lowest common denominator of taste and interest: some popular papers are almost entirely frivolous on nearly every subject that they handle, while others attempt to deal with serious material seriously, but give little of it. The practice of publishing serious feature articles on the topics of the day, which formerly went some distance to raise the intellectual level of some of the popular papers, had become less common, even before the size of newspapers was reduced. The gap between the best of the quality papers and the general run of the popular Press is too wide, and the number of papers of an intermediate type is too small. The quality papers are relatively dear ; some of them have a strong political colour. There is, for instance no paper easily available throughout the country that would meet the need~ of the reader who is unwilling to pay 3d. for The Times, is not in sympathy with the politics of the Daily Telegraph, and wants something more substantial than the left-wing popular papers. There is a lack of newspapers more serious and better balanced than the popular papers but more varied and easier to read than the quality. 562. So long as this gap remains, we cannot find that the Press adequately fulfils our second requirement.

The causes of the shortcomings of the Press 563. Compe_ti_tion for. mass. drcula_tit;m:-We have already discussed the effects of political partisanship. TnVIality and sensationalism have other roots ; we ~ttribute them mainly to the competition for mass circulation. A newsp~~er 1s normally dependent not I?erely fo~ profit but for existence upon adverusmg revenue. The ~aunt of 1ts advertising revenue is governed, for a popular paper, almost entirely by the number of copies it can sell. In order to m~~ain. and if possible increase, its circulation in the face of strong comp7tition, a popular paper 7onc~ntrates on publishing what it knows from expenence a very large public will buy. The need to maintain its mass appeal also limits the amount of serious material which a newspaper feels a~le to publish, and ~e exte_nt to which its style and intellectual level can diverge from those of 1ts public. A paper can be a little ahead of its readers, but not far ; if the distance becomes too great, circulation will fall. Lord Northcliffe had a saying, once famous in Fleet Street, that while it is damaging for a paper not to give a reader what he wants, it is far worse to give him what he does not want. 564. The question arises whether the popular Press is right in its judgment o~ public demaJ:!d and how far, if at all, the popular papers under-estimate erther the potential demand for more solid and informative fare or the distance which they can afford to be ahead of their public. 152

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565. Admittedly both the sensationalism and the partisanship of the popular newspapers ·spring from widespread and well-established public attitudes. The marked rise between 1937 and 1947 in the circulation of the Daily. Express and the Daily Mirror is evidence of the large and expanding public for sensational newspapers ; and the partisanship of the Press may be said to respond to the partisanship natural to a people whose political life consists in an almost perpetual conflict between two or more parties. Nevertheless, there are indications also of an increasing demand for serious information and for the discussion of both sides of a case. Among them are the increased circulation of the quality papers (between 1937 and 1947 the circulation of the quality dailies rose by 85.1 per cent, that of the popular dailies by 58.5 per cent.) ; the increased circulation of the periodicals of opinion and the more informative of the illustrated weeklies ; the popularity of some of the serious programmes of the B.B.C. ; and, as an indication of the growth of a public anxious to learn and to discuss, the rising attendance at adult education classes. We believe that there is a small but growing minority, not perhaps articulately demanding a higher level, but ready to accept and appreciate one if it were offered. If the information and the mental stimulus which this minority needs are not offered by the popular papers they will be sought elsewhere, from the periodicals and the radio, and the popular papers will continue to be read for their entertainment value. And while the popular papers can continue to command a mass circulation at a low level of intellectual content, they will tend to maintain that level and to pay too little attention to the potential market for something better.

566. The standard of education in the profession of journalism.-such of the shortcomings of the Press as are not attributable to excessive bias, com~tition for higher circulations, or the hazards inherent in collecting and publishing news at high speed, seem to us to be attributable very largely to the inadequate standard of education in the profession of journalism. After making allowances for the disruption of normal processes of recruitment and training caused by the war, by post-war conscription, and by the contraction of newspapers to four pages, we do not consider the standards of education prevailing generally in the profession high enough to enable it to deal adequately with the increasing complexity of the events and the background which the modem journalist must report and interpret. We shall refer to this in more detail in paragraphs 621f]. 567. Forms of ownership.-The shortcomings which we have discussed are not peculiar to newspapers in any particular form of ownership. Sensationalism, triviality, and undue bias occur alike in newspapers under jointstock ownership and in papers owned by co-operative societies. They occur in ~ paper whose political control is formally divorced from its commercial policy as well as in papers where there is no such divorce. Ownership by a trust does not in itself appear to exempt a paper from these weaknesses.

568 .. External influences.-We do not think that the performance of the Press JS adversely affected by the direct influence of advertisers or of the Government information services.

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570. The Government information services do not seem to us to exercise a harmful influence on the Press at present. But they are capable of developments which in the interests of free expression of opinion should be carefully watched. 571. An external factor which does aggravate the shortcomings of the Press is the economic situation, because the shortage of newsprint not only increases the difficulty of producing accurate and adequate newspapers but may impede the flow of able young men into the profession and tend to drive out in frustration some of those already in it. This is not to say, however, that an increased supply of newsprint would of itself ~move. the de~ciencies in the Press: it would merely remove one of the tmpedunents m the way of improvement.

Conclusions and implications for the future 572. We have aiven reasons why in our opinion the newspapers, with few exceptions, fail 1:; supply the electorate with adequate materials for sound political judgment. This situation has a~sen in part fro~ the modem conception of news value: In P.art also tt !eflects the f~ure of the P~ess to keep pace with soCial requrrements whtch grow steadily more exac~g. The increased complexity of public affairs and the growth of the readmg public have created a need 'for public instruction on an entirely new scale without producing as yet either the corresponding demand or the corresponding supply. It is a peculia?ty of a ne~~pal?er that it is produced .bY a profession grafted on to a highly 7ompetitive .m~ustry : wh~t.ever the tdeals of the profession, they can be realised only vt'lthin the conditions set by the industry. 573. These conditions are not new. Thev have indeed been operative for a hundred years or more: and they have ·long been explicitly recognised, as is illustrated by the following extract from a letter from Lord Palmerston to Queen Victoria, dated 1861 : "The actual price at which each copy of the newspaper is sold barely pays the expense of paper, printing, and establishment ; it is indeed said that the price .does not repay those expenses. The profit of the newspaper arises from the price paid for advertisements, and the greater the number of advertisements the greater the profit. But advertisements are sent by preference to the newspaper which has the greatest circulation ; and that paper gets the widest circulation which is the mo~t amusing, the most interesting, and the most instructive. A dull paper IS soon left off. ~e proprietors and managers of The Times therefore go to. great ~xpense m sending correspondents to all parts of the world where mterestmg events are taking place, and they employ a great many able and clever men to write articles upon all ~ubjects which from tim: to titJ;le en11a.g~ public attention ; and as mankmd takes more pleasure m readmg cntxciSm and fault-finding than praise, because it is soothing to individual vanity and conceit to fancy that the re.ader has becom~ w~er .thall; those. about .~h_om he reads so The Times, m order to mamtam xts cxrculatxon, cntxcxses freely ev'erybody and everything ; and especially events and persons, and Governments abroad, because such strictures are less likely to make enemies at home than violent attacks upon parties and persons in this country."*

569. Indirectly, however, advertising-the fact that newspaper space is sold t? ~pie who want to a~dress the largest possible public-has some responstbility because, as we pomted out above, the desire to attract the maximum amount of advertising revenue stimulates the competition for higher circulations and the debasement of quality associated with it

574. The problem of bridging the gap between the rising standards of mental nutrition required for healthy citizenship in a modem democracy and the fare provided by the Press is not easily solved. For we face here

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*Letters of Queen Victoria, 1837-1861 vol. III. p. 589.

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something of a dilemma. In a competitive industry, the more scrupulous are always in danger of being undercut by the less. When this situation occurs in industry, it can be, and often is, dealt with by legislation: alternatively, it is obviated by the establishment of a monopoly. The dangers which would attach to either of these solutions in the case of the Press need no emphasis. S15. In these circumstances, we do not think it reasonable to lay upon the Press, and in particular upon the daily newspaper, the whole duty of resolving the problem which confronts us. Much help is to be expected from-and indeed has already been contributed by-the radio and the periodical Press: much is to be hoped from a gradual rise in the level of public taste and judgment as educational standards improve. We cannot. however, accept the view that the Press is doing everything that it can reasonably be expected to do : some of the spokesmen of the Press who gave evidence appeared to us unduly complacent and deficient in the practice of self-criticism. Opportunity, we think, now lies open for collective action by the Press itself, and an obligation devolves upon the Press not to neglect that opportunity. Moreover, the Press's conception of its own function, as expressed in evidence before us, and the high standards of public responsibility which it explicitly acknowledges, encourage us to expect that it will recognise and accept the part which it can thus play in developments which are vital to the future of democracy.

pre-requisite of a free Pre~s. ~nd free enterprise will generally me3:n commercially profitable enterpnse m the case of newspapers .of any considerable size and circulation. 579. It was suggested that, in order to keep commercial motives within bounds, a limit should be set to the profits of newspaper undertakings. There is at present throughout industry a gentlemen's agreement with the Chancellor of the Exchequer that dividends shall not be increased, but this is of course an entirely different proposition from that suggested, which, as we understand it, is to limit dividends to x% of capital. Such a limitation would, it seems to us, be both unfair and undesirable, and would not achieve the purpose intended. An undertaking of similar size to another and earning equal profits may differ widely from it in capital structure, either because profits have been retained in the business and used as capital. or because part of the capital has been subscribed as debentures or preference shares ; and the same dividend on the Ordinary shares would produce different results in the two undertakings. To limit dividends throughout the industry would be to discriminate between established undertakings and those not so favoured where the risks are greater, and would restrict the flow of capital into the industry, which in turn would increase the difficulties of launching new newspapers. It must also be borne in mind that limitation of dividends would not of itself limit profits. The newspaper industry carries risks rather different from, and probably greater than, those in most other industries. Accordingly, any proposal on the lines suggested would, amongst other things, restrict the starting of new newspapers and increase the competitive power of the large undertakings vis-a-vis the small. 580. Some witnesses saw in the competition for higher circulations both the major expression of the commercial motive and the major cause of the failure of the Press to perform what they believed to be its proper function. To limit the size of circulations is on the face of it an attractive method not only of checking the debasement of standards which may follow from an attempt to appeal to increasing millions of readers, but of limiting the influence of the proprietors of mass-circulation newspapers and assisting the development and survival of provincial and other dailies with small circulations. To limit circulation would, however, involve depriving the reader of freedom of choice, and we do not see how any individual could justifiably be refused the right to buy the paper he wants merely because a given number of his fellow citizens also want to buy it.

CHAPTER XVI PROPOSALS AND RECOMMENDAT IONS: (1) FINANCIAL AND ECONOMIC 576. Before we discuss the means of encouraging and assisting the Press to raise the level of its own achievement it will be convenient to consider the economic and financial proposals submitted to us, some of which have been designed to eliminate by other means the faults which witnesses have seen in the performance of the Press.

Proposed measures to eliminate or reduce commercial motives 577. Many of the shortcomings of the Press arise from the fact that newspapers give the public what it pays them to give it. Witnesses who drew attention to these shortcomings inveighed against the commercial motive and suggested that, in large-scale undertakings, it was the antithesis of, and hardly compatible with, the motive of public service which in their view ought to inspire the proprietors of newspapers. Various suggestions were put before us for eliminating or reducing the force of commercial motives. 578. It was not suggested to us by a single witness that newspapers should be owned by the state. Emphatically we should not recommend it ourselves. It was suggested that individual or joint-stock ownership should be prohibited, and papers be owned by government-licensed corporations. This also we reject. To forbid any individual or group of individuals to publish a newspaper would, in our view, be an unwarrantable interference with the libeny of the individual and the freedom of the Press ; and we see no reason to think that newspapers attached to the interests of political parties, trade unions, or other orga~ations would be better newspapers, or have greater regard for truth and farmess, than newspapers published by private undertakings. In our view free enterprise in the production of newspapers is a 155

Trust ownership 581. As an alternative to direct prohibition of or interference with private ownership it was suggested that the formation of trusts-and particularly of trnsts safeguarding the independence of the editor-should be encouraged by giving taxation benefits to undertakings so owned. Some witnesses believed that trust ownership was free from the excessive commercialism attributed to large-scale private ownership and allowed greater independence to the editor. 582. There has been some confusion of thought on this subject. A trust does not necessarily remove a newspaper from ordinary commercial ownership. The three ownership trusts,* the Daily News Trust. the Scott Trust. and the Observer Trust do ; but the two undenakings operated under deeds of trust, Birmingham Post & Mail Ltd. and Bristol United Press Ltd., are ordinary commercial concerns, and so are The Times, The Economist, *See paragraphs 83-4 and Appendix VI.

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587. A trust can be, however, a valuable means of pre~erving qual_ity ~~ere quality already exists. We accordingly welcome the action of public-spmted proprietors who have taken such steps as lie in their power to safeguard the character and independence of their papers ; and we hope that the number of papers so protected will grow.

and the Spectator, which were sometimes erroneously mentioned to us as examples of trust ownership. Even an ownership trust does not necessarily make an important change in the character of the undertaking unless it eliminates the ultimate recipient of surplus profit. If .it merely substitutes for the private shareholder some other persons or some cause (other than the newspaper itself) to whose interests profits ar~ to be devoted, the newspaper may still be run with the object of making profits. 583. Similarly the existence of a trust does not necessarily protect the editor. Of the three trusts which own newspapers only one specifically safeguards the independence of the editor-the Observer Trust-and that only against interference from the board of directors : the editor has no protection against interference by the trustees.* Of the other three concerns sometimes described as trusts only that owning The Economist gives the editor formal safeguards: t the editor of The Times, far from having his independence guaranteed, is on paper entirely in the hands of the Chief Proprietors (Colonel J. J. Astor and Mr. John Waiter), who are specifically empowered by the Articles of Association of The Times Publishing Company to control editorial policy. 584. If. therefore, on these newspapers and periodicals the editor has more real independence and editorial considerations carry more weight than on others, it does not follow that this is so because of the existence either of trust ownership or of special provisions to protect the independence of the editor. Moreover, if greater editorial independence and importance do not depend on trust ownership there is no assurance that trust ownership of itself will secure them. The proprietor of a paper, whether it is a commercial undertaking or a trust, must at least retain the right to dismiss an editor who persists in a policy which makes it impossible for the paper to pay its way. 585. It may be argued that a competent editor who avoids losing his employer's money will be given greater independence under a trust than under commercial proprietorship; but even if this were true (and it is not necessarily true), it would not follow that a trust-owned newspaper would be better than any other. The character of the paper would depend on the character of the trustees and the nature of the trust. It is impossible to draw up any deed of trust which will ensure that a paper retains a particular character in perpetuity, and even if possible it would be undesirable. If specific policies are laid down they tend to become out of date and irrelevant and may dangerously tie the hands of those who have to conduct the newspaper in circumstances unimagined when the deed was executed. If, on the other hand, policy is laid down only in general terms there is room for departure from the original purposes of the trust, and if the calibre of the trustees and the executive officers appointed under their authority declines. so may that of the paper. 586. It should not, therefore, be assumed that because newspapers and periodicals owned by trusts or protected by restrictions on the transfer of control are generally of high quality, the existence of a trust or of similar restrictions will automatically ensure this state of affairs. A trust does not necessarily convert a newspaper from a commercial to a non-commercial concern or give it quality which it did not previously possess. For these reasons we do not consider that it would be effective or appropriate to put any pressure on proprietors by fiscal inducements or otherwise to adopt either trust ownership or any of the arrangements whose purposes are similar. "'See Appendix VI, p. 232.

Proposed measures to help new newspapers to start and independent newspapers to survive 588. As we have indicated above, we do not consider any drastic alteration of present forms of ownership necessary or desirable. We have considered with some care whether anything can properly be done to encourage the establishment and assist the survival of provincial dailies or of national dailies appealing to a public numbered in thousands rather than in millions. We can see, however, no method of doing this which would not involve giving some form of direct or indirect subsidy either to the industry as a whole or to one section of it at the expense of another, and to such a remedy we see strong objections. 589. A public corporation to print new newspapers under contract.-It was suggested that the capital required to start a new newspaper would be very much reduced if the promoters of new papers could be freed from the necessity of investing large sums in plant and equipment, and that for this purpose a public corporation should be established to own the physical · equipment necessary to produce and distribute a newspaper and to undertake production and distribution under contract. The corporation would undertake these services · for individuals or groups able to give financial guarantees of their ability to meet the bills for the first six months. The proposal was directed primarily to reducing the cost of starting new national newspapers, but it was suggested that the corporation might ultimately provide plant not only in London but also, if the demand arose, in other newspaper centres. 590. This proposal does not appear to us to touch the root of the problem. The bulk of the capital required to launch a new paper is needed not to buy plant but to meet running costs, of which the cost of newsprint forms a large part, until such time as the newspaper has established itself in the eyes of the public and of the advertisers and begins to earn sufficient revenue to meet expenses. In any case, if a promoter wishes to have his paper printed under contract-and it is an arrangement not free from disadvantages-there are commercial printing firms in London and elsewhere to which he can go. 591. The irrelevance of the proposal is not our only objection to it: if it could in fact render valuable services to publishers, other, but no less weighty, objections would arise. Launching a new newspaper can never be other than a highly speculative business : there can be no certainty that it will find a sufficient market. A paper for which a public corporation had provided plant might fail after six months, leaving the corporation, even if the printing bills were paid to the last penny, with costly plant on its hands and no return on the capital expended. To safeguard itself in some measure against this, the corporation would be compelled to consider not merely the adequacy of the publisher's financial guarantees, but his chances of proving -successful. Immediately it went beyond the question of finance, political and other considerations would arise, and the problem of deciding fairly what new ventures should be given the advantage of the corporation's facilities might become almost insoluble.

tlbid., page 236.

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592. Reduction of restrictive practices.-It was suggested to us that production costs are inflated by restrictive practices on the side of labour and that if these were abandoned or checked the establishment of ne~ papers would be easier. Witnesses differed about the extent of these practices and their contribution to cost. We did not consider it to be within the scope of our inquiry to undertake the detailed investigation of collective agreements in the industry which would be necessary if we were to determine whether restrictive practices exist to such an extent as to increase production costs significantly, and we accordingly express no opinion on this point. We think it right, however, to draw attention to the matter in order that the appropriate authority may consider whether any inquiry into restrictive practices in this industry is desirable.

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and such-like are at present prohibited by the rules of the Rationing Com· mittee of the. Newsprint Supply Company. The newspapers observe these rules voluntarily.

596. The practice of virtually buying readers gave an advantage to undertakings large enough to afford it, and made it more difficult for newcomers to get a footing in the national Press and for provincial dailies to withstand national competition. It produced no counterbalancing public advantage. Canvassing in itself, divorced from free gifts and free insurance, does not seem to us to be an illegitimate form of enterprise ; but we consider it highly desirable that other forms of non-journalistic competition should not be revived. We do not consider that this is a problem which can or should be dealt with by legislation. We recommend, however, that the present agreement to refrain from these practices should be prolonged indefinitely. We are glad to record that the opinions expressed to us by newspaper pro· prietors, including the proprietors of national newspapers and of the five principal chains, were overwhelmingly in favour of this course. 597. Fiscal measures.-We received a number of proposals designed to reduce the competitive advantages of large and established undertakings. It was suggested that, in order to give a new undertaking a chance to build up its property, the first £X,OOO earned by a newspaper undertaking should be free of tax; or alternatively, that within certain limits income put to reserve should be free of tax. It was suggested that, in order to encourage investment in new newspapers, their debentures should be for a certain number of years a tax-free security, subject to limitations on dividends and on the size of individual holdings. All these schemes involve the payment of what amounts to a subsidy. Under the first two the subsidy would be paid to all newspaper undertakings in the belief that some would derive more benefit from it than others ; under the third it would be paid to particular undertakings simply in virtue of their being new. We do not think that the taxpayer should be asked either to subsidise a large number of prosperous undertakings in order to assist what would always be a very small number of new papers, or to bear part of the cost of starting new enterprises over which he has no control. 598. We referred in paragraph 339 to the effect of high death duties in encouraging the sale to chains of independently owned newspapers. It was suggested that a scheme for the deferred payment of death duties in respect of private concerns might help the smaller undertakings to maintain their independence. We do not consider, however, that newspapers should be put in a privileged position vis-a-vis other properties, the more so as it is possible for a newspaper proprietor, like any other property-owner, to ensure that death duties are not payable upon his property, by divesting himself of it the requisite number of years befo):e death, either by transfer to younger members of his family or by the creation of a trust. 599. Some doubt was thrown in evidence before us on the efficacy of the latter procedure for this purpose, but we were advised by the Board of Inland Revenue that if a family business is settled for a long term on trusts under which the owners(a) have no power of disposal of the capital, and (b) receive no benefits and have no power to obtain benefits. then under the existing law no claim for Estate Duty wiU arise on the death of a settlor during the term, apart from the claim which will arise if he dies within five years of the creation of the trust. 600. A differential price for newsprint.-A proposal directed to the same ends as those relating to taxation was that the disparity in strength between the small undertaking and the large should be adjusted by fixing a differential

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593. Limitation of advertising revenue.-Before the war big advertisers who wanted to reach the public at large preferred to use the mass-circulation papers, and it was not always easy for the provincial papers or the ·smaller national papers to earn sufficient advertising revenue. If a new paper could be enabled to obtain quickly the advertisement revenue it needs, the period during which heavy losses are incurred, and consequently the capital required, would be greatly reduced. Similarly, if established papers could be assured of adequate advertisement revenue, they would be better able to meet the competition of larger rivals. During the war some national advertising was diverted from the mass-circulation papers, by the contraction of their space, into the provincial papers ; and it has been suggested to us that if this state of affairs could be preserved the small papers would be assisted, both directly by increases in their own revenue and indirectly by a reduction of the revenue, and consequently of the competitive advantages, of the large national papers. It has therefore been proposed that a limit should be set either to the amount of advertising a newspaper of a given size may carry, or to the amount of advertising revenue it may earn. 594. We do not think that these proposals would necessarily achieve their ostensible object: in normal circumstances their effect might merely be to drive advertisers to use other media than the Press. The limitation of the amount of space devoted to advertising might do harm to the very papers it is ~esigned to assist, .si?ce they ru;e ~ep_endent on using .a high proportion of therr space for advertlsmg. The limitation of revenue Dllght necessitate either an increase in the price of newspapers or a reduction of the amount spent on producing them, and possibly of the quality of the service !riven to the public. It might also, no doubt, compel newspapers to refrain from the costly methods of increasing circulation in which they indulged before the war, but while we think the elimination of such practices desirable this is not in our opinion the way to achieve it. We pointed out in Chapter XIV that, as long as the cost of producing newspapers is not covered by their sales revenue, they must supplement their income from other sources. and that of the possible sources advertising seemed to us to be the least danaer0 ous. We should therefore deprecate any measures which, by limiting the amount of revenue obtainable by this means, might lead newspapers to look elsewhere for support. . 595 . .E~imination of non-journalistic forms of competition.-Non· JOumalisti~ methods of competition by canvassing, free gifts. free insurance,

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price for newsprint, the price per ton rising with the quantity bought by any one undertaking. The increase in price would be steep enough not merely to neutralise the advantage derived in normal times from being able to buy in large quantities, but in effect to operate as a levy-subsidy: the larger concerns would pay more than the economic price for the greater part of their newsprint. and the smaller less. The attraction of the proposal is that it would operate on the largest single item of a paper's production costs and would be a charge on the Exchequer only to the extent of the expense of administering the scheme. It would, however, mean compelling one section of the industry to subsidise another and competing section, and in our view such an arrangement could be justified only if the survival of the smaller ·undertakings were much more precarious, and the financial difficulty of starting new papers much greater, than we believe them to be.

be in the public interest for a chain to acquire a paper oth~rwise in dang~r of extinction in an area where the chain had no other mterests ; but tt might not b~ desirable for the ~ame chain to acquire a pap~r .in an area where it was already strong. While, therefore, we are of the oplDlon that the growth of a chain to a size appreciably larger than any now in existence would be undesirable, we do not feel able to specify any limit in advance of such a development, and we do not recommend that any statutory limit should be set. 606. The problem of concentration of ownership should, in our view, be studied in relation to particular cases, and cannot usefully be made the subject of any general measures. The Monopolies and Restrictive Practices (Inquiry and Control) Act.. 1948, which w~s p~sed after we con_cluded our hearings, appears to proVtde an appropnate mstrument for this purpose. Under this Act a Monopolies Commission has been appointed with pow~r to make investigations, at the instance of the Board of Trade. when certam conditions appear to prevail. These conditions (so far as they are relevant to the ownership or supply of newspapers) are deemed to prevail (a) if at least one-third of all the goods of a particular description which are supplied in the United Kingdom or a substantial part of it are supplied by one person. or by one group of inter-connected companies, or by two or more persons who so conduct their respective affairs. as. to prevent or restrict competition in the supply of goods of that descnption : or (b) if agreements or arrangements are in operation the result of which is that in the United Kingdom or any substantial part of it goods of a particular description ·are not supplied at all. The Monopolies Commission may be asked to report on the facts alone, or to report also on the question whether, if the conditions prevail, the things done by those concerned as a result of or for the purpose of preserving those conditions operate or may be expected to operate against the public interest ; and in the latter case the Monopolies Commission may recommend action to remedy or prevent any mischiefs. If the Monopolies Commission has been asked to investigate the facts alone, its report may be, and in any other case it must be, laid before both Houses of Parliament. If the Monopolies Commission reports that the conditions or practices investigated operate against the public interest, or if the House of Commons after considering the report resolves to the same effect, the appropriate Government department may declare specified agreements or restrictive practices unlawful. The Board of Trade is required to present to Parliament an annual report on the operation of the Act. 607. Concentration of ownership of newspapers is not necessarily associated with agreements limiting competition, or with restrictive practices. and the importance of . this machinery lies less in the prohibitions which may be enforced under the Act than in the means it provides for identifying and focussing public attention upon conditions which may operate against the public interest. and for considering what action, if any, is required in the light of those particular conditions. 608. Investigation and publicity might, in our view, be particularly valuable in relation to local monopoly. Local monopolies are the expression of economic facts and cannot be dealt with either by prohibition or, short of subsidising competition, which we should not recommend, by executive action. We do consider, however, that if there were reason to think that an extensive local monopoly were operating, or likely to operate, agai?st the public interest, there would be some value in an investigation whtch

Supplies of newsprint 601. We would stress the importance of securing, at the earliest possible date, a supply of newsprint adequate to the needs of the industry. We have already indicated some of the harmful effects on the newspapers of the acute shortage of space. An increase in the supply of newsprint will not of itself necessarily improve the performance of the Press, but in our opinion no substantial improvement is to be expected without it. 602. While, however, it is important that newspapers should return as soon as possible to a more adequate size, it is also important that newsprint should be made available for the establishment of new papers. At present a new newspaper may not, except under licence from the Board of Trade, use more than 8 cwt.* of newsprint in any period of four months. Since this is not sufficient to achieve an economic circulation even for a weekly newspaper, the establishment of new dailies is in effect. prohibited. Discussion of ways and means of facilitating the production of new newspapers is futile as long as this situation persists. 603. It is not for us to determine what priority should be given to the import of newsprint or pulp in relation to other scarce materials, or how the available newsprint should be allocated ; but we should welcome any increase in supplies which may be compatible with the economic position of the country, and we hope that consideration will be given, as supplies increase, to the possibility of lifting the present restrictions on the use of newsprint for new papers. Measures to break up chains or restrict their growth 604. Proposals were put before us for legislation to break up the existing chains or to prevent their groWth beyond a given size. Since we do not consider that chairi. ownership is undesirable in itself. or that concentration of ownership is at present so great as to be contrary to the best interests of the public, we do not recommend measures to break up existing concentrations. 605. The question at what stage of its development either in size or in integration a chain may become a potential danger to the public interest does not appear to us to be susceptible of a simple answer. Much depends on the degree of integration of the chain, particularly on the editorial side, and on the geographical concentration of its members. It might, for example, *It was announced on 26th April, 1949, that this amount would be increased to 16 cwt. on 1st July. 1949.

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drew attention to any abuse of his position by the monopolist. and perhaps to local willingness to support a rival paper. We assume that for the purposes of the Act an area as large, for example. as Devon and Cornwall or an extensive conurbation could be regarded as " a substantial part of the United Kingdom " ; but we recommend that if this should be found not to be so, amending legislation to bring local monopolies in areas of this size or importance within the purview of the Monopolies Commission should be considered.

Disclosure of membership of a chain 609. One of the objections to chains is that readers of a provincial newspaper owned by a chain may be misled into accepting as local points of view opinions or policies which are in fact determined in London. This objection would be removed if chain papers carried on the face of them an indication that they belonged to a chain. The members of the Kemsley chain (other than those published in Wales) at present carry the words "A Kemsley Newspaper " on the front page ; but no other chain has adopted this device. 610. We recommend that where one company. either directly or through subsidiaries. owns daily newspapers (other than sporting papers) in more than two towns, all the newspapers so owned by that company should be required by law to carry on the front page a formula clearly indicating their common ownership. Disclosure of the persons having the ownership or control of newspapers 611. It has been argued, and it is an argument with which we have much sympathy. that, in view of the potential influence of newspapers, the persons who own or control newspaper undertakings ought to be known to the public. The problem of securing the disclosure of this information in relation to companies generally was recently the subject of prolonged consideration by the Cohen Committee on Company Law Amendment, which recommended that the beneficial owners of 1 per cent. or more of the issued capital of a company should be required to disclose themselves. But when the Companies Act. 1947. was under discussion by Parliament it was found impossible to devise any legislation which would effectively secure the automatic disclosure of the beneficial owners of shares. or of the persons entitled to vote upon shares. This difficulty would not be overcome by applying legislation to the shares of newspaper undertakings only. 612. While, however, we see no practicable means of securing the automatic disclosure of the identity of the persons in control of newspaper undertakings, the .powers of investigation conferred on the Board of Trade by the Comparues Act. 1948. appear to us to be sufficient to enable this information to be obtained in respect of any newspaper undertaking the ownership or control of which is in doubt. Section 172(1) of that Act provides as follows: Where it appears to the Board of Trade that there is good reason so to do, they may appoint one or more competent inspectors to investigate and report on the membership of any company and otherwise with respect to the company for the purpose of determining the true persons who are or _have been financially interested in the success or failure (real or apparent) of the company or able to control or materially to influence the policy of the company. 613. It was .su~ge~ed t
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number of newspaper undertakings whose ownership or control is in doubt has in the recent past been very small ; and these undertakings can be identified from the particulars filed with the Registrar of Companies. Where there is no doubt. there is no purpose in making a routine inquiry: where there is doubt, it seems to us sufficient that the Board of Trade has power to make inquiries on its own initiative whenever it sees good reason to do so, and can if necessary be stimulated by means of Questions in Parliament. We think it desirable that the Board of Trade should make investigations in suitable cases. 614. There is no power analogous to that in the Companies Act to inquire · into the membership and control of societies registered under the Industrial and Provident Societies Acts. Two such societies at present publish newspapers. We consider that newspaper undertakings registered under these Acts should be open to investigation to the same extent as undertakings registered under the Companies Act. Accordingly we recommend that powers similar to those of the Board of Trade under ss. 172 and 173 of the Companies Act should be conferred on the Registrar of Friendly Societies in respect of any societies registered under the Industrial and Provident Societies Acts which publish newspapers or periodicals or engage in the business of a news agency. Measures to keep separate channels of news in separate ownership 615. It was suggested to us that newspaper proprietors should not be allowed to own. distribute, or show news films ; and that if new developments in radio (for example. frequency modulation) were followed by relaxations in the B.B.C. monopoly of broadcast news. newspaper proprietors should similarly be forbidden to control the transmission of news by radio. We have no evidence that there is at present any combination of newspaper and newsreel ownership, and the developments in radio have not advanced far enough for us to consider what new situation they may ·create. We do not therefore think it necessary to make any recommendation on this point ; but we think that the scale and significance of any future combination of newspaper 0\v"Dership with control of either news films or news broadcasting ought to be carefully examined.

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[8] Excerpts from Dangerous Estate: The Anatomy of Newspapers.

MR. ELIAS SELLS NEWSPAPE RS LORD SouTHWOOD can claim no such place in a gallery of press portraits as falls of right to Lord Northcliffe or Lord Beaverbrook by reason of that flavour of genius, bold and original if destructive, which is to be found in their personalities. He was not an eruptive and pervasive force in journalism as Northclill'e preeminently was and Beaverbrook is. He was above all else an ordinary little man, a man undistinguished in almost every respect save one: his talent for commercial success. He did not cut a new path for himself through the jungle of the Fourth Estate. He went where the guideposts pointed. It was this, indeed, that made him so portentous a figure, for by following the course of newspaper development in the 'twenties to its logical conclusion he made for himself a career that may not unfairly be said to mark the apogeeor perhaps the reductio ad absurdum-of the commercial principle in journalism. The ambitions that inspire those who own newspapers are commonly varied. 'Purposes,' as the Royal Commission on the Press remarked, 'are seldom single and motives seldom unmixed· the desire to make money, the desire to make opinion and th; desire to make a good newspaper can and do insensibly blend.' It was not so with Elias. His was the single-track mind in journalism. He was as much unlike the popular idea of a press peer-or for that matter his actual contemporaries on this elevated rung of society, Lords Beaverbrook, Rothermere, Camrose and Kemsleyas any man could well be. He had no interest in newspapers as instruments of political power or· public inlluence, or even as n means to a large private fortune. Although he longed for a peerage and was overwhelmed with delight when he got one, especially so because the recommendation was made by a Conservative Prime Minister (characteristically his first act on receiving the news was to send for a hook on etiquette that would tell him the correct manner to address the Prime TV1inisler in reply), he had no desire to play a part in society. lie was a noble benefactor of the Children's Hospital, Great Ormond Street, and raised immense sums-more than 161 D.E.-F

£20,000,000 in all-for charity which apart from his business was the one consuming interest in his life, but his private estate when he died was little more than £100,000. Apart from an odd passion for buying clothes-he had a standing order with his tailor for two dozen suits a year, all conservatively cut in blue, grey or brown, and never liked to have less than fifty pairs of shoes in his wardrobe -he had no private extravagances. He went abroad only once in his life, for a day trip to Le Touquet, and invariably spent his annual holiday of four weeks at the same place, the Grand Hotel in Eastbourne. There, he and his wife, to whom he was devoted, listened enraptured each evening to the orchestra in the Pa1m Court, throwing disapproving glances at fellow guests who chatted or rattled coffee cups: their favourite tune was the Blue Danube Waltz. He rarely entertained, still more rarely went to a theatre, hardly ever read a book, had no interest in conversation except on business matters, listened to almost nothing on the radio except 'Lift Up Your Hearts'. He knew nothing of art-when he decided, on getting his peerage, that he ought to have a country house he made an offer for one lock, stock and barrel including all the furniture and pictures and when the vendor insisted on taking some of the pictures summoned the Editor of Ideal Homes and instructed him to fill the blank spaces on the walls as he thought best. He was a good employer who wanted everyone around him to be happy, happy and loyal. Apart from charity his whole life was concentrated on the firm of Odhams Press. He had joined it as an office boy, saved it from liquidation by tramping London for cut-price orders, and eventually transformed it from a firm of nearly derelict jobbing printers into one of the largest and most prosperous printing, publishing and bill-posting businesses in the world. He worked day and night, had immense commercial courage, as he showed when Horatio Bottomley's arrest and conviction for fraud threatened to ruin not only John Bull but Odhams itself, and was wholly untroubled by doubt as to the purpose of the newspapers and periodicals he controlled. He was concerned only that they should sell and thus keep Odhams' printing presses busy. His entry into daily journalism in 1929 was dictated solely bv this latter need, which was, indeed, the one settled principle of his business life. Odhams already owned an extremely flourishing Sunday paper, the People, whose circulation Elias raised from the mere 250,000 at which it stood when Odhams took the paper over in settlement of a printing debt to-over 2,000,000 by methods which he was now to introduce into daily journalism. Years before he had replied to the owners of the Church paper, 162

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the Guardian, when they expressed dismay that the printers of their respectable journal should also be the printers of Bottomley's scandal-mongering weekly, John Bull, that he saw no difference between printing periodicals and selling lamp standards, razor blades or hair restorers, nor any more reason why he should consider the morals and opinions of his customers in the one case than in the other. To the People he had applied methods of salesmanship applicable to the sale of such goods, employing hundreds of door-to-door canvassers who persuaded householders to take the paper by promises of a great free insurance scheme-the first ever provided by a Sunday paper-free gifts and competitions. He did not believe much in news. 'The public gets the news in all the papers,' he said. The People's success was based primarily on salesmanship and sensational features, of which the most important was a series of 'Confession Stories'. His first big winner was the confessions of Montague Newton a solicitor who extorted huge sums from an lndian maharajah with eccentric sexual tastes in what came to be known as the 'Mr. A' case. His second was the confessions of the housekeeper ofHayley Morris, the central figure in an even more sordid case of sexual offences against young girls. Hardly less successful on a more respectable plane were 'intimate revelations' of King Carol of Rumania and Madame Lupescu and-a great social triumph for the People for which it paid the large sum of £20,000-Lord Lonstlale's life story told by himself. These confession stories were displayed with solid black headlines of a size never seen in any British newspaper before and were supported by news stories of romance, passion, violence and changing fortune for which the People's edit01:, Mr. Harry Ainsworth, scoured Britain and the Continent. The recipe was enormously successful. But the very success of Elias, the salesman, soon began to put Elias, the printer, in difficulties. To cope with the People's weekly print more and more presses had to be bought-and these presses stood idle most of the week. At first Elias hoped to solve this problem by a long-term contract to print the Radio Times for the B.B.C. The enormous demand for this journal would have given his presses enough work to keep them busy for a good part of the week and Odhams' rapidly extending magazine interests could have taken care of the rest: indeed if he had got the contract it is unlikely he would ever have troubled to try his skill in daily journalism. But Sir John Rcith, director-general of the B. B.C., had married the daughter of one of the original Odhams' partners and austerely decided that to give the contract to Odhams mighl 163

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savour of nepotism. lt went elsewhere and Elias turned his mind to thoughts of a daily paper. The first to attract his attention was the "Aforning Post, which was widely known to be in financial difficulties. Although he sometimes lent the garden of his house at Highgate for Conservative fetes he was not a member of the Conservative Party and the Morning Post was High Tory. He was a Jew and it was violently anti-semitic. But there was nothing in his philosophy to require that differences of principle should stand in the way of a business transaction. 'Political attitudes,' as his official biographer Mr. R. J. Minney remarks, 'did not really concern him. Printing was a job of work; machines were machines-and forty of them, great majestic presses, lay idle for six days of each week for fiftytwo weeks of the year.' Negotiations were begun. In the end they broke down not on any issue of principle but simply because Elias came to the conclusion that it would be impossible to popularise so idiosyncratic a paper as the Morning Post was without driving away most of its existing readers. He would be paying merely for a name. It was not an attractive enough commercial proposition. He then turned his mind to the Liberal Dai~v Chronicle. Sir David Yule and Sir Thomas Catto had by now begun to realise how little they knew about newspapers and were known to be on the look-out for a purchaser. The Chronicle had a circulation of close on 1,000,000 compared with the mere 80,000 of the "Afoming Post and was in all ways a more attractive proposition. But unfortunately others thought so too and before Elias could make a deal the lnveresk Paper Company acquired an option on it for £2,000,000. At this moment a casual meeting set his entirely apolitical mind on another track. lt so happened that John Dunbar who had joined Odhams some years previously as editor of the Kinematograph Weekly (formerly the Magic Lantern Jl.font!tly) but was now in general editorial charge of all Odhams periodicals had served during the war in the Press Department of the Royal Flying Corps. There he had made the acquaintance of Mr. C. P. Robertson, later chief press officer at the Air Ministry, who before the war had been labour correspondent of the Press Association. As a labour correspondent Robertson had come to know Ernest Bevin, then a young organiser of the Dockers' Union but by now general secretary of the Transport and General Workers' Union, a member of the General Council of the T.U.C. and chairman of the Daily Herald. Robertson still occasionally met Bevin over lunch in a 164

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restaurant in the Aldwych handy to both their offices. Happening to meet Dunbar after one of these lunch-time me.etings, he remarked that Bevin was worried by the drain of the Daily Herald on trade union funds and was thinking of approaching the Prudential Insurance Company in the hope of persuading it to put up money to develop the paper along more popular lines. Dunbar, who although not a member of the Labour Party had picked up some socialist sympathies during his youth in Scotland and had been active in trade-union organisation among journalists and musichall artists during his early days in London, carried the news to Elias. Neither of them knew Bevin but Dunbar telephoned Robertson and he agreed to act as an intermediary. A meeting was arranged. The position of the Daily Herald itself when Elias, Dunbar and Bevm met throws a good deal of light on the effect of newspaper commercialisation in the 'twenties. The paper had first come into existence as a strike sheet during a printers' lock-out in January 1911 but had later been resurrected as a socialist daily paper. By the time the outbreak of war in 1914 forced it to become a weekly it was almost self-supporting with a circulation of 50,000 a day. To revive it as a daily when the war ended was not easy. Printing costs had risen sharply and the price of newsprint even more so. The standard of news reporting and of the features, pictures and sports coverage expected by readers had been progressively raised under the stimulation of competition.· Free insurance and other services had become almost obligatory if a large circulation was to be secured. But the enthusiasm of George Lansbury, its editor and moving spirit, was contagious. He had a genius for collecting money for good causes and managed to secure promises of a total of £100,000 from a number of trade unions. The miners' unions added another £42,000 on their own account, and the Co-operative Movement £40,000. Various private subscribers contributed a few more thousands and the National Union of Railwaymen agr~ed to act as a newsprint bank, buying and holding newsprint which the Herald paid for as it used it. With these resources it was possible to go forward. On 31 March 1919 the Daily Herald reappeared with Lansbury as its editor and Gerald Gouid, then well known as a poet and essayist, as its associate editor. It was as gay, impudent, passionate, rebellious and unofficial as it had been in pre-war days and soon collected round it a band of contributors such as any newspaper might envy. Osbert Sitwell wrote leading articles for it-two famous ones, sharply barbed for the benefit of Winston Churchill, in free verse. Siegfried Sassoon contributed its literary notes. H. M. Tomlinson, H. W. Nevinson,

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Havelock Ellis, E. M. Forster, Israel Zangwill, W. J. Turner, Herbert Farjeon, Ivor Brown wrote regularly for it. Waiter de la Mare, Edward Garnett, W. H. Davies, Rose Macaulay, Aldous Huxley, Robert Graves, J>hilip Guedalla and a score of others scarcely less well known were among its frequent contributors and Bernard Shaw wrote a series of articles. M. Phillips Price, who had been Manchester Guardian correspondent in Russia during the revolution, went to Berlin for it, H. N. Brailsford was its special correspondent in war-devastated Europe, Vernoti Bartlett wrote its Paris Letter, W. N. Ewer was (and still is) its diplomatic correspondent. Will Dyson, the brilliant Australian cartoonist whose mordant genius had brought it fame before the war, rejoined it, producing, when the Treaty of Versailles was signed, a cartoon with the caption 'Curious! I seem to hear a child weeping' whose tragic prevision has rarely been equalled: a drawing of Clemenceau walking with President Wilson and Lloyd George dowri'the steps of the Palace of Versailles while in one corner, half hidden by a pillar, a naked baby sobs, around its head a halo marked 'Class of 1940'. Seldom can there have been a paper with so diverse and so brilliant a staff. 1t was, said Northcliffe, as it survived one financial crisis after another 'The Miracle of Fleet Street'. But the time · when newspapers could live on miracles was over. The whole of newspaper development was flowing in other directions. By 1920 the Herald's circulation had reached 330,000. A decade or so earlier that would have meant undreamed-of prosperity for a Labour paper. In the conditions that now ruled it was not sufficient even for solvency. Readers alone were not enough. Great advertising revenue was needed to keep a daily paper afloat and this the Herald could not get. The post-war industrial depression had begun. Unemployment was growing. Its readers were in the main working class. They lacked the purchasing power to attract large advertisers even if such advertisers had not, for the most part, been unwilling to spend money on a paper whose politics they disliked. The price of the paper had to be raised from 1d., to which all the popular !ad. papers had gone during the war, to 2d. in an attempt to meet rising costs. Even at this figure-double that of all its popular rivals-the paper managed to hold on to a circulation of 200,000. It was not sufficient. Only constant appeals to readers for donations and gifts from rich sympathisers touched by Lansbury's importunities kept the paper alive: on one occasion only the eleventh-hour discovery of some old rolls of paper in the cellar enabled it to come out. By 1922 Lansbury knew that the Herald could not much longer survive as an independent paper. He had received 166

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a number of private offers for its name and goodwill from people who believed that with capital behind it it could be made to pay, but he refused to sel1 it to a non-socialist. Instead he offered to hand it over to the Labour Party and the T.U.C. to be run as an official Labour paper. This was done. The trade unions affiliated to the T.U.C. agreed on a special levy to finance it (six years later the T.U.C. took the paper over completely, relieving the Labour Party of all financial responsibility) and a new editor was appointed-Hamil ton Fyfe, a distinguished war correspondent on Northcliffe's staff who had joined the Labour Party after the war. With its loss of independence the Herald lost also a good deal of its original gaiety and elan. It became more respectable, but also much duller. Most of the brilliant band who had sharpened their pens in its pages drifted away. But its general news service was extended and its interest for the ordinary reader increased. Its political and industrial news was superior to that of most of its more popular rivals-as were also oddly enough its racing tips. It took its responsibilities seriously and sought to deal intelligently with the problems of the day, stating the Labour point of view with force and candour. But it could not compete with the Mail, the Express, the Daily News and the Chronicle in entertainment and general appeal-nor in free insurance. It was smaller in size and it carried nothing like as many features as they did. It acquired a solid core of a quarter of a million readers but could not much increase that number or obtain anything ljke the amount of advertising modern conditions made necessary. This was the situation when Elias and Dunbar met Bevin. 1t was one in which the small figure of the apolitical printei· Julius Salter Elias could hardly help but seem a remarkable answer to the T.U.C.'s problems when his interest in taking over the financial burden of the Daily Herald was made known. His proposition was hardly less welcome to the political Labour Party. Continental socialist parties had met the problem of a hostile press by themselves establishing powerful social-democratic newspapers with circulations and resources comparable to those of their rivals. The commercialisation of the popular press in Britain had made this impossible. Whatever their political views those who bought popular newspapers had come to expect something very di!Terent from either the Continental socialist dailies or the old Daily Herald -less political, much more comprehensive in news and features, \'astly more costly to produce, dependent to a much greater extent 167

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than the Continental press on large advertisement revenue and therefore requiring a vastly greater circulation to pay its way. A circulation of 250,000 might have sufficed if the Herald renders had belonged to the upper and middle classes. But they were, by nature of the case, mainly working class. Individually their purchasing power was not such as to attract advertisers; numbers were essential. The proposal now made to the T.U.C. by Elias offered a way round this problem of an unexpected and welcome kind. They found themselves invited to do business with a unique phenomenon-a man who although able to command the resources needed to develop a newspaper with a great circulation was not in the least interested in its political views. But he was perfectly prepared to give any guarantees asked for that it should contim~e to advocate the policies of the Labour Party so long as he, for hts part, was given the right to do whatever was necessary to raise its sales to more than a million. Eight years previously C. P. Scott, examining the nature of ne\YSnapers on the occasion of the Manchester Guardian's centenary, had said : 'In all living things there must be a certain unity, a principle of vitality and growth. It is so with a newspaper and the more complete and clear this unity the more vigorous and fruitful the growth. A newspaper has two sides to it. It is a business like any other. ... But it is much more than a business ... it has a moral as well as a material existence and its character and influence are determined by the balance of these two forces.' Elins was ready in the interests of the commercial principle to deny with every show of assurance that any such unity need exist; to say that what a paper stood for in public affairs-its moral e'?stence-.nee~t be ?f no particular concern to those in charge of 1ts orgamsatlon-tts material existence-and to affirm that body and soul were perfectly easily divisible by trust deed. There were those to whom this could not but seem a dubious journalistic principle, not only when judged by the austere standards of a C. P. Scott but even by the more commercial ones of a NorthcliO"e or a Beaverbrook. For there could be' no question that much of the reason for the rapid advance of the Express at this time, as of the Mail earlier, lay in the wholeness of its personality and the singleness of its purpose; whether one liked it or not ~ts ~ttitud~ to life was never in doubt, it was expressed not merely m tls leadmg articles but in every headline and paragraph and choice of type. Yet whatever the journalistic dubiety of Elias's doctrine it could hardly do other than strike the trade union directors, struggling 1~8

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with their apparently insoluble problem, as a political principle of the most welcome kind. They accepted Elias's offer and in so doing precipitated a newspaper war of the most savage intensity that was to have remarkable results on the total circulation of the popular press. A new company (Daily Herald (1929) Limited) was formed, the T.U.C. receiving £49,000 in shares out of a total nominal capital of £100,000 for their property. Odhams received an exclusive printing contract and put up the balance of the nominal share capital in cash, undertaking at the same time to secure all the large additional finance needed to reorganise the paper in a big way. Odhams had four directors on the Board including the chairman, Elias, the T.U.C. four with Bevin as vice-chairman. The entire commercial management of the paper was vested in Odhams but trust deeds ensured that the political policy of the paper should be that of the Labour Party and its industrial policy that of the T.U.C. Significantly enough neither side considered it necessary to provide safeguards for the editor or even to discuss his position in drawing up the constitution of the new paper, although this might have seemed of some importance to the day-to-day policy and influence of a political newspaper in such a situation. To the T.U.C. an editor was no more than another paid official at the receiving end of a Congress resolution, to Elias, a techniCian hired to do a production job. In the event two editors were dismissed in five years and when the whole question of the editor's status and area of responsibility was directly raised by the resignation of a third (the present writer) on an issue of general principle in the early days of the war Odhams successfully maintained in face of Labour and trade-union protests at the subsequent Board meeting and elsewhere that the appointment of the editor and the degree of authority allotted to him fell solely within its responsibility as commercial controller of the paper. Elias originally estimated that the Herald could be made to pay with a circulation of 1,000,000. This figure was reached with the first issue of the new paper on 17 March 1930 (the opening day of the flat-racing season) after nine months of preparation in the course of which Ernest Bevin toured the country appealing for the support of Labour and trade-union audiences while Odhams reinforced political enthusiasm with financial advantage by offering a personal reward of £3 15s., plus a contribution of £2 lOs. to local party funds, to any Labour Party member who enrolled a hundred registered readers. Those readers willing to buy the paper for at least ten weeks were themselves rewarded with a prize of either a 169

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camera or a writing set according to taste-a method of sales promotion never previously tried by a daily paper. The new 1d. paper was twice the size of the old Herald. It had a specially written serial by Edgar Wallace, a series of articles on world affairs by H. G. Wells, a page of women's fashions, four pages of sport, scores of photographs and a message from Mr. Ramsay MacDonald. Its page size was somewhat smaller than that of the !1-fai/, the Express and the Daily News because it had to be the same size as the People and its headline type-bought originally to suit the People's specia! needs in sensational display-was blacker and uglier than was then customary in daily journalism. But it was clearly excellent value for money as a popular newspaper and had little difficulty in holding on to the million sale even after the first curiosity-demand passed. Indeed its impact on an already over-stretched industry was such that the already financially weak Daily Chronicle survived the arrival of this new competitor by less than ten weeks. Even in 1930 a million circulation was a handsome enough figure by most standards. The Daily Telegraph was being nursed back to great prosperity and substantial political influence on much less than that: its circulation after coming down in price from 2d. to ld. in 1930 was 200,000 and it took nearly another six years of unostentatious steady progress to reach the half million. Yet even with a million sale the Herald was heavily in the red. The reason for this difference lay, of coi.1rse, in the fact that the Daily Telegraph was edited and produced for a Conservative middle-class public with an individual purchasing power high enough to draw advertisers by the attraction of a 'quality' market, whereas the Herald was designed as a mass-circulation paper with a predominantly working-class readership. The big advertisers took space in the early first numbers of the new Herald but very soon made clear their unwillii1gness to continue doing so on a large enough scale for profit with a net sales figure of only just over a million. Elias thus found himself faced with a situation in which a rapid further rise in circulation was plainly essential if the paper \vere even to cover its costs. He was caught inescapably by the commerical formula that now governed in the newspaper industry and by which he himself had prospered in his other enterprises. Five years later a much rougher, tougher and more politically radical character than Elias, H. G. Bartholomew, editorial director and later chairman of the Dai(v Mirror, was to meet this problem in a very different way. Using sensational make-up for news and 170

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features, bringing strip cartoons to the British public for the first time, daily exploiting sex and crime in news, features and pictures to an even greater extent than the People on Sundays he managed to combine all this with a vigorous, muck-raking policy in social affairs and a hard-hitting, alarm-bell-ringing radicalism in political affairs and thus created a new kind of popular daily journalism that for the first time successfully tapped the great reservoir of working-class readership which all daily newspapers had previously ignored. As a result the Mirror was able without any adventitious commercial aids to build up a circulation so vast that it could command what advertisements it needed while getting along with far fc\ver than most others required because of its large income from sales. Elias was precluded from seeking circulation by such iconoelastic, swashbuckling, loud-mouthed and radical means both by his obligations as the publisher of the oiiicial organ or a serious political party-most of whose leading members had already begun to complain bitterly that the Herald was growing sensational and devoted too little space to the serious examination of political, economic and international problems-and by his own character. A shy and modest man, he had no objection to sex and crime if they sold papers but he disliked noise, hated what he considered rudeness-almost the only interest he ever showed in the /lerald's leading articles was to complain of the adjectives of opprobrium employed in dealing with Mr. Chamberlain and his policy during the period of appeasement-could not bear to be thought politically unrespectable, nnd longed to be liked by everyone. Nor could he ever bring himself to believe that ordinary people could be excited by politics. Both the road taken by the Daily Telegraph and that to be taken by the Daily !dirror were closed to him. So also-although he hankered after it constantly-was that cut for itself by the Daily Express, which was advancing rapidly in circulation and advertising favour. This it was doing by making suburbia feel that it belonged tl) the smart set and that every day was a happy day however ominous the clouds on the national and international horizon might be. But both these objectives were closed to the Herald by its political nature. Moreover the Express had the advantage oF a prnpridnr who although capricious and mischievous in his political hates and loves was able and ready to plough back the proflts he made into the business in order to develop world-wide news services of an exclusive character. Elias could not afford to wait for the long-term results of a long-term editorial policy. Nor had he any 171

real interest in news: he could not help feeling that money spent on foreign correspondence was a wilful extravagance-how much nicer the world would have been if it had ended at Enstboun1e. When a periodical did not pay it had been his habit to cut his losses without further dissipation of energy: he was interested only in success. He did this a little later with the most famous socialist weekly there has ever been, Blatchford's Clarion, which he bought in 1933 in the belief that it might be retailored to attract a large public under the editorship of Robert Fraser, now director-general of the Independent Television Authority, only to close it down after six weeks when he found that it was selling no more thari 80,000 copies. Too much capital had been sunk in the Herald for such a drastic remedy. To finance its expansion and set up a printingplant in Manchester as well as London Elias had borrowed heavily on Odhams' assets by means of debentures issued through a finance company, the Investment Registry, with which he had close associations. He could not afford to turn back. But he had plenty of commercial courage and if he did not understand daily newspapers very much nor politics at all he understood a great deal about the selling of goods to an apathetic public. He dismissed the Herald's editor, William Melior, who had been with the paper since the days of Lansbury"s miracle, and appointed another; found him no more satisfactory and dismissed him (in both cases with generous compensation, for he was a kindly man) and appointed a third-a younger one, who, although the circulation rose, turned out a disappointment to him for other reasons and, finally, as mentioned earlier, resigned. The rise in circulation although substantial was not enough. To increase it the paper must, he decided, be made brighter, less political, less serious, more entertaining-altogether more likely to catch the roving eye of the stray buyer at the railway bookstalls. Each morning he spread all the popular morning papers on the floor of his office-it was rarely his habit actually to read them -and walked among them brooding. He ordered the use of more and more pictures, producing from a disgruntled wit the comment that the only way to get any socialism into the official Labour paper was to write it on the back of a bathing beauty. He did not try to turn it from Labour politics. He had undertaken that it should remain a Labour paper and he held faithfully to his word: all he wished was that its politics could be made less noticeable. Yet despite everything he did the circulation continued to remain below the level that the iron laws of advertising, calculated on net-sales and readers' -income levels, demanded. 172

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It was in these circumstances that Elias decided to go out and buy readers. A million circulation among people who took the paper because they wanted to read it was no good. Even a million and a half would probably prove insufficient. Very well then, the circulation must be raised to two million-the largest in the world. Th~tt would make advertisers sit up. Whether those who bought the paper read it was immaterial. All that mattered was that they should become registered readers, units in a net-sales certificate. The circulation war that this decision precipitated marks the logical climax of the commercial principle introduced into journalism by Northcliffe. As a consequence of the Northcliffe revolution the intimate relationship that had formerly existed between newspapers and their readers based on mutuality of interest and confidence in the independence, integrity and good judgment of those responsible for editorial policy had become progressively less important. Now not merely whether people bought a newspaper because they trusted it but even whether once bought they actually bothered to read it was of little significance. All that mattered was that they should buy it. After seven months of fighting existence the new Dai~v Herald had a circulation of 1,082,000, close on four times what it had been when Elias and Bevin made their bargain. Ahead of it were the News Chronicle with a circulation of 1,400,000 (the combined circulation of the Daily News and the Daily Chronicle when they joined forces was 1,600,000 but some of this had been lost), the Daily Express with 1,693,000, and the Daily Mail with 1,845,000. All these three had now to be passed if Elias was to achieve his aim. He turned to the methods that came naturally to him. Vast numbers of canvassers were engaged, many or them naval officers axed in the economy wave and glad to earn £3 or so a week touting from door to door. The other newspapers had to do likewise to defend their positions. Soon an army of more than 50,000 canvassers was knocking at doors all over the country, pleading with householders to take this newspaper or that. Included in the bait offered were insurance schemes more grandiose than ever before and a galaxy of 'easy to win competitions' with prizes of up to £5,000. None of this proved sufficient. Elias was forced to increase the pace. His canvassers were armed with bribes of astonishing variety: cameras, fountain pens, silk stockings, tea-kettles, cutlery; they were the bagmen of the modern world seeking payment not in 173

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currency but in a signature on a piece of paper, a promise to become a registered reader for ten weeks. The Express replied vigorously, so on a slightly lesser scale did the Mail and the News Chronicle. The shower of free gifts became a torrent: the cost to the newspapers appalling. New readers were being gained, it is true. llut the cost was high: for the Herald it worked out at £1 a head for a promise to take for ten weeks a paper costing Id. a day. Brieny, sanity returned. At a special meeting of the Newspaper Proprietors' Association which met under the shadow of growmg national economic and financial crises the others warned Elias that if he continued in his course they would throw every resource they could command into the struggle and outbid him on every free-gift oiTer he made. An agreement was reached that although newspaper canvassing should continue, the bait offered to new readers should be restricted to competitions and free insurance, there should be no freegift schemes and nothing should be offered to readers below cost. The agreement, did not however, last long. Elias was i~ .no position to depend on the same free insurance and compet1t1on schemes as the others. His problem was different from theirs. They could rub along comfortably on the circulations they already had. He could not. So long as it could hold its position against attack and look to editorial enterprise to bring a due reward in time his main rival, the Daily Express, had no objection. to shedding some of the artificial gains which had, from its standpomt, become absur~ to the point of fantasy; how absurd was demonstrated when !t suddenly called off intensive canvassing and dropped 250,000 m circulation almost overnight. Elias dared not risk such a gesture. Not only was the Herald forced by its need for advertising revenue to hold what it had won at almost any cost, it had to continue to expand or die. U_nless it could nourish a net sales certificate of the order of 2,000,000 m front of advertisers it could not hope to pay its way on the level at which it had been forced to establish itself to get into the race at all. The Express continued to spend more and more on news services in all parts of the world. On the Herald editorial costs-except for big names that had advertising value-were vigorously cut back. The ;tving was a mere drop in the ocean. And then pacing his room Elias found-or thought he found-an ace up his sleeve. Some time before this Odhams had branched out into the popular book-publishing business in a large way. A ne~v ~roc~ss o~ book: binding at reduced cost had been developed. W1th 1ts m~ Elms pe_rceived he might find a way to get round the no-free-gtfts bargam while holding to the letter of his agreement. He could replace the 174

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bait of free gifts to registered readers by the offer of books at prices which although advertised as 'far below real value' would in fact be sufficient to cover costs. No one could accuse him of having gone back on his word. He would not be giving anybody anything-he would be asking them to pay. Vast editions of the Home Doctor, the Handyman and a popular dictionary were printed and the canvassing teams increased. The scheme proved even more successful than he had hoped and he moved on to a bolder plan: the offer of a complete set of the works of Charles Dickens in sixteen volumes handsomely bound in cloth or imitation leather-something for every mother to buy for her children and every newly married couple to display in the front room as an evidence of culture. To Elias the man of commerce this was simply a shrewd stroke of business. When complaints thundered from all over Fleet Street he was amazed. No one, he protested, could accuse him of breaking his agreement he had merely found a way round it. He ought to be congratulat~d for his shrew~ness, not revile~ for business dishonesty. Other newspaper propnetors thought differently. A meeting of the controllers of the four papers most heavily involved in the circulation war, the Express, the Ja.1ail, the News Chronicle and the Herald was called on neutral ground in a private room in the Savoy. In a' minority of one, he offered to compromise. He was shaken by the storm that rage~ around him and conscious of how heavily he was already leanmg on Odhams' other properties to sustain the Herald and how much greater might be the financial drain if Beaverbrook, with the Sunday Express and the E1•ening Standard as well as the Daily E\:pr~ss to rely on, threw all his resources into the attack. Perhaps, he smd, some agreement could be reached to limit book offersinnocent though they were. But Beaverbrook demanded total retreat. Nothing less than the complete withdrawal of the Dickens otlcr would satisfy him as the price of peace. Elias refused and with a dramatic gesture, Beaverbrook, ever the actor walked over to him. 'Eiias:' he said, 'this is war-war to the deatl;. I shall fight you to the bitter end,' and drawing an imaginary sword he ran him through the body. On this note the meeting ended. Elias returned to his office to tl!ll his waiting colleagues what had taken place. Lords Beaverbrook and Rothermere and Sir Waiter Layton returned to theirs. The war, as Beaverbrook had declared, was on. Sets of Dickens were hurriedly ordered by the Express, lvfail and News Chronicle and thmg at the heads of readers increasingly bemused by this concern for their literary education-those offered by the EA:press which 175

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lacked the advantage given to Odhams by its book-publishing business cost l4s. 4d. to produce and were sold at 10s., involving the paper in a loss of over £26,000 on the 124,000 sets disposed of. But as is well known not everyone wants more than one good book. With the original free gift agreement torn to shreds the battle was once more open. Into it the warring newspapers now threw everything they could Jay their hands on, hardly excluding the kitchen sink. Cameras, fountain pens, silk stockings, cutlery had been offered before: the canvassers at the doors now offered kettles, tea-sets, fruit services, mincing machines, mangles, overcoats, flannel trousers, mackintoshes, boots and shoes, gold wristlet watches and ladies' underwear. In South Wales, which was a particular target for canvassers because the total readership of daily newspapers there had previously been small, it was estimated that by skilfully timed switches from the Herald to the Express, the Express to the Mail and the Mail back to the Herald a miner"s family could be clothed from head to foot at the cost of a few shillings. Neighbours who took different papers found it easy to equip their kitchens at no cost to themselves by ordering each other's paper and swopping over the garden fence. Journalism had reached its zenith as a public service. One had only to be a 'new reader' to get the moon. The struggle proceeded. First the Herald passed the News Chronicle. Then the Express passed the Mail, ending its close on forty years' supremacy. Then the Herald passed the ~Mail also and came up hard on the heels of the Express. The two of them shot neck and neck down the straight with the Mail and the News Chronicle racing for third place. Between them the four were now spending close on £60,000 a week, or at the rate of £3,000,000 a year, on clothing and equipping hundreds and thousands of people all over Britain. The Herald made a last sprint. It beat the Erpress by a cutlery set and became-although by a matter of days only -the first newspaper in the world to announce a circulation of 2,000,000 copies a day. It was a remarkable achievement and one which Elias felt justified everything. He had increased the Herald's circulation eightfold and brought it from nowhere to first place in net-sales rating. lt would be pleasant to report that his troubles were ended. But this proved to be far from the case. The Herald found it impossible to hold its lead. Benefiting now from its policy of spending money on news services as well as on silk stockings and flannel t rouscrs, the Express first reached and then passed the Herald. By 1937 its circulation had climbed to 2,329,000 while the Herald 176

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sti11 struggled to keep its 2,000,000. The Mail was down to l ,580,000 (it had been 1,845,000 at the start of the circulation war in 1930) and the News Chronicle to 1,324,000. Elius had to abandon all hope of being first. Instead his efrorts were now concentrated on holding at any cost to the 2,000,000, that magical if by now somewhat blown-on figure that provided the only passport to the sort of advertising revenue he needed. Even to do this did not prove easy. Readers bought in a hurry tended to leave in a hurry. To hold them proved almost as costly as to get them. Although it could boast of a 'more than 2,000,000' circula-. tion the Herald losses reached £5,000 a week. Before long they were £10,000 a week. They might have gone higher and become too heavy to carry despite the success of the rest of the Odhams properties if the war had not come along to end all canvassing, prizes, insurance and free gifts by agreement, create a seller's market in advertising space, cut newspaper costs by restricting sizes, and inflate all newspaper sales, as wars always do. Elias had forced the commercial principle in journalism to the fullest limit it would go and the fruits proved strangely bitter. That he should have twisted the permanent values of journalism as he did, turning the relationship between newspaper and reader so largely into a mere matter of barter, was not solely his fault. He was the victim of a situation from which be could see no other escape. Others might perhaps have sought it in the slow building of circulation on editorial appeal. But in fact that avenue was closed to him when he decided after the deal with Bevin that an immediately spectacular leap forward was the only way by which the oid Herald could break through the resistance of advertisers and be made into a paying commercial proposition. Having once begun along that road there was no turning back. 1t may indeed be, as he always insisted, that no other road was open from the first. It was a squalid road and one on which no one, certainly no journalist, can look back with pride or pleasure. But it was one that not Elias but the whole inter-war development of the newspaper industry had marked on the map. Yet what remains of lasting significance is that despite all its excesses the newspaper war of the 'thirties did succeed to a remarkable extent in permanently increasing newspaper readership. A surprising number of the bought readers stuck. The average daily readership of national morning papers in 1930 was 8,929,000. By the end of 1939 it had risen to over ten and a half millions and all over the country people who had never read newspapers before were doing so. They were to go on reading them in increasing numbers. 177

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A MONGLITH IC PRESS C. P. S eo TT remarked in that same classic statement on journalism in which he declared that 'comment is free but facts are sacred' that 'One of the virtues, perhaps almost the chief virtue, of a newspaper is its independence. Whatever its position or character, at least it should have a soul of its own.' But what, one finds oneself asking as one looks at the pattern of today's press, does independence mean? There was in the past no such dubiety. What was then at issue was independence from the State, from the pressures of King and Government and the great vested interests of political power. All this has been won in this country at last. No one today disputes the right of any newspaper in Britain to say what it likes and publish what it pleases so long as it does not transgress the ordinary Jaw of the land. The issue of independence has taken on a different and in some ways a more complicated form. Control of more than 60% of the nearly thirty million newspapers of all kinds daily sold to British readers now lies in the hands of four major newspaper groups: the Daily Mirror-Sunday Pictorial group, Associated Newspapers, of which Viscount Rathermere is chairman, Beaverbrook Newspapers, and Kemsley Newspapers; more than 70% of the circulation of all the national morning newspapers is concentrated in the hands of three of these same four, the kfirror-Pictor ia/ group, Beaverbrook Newspapers, and Associated Press. Moreover this tight control of newspaper readership and thus of a large part of the national and international news that reaches the majority of the British public seems likely to increase rather than diminish. Rising costs, particularly of newsprint but also of wages and distribution, now face all but the most powerful newspaper groups with problems of increasing gravity. The industry is, indeed, in some danger of reaching a position where all but the biggest may soon find it almost impossible to bridge the gap between revenue and expenditure- a consummation which some of the most powerful of the newspaper combines would by no means deplore as a 203

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means of crippling their less prosperous competitors and opening the way to additional circulation for themselves. Newspapers as a whole never 'had it so good' as during the war and immediate post-war years. Costs rose but circulations and advertising revenue outpaced them. Those mellow days are over. The closing down of the Daily Dispatch and Sunday Chronicle by Kemsley newspapers in November 1955 and the subsequent sale by Kemsley of their three Glasgow papers, the Daily Record, Glasgow E1·ening News and Sunday Mail, to the lvfirror-Piclor ial group provided the first dramatic indication of the change of climate. And although the Kemsley-Mitr or deal involved no more than a transfer of power from one big group to another, giving the /1.1irror-Pictoria/ group first place among the newspaper giants with control of just over 18% of the newspaper circulation of the entire country, there is no assurance that what has happened to these newspapers may not also happen to others more genuinely independent. The Daily Dispatch did not die because it had failed to find readers. Its circulation was still rising. Indeed the last Audit Bureau of Circulation return published before the decision to close down showed an increase of 14,680 copies a day. At more than 465,000 its sales were the largest of any daily newspaper published outside London, accounting for close on a fifth of the total circulation of provincial morning newspapers as a whole. It had been born with the century and had behind it a life of vigorous and popular activity during the course of which it had established itself as the favourite daily paper of generations of Lancashire and North Country people, many of whom took no other paper. It died because in the face of rising costs and increasing competition it seemed more profitable to its owners to lease its printing presses to the Mirror-Pictor ial group on a long contract than to make the effort to keep it alive. Robert Blatchford's old paper, the Sunday Ch'ronicle, with not far short of three-quarters of a century of newspaper history behind it and a current circulation of over 830,000, was silenced at the same time, in the same way, by the same proprietors, for the same reasons. A similar assessment of commercial prospects dictated the sale of the three Glasgow papers. The five newspapers thus killed or disposed of were originally acquired by the Kemsley group in the newspaper deals of the 'twenties. For a time they yielded great profits. They were dealt with as they were in November 1955 because this period of high profitability was coming to an end. No consideration for their traditions or relationship with their 204

readers weighed in the decision. The three Glasgow papers had been Conservative from their earliest day: they were now required to change their politics with their masters. Certainly none was given to that truth of which C. P. Scott spoke when he said, 'A paper \Vhich has grown up in a great community, nourished by its resources, reflecting in a thousand ways its spirit and its interests, in a real sense belongs to it: how else except in the permanence of that association can it fulfil its duty or repay the benefits it has received?' It would have been absurd to expect that any should be. These papers had been bought purely for profit. They were now closed down or disposed of for the same motives. It was a commercial, not a journalistic transaction: its significance that it provided the first clear evidence that the favourable conditions which had ruled in the newspaper industry for more than a decade and a half were over. Since then three more provincial morning papers have died. Although newspapers are smaller than pre-war the rise in the price of newsprint far outweighs the saving in quantity. It was £ II 1Os. a ton before the war. It is now £58 and may well go still higher. As paper and ink account on average for between 40 and 46% of the total production costs of a national daily paper t.he outlook is serious for many. It has become all the more so wtth the freeing of newsprint for while those with large advertising revenues can afl'ord to foot the bill for bigger papers, even with costs as they are, the rest cannot. Yet if they do not they may fall still farther behind in the circulation race. Moreover although newsprint production has greatly increased in recent years-it rose from 3,600,000 tons to 6,000,000 tons in Canada alone between 1945 and 1954 and the smaller United States and Scandinavian output has risen in the same degree-world consumption has risen even more rapidly. The gap between them is likely to increase as literacy advances in educationally backward areas. The Commonwealth Press Union was informed at its Canberra Conference in November 1955 that if consumption of newsprint in India alone were to rise to no more than one-tenth of that per head in the United States another I ,000,000 tons of newsprint a year would be required. Even without such new demands the Newsprint and Supplies Committee of the Newspaper Society has estimated that by 1960 world consumption will be well above production despite big increases in productive capacity. In the United States Du Ponts are at work on the development of a synthetic product, other chemists are exploring the possible use of sugar-cane refuse as a raw material. Failing the large-scale development of such alternative sources newsprint supplies can only 205

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be increased by the use of timber resources which have until now been regarded as too inaccessible for economic use. This would mean higher costs and another sharp rise in price to newspaper users. Meanwhile all other production costs including wages have risen sharply. The newspaper strike of April 1955-the only major strike in the history of the British press--inflicted heavy losses on all national newspapers: according to the Annual Report of the Beaverbrook Newspapers published in November 1955 this and the railway strike cost that group alone around £560,000. The cost to other large newspaper undertakings was of the same order. Although precipitated by one small group of employees the newspaper strike may in retrospect come to be seen as marking the end of an era for the British press. The wage claims that led up to it were inspired by the knowledge that the war and post-war prosperity of the newspaper industry was coming to an end and that if the unions did not press their claims quickly the opportunity might have passed for a long time. The employers resisted because as easy conditions of trade ended they were trying desperately to hold off rising costs in the one field, that of labour, where they believed themselves still able to exercise some control. This period of rising costs coincides with an ending of the long period of expansion in newspaper sales. For the first time in their history the market for newspapers may be at or near saturation point. The frontier can be pushed no farther. Close on 88% of the adult population of these islands now reads at least one morning paper during an average day according to an analysis made by the Hulton Readership Survey in 1956. When this figure is set against that of the 12-!% of the population rated in surveys of national intelligence as educationally subnormal and able to learn to read only with considerable difficulty, if at all, it seems clear that, failing a considerable increase in the habit of reading more than one newspaper, we are very close to saturation point if not already there. Gains of the order of the last decade and a half cannot be repeated. On the contrary the evidence suggests that newspaper readership has at last begun to take a downward turn. The circulation achievements of the powerful are likely in the future to be increasingly at the expense of the weak. Such conditions are serious enough for many established newspapers. They make virtually impossible that constant refreshment of the press that came in happier times when costs were lower from the competition of new newspapers. Sixty-odd years ago it was possible for Northcliffe to launch the Daily At/ail on a capital of £15,000 and although he subsequently 206

drew on the resources of his periodicals for its development the total amount involved in establishing it at a high level of profit was probably well under £100,000. Twenty years later Beaverbrook acquired the Daily Express with a circulation of 230,000 for £57,000 (£15,000 for the shares, the balance to meet a bill owing for newsprint). He had to pump more money into it to put it on its feet but he was able to put it on a sound economic foundation and also launch the Sunday Express without putting any very serious strain on the private fortune of 5,000,000 dollars he had made from company promoting in Canada and brought to London with him. Twelve years later, such had been the change in the structure of the press in the interval, Odhams Press was forced to sink more than £2,000,000, close on double the entire personal fortune commanded by Lord Beaverbrook when he bought the Daily Express and launched the Sunday Express, in the effort to turn the Daily Herald with its circulation of250,000 into a popularnational daily .It was able to draw on important reserves of goodwill in a large political movement and had the resources of a great printing works behind it. Yet at the end of this vast expenditure the paper was still making a loss. The Royal Commission on the Press expressed the view that the cost of launching the Herald as a popular paper could not be regarded as relevant to others because the speed of the transformation involved quite abnormal expenditure. Other new popular journals could, it suggested, be started more cheaply. But in fact the frantic speed at which Elias sought first a million and then a two million circulation was forced upon him for the very reason that he was producing a 'popular' paper and that unless a very large circulation and the advertising revenue that went with it could be quickly won there was no means of escaping a ruinous loss. Similar but even worse conditions would face any new newspaper seeking to break into the mass market today. The costs to be met in the initial period are far greater than they were thennewsprint alone has risen sixfold in price. To the established masscirculation newspaper there is compensation for this enormous increase in running costs in the vastly increased rates for advertising space. But a new paper could not expect to benefit from these unless it could produce circulation figures to justify them. So far from £2,000,000 being an over-estimate an investment of around double that sum would probably now be needed to launch a new national popular morning paper. A sum such as this would almost certainly be required if it were necessary for the new paper to build its own printing plant. The Royal Commission took the view that adequate facilities for 207

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printing new papers under contract could be found without affecting old ones. It is doubtful whether that was the case even then. It is still more doubtful now. The Daily Mirror had originally intended to build its own plant in Manchester to print its Northern edition. It found that it would take five years to do so. The death of the Daily Dispatch with its fifty-five years of history and its close on half a million circulation was the result. There may be printing plants in London on which a smallcirculation morning newspaper or possibly an evening paper could be printed under contract. The Daily Recorder was printed on the News Chronicle presses during its brief life, the News Chronicle itself unfortunately not using all their capaGity. The Co-operative Press plant which prints Reyno/ds News at the weekend is far from fully engaged the rest of the time. But any attempt to launch a new popular daily of large circulation would certainly be hampered at the outset by the need for a heavy capital investment in plant on which no early return could be anticipated. Under present conditions the costs and the risks are too great. lt is true that in another field of mass communication the independent television programme companies have each embarked upon an enterprise comparable in scope to that of starting a new daily newspaper. But in their case the heavy initial capital investment in the radio equivalent of printing plants-transmitters-is covered by the Independent Television Authority. Running costs are high but the prospect of a big new advertising market is considered sufficiently attractive financially to justify the risk. Anyone wishing to start a new popular national daily would have .to meet much heavier costs than the television contractors and do so not in the expectation of a new market to exploit but the certainty of ruthless and severe competition in an already crowded one. It is not an attractive prospect. So long as costs stand at their present level any breach in the monolithic structure of the national daily press is so unlikely as to be for all practical purposes non-existent. Costs are smaller for Sunday papers but the outlook for new development even in this field is not encouraging as the experience of the Sunday Star shows. ln June 1956 Hulton Press, owners of Picture Post and other successful periodicals, had completed plans for the first full colour Sunday newspaper in Britain and very possibly in the world. It was to sell at 4d. and the first print order was for more than I ,000,000 copies. Editorial stafis had been working on the paper for some months, printing arrangements employing a new and in some ways revolutionary colour process \Verc completed. For the first time since Beaverbrook founded the Sunday 208

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Express at the end of the First World War a new Sunday paper was promised. Instead the project foundered before the opposition of the Newspaper Proprietors' Association and the National Federation of Retail Newsagents: both bodies much concerned in the advantages offered by a rigidly controlled newspaper industry. From the N.P.A. Hultons received an ultimatum. The new paper would not be allowed to share in N.P.A. distribution facilities or be carried by the newspaper trains which are essential for speedy overnight delivery unless it were handled by newsagents on exactly the same discount terms as existing Sunday newspapers. From the Federation of Retail Newsagents came a second ultimatum. The two were mutually exclusive. For the Federation demanded better terms than newsagents were getting from N.P.A. members, and informed Hultons that unless these improved terms were given newsagents would be instructed not to handle the Sunday Star. Hultons thus found themselves in a wholly impossible situation. Unless they accepted the Federation's demands the new paper would not be sold by the majority of newsagents. lf they did the N.P.A. would refuse to allow it on the newspaper trains. After vain attempts to break the circle they postponed publication of the newspaper indefinitely. Any further attempt to start a new Sunday paper would run into the same difficulties for although the case of the Sunday Star was complicated at one stage by some argument as to whether it was a genuine newspaper or a weekly illustrated news lcature magazine the Newsagents' Federation subsequently made it clear that the demand for improved terms would apply to any new Sunday paper. This attitude although in part inspired by dissatisfaction with existing terms is almost certainly coloured by the feeling that with a market that has reached or is near saturation a new paper could only get circulation by taking readers from existing Sunday papers so that the newsagent would have more work with no compensating increase in total turnover. In distribution as in production everything points to the continuation of a frozen press structure. Only in the market for popular magazines does any real opportunity for new development on a national scale still exist. This market has expanded greatly since the war, especially for magazines appealing to women. Indeed it has done so to such an extent as substantially to increase the difficulties of the middle circulation newspapers since these women's magazines are now strong competitors for the national advertising without which such newspapers cannot survive. IVoman, owned by Odhams, has shot up to a sale nr more than three and a quarter millions a week; JVonum·s Own, 209

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published by Newnes, has one of over 2,400,000, and the Daily Mirror's latest enterprise, Women's Sunday Mirror, has quickly established itself at over a million. Apart from women's papers, however, demand seems to be slackening even in the popular magazine field. Both the national picture Weeklies. Picture Post and 11/ustrated, arc dead and sales of both John Bull and El'l'l)'botfl··s have fallen. The attempts of the Mirror and Express to catch readers young by publishing junior editions both turned out disastrous failures. Nor do conditions in provincial journalism hold any hope of new daily newspapers. In the past four decades the number of provincial morning papers has been more than halved. Eight have died since the end of the war, six in the last four years. So far from there being any likelihood of their number increasing we shall be very fortunate if all of those now in existence manage to survive through this new era of rising costs. Fifty-two cities in Great Britain, apart from London, have a population of over 100,000. In only five of them have readers now any choice between locally published daily newspapers, whether morning or evening, in separate ownership. Twelve have no local morning or evening newspaper of any kind whatever. In each of the remaining thirty-five there is a complete local monopoly in newspaper ownership. And although the Royal Commission on the Press was assured in 1949 that plans for several new provincial evening papers were in preparation all have since been abandoned because of rising costs. Throughout a large part of the modern press we are thus faced to a degree which would have appalled those who fought for press freedom over the centuries by monolithic structures that show every sign of becoming more instead of less tightly knit and restrictive. It can be argued that in this, as so often in the past, the press merely mirrors the state of our society. This is the age of mass movements. Mass taste, mass buying, mass thinking govern our lives. Mass entertainment draws the crowds, mass political parties attract their allegiance: indeed politically the 2ld. newspapers mirror the life of our times with astonishing fidelity-on the right the Daily Express, Daily Mail, Daily Telegraph and Dai(l' Sketch together deploy a total circulation of some 8,000,000; on the left the Daily Mirror, Daily Herald and News Chronicle are within a hundred thousand or so of the same strength. The minority man is out of key with the century: he would do better to stop complaining and thank his lucky stars that there is still as much variety in the press as there is. So it can be argued. That a largely new reading public should 210

demonstrate a good deal of sameness of taste is, in fact, no matter for surprise. It did so even more when the public discovered by Northcliffe gave the Daily Mail so massive a sales predominance over all others for so long. What is unnatural-or at least would seem so in the light of previous experience-is that the serious middle public with a long settled habit of newspaper reading behind it should be able to support so few newspapers compared with the number that catered for a comparable but much smaller group, forty, fifty or a hundred years ago. The paradox may, however, be more apparent than real. It may be that such papers are losing ground precisely because, they appeal to too many people. They have been forced by the economic pressures in the newspaper industry to adopt a pattern contrary to their real function. Instead of seeking to satisfy a particular public they find themselves forced to follow the purveyors to the mass in a fanatical search for an amorphous readership of millions. As a result they neither get those millions nor satisfy the smaller public that is naturally theirs. This is partly due to the fact that even after the successive price ii1creases of the last few years most British newspapers are still seriously underpriced-demonstrably so when compared with those in most other countries and especially in the United States. Those who complain of the inadequacies of the popular pressand such complaints come particularly from those in the middle and professional groups-must bear a good deal of the blame themselves unless they are ready to pay more for their newspapers. Jf serious popular newspapers were able to sell at a price that would at one and the same time do away with their present excessive dependence on advertising and their excessive preoccupation with circulation it would be possible to produce papers much closer to the real tastes and needs of this middle reading public than is now the case. This public would almost certainly be better served journalistically-and with much more satisfaction to the separate groups within it-by four or five national newspapers with sales of a million or even less, than by three, each of which must try desperately after a circulation of between one and a half and two millions to keep commercially afloat. The journalistic tragedy of our time is that the risk of trying something new has become too great to be taken. This is bad for society which in the field of news and ideas above all others needs the fertilisation of many rivers if it is to be kept healthy, bad for the press which thrives best on the cla~h of competition, and bad for the individual journalist whose opportunity of employment is restricted and who may, should he be a journalist of opinion, find himself permanently bereft of any regular oppor211

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tunity of usefully employing his pen if he should happen, for whatever reason, to relinquish his foothold on one particular platform. We are at a stage in the industrial development of the press that bears some resemblance-although an incomplete one-to that in the mid-nineteenth century when a frozen industrial structure contributed to the monopoly position of Tfte Times by making it virtually impossible for any new newspaper to print quickly and cheaply enough to capture a popular market. The immense burst of activity in the founding of new newspapers in London and the provinces that came in the 1850s owed almost as much to technological developments in printing, paper-making and distribution as to the ending of the Stamp Tax. Psychologically the end of the tax was no doubt immensely important. It was an earnest of a totally new attitude to the press on the part of Government and public. But in itself the tax no longer represented so serious a barrier to new enterprise as did the slowness and high cost of newspaper production. It was the technological revolution in printing, in distribution and in communications that enabled the new papers to meet the demand for a popular press. In the very different conditions of the mid-twentieth century the need is hardly less urgent for a comparable technological revolution. It may well be that only by such a revolution can costs be brought down to a level at which it will once again be economically possible to publish generalinterest national newspapers with an optimum circulation of a million or less, increase the viability of independent provincial journalism and bring within reach new evening papers in areas where all competition has ceased to exist. No such large-scale technological revolution is yet in sight. If it were it would probably be resisted by strongly entrenched interests on both sides of an industry that is remarkable for the fact that except for a few isolated spurts it has evolved so slowly and that the basic processes employed have remained so very much the same for so long. In the end it may be that the application of electronic engineering to the printing industry will add up to such a revolution. The development of magnetic printing processes, photographic composition instead of mechanical setting, and electronic engravers capable of producing half-tone plates in plastic direct from original photographs at half the cost of conventional half-tones begins to point in that direction. Synthetic substitutes may ultimately also bring the price of newsprint to more manageable levels. Nor can even more far-reaching changes be regarded as beyond the bounds of possibility. A facsimile transmission system by which 212

text or photographs or both can be printed by radio was developed as long ago as 1926 and has since been so improved as to transmit printed matter at a rate of five hundred words a minute from highfrequency stations. Some years ago the Radio Corporation of America using television transmission for a refinement of facsimile known as Ultrafax transmitted and reproduced in printed form the 1,049 pages of the novel Gone with the Wind in two minutes twentyone seconds-an awe-inspiring thought. With the use of facsimile transmission it would now be perfectly feasible for a newspaper reader to come down to breakfast, switch on his television receiver, tune in to the right wavelength, press a button and receive into his hand an up-to-the-minute, fully illustrated newspaper printed on electro-sensitive paper impervious to light and as easy to handle as ordinary newsprint as it unrolled from under a printer blade in a recorder built into the set in much the same manner as a record player. Technically, in fact, there is no reason why we should not all have our favourite newspapers delivered direct to our livingrooms whenever we feel like it without the blessing of composing room, printing press or newspaper train. Facsimile newspapers have been experimentally transmitted in the United States by the New York Times, the Philadelphia Bulletin, the Philadelphia Inquirer and the Baltimore News Post. They cut out the whole of the involved and costly process of printing and distribution other than the actual setting of pages in type. Although such a newspaper would be somewhat different in form from those we are accustomed to-it would probably for example be made up of single sheets, not folded pages, and be smaller in size-there is no reason why in general make-up and content it should not be very much the same. The facsimile process requires high-frequency radio or television transmitters but in principle there seems no reason why such newspapers could not be transmitted from existing television stations in the morning hours when no television programmes are sent out. Originally one possible objection was that newspapers so transmitted would have to depend for revenue entirely on advertisements --in the same way as commercial television programmes do-and would thus be in the hands of advertisers to an extent that an independent newspaper obtaining a considerable part of its revenue from sales is not. Past experience of give-away newspapers paid for by advertisements and distributed without charge does not create much confidence in such productions. There seems now, however, no technical reason why lhis difficulty could not be overcome simply enough by building into the 213

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television set along with the facsimile recorder one of the various 'subscription' devices for 'pay as you see' television which have been perfected in the United States. With a combination of facsimile transmission and 'pay as you see' the newspaper reader would simply switch on his set, tune to the wavelength on which his l~tV(lUrite journal was being transmitted at that hour, drop his coppers in the slot to unscramble the transmission and pick up the morning paper. He would get it hot from his own private printing press with news several hours later than if it had had to be printed on giant presses at a newspaper office, dispatched by van and train, and delivered to his door by a newsagent. At the other end it would be necessary merely to set up single copies of each page, put them in a frame that would flick each page rapidly in turn before a television camera, and leave them to be received by any number of readers during the scheduled transmitting period. The main difficulty-although broadcasting found it possible to get over one inherently similar in its early days-lies, of course, in the fact that it would not pay to transmit a facsimile newspaper or to take advertising space in it, unless a sufficient number of television receivers were first adapted to receive it; and no viewer is likely to spend money on having a built-in facsimile recorder in his television set unless there is already a newspaper for him to receive, and probably not even then so long as he can get his newspaper in the ordinary way without trouble and expense. Not unless the ordinary television set sold at the radio dealers were to have the necessary equipment built in as standard would facsimile newspapers be likely to find a public of any size: not until facsimile newspapers had created a demand for themselves would radio manufacturers be likely to build such sets. We are back to the old problem of the hen and the egg. However, should commercial television fail to attract sufficient advertising revenue on the appeal of programmes alone it is always just possible that some of those concerned in it might think it worth while to finance a pilot experiment in order to offer the advertiser the additional inducement of a repeat of his advertisement in the more permanent form of print. All this is speculation for the future. Yet even when launched prematurely on a world unready to alter its established commercial \vays to meet their challenge technological revolutions have a habit of refusing to. die: they crop up again when times are more propitious. Remote though it may seem it would be overbold to dismiss quite out of hand the possibility that one of these days we may get our newspapers, like so much else, from a television aerial on the roof. 214

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WHAT KIND OF FREEDOM? IT Is useless to criticise the press without relation to its trading position. But terms of trade are not all. The freedom of the press does not exist in order that newspaper owners should grow rich. lt is not a possession of newspapers or their proprietors or editors but of the community, won by many who were not journalists, as well as many who were, during that long struggle for freedom of religion, opinion and association and for the independence or Parliament, judiciary and press on which our democratic society rests. Those responsible for a newspaper are in a different position from those responsible for a business who may properly govern their activities by what is commercially advantageous to themselves, their employees and their shareholders: they have inherited other calls on their fidelity. A newspaper must sell to live, but it cannot claim that what sells most is by that fact alone justified. lt has other obligations: obligations to the past, for newspapers would never have known independence if earlier men had not been ready to sacrifice themselves for principle; obligations to the present and the future, for the press is as much a custodian of national freedom and the qualities of civilisation as Parliament or the courts. It cannot turn its back on these obligations without reducing its stature, for it is on them that its stature depends. Those who control or write for newspapers have no more right to claim immunity from the historical responsibilities of their office on the excuse that these responsibilities come between them and commercial advantage than have Members of Parliament or judges: the positions of all three in our society are analogous, just as the independence of tne press was won in the same struggle as that for a free Parliament and an independent judiciary. The journalist is not buttressed as they are by constitutional safeguards; his status and the principles which must govern him in the exercise of his duties are less firmly rooted in acknowledged tradition and less clearly defined. Unlike them he is a hybrid, a Janus with two faces, a twopurpose beast. He has commercial obligations they do not have. But he has obligations to society not less important than theirs. It is by the manner and degree in which these dual demunds are

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reconciled that the press is properly to be judged. The nature of the reconciliation is not the same for every age, nor is it the same for all newspapers. But its compulsion exists for all and at all times. Recognising this special relationship of a newspaper to its readers the owners of some have voluntarily made over their property to non-prolit-making trusts, others have deliberately imposed restraints upon themselves or their heirs in the matter of a sale. The control of three national newspapers, the News Chronicle (with its companion evening paper, the Star), the .Manchester Guardian (with its evening companion, the lvlanchester E•'ening New~) and the ObserJier, is vested in non-commercial, non-profitmakmg trusts, the Daily News Trust, the Scott Trust and the Observer Trust. These trusts are required to devote their income firstly to development and secondly to charitable and educational purposes so that there shall be no question of their ne\vspaper properties being run purely for the profit of individual shareholders or proprietors, now or in the future. 111e Times is under ordinary commercial ownership but its future is similarly safeguarded by articles of association which require that any transfer of ordinary shares (at present held in the proportion of nine to one by Lord Astor of Hever and Mr. John Waiter) shall be subject to the approval of a committee consisting of the Lord Chief Justice, the Warden of All Souls, Oxford, the President of the Royal Society, the President of the Institute of Chartered Accountants and the Governor of the Bank of England -a truly formidable and diverse body. In giving or withholding approval this committee is required to have regard to the importance (a) of maintaining the best traditions and political independence of The Times and national rather than personal interests and (b) of eliminating as far as reasonably possible questions of personal ambition or commercial profit. The sale of shares to a Corporation is prohibited. Safeguards of similar effect are contained in the articles of association of both the Economist and the Spectator. Restrictions on the transfer of shares to prevent any basic change in the character of the paper also operate in the case of a number of important provincial journals, among them the Yorkslzire Post, the Lil·erpoo/ Daily Post and the Birmingham Post; indeed the present owners of the latter paper and its evening companion, the Birmingham Mail. are required by a trust deed established when they bought the property in 1944 and effective until 1965 to conduct the two papers on substantially the same lines and with substantially the same policies as under the previous owner, the late Sir Charles llyde. 216

In particular they are required under this trust (1) to provide a full and impartial news service with only such comment as is fair and free from bias and (2) to preserve the independent and local character of the newspapers and their freedom from control by any political party or trade association or any London newspapers or any combine or syndicate of newspapers. Although very far indeed from being universally accepted, the principle that commercial considerations wholly proper in the general conduct of business are not so in the conduct of newspapers is thus formally recognised by several newspapers to whom the influence the press can exert seems more important than profit. What is the extent of this influence? Contrary to some expectation there is no evidence that it has been diminished by broadcasting or is likely to be much affected by television. The difference between the two mediums is too great. This difference was well set out by Sir William Haley, editor of The Times and former director-general of the B.B.C., in his Clayton Memorial Lecture to the Manchester Literary and Philosophical Society on 'The Public Influence of Broadcasting and the Press' some years ago. 1 am grateful to him for his permission to quote from it. Comparing the influence of press and broadcasting he asked his listeners to bear in mind the limitations of broadcasting before coming to any judgment. The first of these limitations he suggested was its inacessibility. 'This may,' he- went on, 'seem surprising, hut ubiquity and accessibility are not the same thing. Broadcasting is geographically the most pervasive means of communication yet devised. Simultaneously it can enter millions of homes: be available to everyone in the land. But that simultaneity is also one of its greatest drawbacks. If you are not available to hear the broadcast then you cannot recapture it. A newspaper can be read dudng any hour of the twenty-four, a broadcast (I am not speaking primarily of news bulletins, which are repeated) must be heard when it is made.... The effect is made all the worse by the vast area of interests that broadcasting has to cover. A day's broadcasting, even in the spoken word alone, ranges far more widely than any newspaper (or indeed than all newspapers combined). But again whereas in a newspaper the reader can turn from one column to another, or from one page to another instantaneously-and read whatever he chooses at whatever pace he wishes-the listener can only go from subject to subject as they are offered over long stretches of time, and then cannot take any broadcast faster than it is delivered. Only the completely leisured, bedridden, or fanatically single-minded listener 217

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can get from his wireless set as comprehensive a service as he gets from his newspaper.... 'Further there is the limitation-and this applies above all to the news bulletins-of the space factor. (In broadcasting space is time.) The fifteen-minute news bulletin contains under 2,000 words -that is less than two columns of the Mane/tester Guardian. In that compass everything from world events to Parliament and sport has to be compressed. 1t is good discipline in concentrating on essentials but it has its drawbacks.' Broadcasting has it is true some strengths that newspapers do not have. The first, as Sir William Haley pointed out, is immediacy, nut merely in time but in contact: the ability, particularly where television adds vision to sound, to bring events to the listener or viewer in the home when they are actually taking place. As Sir William Haley said: 'When it comes to great occasions, historic events, or even sporting encounters then broadcasting comes into its own. The heart can be lifted or depressed, the profoundest emotions can be stirred. Some broadcasts live in the memory for ever, as no newspaper report can hope to do.' Yet this being said the balance is still heavily on the side of the press. 'Newspaper production,' as Sir William Haley went on to point out, 'is an infinitely simpler and more flexible operation. It is therefore capable of far greater adaptability. On a matter such as the Budget, or devaluation, or some scientific revolution, the press can at once provide a wealth of information, opinion, discussion, illustration that would take days to assemble at the microphone (and then be physically unmanageable on the same scale when it got there). In political matters the press is far freer and less inhibited. This has nothing to do with the B.B.C. monopoly; similar limitations affect American broadcasting. Because its output can be comprehended-! am using the word in the sense of being all-embraced and not merely of being understood-by each individual reader, a newspaper can have an impact which no broadcasting station can have.' Sir William Haley's paper was read before Commercial Television had come into operation in Britain, but l doubt whether he would feel it necessary to alter much of what he had to say on that account. This is not to discount the impact of television. No one who has appeared regularly on the television screen and found himself hailed as an old friend by strangers in bars and restaurants, on buses and trains and in the street, and precipitated into scores of discussions on the various subjects dealt with in his programme is likely to do that. Television and sound broadcasting clearly have 218

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an immense and pervasive influence on social attitudes and social values. So far as the most popular programmes· of entertainment and family interest are concerned this influence tends to be directed to sustaining mediocrity as the most acceptable social value. But it can hardly be doubted that in their more serious documentary ami discussion programmes broadcasting and television open windows on the world for many people and stimulate a good deal of interest in public affairs that would otherwise remain dormant. Yet for the reasons given by Sir William Haley this influence, although often more direct and sometimes more profound than that of the press, cannot compete with it in total extent. Nor is television likely to rival the press in the field of news itself for the truth is, as Sir William Haley pointed out, that 'a great deal of news, particularly the most significant and important news, has no visual quality'. In most instances the nature of the medium is bound to be at war with the real values of the news. This is not, of course, true in every case. The impact made by a television reporter who brings to the microphone in front of a television camera Jews and Arabs in the Middle East, there Lo express in bitter broken English their hatred of each other and of Britain and their longing for war as a means of salvation, is likely to be much greater on those who see it than a dozen newspaper dispatches warning of crisis. But over the whole range of news the television camera cannot compete with the newspaper. On the premiss that he who pays the piper calls the tunc it is the newspaper owner who is now generally regarded as possessing this great influence. It would not have been thought so in earlier times. It was Barnes, not John Waiter H, whom Lord Lyndhurst dubbed 'the most powerful man in the country', and J. A. Spender, as recorded in an earlier chapter, felt it incumbent upon him as editor to disabuse his chief proprietor, Sir Alfred Mond, of the idea that a proprietor had any right to use his paper for the expression of his own opinions-even in its letter columns. Lord Northclifl'e is frequently thought to have altered all this. But in fact he did so only as regards a part of the press-and that the kast politically inlluential. The inlluence that C. P. Scott of the lvfllnchesrer Guardian exercised-and it w~1s infinitely greater than that of Northcliffewas exercised as an editor, not as a proprietor, although the fact that he inherited his uncle's financial control of the paper naturally helped him immeasurably in making it what he wanted it to be, as mnny another editor struggling against proprietorial caprice 219

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has woefully reminded himself. Moreover even when Northcliffe owned The Times the influence exercised by its editor, Geoffrey Dawson, was infinitely greater than his own. NorthcliiTc, as Dawson himself wrote in a letter to Lord Knutsford, quoted in Sir John Evelyn Wrench's admirable and revealing Cieojfi·ey Da11·smz and Our Times, was a master of publicity whose ability as such 'enables him to associate himself, and to be associated by others, with political movements and events with which in nine cases out of ten he has hardly the remotest connection'. He indeed had a genius for identifying himself so completely with the fait accompli in politics that in the eyes of the uninformed he became the person responsible for it. In fact in most instances his part was small; absurdly so compared with that of Dawson. This was due in part, no doubt, to the fact that Dawson had an infinitely greater understanding of the real nature of political power and a much more subtle comprehension of the springs of political action than Northcliffe had. But it was also due to the very nature of their functions as proprietor and editor. The influence exercised by a newspaper derives from the nature of the medium-from the fact that it arrives daily before its readers as an ambassador from the outside world conveying to them news of events as seen through the eyes of its staff, docketed and assessed in importance and interest by men working daily at high speed, interpreted and commented on by men required by the nature of their task to make immediate judgments. The character of a newspaper may be set in a certain mould by its proprietor-in the way that Northcliffe created the Mail in his own image and Beaverbrook has done the Express. But even with such a newspaper the selection of news and features, the twist and turn given to the reporting of events, the total flavour of the daily dish put before the public, reflect, and cannot help but reflect to a very large degree, the personality and judgment of the man who does the daily job of producing it-the editor. The proprietor may inspire the big political campaigns. They seldom, experience indicates, have much influence anyway. It is the editor who makes each daily issue what it is. It is curiously the case indeed-although some newspaper proprietors and managers do not even yet appear to have got around to the fact-that the commercialisation and popularising of the press so far from diminishing the importance of the editor has in many ways enhanced it-even by the standards of commercial success themselves. That great newspapers are made by great editors the whole of newspaper history shows. But it is also the case that popular papers depend for their success upon their editors 220

to a degree not always sufficiently appreciated for their own good by those who profit from them. Lord Northcliffe was aware of this fact although his brother Lord Rothermere was not. To Rothermere editors were expendable. He did not, he said, believe in strong editors. The progressive decline of the Daily .Mail and the Daily Mirror, both in prestige and circulation, under his control was the result. Northcliffe stamped the Mail with his personality-he remained from the beginning to the end its presiding genius, acting virtually, indeed, for most of the time as its editor-in-chief in daily control of all that was done. But having, after some preliminary fun and games, appointed a strong editor, Thomas Marlowe, he had the good sense to hold on to him. Other papers might switch editors. Marlowe remained in charge of the A1ail so long as Northcliffe lived. lts success was due to him second only to Northclifle. There is indeed nothing like a good editor for a newspaper. Whatever may be the level of journalistic success to which they aspire, only those newspapers that hold their editors seem to succeed. The correlation between s~ability of tenure in the editor's room and a newspaper's success, whether in prestige or circulation, is so close, in fact ' a·s almost to provide the basis for a mathematical formula for the guidance of ambitious newspaper proprietors. This is obviously so in the case of the more serious newspapers: no one has ever disputed the importance of its editor to The Times or the AJanchester Guardian. Similarly the Obsener has been madl.! by two editors, the first that great journalist J. L. Garvin who created serious Sunday journalism, the second David Aslor who, coming to the editor's chair young and with little political experience, so that many regarded him as no more than his father's -and mothcr's-son, has shown himself an editor of great courage and ability, giving to the paper new life and vigour. The Sunday Times has .b~en equally sparing in its use of editors. H has had two only in the period of its great modern revival. So also has the Telegraph, which owes its amazing progress over the last twenty years to the fact that the first Lord Camrose disposed of all other daily newspaper interests when he acquired it, and became not, as its previous proprietor had been, its manager, but its editor-in-chief, attending daily at the office to conduct its journalistic atrairs, even to the reading of all proofs. As for the serious weekly reviews who can think of the New Statesn1mz and Nation without Mr. Kingsley Martin or imagine that the Economist would have won its immense war and post-war prestige without f\·lr. Geoffrcy Crowther? It is, however, when one turns to popular journalism where the 221

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unimportance of the editor compared with the proprietor is now sometimes accepted as a proven fact that the principle demonstrates itself in the most surprising way. There are no doubt a number of re~~sons for the success of the Daily Express, the biggest of all bemg Beaverbrook. But one of the most important is that it has had only four editors in its more than fifty-five years life and that the most effective of them, Mr. Arthur Christiansen was in undisturbed possession for close on a quarter of a centm~y. At least this seems a natural conclusion to draw from the experience of other popular newspapers. The Daily Mirror staggered down the road to bankruptcy when the first Lord Rolhennere's polit:y of no strong editors ruled. Only when Uartholomew seized the chance to grab complete editorial control of the firmest sort was the spell of doom broken. The chequered circulation careers of the Mail, the Herald and the News Chronicle over the past quarter of a century keep step in each case with constant changes in editorship which compare strikingly with the history of editorial stability on the Express; For years the Dai(v Sketclz fumbled from disaster to disaster under a succession of editors so numerous that it was difficult to keep account of their names: only when a large degree of authority and independence was given to its present editor Mr. Herbert Gunn did it-whether one likes his methods or notbegin to increase its circulation at a phenomenal rate. The same is true of popular Sunday newspapers. The Sunday Express, like the Daily Express, owes its success in no small part to Lord Beaverbrook's readiness to appoint an editor and keep him for a long time: in this case Mr. John Gordon. Under the impact of the first Lord Rothermere's conviction that editors were something you got rid of the Sunday Dispatch had eight editors in six years. Its circulation fell to less than 700,000 in the process. When it finally settled on one for several years sales rose to 2,500,000. When the People experimented with numerous editors, some good, some bad, it could not pay its printers' bills. With an editor who stayed 'for keeps' its circulation rose to over 5,000,000. The News (~r tile World is known throughout Fleet Street as an old faithful that keeps its editors 'for life'. It has the largest circulation in the world. In the post-war period the Sunday Chronicle dispensed with editors at a speed that rivalled even that of the old Daily Sketch. It died in November 1955. Jn fact although the industrialisation, commercialisation and popularisation of the press have done a good deal to alter the face of journalism they have done nothing to impair the basic journalistic fact that newspapers are made by journalists. This was first

demonstrated a century and three-quarters ago when the A1omiug Cltrouic/e fell in circulation by two-thirds as soon as Perry, whose editorship had raised it to greatness, left. lt is the daily impress of an editor's personality that gives a newspaper character whether the character be grave or gay, austere or scandalous. 1\loreover, the importance of the editor which seemed at one stage in the commercialisation of the press to be in so much danger of being diminished seems likely to become not smaller but larger as time passes. The age of the strongly individualist newspaper proprietor who himself impressed an editorial personality on his paper is almost over: we are moving into the era of the administrators. Only Lord Beaverbrook remains of the old breed. And even he although he has no difficulty in controlling his newspapers by telephone-or telepathy-wherever he happens to be is growing old. The first Lord Camrose is dead, Lord Kemsley's empire shrinks around him. The second Lord Rothermere shows (fortunately for his properties) none of his father's pas.sion for using newspapers as platforms for personal publicity. Lord Southwood has been succeeded by a committee, the ebullient Bartholomew by the business-like Mr. Cecil Harmsworth King. As for Lord Northcliftc there never was anyone to replace him. Large circulations and greater costs have increased the capitalisation of newspaper companies, making it more difficult, especially in an age of heavy taxation and high death duties, for one man to own a newspaper and virtually impossible for even the richest to dream of starting one. The characteristic pattern of newspaper ownership in the national press, although less so in the provincial morning press. where family ownership still persists, is now becoming that of the large public corporation in which many commercial interests have to be taken into account. The ownership of the Daily Mirror with a readership greater than any other on earth so far from being in the personal possession or one single proprietor, or even of a small group of proprietors, is so widely spread over so many shareholders, many or them small shareholders, that it is quite impossible to give any specillc answer to the often repeated question 'Who owns it?' The largest single block or shares, some 22%, is held by the Sunday Pictorial Limited. As, hm,vever, the Mirror is in its turn the only large shareholder -·and at that a minority holder-in the Sunday Pictorial, and as the rest of the Pictorial shares are spread as widely among the ordinary investing public as those of the Mirror, this does nothing to concentrate ownership in one group of hands. The Daily A._fail is owned by a public company, Associated Newspapers Ltd., which 223

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now also has a controlling interest in the Daily Sketch and is itself controlled by the Daily Mail and General Trust, whose shares are similarly widely spread, although a single block of some 21% of the total is held by Lord Rothermere. The Daily Herald is owned by the Daily Herald (1929) Ltd. in which commercial control (although not that of political and industrial policy) is owned by Odhams Press Ltd., a public company in which no individual shareholder or group of shareholders has a controlling interest. The News Chronicle as described earlier is controlled by a non-profit-making trust. So also is the Manchester Guardian. Only three national newspapers still remain in private ownership in any complete sense: The Times in which Lord Astor of Hever holds 90% of the shares and Mr. John Waiter I o<~{1 ; the Dai~v Telegraph in which the Berry family hold all the ordinary shares; and the Daily Er:press of which Lord Beaverbrook's absolute mastery has never been in any doubt-even although he did announce in 1929 that he had given his controlling interest to his eldest son, the Hon. William Maxwell Aitken, and in 1954 that he had given the same controlling interest to the lleaverbrook Foundation, a British Empire Educational Trust. The age.of the press lord moves into history to be replaced by that of the big business administrator. The substitution of ownership by public corporations for ownership by individuals does not of course mean, any more than it does in other industries, that effective managerial control is not in fact vested in the hands of a very few people. In this industry, as in others, the control over very large capital enterprises can be exercised with masterful ease through voting control over minority blocks of shares-at any rate so long as things are going well. But it does make it less likely now than in the past that newspapers will become the personal vehicles of dynamic personalities and more likely that their commercial control will pass increasingly into the hands of high-grade salaried executives. The managerial revolution came to Fleet Street somewhat later than most other places but it is by now firmly entrenched there. As for the consequences, they may turn.out both good and bad. The vast conglomerations of press power in a few individual hands which seemed likely to become the most characteristic feature of newspaper development in the 'twenties and •thirties obviously had greater potentialities of public mischief, although the danger, like the political influence of the press lords, tended to be overexaggerated by the nervous. To that extent the extension of ownership by public corporations is to be welcomed. 224

But although there may be risks in a newspaper becoming the personal mouthpiece of one man there are dangers of a different kind in its becoming simply a business. The great press lords made fortunes out of journalism, but all of them-even the first Lord Rothermere although to a lesser extent than the others-were prepared at times to put both profit and circulation second to the advocacy of what seemed to them important. Lord Northcliffe's attack on Kitchener in the First World War may, as Geoffrey Dawson for instance claimed, have come long after Kitchener had been entirely discredited in governing circles and may have had the etTect of making it not more but less easy to get rid of him. But it was conducted by Northcliffe in a spirit of patriotism that did not count the effect of public reaction on the Mail's circulation. The Daily Express is as brilliantly entertaining and unpredictable a newspaper as it is because Lord Beaverbrook has always been ready to use its profits to make it a better one, spending large sums to give real news more promptly and sometimes more ful1y than its competitors and following a policy of ploughing money back into development at a rate that his successors may find both difficult and unattractive.. The real danger facing a good deal of journalism today, in fact, is not, as it seemed to be a generation or two ago, that much of its historic duty of public information may be twisted to serve the propaganda purposes of powerful individuals but that it will be pressed into a pattern that denies it all purpose other than the purely commercial one of attracting the largest number of paying customers by whatever means comes most readily to hand. The responsibility of journalists, and especially of those in editorial authority, will become especially great if this should prove to be the case. The defence of journalism as more than a trade and greater than an entertainment technique-although a trade it is and entertaining it must be-is properly the journalists' and no one else's. It is they who are the legatees of history in this respect. They have both a professional and a public duly to look after their inheritance. This is not, of course, to suggest that the interests of editor and publisher are necessarily antagonistic. They are far from having proved so in many famous partnerships of the past: they are very far from being so in many instances today, indeed it is difficult to see how any newspaper can succeed at the highest level except when they are identicaL Nor is it to suggest that the proprietor and publisher is necessarily likely to be less concerned with the truest interests of the press than is the journalist; this has certainly D.E.-H 225

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not proved so on many occasions since the days when Henry Sampson Woodfull, the owner of the Public Ad~'ertiser, gladly risked prison in order that 'Junius' should have a platform for his views. Nevertheless the guardianship of journalistic values rests primarily with the journalist: c'est smz metier. He cannot dissociate himself from this responsibility without ceasing, in a fundamental sense, to be a journalist. Nor is there any final excuse for him in the claim that he is, after all, simply a hired man who must do as he is bid. He must be ready, as must all men when issues of principle arise, to stand up and be counted. The relationship between editor and publisher can never be simple-unless indeed it is so simple as to make the editor no more than a paid servant. The Royal Commission on the Press was content on the whole to accept this simple version as the correct one-especially in relation to popular newspapers. But to do so is, in fact, to set aside a good deal of what is most important in the history of the press and to overlook the fact that the freedom of the journalist-freedom not only from censorship or intimidation by the State but from censorship or intimidation by anyone including his own employer-is an essential part of press freedom. This freedom involves the right of individual reporters to report facts honestly even if they prove inconvenient to the fancies or prejudices of editors or news editors, it involves the freedom of foreign and political correspondents to report and interpret the evidence before them according to their independent judgments and journalistic conscience, even if to do so is awkward for the policy of the paper that employs them, and it most certainly it1volves the degree of independence possessed by an editor in his relations with his publisher. Such independence clearly cannot be absolute. Whether a newspaper is owned by an individual, a joint stock company or a trust the right to decide the kind of newspaper it is to be, the sort of public it is to aim for, and the policies it will in general support must rest mainly with those who own it. Mainly but not entirely, for a newspaper is more than a piece of property, it is a living personality with a character and tradition deriving not only from those who own or edit it but from its readers, from the interests it has historically served, and from the community of which it is a part, a fact, as earlier shown, recognised by some proprietors through the formal instrument of trust deeds and articles of association. This double responsibility is especially true of those newspapers that serve a specific local community, nourished, as C. P. Scott said of them, 'by its resources, renecting in a thousand ways its spirit and its interests', so that they 'in a

real sense belong to it'. To alter the character of such a paper for reasons solely of increased profit, or to buy and sell it as though it were no more than a piece of merchandise without regard to the purposes and policies that have won for it its special place in the community, is an abrogation of the true responsibilities of newspaper ownership, although one which some of those who have made large profits out of newspapers have found by no means uncongenial. Free enterprise is a valuable bulwark of a free press. But the freedom of the press differs from, and ought always to be recognised as greater than, the simple freedom of an entrepreneur to do what he pleases with his own property. A journalist has commitments to the commercial interests of those who employ him. But he has other loyalties also and these embrace the whole relationship of a newspaper to its public. This is equally so whether the character of a paper derives from the authoritative discussion of public affairs or from its power to interest and entertain a wide variety of readers whose concern with public affairs is limited and intermittent. The influence of a newspaper on its readers derives not only from its expressed opinions but from its daily selection of news, the honesty of its reporting, the weight of its headlines, the values it emphasises in its features, the whole picture of the world and what is important in it that it daily presents to those who read it. By the very nature of daily newspaper production these depend more upon the editor and his staff than on anyone else. The editor is legally responsible for all that appears in the paper he edits; his moral responsibility is not less. He ought not to be allowed to escape it. But he ought also to be put in a position to sustain it in the public interest no less than his own. The correct working relationship between a newspaper editor and his proprietor or publisher is not easy to define. It has been much discussed, although less so in Britain than in some other countries. ln Norway the leading journalists' associations have defined the correct relationship as one that, within the broad framework of policy laid down for a paper by its owners and mandatory on it by reason of its traditions, gives the editor 'complete freedom to maintain his own opinions even though they may not in some cases be shared by the publisher or management', and that places upon him 'the entire responsibility for the editorial content of the paper'. 'He must not,' according to this definition, 'allow himself to be influenced to uphold opinions which are contrary to his conscience and conviction. He directs and accepts the responsibility for the activity of his editorial staff.' This definition has been largely

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accepted by influential Norwegian public opinion and has been reflected in the constitution of the leading newspapers. Much the same is true in Sweden. Thus although the editor of the leading Swedish Liberal paper, the Dagens Nyltctcr, is required under the terms of his appointment to consult with the chairman of the board on major political matters it is also stipulated in the paper's constitution that it is the view of the editor and not of the chairman that shall be decisive in: such matters and that political questions shall not be discussed at board meetings but shall be determined by the political staff of the paper. Approximately the same procedure rules in the chief Swedish Conservative paper, s~·enska Dagbladet. A number of Dutch papers have similar provisions in their company-statutes requiring that so long as he holds office the editor shall have absolute independence in his decisions on the editorial contents of the paper. In Britain independence in the control of editorial policy is similarly guaranteed to the editor of the Manchester Guardian under the Scott Trust and also to the editor of the Manchester E1•ening News. Although formally the articles of association of The Times vest control of policy in the chief proprietors in practice the independence and authority of the editor is virtually absolute. That of the editor of the Observer is specificaUy safeguarded in its articles of association. Such independence is far from belonging to the editors of most great commercial newspaper enterprises. Nor, since their purpose and the relations they have with their readers are so different, would it be wholly appropriate. Yet although the relationship bet\veen editor and publisher necessarily differs on a popular mass-circulation newspaper from that on a journal of opinion the diminution in the status of the editor to no more than a paid servant of proprietorial interests, the mere tool of other men's whims and financial appetites, that has accompanied a good deal of the commercialisation of the last half century or so runs dangerously counter to the public interest and is contrary to the traditional role of journalism in public life. The journalist is at once freer and more vulnerable than the barrister, the solicitor, the doctor. Freer because he belongs to a more open profession that recruits men and women of diverse experience through many different doors and must be able to do so if it is to maintain its true character; more vulnerable because he is a wage-earner dependent for the most part on orte employer. Yet his professional responsibilities to the public are not less than theirs. The obligations imposed upon them in their relations with the public and supported by the powers vested in their governing 228

professional bodies, the Bar Council, the Law Society, the General Medical Council, are not applicable to him in the same form. Yet the preservation of the strictest ethical and professional standards in the press is no less important to society than in their case. And because he is dependent, to an extent they are not, upon the goodwill of a single employer, the journalist may find himself less able than they to resist pressures that would reduce them. The journalist ought to accept and ought to be required to accept standards of professional integrity morally not less mandatory than those of the barrister, the solicitor or the doctor. But what is required in their case to safeguard the public against professional malpractice is required in his case not only for this reason, important though it is, but also to provide the journalist himself with a safeguard against those pressures to which one who is dependent upon a single master may find himself vulnerable: a professional power to set against, and if necessary act as a counter-: balance to, the immense and growing power of financial control in the newspaper industry. It is possible that the Press Council will provide such a counterpower: indeed there are already some signs that it is beginning to do so. At the time of its foundation I took the view, as did several members of the Royal Commission out of whose recommendation it was born, that there would have been great advantage in establishing the Council as a statutory body with powers analogous to, although not identical with, those of the General Medical Council. Such a statutory body would from the beginning have entered the Held able to provide a valuable counter-balance to the massive power of commercial interest, which ought not to be left to decide alone the standards by which popular journalism is to live. Yet it is possible that a voluntary Press Council may in the end succeed in doing this no less effectively. The moral pressures it can bring to bear, both on proprietors and journalists, are considerable. Its specific judgments may be overridden, but they can serve to create a general climate of public and professional opinion that cannot be ignored so easily and whose effects may be pervasive and far reaching. To create such a climate is the most important of all the responsibilities that rest upon the Council. It is a responsibility to which it is applying itself with considerable courage and in which it needs all the public and professional support it can get. Yet whatever tlie Press Council may do it is upon the individual journalist that the ultimate responsibility rests. He is the legatee of a great tradition. He cannot abdicate. He has loyalties greater than to his pay packet and they should be paramount. 229

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In 1955 the British broadcasting system was commercialized, culminating an extended campaign engineered by the London branch of the American J. Waiter Thompson advertising agency. The following year an elated Canadian, Roy Thomson, was granted the television franchise for Scotland. Upon being awarded the franchise Thomson exclaimed that a television license is ''like having a license to print your own money!" Since then Thomson's maxim has become legendary, as have the profits reaped by broadcasters. In 1956 Chairman Emmanuel Celler of the House Antitrust Subcommittee interrogated George McConnaughey, then Chairman of the FCC. The following exchange occurred concerning a CBS-owned New York station: Celler: In 1955, WCBS had a net income before federal income taxes of $9,375,339? McConnaughey: Yes, sir. Celler: And WCBS had a net investment in tangible broadcast properties as of December 31, 1954, of $409,484? McCmmaughey: That is correct, sir. Celler: This means, does it not, that in 1955-and I give emphasis to these figures-WCBS recovered 2,290 per cent on its total investment in broadcast property? McConnaughey: That's correct, sir. Celler: You would say, would you not, those are high profits. McConnaughey: Extremely high profits.!

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Precise profit figures for an individual television station like WCBS are now carefully concealed from public view. Not eager to risk potentially embarrassing inquiries like those of Congressman Celler, the FCC has an agreement with broadcasters to keep secret from the public the specifics of broadcast profiteering. The only exceptions are the gross aggregated balance sheet data the FCC annually releases for all network operations combined, and all broadcast stations collectively. Consequently the revelations like that for WCBS are informational anomalies among available data on broadcasting finances. But even the data doctored for public consumption, first by the broadcasters and then by the FCC, makes clear that "extremely high profits" are not financial anomalies. The profit picture that emerges from FCC statistics shows the most handsome profits concentrated at the top, in the networks. As the chief distributors of advertising and programming for the industry as a whole, the networks have the power to apportion the wealth. And that wealth is not shared equally. In 1970 the three networks sold $1.5 billion in advertising time for programs carried by their affiliates. The networks retained 87 percent of this amount, over $1.75 billion, and distributed the remainder. To the network-owned stations an average share of $2.5 million was allocated. The remaining 523 affiliates were left with shares totalling $394,000, on the average. For the industry as a whole, broadcast revenues continue to rise annually. Revenues topped $3.7 billion in 1974, which is nearly a billion dollars more than the 1970 total. Profits have followed suit. In the 15-year period from 1960 to 1974, the ratio of pretax profits to depreciated tangible investments reached a startling high of over 200 percent in 1974. The low for 'this period was a healthy 53 percent in 1971. W1thin the industry, the television networks and their 15 stations accounted for $213 million in 1972 pretax income. The other 475 VHF stations made $355 million, while the 173 UHF stations faced a collective deficit of $16 million. Clearly the networks fare best: their ratio of pretax income to depreciated tangible investments had never fallen below lOO percent in the 1960-1972 period. Occasionally leaks develop in the walls of secrecy erected by and broadcasters, which provide enriching detail to the agreFCC the gate evidence. Insiders at WNBC-TV in New York revealed that station's profit status for one year calculated on the basis of profits as a percent of gross revenues. For 1970, WNBC-TV's revenues tallied $50.6 million, of which 48 percent, or almost $25 million, was profit before taxes.2 Reports of similar findings elsewhere suggest that such bonanzas are not limited to network-owned stations broadcasting in the largest television market. In fact, WNBC-TV's standing may be

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typical. The National Association of Broadcasters has reported that a sample of top 50 market stations showing profits in 1970 averaged from 30-38 percent return on revenues.3 And from far down in the market ranks comes the case of WISC-TV, the sole VHF broadcaster in the lloth-ranked Madison, Wisconsin market area. A vigorous citizen's investigation there revealed that WISC-TV retained 48 percent of its revenues as profits in 1967, and 40 percent in 1969. As one former station owner testified during Senate hearings in 1969, "Well-managed major market stations ... are already earning lOO percent on invested capital. They will get their money back three times over in a three-year license period, and many have already made 10 and 20 times their licenses."4 Yet even FCC and NAB aggregate figures doubtless understate the affluence enjoyed by broadcast corporations. First, the concept of profit has been expanded in the world of modern corporate broadcasting to include benefits that do not show up on conventional profitand-loss sheets. These include the opportunity to retain stand-by pools of employees, excessive reserves of equipment rarely used, and salary- and fringe-benefit arrangements for on-camera performers which resemble emoluments customary under the Hollywood star system. Nor are such hidden profits restricted to television entertainment productions. For example, an executive from WCBS-TV in New York lists the following annual "news" expenses for the station:5 A new set has been built in each of the last two years Anchorman Jim Jensen

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$ 100,000 150,000

A newly added anchorman

60,000

An announcer to say, "Here is Jim Jensen"

17,500

A fourth camera for an opening "beauty shot" from above (permanently mounted, and with no other use), including maintenance

52,000

Ten film crews, $125,000 each, including dar, two-way radio, and three men for each (five are superfluous, the executive said) 1,250,000 $1,629,500 Secondly, profits are hidden through a variety of accounting devices and other practices employed in the service of obfuscation and deception. The favored technique involves passing on profits from a

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station to other nonbroadcasting divisions of the station's parent corporation, thereby reducing the real profit levels for operations that must be reported to the FCC. Thus stations often "rent" their studios and their offices from corporate parents, and use in-house ad agencies to which they pay commissions far in excess of competitive rates. This way the parent company retains the profits, reporting them as broadcasting expenses, while segregating them as income from nonbroadcasting subsidiaries. WNBC-TV, for example, utilizes each of these mechanisms and others, which has prompted one investigator of that station's financial structure to estimate that an undoctored account would show the station profiting 70 percent on gross revenues.6 The same expertise in accounting is applied to another set of public reports, those required annually by the Securities and Exchange Commission of all publicly traded stock corporations. While the SEC regulations stipulate that each division of a publicly owned conglomerate must show its separate earnings, broadcasters typically avoid the full disclosure intent by aggregating their soft-drink bottling operations, theater holdings and other unrelated interests with their broadcasting division. Even so, the SEC reports detail the standing of broadcast profits comparative with profits from other types of commercial enterprises. The records of two diversified conglomerates furnish examples. RCA, parent to NBC, reports that its broadcast and related operations in 1970 accounted for 23 percent of the corpo- · ration's total revenues. But the profits contributed by broadcasting the same year accounted for 50 percent of RCA's total. Similarly, Westinghouse's broadcasting subsidiary collected 5 percent of the corporation's revenues in 1970, but supplied the conglomerate with 20 percent of its total profits. SEC reports confirm the impressions of "extremely high profits" that surface regardless of what source is cited or what profit measure is used. But more importantly, they allude to the formative role that these profits assume in generating a diversified, conglomerated corporate structure around broadcasting. The RCAs, Westinghouses, and a number of less well known corporations have found in broadcasting a profit center approaching indisposable proportions. If the regulatory climate allows profits to be not only uncontrolled, but even undisclosed, it also empowers the business owners to use the telecommunications resources however they choose. Their skillful use of it has shaped electronic communications into a mass consumer delivery enterprise. The profit opportunities detailed above demonstrate the enormous incentives, to business owners at least, to make use of the communications resources in this way. But unrestricted profit opportunities have other consequences as well. The accumulated income that is produced exceeds the owners' capacities

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for earnings retention. Thus the initial business incentives generate others: to reinvest earnings through expansion and diversification . In the previous chapter we examined one business expansion biography which exorbitant profits facilitated. In ABC' s case international expansion was emphasized. Even so, within a decade of the company's creation it had also expanded domestically to acquire profit and production control over both the entertainment and informational programming it broadcast. The incentive to diversify led ABC into the ITT merger which was later blocked by legal developments. But other corporate broadcasters have been more successful in their diversification drives, which will be examined in this chapter. The incentives which make expansion and diversification imperatives are acknowledged by broadcasters, but in a different vernacular. As the chairman of one station group explained, "stations are considered milk cows by some broadcasters. They pull in the money from them while they move into other areas. "7 To some investment analysts, any commercial enterprise promising growth is a candidate for acquisition by diversifying broadcasters. But while there may be some truth in one analyst's claim that "broadcasters don't know what to do with all the money they've been making, "8 corporate indifference to investment choices is clearly not one of the discernable outcomes of the diversification imperative. The investment patterns that do emerge can be differentiated into three forms, corresponding to the relative homogeneity of their economic lines: media conglomerates , concentric conglomerates , and diversified conglomerates . MEDIA CONGLOMERATES The term media conglomerates is given to broadcasting corporations which combine their television operations with newspaper, periodical and book publishing, radio broadcasting, and cable television to form horizontally integrated information empires. A company like Cowles Communicatio ns, Inc., turned to broadcasting to rescue a stagnating magazine publication and was amply rewarded, fashioning an extensive media machine in book, periodical and newspaper publishing from its broadcast profits. Cowles began in 1936 with Look magazine and remained a single magazine publisher until building a radio-TV station in the media's early days. Adding to its broadcast holdings by acquiring a major market radio-TV station in 1963, Cowles began its expansion and diversification drive. By 1970 the company owned three radio-TV outlets, two in the top 7 5 markets, and over 45 subsidiaries engaged in publishing six mass circulation magazines, eight daily newspapers, 16 professional and

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business periodicals, encyclopedias, directories and books. During this time Cowles' newspaper acquisitions made the corporation the eighth largest newspaper chain in the country. The corporation's dependence upon its broadcast profits, even with its numerous and diverse other properties, was reflected in its 1970 financial statements. Revenues from broadcasting that year accounted for only 6 percent of Cowles' consolidated revenues; but broadcasting accounted for 89 percent, or virtually all of Cowles' income. In 1971 Cowles transferred several of its properties, including a TV station, to the New York Times in exchange for 23 percent of the Times' stock. Several other properties were sold at the same time so that Cowles now functions as a management investment company with the Times' media holdings being its most important asset. Meredith Corporation, like Cowles, began in magazine publication, and for over 40 years was confined to publishing two monthly periodicals. Its construction of a TV station in Syracuse in 1948 opened up growth opportunities which paid off rapidly: from 1951 through 1954, Meredith each year added other stations to its broadcast holdings. Beginning in 1959, these profits were turned elsewhere as Meredith, over the next decade, purchased ten other corporations engaged in newspaper publishing, elementary, high school and college textbook publishing, consumer book publishing, and telefilm production. Since 1970, Meredith has invested vigorously in microwave communications which provide ground linkage for satellite systems, and the relay of information services nationwide. Through its interest in MCI Communicatio ns, Meredith is part of an electronics consortium which holds a coast-to-coast microwave monopoly reaching more than 6,000 miles through 41 states, with service areas covering 81 percent of the nation's population. still forming the profit core of its operations are Meredith's five TV stations, all located in the top 75 markets, and its six affiliated radio stations. Cox Broadcasting, perhaps more than any other media conglomerate, has demonstrated how impressive gains in several media fields can be achieved in less than a decade. The Cox philosophy of diversification was expressed by vice-president C. M. Kirtland in 1967: We do know we'd like to bring into the home anything that's going to come in, and we suspect that with broadcasting as a base, there's a little bit of a head start because we're already in the home.9 Since that time Cox has departed occasionally from its own version of home rule by indulging in automobile auction services and technical publications in its portfolio of acquisitions. Its status in home media services is, however, in keeping with Kirtland' s ambition.

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Cox's five television properties in the top 50 markets and its nine radio stations place it among the larger group broadcasters. Its daily newspaper holdings rank ninth among newspaper chains. And its CATV acquisitions combine to form one of the largest cable systems in the United States. Cox Broadcasting Corporation was officially launched in 1964 when the four TV and eight radio stations owned by James M. Cox were consolidated under a common corporate title with Cox's seven daily newspapers. Diversification and expansion began promptly with three acquisitions in the next ten months, and 20 more have followed in the succeeding ten years. In the process Cox has added three newspapers; purchased or built cable systems in over 50 communities in 15 states, giving Cox enough franchises to make it number five in that industry; expanded its radio and TV holdings; purchased a substantial portion of the regional auto auctioneering services and facilities east of the Mississippi; and acquired magazine and directory publishing firms serving the commercial, military and aerospace electronics market .. While vigorously pursuing diversification, Cox has at the same time spared no money in its quest for additional major market broadcast properties, attesting to that medium's importance in the corporation's scheme for continued growth. Thus Cox's purchase of Pittsburgh TV station WIIC in 1964 for $20.5 million established a price record not broken Wltil1967. And its 1973 acquisition of KF1-AM radio in Los Angeles for $15.1 million exceeded by more than 30 percent the previous price record for any radio facility. Not surprisingly, the company's financial statements provide justification for these moves-while in 1970 65 percent of Cox's revenues came from broadcasting, fully 87 percent of the corporation's profits were supplied by that division.* By and large, media conglomerates are formed by companies with established investments in earlier media of mass communications. (They are the crossowners discussed in Chapter 3, but in a majority of cases their newspapers are not located in the same cities as their television stations.) Upon securing a profit base in broadcasting, they have extended the investment logic which protected their original

*Cox's CATV interests are now separately incorporated as Cox Cable Communications, Inc., with Cox Broadcasting maintaining its controlling interest and interlocking directorate with the firm. Cox Broadcasting does not include its CATV interests in the financial reports it files with the SEC, from which the profit and revenue data reported here were taken.

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print interests, and in some cases spelled their once impending stagnation. Thus developing media conglomerates have turned to investments in still newer technologies like cable and microwave; retrenched their position in the older media of newspaper, periodical and book publishing; and, at the same time solidified their broadcasting prominence through trading up to higher market, higher profit, stations. CONCENTRIC CONGLOMERATES Concentric conglomerates, on the other hand, represent a younger generation of media enterprises first established on a broadcasting base. These are major corporations whose nonbroadcast interests are primarily in a single large enterprise, or group of closely related companies-hence the term, concentric. Lacking a prior history of media experience, their diversification imperative follows no common form, as in the case of media conglomerates. While there are instances of investments into allied fields such as advertising and entertainment, other acquisitions seemingly owe their logic only to the personal predilections of their founding, and still reigning, fathers. Thus these companies have been charged by some financial analysts with indifference to the problem of selecting investments. For the visibly incompatible corporate portfolios which sometimes result suggest an indulgent and even capricious investment scheme which only a profit-beseiged company could afford. Concentric conglomerates in particular show an exceptionally high ratio of profits to revenues contributions from their broadcasting divisions. A sample of major corporations in this category report, variously, that their broadcast divisions contribute only 20 percent to revenues, but 55 percent to profits; or 52 percent to revenues, and 83 percent to profits; or 34 percent to revenues, and 252 percent to profits. Wometco Enterprises, Capital Cities Broadcasting, and storer Broadcasting, respectively, are three such companies. Wometco's broadcast profits have afforded it the financial leverage to become one of the nation's major soft drink bottlers and vending machine operators. In explaining Wometco's investment program, one industry executive argues that "a license for broadcasting isn't unlike a franchise for a bottling company."10 This would seem to reflect the view that the only responsibility of local beverage or communications distributors is to package the formula products of national syndicates. Wometco also lists among its holdings the Miami Seaquarium, 97 movie theaters, cable television systems in seven states, and three wax museums.

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Storer Broadcasting is a major group owner holding 13 broadcast properties along with extensive CATV interests in five states. Five of its six television stations are in the top 25 markets. storer more than doubled its operating revenues in a single transaction when it acquired Northeast Airlines in 1965. This diversification in particular is referred to in industry circles as representative of the "hidden similarities between industries that make some seemingly wild moves a lot more reasonable," purportedly a reference to the fact that both broadcasting and air transport operations are government regulated.ll The acquisition in this case has proved to be a continuing receptacle for broadcast profits, as Northeast's unbroken record of annual deficits occasionally topped the $20 million mark. In 1972 storer merged the airlines with Delta, becoming a major Delta stockholder in the transaction. A new field for diversification was entered in 1973 when storer purchased a Boston professional hockey team. Like storer, Capital Cities Broadcasting is a major group owner. It also owns a well-deserved reputation for station trading, with a remarkable record of 21 broadcast acquisitions and 12 station sales during the 1961-71 decade. It began the 1960s with four TV and three radio properties, and in 1972 owned six TV and 11 radio stations, managing to retain only one of its original TV properties. Amidst this shuffling of stations in the process of trading up, Capital Cities, like storer, doubled its operating revenues through a single diversification move, when it acquired the merchandising publication operations of Fairchild Publishers in 1968. These three companies and the subsidiaries they control each have annual operating revenues in the $100 million to $250 million range. The undisputed pacesetter among concentric conglomerates, however, is a company whose diversification record on the whole reflects a more visibly compatible portfolio-Metromedia. The Metromedia success story, a favorite in the trade press, is an account of almost legendary growth from holdings of two TV properties with gross assets of $6 million in 1957, to assets of over $200 million and the status of a major group broadcaster and conglomerate in just 15 years. Like Capital Cities, Metromedia grew through trading up, first acquiring small market properties, then selling them off at handsome profits as major market stations became available for purchase. In 15 years Metromedia acquired 23 stations and disposed of eight, selling its small market TVs at profits ranging from 130 percent to more than 1000 percent. In 1974 it owned six TV stations, all in the top 25 markets, and 12 radio properties. In the course of these transactions, Metromedia simultaneously diversified, purchasing 33,000 billboards in 15 metropolitan

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markets, franchises for sale of advertising space on 22,000 transit vehicles in nine markets, and direct mail advertising lists totaling over 52 million consumer names. As a result the corporation is now the country's largest outdoor and transit advertiser, and the third largest direct mailing firm. Along the way Metromedia has also indulged in less conspicuously compatible purchases, acquiring the Ice Capades and Mt. Wilson, which it promptly transformed into an amusement park. These latter investments have a subtle logic of their own, according to industry analysts:* . .. when you have your own ready-built promotional and sales facilities, there is a method for pushing such seemingly capricious subsidiaries as the Ice Capades (Metromedia), Miami Seaquarium (Wometco) or Weeki Wachee Springs, Fla., resort (ABC).12 Thus the concentric gestalt which emerges from Metromedia's diverse subsidiaries might be labeled "coordinated marketing and promotion." As one company spokesman explains, "No matter how round-about a route we take, in the end, we are probably the only company in the country where all of our activities can be reported in the advertising press every week. "13 DIVERSIFIED CONGLOMERATES To recapitulate briefly, there is a tendency among older firms, already established in the printed mass media prior to the television era, to use broadcast profits to fashion national media machines. Here print, cable and broadcast communications are combined under one corporate parent. In the case of younger companies first raised to prominence on a broadcasting foundation, towering empires in service, leisure and advertising industries are being wrested from the same base. But the institutional integration of broadcasting with the industrial system as a whole is nowhere as advanced as in the case of the diversified conglomerates grounded financially in electronic communications.

*Taft Broadcasting, another concentric conglomerate, also owns multimillion dollar amusement resort centers in the South and Midwest.

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This probe of television's ownership structure began in order to consider the meaning of business control for the electronic communications flow. This required a look at incentives, which originated with profit opportunities, and as we saw, developed into imperatives of expansion and diversification. In the process tlle incentive structure grows more complex. For with multinational expansion and even more so with diversification, as we shall see, the control structures of broadcasting and those of the corporate industrial system are blurred. This encourages additional incentives to identify and exploit common interests between these two institutions. And with electronic communications conceived of and operated as a consumer delivery enterprise, there is a basic compatibility between the broadcasting business, and business in general. Opportunities constantly arise to use the consumer delivery enterprise to maximize shared interests in ways beyond the basic transaction of paid business access, which built these bridges in the first place. These opportunities are brought closer to home for the broadcasting corporations which expand, diversify, and become conglomerates. There is another facet to consider, particularly so in the context of consolidating control structures, and in the context of the more cooperative incentives which appear to be developing. Do broadcasting's owners have the capacity to represent economically and politically diverse interests, needs and priorities? Have they the capacity to reflect faithfully political and economic antagonisms in those brief moments allocated for social intelligence purposes in a consumer delivery communications system? The capacity of the flow itself to service a diversity of interests is already undermined by its very shape. As we noted in analyzing business pluralism earlier, regular paid access privileges are awarded exclusively to business interests and commercial information is alloted more time than is social intelligence. The problem here, then, is to consider to what extent developing control structures and incentives facilitate diversity or frustrate it. The development of a different kind of diversity in the control structure-one called conglomeration-is instructive. For example, ABC described its diversified interests in the language of a public relations release: When you go out to the movies in Tucson, you're watching ABC. Or in Chicago. Or Houston. Or Jacksonville. Because ABC owns the largest chain of motion picture theatres in the world. When you play a top ten record, you're watching ABC. Because ABC is one of the largest producers of records in the world.

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When you're learning all about high-lysine corn in Prairie Farmer, you're watching ABC. When you ride in a glass-bottom boat or go out to see "Hell in the Pacific," you're watching ABC. When you play a top ten record or talk to the porpoises at Marine World, you're watching ABC. We're many companies, doing all kinds of entertaining things you probably didn't know we did. There's a lot more to American Broadcasting Companies than broadcasting. We're not quite as simple as ABc.14 While ABC's insistence on its conglomerate status has grown more vociferous since the ITT merger fumble, the diversification enjoyed by the company's collegial superpowers is undisputed. RCA Corporation, Columbia Broadcasting System, Inc., Avco Corporation, Westinghouse Electric Corporation, General Tire and Rubber Company, and Kaiser Industries Corporation each exhibit a profoundly extensive diversification through the industrial system. And in broadcasting, all are major group.owners with four or more television stations in the top 50 markets under their control. Table 7 lists the most important telecommunications corporations in the United states, based on group ownership of at least four TV stations in the top 50 markets in 1974~ They are ranked according to the proportion of the national audience they have direct access to. In actuality, several of these corporations have either network or syndication systems which give them effective access to a greater proportion of the audience than these figures suggest. The diversified conglomerates on this list are led by the CBS and NBC networks (the latter is a division of RCA), each of which owns five TV stations located in cities which include 23 percent of the national television audience. In addition, their network arrangements with affiliates give them virtually lOO percent penetration of American TV homes. In 1974, CBS owned 14 radio stations and NBC owned eight. The next ranking conglomerate, Kaiser Industries, owns .seven TV stations located in the top ten markets with access to 21 percent of the TV public. The General Tire and Rubber conglomerate follows the networks with its TV stations broadcasting to more than 18 percent of the American public, along with a full complement of radio properties. Next in order is Westinghouse, with five TV and rune radio stations. Through its Group W division, Westinghouse is also a major program supplier and syndicator to the rest of the industry. Avco, the remaining conglomerate on this list, with five TV stations is primarily a regional, midwestern broadcaster, although its syndicated programs are seen nationwide. Avco also held seven radio properties in 1974.

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TELEVISION IN THE CORPORATE INTEREST TABLE 7 Access of Television Corporations to National Audience, 197 4

Corporation Columbia Broadcasting System, Inc. American Broadcasting Co., Inc. RCA, Inc. Kaiser Industries Metromedia, Inc. Gen. Tire & Rubber Co. Spanish International Communications Corp.* Wastinghouse Electric Corp. starer Broadcasting Co. Taft Broadcasting Corp. Capital Cities Broadcasting Corp. Oklahoma Publishing Co. Cox Broadcasting Corp. Avco Corp. Combined Communication Corp.

stations Owned TV Radio

National TV Audience (percent)

5 5 5 7 6 4

14 12 8 3 12 13

22.8 22.8 21.9 21.3 19.1 17.3

5 5 6 6 6 6 5 5 6

0 9 6 8 11 2 9 7 2

16.4 10.7 9.1 7.2 7.1 6.6 6.5 3.9 3.7

*All Spanish language stations. Note: All group broadcasters owning four or more TV stations in the top fifty markets in April 197 4 are included. The access percent is derived by summing the percentages of national TV households for each market where a corporation owns a TV station. Source: Compiled by the author. Each of the above, in addition to being among the largest television broadcasters in America, is also a well-diversified conglomerate corporation. A survey of precisely what these conglomerate operations entail suggests that their control structures, and the incentives which govern their decisions, are qualitatively different from the kind of mom-and-pop local broadcasting operation romanticized in the FCC's pluralist ideal. Conglomerated communications systems are vastly more complex operations. Their financial interests penetrate most of the industrial economy, and involve them with much

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of the government bureaucracy-federal, state and local. Even within their own house the complexity is profound. The management decisions within one subsidiary may have considerable effect on the fate of a separate subsidiary. This may sometimes produce internal conflicts within the conglomerate as a whole. At other times it may produce compelling opportunities .for mutually advantageous actions and policies. One thing conglomeration facilitates is a supramanagement authority overarching these separate enterprises. Its capacity, to direct and coordinate would not exist lacking the financial and administrative bonds of conglomeration. That supramanagement may be faced with decisions of whether or not, and how, to exploit internal opportunities; of whether or not, and how, to resolve internal conflicts. The substance of these decisions invariably involves more than simply determining whether to use the liberal income of one subsidiary for the expansion of a different and perhaps struggling subsidiary. But even that decision may place profit or revenue generating responsibilities on one enterprise which force it to minimize costs unnecessarily in terms of its own separate financial status. Conglomeration, however, probably makes separate and self-contained considerations something of a relic-a luxury of preconglomerated management structures. The smooth and efficiently tuned bureaucracy, however, will endeavor to present as few problems as possible for the supramanagement to settle, whether they be conflicts or opportunities. At the higher levels of each subsidiary or group of companies, the management will likely be quite aware of the parent company's overall interests and how these must be integrated with their own self-interest in scaling the corporate hierarchy. Corporate socialization means management will anticipate opportunities for intraconglomerate cooperation and initiate action on its own. It means management will anticipate potentially severe conflicts, and thereby avoid actions and policies which might aggravate them. In other words, the efficiently managed and bureaucratized conglomerate will not have to be ordered by its high command to pursue certain policies and not to pursue others. · An appreciation of this is significant. This is because some observers of control systems conclude rather hastily that lacking specific executive orders to proceed here or retreat there, visible retreats and advances must not be related to the corporate environment (that is, the financial and administrative attachment of mass communications systems to the business conglomerate). The behavior of the business conglomerate, like its control and incentive structures, is at once more subtle and complex than that stance admits.

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With these general considerations in mind, we will survey more specifically the diverse economic interests of communications conglomerates for insights into the substance of business incentives therein. To explore these diversified investments we will borrow the paradigm of the ABC public relations release. When you're watching American entries in the international competition for space exploration, you're watching CBS, RCA, Westinghouse, General Tire and Avco. * Each corporation is a profit beneficiary of the U.S. space program through contracts with the National Aeronautics and Space Administration. Much of the NASA space program is engineered by RCA, which provides logistical support for NASA's tracking stations around the world, as well as for the agency's space flight centers and its testing ranges in the United States and offshore areas. Not limited to engineering phases, these corporations also figure importantly in hardware construction. RCA designs and builds Atmosphere Explorer satellites, and constructs major components of the Earth Resources Technology satellites. RCA and General Tire work jointly on the Nimbus weather satellite series. And many of NASA' s satellite earth stations are being built by RCA. The most expensive and also the most heavily televised NASA program, the Apollo moon shot series, is a major joint enterprise of the broadcast conglomerates. RCA provides ground support and engineering for the moon shots which are launched by General Tire's Apollo rocket engines, equipped with Avco's miniaturized communications equipment. Once in space, RCA's guidance systems control the course of the craft and maintain communications contact with ground controL Even on the moon the television system already resembles the mixture of corporate broadcasters earthside, with some lunar cameras designed by CBS and built by Westinghouse, and others developed by RCA. With an eye on their future even as they showcase their latest hardware and software products to national television audiences, the conglomerates are preparing already for further space programs where they are assured a prominent role in design, construction and promotion. General Tire holds research and development contracts for NASA's proposed space shuttle. Avco is engaged in research and development on the Venus probe. And the profit prize, the Mars flight scheduled for the 1980s but still a political uncertainty, is

*Unless otherwise cited, the corporate activities described here and in subsequent sections are all referred to in the respective annual reports of these corporations for the period 1967-71.

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presently being developed under NASA contracts with General Tire and Westinghouse (for the NERVA nuclear rocket engine) and RCA (for the companion Viking spacecraft). The resolute determination with which the broadcast industry tirelessly presses space flight coverage upon its audiences is reflected in its own programming statistics. For example, during the Apollo lllunar landing in the summer of 1969, the hours of space coverage alloted by the networks collectively exceeded their grand total of television political interview programs, documentaries, news specials, news analyses and news roundups programmed during the entire general election campaigns of 1960, 1964 and 1968 combined.15 The strategic role of RCA in the space program is reflected by the fact that NBC invariably leads the networks in programming time alloted to space coverage. CBS, with few NASA contracts, consistently trails NBC in hours alloted to space missions. And ABC, with no contract incentives to spur its interest, barely devotes half the time typically set aside by NBC. Saturation programming of the above sort continues relatively unabated, despite the fact that occasional viewer feedback suggests that audiences prefer the telefilm fantasy versions to the infinitely more expensive NASA productions. The industry trade organ notes, for example, that "as early as 1966, when the !letworks stayed with coverage of the emergency splashdown of the crippled Gemini 8, many viewers complained about pre-emption of regular programs," including one called Lost in Space.16 When America's proprietary health care system defends itself against consumer critics, you're watching CBS, Avco, General Tire, Westinghouse and Kaiser. Like the medical profession itself, each corporation has concentrated its operations in a few specialized areas. But together these corporations input into every principal level of the health business, from the training of medical professionals, to the development of medical technology and hardware, to the development and administration of delivery institutions, and to the planning of health care systems for the society's future. Medical education is the special province of CBS which, through its W. B. Saunders subsidiary, is a prominent publisher of medical books, journals and other materials for medical professionals. The largest single area of expenditures in the American health system is allocated to hospital supplies and equipment, which includes the growing market for medical electronics.17 For most of the broadcast conglomerates, entry into the medical equipment and electronics field has originated as a military spinoff from projects they first developed under defense contracts. Thus General Tire's Aerojet defense industries division manufactures sophisticated electronic

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disease detectors, Avco develops and markets heart surgical technology, and CBS is under federal contract to apply its holography process to cancer and heart disease diagnostics. At the delivery level, Kaiser Industries oversees, through its financial and corporate interlocks with the Kaiser Plan, "the nation's largest privately controlled prepaid health care system. "18 This consists of 51 clinics and 22 hospitals located across six states, paid for by more than 2 million subscribers. And ih turn, the Kaiser empire of hospitals and clinics is a major client for Kaiser Industries. "Kaiser engineers are the prime contractors for all Kaiser hospital construction,'' and the Kaiser steel, Kaiser Aluminum, and Kaiser Cement and Gypsum companies market their respective materials to the Kaiser Health Plan building program.l9 Westinghouse has taken the lead in the area of health care planning, defining the nation's medical care problems in terms which conform with Westinghouse products, capabilities and resources. The company's Medical Province department finds the basic crisis in medicine to be "the increasing complexity and ris~g cost of health care."20 The Westinghouse-supplied solutions involve research, computer systems, medical engineering, information handling, programmed teaching and advanced systems engineering. In this regard, Westinghouse has designed a new generation of general hospitals under a contract with the Department of Defense, and is analyzing pediatrician efficiency for HEW. When surveillance is promoted as the panacea for rising crime and political disorder, you're watching Westinghouse, General Tire, RCA, CBS and Avco. With the provision of a laboratory for the development and testing of sophisticated surveillance technology in Vietnam and other third world areas of American involvement, manufacturers of electronic snooping devices have been afforded a taxpayer-supported opportunity to research and develop detection hardware for subsequent mass domestic deployment. Simultaneously, the wide publicity given to crime wave statistics by the media, and the propagation of law and order issues has been an undeniable aid to the development of vast, new markets for this security technology among frightened citizens and suddenly affluent police departments. Eager to capitalize on this newly cultivated consumer taste are the crime profiteers, corporations which instinctively respond to social problems as potential markets for new technologies, in this instance surveillance systems. The involvement of the broadcasting conglomerates in this field originates with the American military strategy in Vietnam. A number of surveillance systems with instutional applications are derived from Vietnam-inspired research. As examples, Westinghouse

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has perfected radar pulsing equipment; RCA and CBS have concentrated on laser and television photographics; General Tire has specialized in infrared techniques; with Avco developing both infrared and radar systems. One need only look to Westinghouse and CBS for evidence of what peacetime conversion of war industries can mean. CBS's Compass Link system of reconnaissance photography provictes the kind of high resolution photographs of local comings and going of citizens which are apparently desired by police departments, given the demand reflected in its use in numerous American communities.21 And oriented toward mass consumer security consciousness is Westinghouse's Security Systems Inc., which manufactures and markets an electronic home protection system that is a market leader. The complementary Westinghouse arsenal for the institutional security/ espionage market is evidently the most diversified, including underground detection devices, ultrasensitive low light level imaging tubes, and a variety of surveillance-designed cameras. When public education is beset with fiscal crises, when educators spar over test-centered learning, and when school administrators deflect pressures for community control by resorting to contract schools, you're watching Westinghouse, RCA and CBS. On issues ranging from teaching methods to institutional control, these corporations are firmly committed to positions which channel the flow of educational funding into their hands. As producers of educational materials, they have been a vanguard in promoting the "materials teach" philosophy of learning, a revision of the older "teachers teach" maxim in favor during pre-Sputnik days when educational budgets were sparse. The materials that are currently alleged to do the teaching may be found in the Westinghouse, RCA and CBS warehouses: teaching machines, audio-visual equipment and materials, programmed instruction supplies, textbooks and tests. A clue to the spiraling costs of public education may be inferred from some of the fashionable technologies these corporations are busy marketing to school systems prey to the notion that innovation is something you buy. The Westinghouse Learning Corporation, for example, promotes the use of computers and the application of operations research technology (developed for the military) to problems of classroom scheduling, facilities planning and student record-keeping. Apart from school operations, the company's Measurement Research Center functions in the area of instruction as a major processor of educational test results. RCA has coordinated its testing and publishing operations to create the Criterion Reading Program, "which not only combines individual diagnostic testing of elementary school pupils with prescriptions for advancing their progress but also supplies the required

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reading materials. "22 Such required materials are produced in conjunction with RCA's extensive publishing division, which includes the imprints of Random House, Alfred A. Knopf, Borzoi, Pantheon, Modern Library, Vintage and Singer. The CBS print and audio-visual instructional materials are produced by its Education and Publishing Group, which includes the Halt, Rinehart & Winston publishing house. CBS notes with respect to its subsidiaries in this division that growth and prosperity continue to "depend largely upon the vagaries of public school funding," particularly the levels of state and federal aid to education.23 More ambitious than the marketing schemes for instructional materials are the corporations' efforts to take responsibility for, and control of, any number of the critical functions of public education systems, including in some instances the entire school system itself. This phenomenon, labeled contract schools, is an outgrowth of the channelling of U.S. Office of Education funds in bulk to beleaguered school districts. The districts, in turn, transfer under contract the management of various programs, along with the funds, to corporations which take jurisdiction for a profit. With its operations spread over five states, RCA stands as one of the more aggressive marketers of school contracting arrangements. In Florida, the state Department of Education has hired RCA to provide a staff development program for teachers in migrant worker communities across the state. In Reading, Pa., the school system has turned over its administrator and teacher development functions to the company. In Texas, the Dallas Independent School District has contracted with RCA for a Career Development Center where the company provides counseling and career oriented curriculum plans for several thousand high school students. Federal funds allocated to the Camden, New Jersey schools began in 1970 to be channelled to RCA, which has charge of a comprehensive program to upgrade the local educational system. And in Delaware, RCA's Educational Management Systems Group is under contract to develop legislation for all phases of school construction in the state. Such contractual arrangements have understandably provoked contentious controversy, albeit limited to the circles of professional educators. One can only speculate to what extent the containment of such controversy may be related to the disinterest of the contractors' broadcasting divisions in this dimension of the crises in education. If television has paid selective attention to the fiscal dimension of educational problems, it has favored a crisis which threatens to stifle its newly found growth industry. When the Department of Housing and Urban Development commits itself to the unprecedented national objective of 26 million new housing starts in the 1970s, you're watching Avco, Kaiser, General Tire, Westinghouse, CBS and RCA.

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Just a decade ago, no more than one of these corporations would have been considered part of the housing industry. That was before the creation of HUD, which removed the economic risk from low and moderate income housing. Now federally financed construction and an assortment of subsidies has turned housing shortages into new profit opportunities. Subsequently, Avco Community Developers was formed, now a major developer of master planned new towns and low income housing. RCA, through its Cushman and Wakefield real estate subsidiary, purchased Construction for Progress, a developer of low and moderate income housing. And CBS acquired the Klingbeil Co., a nation-wide developer and manager of residential communities. Federal decisions in the early 1970s expanding existing programs to include mobile homes among low income housing projects (a veiled retreat from construction goals announced earlier) represented a victory for mobile home industries like Avco and General Tire. The latter is a major manufacturer of mobile home accessories and interiors, while Avco builds and manages mobile home parks. Leadership in following the federal dollar is shared by Kaiser (the only one of these conglomerates previously a part of the housing industry) and Westinghouse. Like Kaiser Cement and Gypsum, a major wallboard manufacturer, the fortunes of the Kaiser group, including Kaiser Sand and Gravel and Kaiser steel, have historically been dependent primarily upon the level of new housing starts. Consequently, Kaiser has been a prime contractor with HUD for inner city housing programs. At the national level, Kaiser's responsibility has ranged over all the major program phases, including housing design, project supervision, and the responsibility for developing federal plans. Locally, Kaiser is building federally financed low and moderate income housing from Florida to California. In San Jose, for example, Kaiser has been selected to ascertain and define the housing needs of the poor, and to develop a master plan to meet them. Just months after HUD was created by an act of Congress, Westinghouse launched a major initiative in pursuit of federal housing funding, purchasing a manufacturer of built-in home furniture, acquiring a series of local and regional construction firms across the country, and creating two new subsidiaries to manage the company's construction programs. As Westinghouse resports, "For the $20 billion a year home building market, the Company has formed the Urban Development Coordinating Committee, a 'think tank' with representation from all divisions of the Company," including, presumably, the broadcasting division.24 Simultaneously, Westinghouse created the Urban Systems Development Corporation "to develop, build and sell low income housing through government sponsored housing programs," and to carry out strategy developed by its think tank.25 The

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USDC is conveniently headquartered just a short distance from the HUD offices, in Arlington, Va. Its first project was a study conducted for HUD of the "complex construction problems of low income housing" in 25 different American cities.26 By 1971, barely three years later, USDC was itself building housing units in 26 different American cities, an undeniable tribute to the systems approach evidently utilized by Westinghouse. When the federal government launches innovative social programs in a War on Poverty, you're watching Avco, Westinghouse and RCA. Participation of the poor in the planning and administration of antipoverty programs has received some attention in the media, enough so as to render that participation controversial. On the other hand, corporate participation has proceeded virtually unmentioned. A review of the antipoverty grants to several broadcasting conglomerates-at a profit-suggests that they may have secured a more lasting presence in these programs than was ever achieved by client groups. Avco, for example, has operated Office of Economic Opportunity-Labor Department Job Corps centers in the states of Maine and Washington. RCA ran the Job Corps center in New York City, and one for women in Pennsylvania, while Westinghouse has operated an Indiana center. A related project, funded by the Labor Department, is the Concentrated Employment Program (CEP). Westinghouse has been a prime recipient of CEP funds for the establishment of Remedial Education and Job Development Centers in Manchester, N.H., East St. Louis, lll., and Washington, D.C. RCA operates the Choanoke Area Development Center for migrant farm workers in North Carolina. Under the Model Cities program, Westinghouse has found yet another market for its Systems Operation department. This time in Baltimore, Westinghouse established the federally financed Model Urban Neighborhood Demonstration, a project which uses an engineering approach to encourage 20,000 ghetto dwellers to find solutions to their housing problems. Corporate participation and control continues in a variety of other programs as well. Under the Manpower Development and Training Act, RCA is paid to train the hard-core unemployed in the major urban centers of the nation, including New York, Chicago, Los Angeles, and. in Camden, N.J. (where, as was noted previously, RCA holds a comprehensive school contract). Some training of Vista and Peace Corps volunteers has been contracted out to Westinghouse. Publicly funded extracurricular and educational programs are operated by RCA at the Cornwells Heights Youth Development Center in Pennsylvania. The only goveriunent funded national evaluation of the

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Head Start program was conducted by Westinghouse. And conglomerate Avco was the first company selected for participation in a government funded training program called the Federal Test Program for Job Development. The terms of this grant enable Avco to be paid to hire Roxbury ghetto dwellers for its new printing diversification venture in Boston. When America goes off to war in Vietnam, Laos, Cambodia and Thailand, you're watching Avco, CBS, Kaiser, General Tire, RCA and Westinghouse .27 With the exception of CBS and Kaiser, all of the above broadcasting conglomerates appeared on the list of top 100 military contractors for fiscal year 1972, a status Avco, General Tire, RCA and Westinghouse shared every year in the preceding decade. A full accounting of the services supplied by these corporations, and paid for by the military, could potentially fill volumes. For their products and expertise have been involved, directly or indirectly, in every phase of military policy for a decade. And in some cases the partnership extends back over generations of wars, cold and hot. These conglomerates, in short, represent the corporate face of the military-industrial complex. When U.S. troops and weapons embark for foreign shores, these corporate trademarks carry them to their destination: if by air, Avco; if by surface ship, Kaiser; if by submarine, Westinghouse. Avco, which calls itself the nation's leading subcontractor for aircraft structures, is also one of the nation's leading beneficiaries of the Indochina war. In 1966, the year of the major American buildup, its military contracts quickly doubled, to an annual total of more than $500 million. Troops, ammunition, vehicles and other cargo are flown to Indochina literally on the wings of Avco. The company's Aerostructures division produces the structural components, including the wings, for the military's C-130 Hercules and the controversial C5 series of air transports. When tanks are deployed on foreign shores, their delivery comes via Kaiser's new generation of LSTs, or tank landing ships, engineered and produced by the company's shipbuilding subsidiary, NASSCO. Transportation on land for the military is also provided by Kaiser through its jeep division. From 1964 to 1968, Kaiser manufactured more than 100,000 cargo and ambulance trucks for the military for the sales price of more than $1 billion, providing its jeep subsidiary with record profits first in 1967 and again in 1968. * Like Avco, Kaiser *In 1970, Kaiser transferred its jeep division to the American Motors Corp. in exchange for controlling stock interests in that company.

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Industries as a whole benefitted handsomely from the military buildup in 1966, more than doubling its defense contract totals from the previous year. And with two cement divisions and one fluorspar processing plant in Thailand, the American presence in Indochina provides Kaiser With another kind of overseas insurance in addition to the financial coverage it has acquired from civilian agencies of the government. The Westinghouse atomic fleet, operated by the U.S. Navy, is that company's most recent product in a continuing line of naval craft and armaments. Since 1942, Westinghouse has pioneered 13 generations of torpedoes, including the first to carry a nuclear warhead. In torpedo development and design alone, Westinghouse has produced over the years tWice as many models as its nearest competitor. Fruits of the company's systems approach, which it applies to marketing and promotion as well as to product development, are reflected in Westinghouse's systematic integration into naval policy and hardware at every strategic level. Midshipmen are first introduced to the company through leadership training courses prepared by Westinghouse for the U.S. Naval Academy. There aspiring midshipmen learn that successful naval careers are crowned With lucrative Westinghouse retirement plans. In fact, so many retired admirals and other highranking naval officers have joined the executive payrolls of Westinghouse that the company has been singled out by Senator William Proxmire for excessive practices of this kind. 28 still, the tribute exacted for such favors is impressive and compelling. For example, the Atomic Energy Commission's Bettis Atomic Power Laboratory is virtually indistinguishable from what would otherWise be called a wholly owned Westinghouse subsidiary. While Bettis is nominally a facility of the AEC, the laboratory is operated rent-free by Westinghouse for the AEC. Parenthetically, these privileged arrangements and others like them are in fact routine practices for Westinghouse, and have been for some time. Beginning in the 1950s, and repeatedly since then, the company has been cited in Government Accounting Office audits of defense contractors for excessive costs, unreasonably high profits, interest-free use of government funds, and rent-free use of government property.29 The majority of the Navy's nuclear fleet is powered by Westinghouse reactors designed and developed at Bettis. * This includes the

*Research at Bettis has also facilitated the company's position as the leading manufacturer of nuclear power :plants throughout the world.

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entire Polaris-firing submarine fleet, the majority of nuclear surface ships, and the launching equipment for all submarine-fired Poseidon ICBMs. With an assortment of other military hardware in both planning and manufacturing stages, Westinghouse is assured a continuing flow of military funds in the future at at least the level (10 to 12 percent of total company sales) that it experienced during the decade of the Vietnam War. On the ground and in the air over Southeast Asia, the war proceeded in conformity with the capability of products designed by these conglomerates. Aerial bombing is facilitated by Kaiser's production of electronic optical vieWing systems for B-52 bombers refitted for Vietnam deployment. Kaiser also designs and installs the radar and avionics systems on a variety of all-weather attack aircraft. And the Navy F-14 fighter, controversial because of cost overruns and crashproneness, is supplied with avionics systems by Kaiser. At lower altitudes the war was conducted by Avco-powered helicopters, including both gunship and cargo varieties. Avco manufactures 80 percent of all U.S. helicopter engines. Inside th.e aircraft, RCA' s interior voice communications systems aid the monitoring processes of the helicopter-borne tactical radar, the latter being a Westinghouse concept. The radar permits unparalleled detection of trucks, tanks and other aircraft, and provides a complementary system to Westinghouse's photographic quality side-looking radar used aboard surveillance planes in Vietnam. Filling out the array of observational technologies is the ReAproduced system of satellites, and the company's line of hand-held tactical radar. Together these systems are used to coordinate and direct napalm strikes, artillery barrages, or a rain of what Avco calls its "antipersonnel kill mechanisms." The ordering and direction of such assaults by armchair generals situated in Washington, and the commandeering of the war by the executive branch of the government alike, is made possible by CBS's Compass Link system. The system combines television and satellite technologies to relay high resolution aerial photographs of ground activity in Vietnam to Washington only moments after the photos have been taken.*

*In 1973, a U.S. Congressman and former staff member of the President's Council of Economic Advisors stumbled across the first of the CBS Compass Link projects. His further investigations showed that with the withdrawal of American ground forces, CBS had conceived of a more elaborate Compass Link system. This project was designed to obviate conventional Air Force communications and enable Pentagon generals to issue bombing instructions directly to pilots after

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The antipersonnel weapons used in·Vietnam, considered criminal by the International War Crimes Tribunal in 1967,30 are designed and manufactured by Avco and General Tire. Antipersonnel weapons, it has been noted, have no effect against buildings or factories; they can do very little damage to military fortifications or vehicles; in fact, they cannot even harm military equipment, targets or personnel protected behind sandbags. They are aimed at only one target-people ... 31 Antipersonnel bombs have elsewhere been described as ''the deadliest weapons being used against people in Vietnam, "32 and as having the killing power approaching that of small, tactical nuclear weapons.33 The military name for these weapons is cluster bolllbs. Mqst are dropped by aircraft; some are activated by land mines. The bombs themselves are designed to house a diversity of weapons packages, including flachettes, beehive darts, steel and gravel pellets, incendiaries like napalm and white phosphorous, and biological weapons. General Tire holds the distinction of being one of only two American companies which manufacture entire weapons systems. Between 1966 and 1969 General Tire sought and acquired 19 different contracts for the production of such weapons. Another supplier, Avco, has achieved special prominence with its sophisticated innovation known as the "jungle canopy penetration fuse." The latter was developed specifically for use against human beings in Vietnam. The company also assists the Air Force with chemical and biological warfare research.34 Elsewhere in Vietnam, RCA is active through an NBC International contract to supply managerial, technical and engineering serv-

receipt of aerial destruction photographs. This redesigned two-way system is of obvious strategic importance to the military's ability to continue bombings even in the absence of ground troop support. Congressman Les Aspin said this implicated CBS in the Asian bombing and called for the company to "get out of the war business now," because it was ''potentially compromising'' to its news operations. A CBS spokesman defended the company by claiming CBS was not responsible for what the military did with its ideas and equipment. While the public-exchange was reported in some newspapers, CBS News declined to carry a story on it. (Capital Times, Madison, Wis. [June 7, 1973], p. 13.)

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ices to the South Vietnamese ministry of information.35 The precise range and extent of the company's services has never been clearly defined. It is known that during the major American buildup of the war, NBC's coordinator for international broadcasting management services functioned as the director of South Vietnam's television network.36 Whatever its dimensions, this project has been coordinated by the Joint U.S. Public Affairs Office (JUSPAO) in Saigon, the propaganda and psychological warfare arm of the American military in Southeast Asia. According to one source, JUSPAO has been delegated responsibility for martialing "American support for the war by favorably influencing newsmen. "37 RCA' s participation in military propaganda and psychological warfare actions is scarcely novel. RCA's partnership with the military through hardware, services and personnel dates back to the company's founding at the end of World War I. At that time it was the naval branch of the military that was most dependent upon wireless communications for tactical operations. Because the young wireless communications industry was dominated in the United States by a foreign firm, British Marconi, the Navy engineered its expropriation in 1919, and supervised the creation of a quasi-government corporation known as the Radio Corporation of America. For control of the company, ownership was vested to General Electric, Westinghouse and American Telephone and Telegraph, with provisions included to .Provide for Navy representation on the board of directors. For its embryonic period, a general was selected as the company's president to consolidate military ties. When commercial broadcasting proved to be a profit bonanza, RCA bought out its original corporate investors. But its military ties were not relaxed. In 1936 a military engineer was named NBC president, and his army associates were subsequently appointed to NBC managerial posts.38 With the coming of World War II, NBC was found to be compliant With military objectives in numerous respects, including the production of regular programs aired over its commercial affiliates, such as the Army Hour, Labor for Victory Series, and Victory at Sea.39 Following World War II, Brigadier General David Sarnoff replaced retiring General James Harbord as RCA board chairman and president. During the first Eisenhower administration, Sarnoff retained for himself the position of NBC president, in addition to his other corporate duties, and Sarnoff used his position to shepherd RCA and NBC into an ever closer embrace with the military, a policy he continued until his retirement in 1970. During the Eisenhower years, Sarnoff promoted the military-political uses of RCA's technology,

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from its equipment to its propaganda services. At Fort Meade, Maryland, Sarnoff demonstrated to fellow officers how future battles could be coordinated by TV, a precursor of the electronic battlefield. He served as an advisor for the CIA' s Radio Free Europe and Radio Liberation. In consultation with the CIA, the U.S. Information Agency, President Eisenhower and Nelson Rockefeller (then Special Assistant to the President on psychological warfare), he developed in 1955 a comprehensive strategy document titled, "Program for a Political Offensive Against Communism. "40 Known as the Sarnoff Plan, it urged expanding American communications control abroad in noncommunist countries for propaganda purposes; penetrating communist countries through aircraft drops of transistor radios designed to receive only American transmitters; disseminating intensively the cold war message to the American public via radio and TV; and establishing special political-psychological warfare schools to train communications propagandists. Sarnoff managed to personally implement most of his proposals. For example, the CIA's Radio Liberation propagandists were trained at NBC studios, NBC International took charge of the South Vietnamese communications system, and the transistor bombing plan was acted upon by USIA-JUSPAO in Vietnam.41 Evidence suggests that the military-communications conglomerate interface will persist, even with the winding down of the war in Indochina. For the advent of the 1970s was marked by accelerated funding for strategic weapons production. The Navy awarded RCA its largest contract in a decade (ultimate value in excess of $1 billion) for production of the Aegis missile system, a new generation of guided defensive missiles. Increased ABM funding assured Avco of contracts for the company's ABM radar system, and the firm entertained hopes for a revival of SST aircraft construction in order to reclaim its status as the principal SST subcontractor. In 1971, the Navy launched its campaign for a new fleet, claiming Soviet naval supremacy, and letting significant new ship building contracts to Kaiser. And the automated battlefield system, estimated to cost $20 billion if funded, had moved beyond the concept and design phase, assuring all the conglomerates of substantial production contracts, ·particularly RCA and Westinghouse. The preceding inventory of conglomerate investments is intended to be suggestive, not exhaustive. It gives evidence to how extensively the electronic communications system is simply a business adjunct to corporate America. The further significance of this for the shape of the communications flow will be considered in the final chapter.

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NOTES 1. A lengthy excerpt of this interrogation is reprinted in Harry J. Skornia and Jack William Kitson, Problems and Controversies in Television and Radio (Palo Alto: Pacific Books, 1968), pp. 53-58. 2. Bill Greeley, "The World's Richest TV Station," More -(January 1972): 5. 3. Broadcasting (August 9, 1971), pp. 24-25. 4. Testimony of Anthony Martin-Trigona, Amend Communications Act of 1934. Hearings before the Communications Subcommittee of the Committee on Commerce, U.S. Senate, on S.2004 (December 15, 1969), Part 2; p. 502. 5. Ron Powers and Jerrold Oppenheim, "Is TV Too Profitable?" Columbia Journalism Review (May/June 1972): 12. 6. Greeley, op. cit., p. 6. 7. A statement of Hazard Reeves, chairman of Reeves Telecom, quoted by Waiter Spencer, "Why Diversification is the Name of the Game," Television 24, no. 10 (October 1967): 41. 8. This opinion was offered by Emmanuel Gerard of Roth, Gerard and Co., a New York brokerage firm with close ties to the broadcasting industry; ibid. 9. Ibid., p. 60. 10. Ibid., p. 43. 11. Broadcasting (January 24, 1966), p. 31. 12. Spencer, op. cit., p. 43. 13. Ibid. 14. Adapted from a series of ABC advertisements appearing in Television Factbook 1969-70 39, vol. 1. (Washington, D.C.: Television Digest, Inc., 1970). 15. This results from comparing statistics reported in Broadcasting (December 11, 1972), pp. 15-16, with others reported in Malachi C. Topping and Lawrence W. Lichty, "Political Programs on National Television Networks: 1968," Journal of Broadcasting 15:2 (Spring 1971): 176. 16. Broadcasting (December 11, 1972), p. 15. 17. Health Policy Advisory Center, The American Health Empire (New York: Vintage, 1970), p. 95. 18. Judith Milgrom Carnoy, "Kaiser: You Pay Your Money and You Take Your Changes," Ramparts 9, no. 5 (November 1970): 28. 19. Ibid., p. 30. 20. Westinghouse Electric Corp., 1968 Annual Report, p. 14.

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21. The Network Project, Domestic Communications Satellites, Notebook Number One (New York: October 1972), p. 15. 22. RCA Corp., 1971 Annual Report, p. 22. 23. Columbia Broadcasting System, Inc., 1969 Annual Report, p. 5. 24. Westinghouse Electric Corp., 1968 Annual Report, p. 6. 25. Ibid. 26. Ibid. 27. Unless otherwise cited, the corporate activities described in this section are referred to either in the annual reports of these corporations, 1967-71, or in the company profiles available in "Corporate Military Contracting 1971," Economic Priorities Report 2:4 (January/February 1972). 28. Congressional Record (March 24, 1969), p. s3072. 29. Richard F. F..aufman, The War Profiteers (Indianapolis: Bobbs-Merrill, 1970), pp. 27, 114-15. 30. See Jean-Paul Sartre and Arlette El Kaim-Sartre, On Genocide and a Summary of the Evidence and the Judgments of the International War Crimes Tribunal (Boston: Beacon Press, 1968). 31. The Council on Economic Priorities, Efficiency in Death: The Manufacturers of Anti-Personnel Weapons (New York: Perennial Library, 1970), p. ix. 32. Quoted in Efficiency in Death ... , from Frank Harvey, Air War Vietnam (New York: Bantam, 1967), p. 5. ---a-3. John S. Tompkins, The Weapons of World War ill (Garden City, New York: Doubleday, 1966), p. 116. 34. National Action/Research on the Military Industrial Complex, Weapons for Counterinsurgency (Philadelphia: American Friends Service Committee, 1970), p. 28. 35. Ralph Tyler, "Television Around the World," Television 23, no. 10 (October 1966): 59; "NBC Agrees to Help South Vietnam Build a TV Network," Wall street Journal (July 1, 1966): 18. 36. Tyler, op. cit., p. 59. 37. Gail Grynbaum, "United States Information Agency: Pushing the Big Lie," NACLA's Latin America and Empire Report 6, no. 7 (September 1972): 6-7. 38. Erik Barnouw, The Golden Web (New York: Oxford University Press, 1968), p. 125. 39. Ibid., pp. 162-63, 230; and Erik Barnouw, The Image Empire (New York: Oxford University Press, 1970), p. 14. 40. Broadcasting (May 16, 1955), p. 114. 41. Barnouw, The Image Empire, op. cit., p. 145.

[10] Concentration

In the course of its development, communication has been affected by many changes: a greater variety of expression, an extension of its scope, a multiplicity of media and a diversification of its means. Overall, these developments emphasize how communication has been transformed from a singular yet complex social phenomenon into a vast new industry, bringing with it even broader, more variegated implications.

1. The Communication.Industry

'i

Communication, once carried on by small enterprises which lived in an atmosphere of craft rather than industrial production, is today an important industry which bulks large in the economy of any nation, in terms of plant, employment and requirements for capital. This holds true in countries with market or centrally-planned economies, and whether the economy as a whole is a big or a small one. The organization of communication on an industrial scale, with ample resources, did lead to the widespread and rapid provision of more abUildant information, to diversified and popularized cultural activities and to broader participation in social development by a population better informed and more alert to changing realities than ever before. But it can also happen that access to information is unbalanced and unequal, both between city and countryside and between one nation and another; that the information flow is one-way culturally biased and poor in content, and that it relates to alien concerns and alien realities. These ill-effects too can fairly be laid at the door of industrialization, when conducted without suitable responsibility and democratic oversight. There are significant differences regarding the industrialization of communication, but the basic trend is a general one. As a result continuous and ever more substantial capital investment is called for in the different fields of communication. Two consequences of the increasing scale of this capital investment are increasingly prominent: first, the number of people utilizing the media must rise if the process is to be economical (in terms of the cost of serving a single person or sending a single message}, and, second, control of financing and equipment tends to pass into the hands of large-scale enterprises, which are able to pool the capital needed. The most common components of the communication "industry" can be found, to a lesser or greater extent, in most countries: various print media enterprises; radio and television companies; news and feature agencies; advertising and public relations firms; syndicates and independent companies producing and distributing print, visual and recorded material for print and broadcasting conglomerates; public or private 96

256

The Political Economy of the Media I CONCENTRATION

The Political Economy of the Media I 97

information offices, data banks, software producers; manufacturers of technological equipment and so on. It is conventional to divide communication structurally into two main branches: production on the one hand, and distribution on the other, of information, opinion and entertainment. In practice, the division has never been absolute and overlap
98

MANY VOICES, ONE WORLD

unbalanced and repetitive in content; (g) news saturation occurs primarily in urban and semi-urban centres, leaving the majority of people untouched by the major issues and events of their time; (h) news transmitted by transnational agencies frequently relates to realities which are divorced from the problems and requirements of the national culture and national development. The "communication industry" also includes what has come to be called the "cultural industry", meaning that it reproduces or transmits cultural products or cultural and artistic works by industrial techniques. At the beginning of this century, public access to cultural creations was generally limited to the bookshop or library, museums, theatres and concert halls. Today, cultural productions- books, films or recordings, television programmes - often reach a multi-million audience. (I) Such massive dissemination, built up mainly in the last three decades, points to a vast democratization and popularization of culture, certain products of which until then had been largely the province of the intelligentsia and the wealthy. This is a trend, positive and commendable by itself. Yet some claim that this has debased culture or diminished cultural values. Although there may be a basis for certain criticism, it is surely more important to stress the positive effects, both cultural and social, and to encourage private and public efforts in promoting the diffusion of artistic and cultural works. In addition to enlarging the cultural audience, the industrialization of production and marketing of cultural creations has provided more work and better earnings for a large number of creative and performing artists, writers, professionals and categories of communication - information supplied through different carriers, ranging from mail, telephone, and data to TV, schools and books) increased almost 70 per cent. The figures show also that the information volume increased more rapidly than real-term GNP.

Transition in Japan's Information How Volume Index 200

(F/oll' Volume 1970 = 100) Information volume supplied 150

"

Real-term GNP _,/ ,--:;::;Information volume ./:.,..""',. ~ consumed

~:.':,',.;... _ ....... ~Population

lOO

v..:-------

1970 (l) As an example, the distributors (newspap~rs, radio and TV stations, etc.) produce some of their own material, but they receive a great part of it from other sources and that portion is generally increasing. (2) An example of this phenomenon is illustrated by a Japanese study which assessed population growth in relation to the volume of information supplied from 1970-75. During that period, the population increased by only 7 per cent, while the volume of information produced (covering 34

/

73

74

75

(Source: Report on Present State of Communication In Japan,l977, Ministry of Post! and Telecommunications, published by The Look Japan, Ltd.).

(I) For instance, a 1978 performance by the Berlin Philharmonic Orchestra of Beethoven's Ninth

Symphony was seen and heard by 120 million persons; the BBC production ofGalsworthy's novel The Forsyte Saga has been shown to huge television audiences in 57 countries.

257

258

The Political Economy of the Media I CONCENTRATION

The Political Economy of the Media I

99

technicians. In Another broad benefit results from the expansion of international cultural exchanges which the industries promote; the films of Bergman, Fellini or Satyajit Ray are appreciated around the globe; the books of Mishima, Borges and Gunter Grass are international best-sellers; Picasso reproductions and Ravi Shankar recordings can be seen or heard in virtually every capital in the world. However, the large investments required by cultural industries, their methods of production and marketing and the very magnitude of their operations raise general problems concerning cultural development policies, content and quality of the mass product and effects on consumers which require serious reflection and, more particularly, further research. Thus, the production branch of the communication industry- notably publishers, news agencies, data-suppliers, film and recording producers, and advertising agencies - is vital to the progress of the industry as a whole. Mass production has its dubious aspects, but it would be unfair"to say that industrialization is on balance harmful to communication. Without it, the level of communication would undoubtedly be lower. It can nevertheless, create a cultural environment affected by undesirable external influences, or marked by uniformity and stereotyping. In many countries, innovation is precluded by the force of inertia, or else by a dogmatic interpretation of the interests and tastes of the public. Creative individuals, and spokesmen for the audience, must have more say in cultural policy if it is to be genuinely democratic. The communication industry is closely connected with other branches of industry. The first of these are the printing and newsprint-producing industries and the electronics industry, which provides the media with the photo-setting machines, the radio and television broadcasting equipment, the radio and television sets, and other devices and equipment without which modem mass media cannot function. It also has links with other branches of the industrial complex, such as computer manufacturing, chemicals, transport and many others. So managerial circles in various industrial branches have increasing influence on the media and their functioning. In any case, the many inter-lockings between the media and other industries have fostered rapid mutual growth, which has most often required a very high level of investment and, at the same time, produced equally high profits. The huge size and spread of these components and their growth rate within the overall industrial complex has had a number of divergent effects on the social, economic and political development of every country. We are interested in these issues for three main reasons: first, 'the industrialization of communication calls for much greater attention from policy makers, planners and media practitioners; second, the imbalance and lack of correlation between different branches of the communication industry is still.a major cause of dependence in the communication field; third, since the communication industry is not and cannot be like any other industry, it deserves particular scrutiny, which has not yet been universally recognized.

2. PluraUsm In Ownership and Control 2 The phenomenon of industrialization is closely linked to media ownership1 l which in

(1) Eg. in 1976, in France alone, the record industry produced $60 million in revenue for composers

and performers. (2) Any attempt to draw up profiles or models of ownership, control, management and financing of the mass media is difficult and must be circumspect. This is due to several reasons:

100

MANY VOICES, ONE WORLD

today's world is itself of a pluralistic, diversified nature. Pluralism in ownership has two different origins. On one side, the structures of ownership and control of the media have gone through considerable transformation since the Second World War owing to a) technological advances, b) concentration of production and marketing, c) the capacity for a global span of communications across the world. On the oilier, both ownership and control patterns depend closely on the overall political system in each country. For all these reasons the ownership patterns vary widely and their coexistence is part of the world picture of communication models in our time.Ill In the majority of countries around the world, newspaper publishing is a private, commercial operation. This holds true for dailies and periodical paper!!, except for ten African and eight Asian countries, Cuba and the countries of Eastern Europe. However, in almost all countries there are private but non-commercial newspapers owned and managed by political parties, non-governmental organizations, etc. In socialist countries, newspapers are either owned and published by political and official bodies or else by such associations as trade unions, youth organizations, factories, collective farms, sports associations, higher education establishments and soon. While newspapers which are commercial enterprises expect to sustain themselves by sales and advertising, they are not always viable on this traditional basis. Capital and profits from other media and from business in general are often injected into the newspaper industry. In many cases, the financing, or at least the deficits are covered by governments or political bodies. Assistance from the State has taken various forms, including tax concessions not enjoyed by other industries, reduced postal and telephone rates, guaranteed Government advertising, and subsidies to the price of newsprint. Although the press is suspicious of Government involvement in its affairs, a desire to preserve variety by keeping the weaker papers alive has led to consideration of various schemes.l 2l Direct grants to papers in need are made in seven European nations. 1. The delineation of a single model or even several typical patterns is obviously fruitless, since neither would be adequate to represent accurately the gamut of systems governing the ownership, control and operation of the mass media around the world. 2. The difficulty of presenting an infinite variety of models in this field to give an international, or even a national, picture which reflects reality is further compounded by incomplete, vague or conHicting data. 3. Moreover, the various national constitutional, legislative or statutory provisions governing mass media under consideration often differ widely from actual practice. 4. In the majority of systems there is more than one single formula for each ~fthe aspects: split ownership, pluralistic control, tiered management and multiple-source financmg are common. 5. Finally to blur the picture even more, structural and operational patterns of the media are undergoin~ major revisions in many countries due to inter-related social, political and economic developments. (I) In the words of one Commission member: "Our world contains a bewildering variety of working models for the ownership and control of communication systems. These range in their diversity from systems in which the state owns and controls all channels of communication to those in which the state is debarred by the Constitution from interfering in the flow of information, with an infinite variety of alternative models filling the spectrum between the two extremes. It is not the task of this Commission to confer its blessing upon any particular model" (Communication/or an interdependent, pluralistic world, by Mr. EUe Abel, CIC Document No. 33). (2) A few examples: in the United States, the newspaper industry is pressing the Government for some kind oftax-reliefformula that will provide an incentive for retaining ownership oflocal newspapers outside of chains. Since the advertising revenue in the larger dailies in the Federal Republic of Germany fell by about

259

The Political Economy of the Media I

260

The Political Economy of the Media I 101

CONCENTRATION

Smaller newspapers and some parts of the "quality" or "specialized" press have experienced difficulties from a contraction of operations and size, which has led to limitations on the variety of information sources. This has induced many governments to examine the possibility of subsidies to help keep newspapers alive or to establish new ones, in monopoly circulation areas and to promote plurality and variety in general. The chart below summarizes various forms being considered or employed in 13 European countries:

.,....c "§ I§

. 0

Type of Subsidy VAT concessions Other tax concessions Direct grants Low-interest loans Postal concessions Telephone and telegraph concessions Rail concessions Transport subsidies Government advertising Training and research grants Newsagency subsidies Subsidies to !lO!i~ical party orgamsattons Subsidies for joint distribution Subsidies for joint production

ti..

"

C)

~

;;..,

-o c

s:I ]

·c;,

u

~

,!;l ;!: Cll

.

·c

-o c

:I

:g

t;

<

., :~c ~

..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; v ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; v ..; ..; ..; ..; ..; ..;

..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..; ..;

.

"""la· -o -oc " i:0 sc .,c 'i3., ";!: z Cl" :s :X: ti.. Cll c -o

..; ..; ..; ..; ..; ..;

v

Source: Anthony Smith, "Subsidies and the Press in Europe," Political and Economic Planning, Vol. 43, No. 569, London, 1977.

Structural patterns in the periodical press industry follow that of the press in general. In socialist countries, the magazines are published or produced by publk bodies and numerous social/cultural/economic groups. In the Western industrialized countries, particularly the United States, major consumer magazines are essentially privately owned and a vital element in the marketing structure. 50 per cent from 1974 to 1976, the government looked into the creation of a loan fund for ailing newspapers to be administered by a press foundation. Various financing schemes for the fund hav< been put forth, including tax rebates and publishers' contributions, but the proposal is still under consideration. In the United Kingdom, three post-war Commissions on the press have studied the problem o~ concentrated ownership and closures, but no suggestions concerning subsidies or loan arrangements have yet been accepted. In Sweden, however, the Government h!!S established a varied assistance programme, including production grants, low-cost loans, and various subventions.

102

MANY VOICES, ONE WORLD

Whether the book publishing industry is in the public or private sector depends as with other media primarily on the political and economic system of the country. In many countries, publishing is essentially a private enterprise activity, but most also have extensive government publishing operations (e.g. Government Printing Office in the USA; Her Majesty's Stationery Office in the UK). Mergers between publishing houses, the grouping of several houses under an 'umbrella' of finance and distribution, and financial control by interests outside the publishing sphere have been increasingly common developments in recent times. In socialist countries, publishing is part of the State-owned economy. Most developing countries have adopted a mixed system with the State taking an extensive share, partly because of the absence of adequ11tely equipped private entrepreneurs, partly because of the preponderant importance of educational books which comprise over 80% of the publishing output of the developing part of the world. Radio and television present a different and more complex pattern of ownership. Early in the development of radio, it was widely recognized that the persuasive power of the new medium posed unprecedented questions and that the ownership pattern of the press should not necessarily be followed; moreover, the small number of wavelengths then available raised the danger that the first in the field might establish a monopoly. For these reasons, governments were more concerned with broadcasting operations than with other mass media and to a greater or lesser degree, the radio and television services of all countries became subject to some State involvement. Many countries have established publicly-controlled broadcasting corporations and the idea of an autonomous but socially responsible broadcasting authority was adopted in several European countries, in Canada and Australia; in Japan, and later in some countries in Mrica. The degree to which the authority really makes free policy decisions and gives equal access to divergent opinions, or on the contrary relays the views of the Government. of course varies according to political circumstances. When a broadcasting system is organized in the form of a public service, it may operate independently, under the overall authority of government or parliament which has defined the basic legal statutes, charters and regulations. In most instances, the transmission facilities are owned and operated by the state (e.g. PTT administrations}, but there are exceptions where the broadcasting organizations own and operate the distribution facilities. Where broadcasting is organized as a government service, the state owns and controls the system, with many variations in the division between central authority and day-to-day management responsibility. This system has been established in the socialist countries, where broadcasting activities are generally the responsibility of a state committee or divided between central and provincial authorities. In Mrica, all the national systems are government owned and operated, with the nominal exception of four countries (Ghana, Malawi, Mauritius, Nigeria) where public corporations are formally independent of government authority in day-to-day operations. In the Asia-Pacific region, the pattern is somewhat different. For example, in Japan, Australia, and the Republic of Korea, in agdition to the public corporations (NHK, Japan; ABC, Australia, KBS, Republic of Korea) there are a number of privately-owned commercial broadcasting services. Government-operated organizations in many other Asian countries accept paid publicity and several also have private commercial competition. Private commercial broadcasting predominates in the USA and most of Latin America. The State serves as the regulatory authority, issuing licences and

261

262

The Political Economy of the Media I

The Political Economy of the Media I CONCENTRATIO N

103

maintaining varying degrees of operational control. In the USA the Federal Communications Commission enforces certain general rules and h~s the power ' rarely used, to cancel or not renew the licence of a station. We .see! therefore,. a spectrum of ownership patterns ranging from private ~nterpnse m the Amencan style, through the autonomous State corporation common m Europe, to Government ownership which is the system in the socialist world and in m~st nations of Afri~a and part Asia: But the ~istinctions ~ave become less sharp; pnvately-owned radio and teleVISion ex1st alongs1de the pubhc organizations in such countries as Britain, Japan, Australia, Canada and Finland. In the USA, the Public Broadcasting network, financed mainly by public funds (provided partly by the Fed~ral Governm~nt .and partly by ~he various St~tes or cities), has grown from servmg a small mmonty to commandmg a substantial audience. Latin America has some government-operated stations, and some religious and educational broadcasting, as well as the commercial network. The advent of cable television is likely to bring about further variations in ownership and control. The financing of broadcasting services has traditionally been from three major sources: state subsidies, licence fees and advertising. The present economic condition of the broadcasting industry is forcing a revision of previous patterns almost eyery~here. Notabl~, government or public subsidies are growl!lg and being d~ve.rs.lfi~, so that lic~nce fees,. -:vhere they exist, are proportionately playing a d1mtrushing share, while advert1smg revenue is becoming an increasingly large re.source for broadcasting support. The increasing costs of broadcasting operations wdl soon force ?lost systems to seek new and/or diversified· sources of financing. Generally _speakin~, the ~~mb~at!on of. economic and technical developments will dem~nd wtder public partiCipation m solvmg the problems raised. F1na11¥, the feature film_industry is basically a private commercial enterprise except.~ socialist. co~n~ries ~d a ~ew o~h~r parts of the world. However, publi~ authonties are findmg 1t mcreasmgly m their mterest to have some involvement in the film industry. Certain areas of film production and content are being stimulated by the introduction of a~ards and grants. In recent years, some governments, mainly in Western Europe and m Canada, have begun to subsidize commercial producers for both cultural and economic reasons. <1> . J The world picture of communication, particularly of ownership, financing and ~a11agement pat~erns, shows a wideyarietY. of practices and decidedly pluralistic Image. A. diversity of systems ~as been adopted by differellt countries and they operate Simultaneously with varted results. The Commission does not favour any particular o~e of the existing ?perations over another or recommend any standardiz:atl?n of ownership practices or models. But we are receptive to proposals, and even mclmed to suggest serio~s consideration of measures, which should lead, in any of the existing public or private systems, to avoiding abuses and distortions by impr~ng autonomy of the media on the one hand aiiasoc1al accountability~on the other.

.or

(I~ For instance, in the ~ederal Republic o~ Genna?y• a public institute, the Filmfcirderungsanstalt (Film Advancernen~ In~titute) was created m 1971 m West Berlin for the subsidizing of native ~rm~ films. The msut~te guarantees help to producers for the production of native films or mte~ational ~-productions to _th~atre-owners, and to agencies which carry out both domestic and fore1gn advertismg [or films. Th1s IS all funded by a special fee levied on all commercial screenings in the Federal Rep?blic and West Berlin. In addition there are further federal Liinder and community measures to ass1st the film industry.

104

MANY VOICES, ONE WORLD

3. Concentration and Monopolies Concentration of ownership in fewer and fewer hands is causing anxiety in many countries today. Industrialization has tended to stimulate a concentration in the communication sector through the formation of oligopolies and monopolies in the gathering, storing and disseminating of information. This concentration operates in three directions: (a) the horizontal a~vertical integration of enterprises connected with information and entertainmen,t- (b) the involvement of enterprises __gperating in different branches with the media expansion (hotel and restaurant cliains, airline companies, automobile manufacturers, mining companies, etc. are now involved in the press, film production or even the theatre); (c) the merging and intermeshing of various information industries into large-scale multi-media conglomerates. Although there are sometimes political reasons and pressure for concentration in main areas of communication industries the principal stimulus comes from conditions in national and world markets of profit rates, capital flows and technical developments. Vertical integration is enforced by the development of new technologies as, for example, in the computer industry, where some companies not only do research and development and manufacture and sell the machines, but operate and maintain the entire system and supply the software. Concentration is indeed the result of several factors as illustrated by the newspaper industry: (a) basic trends in the market economies; (b) trends towards standardization of information products, messages and contents as needed by some public authorities; (c) economic pressure stemming from technological changes in publishing and distribution patterns; (d) pressures resulting from competition for circulation and advertising revenue; (e) competition between rival media; (f) uniformity of"cultural products" in general; (g) lack of economic and social need for some newspapers; (h) rising production costs and decreasing advertising revenues; (i) planned consolidation of newspapers; G) administrative arrangements, financial incentives and tax policies discouraging independent enterprises; (k) managerial shortcomings; (I) inflation and general re6ession; (m) lack of new initiatives, both private and public, as well as of new fipancial resources. 0 Concentration is a world-wide phenomenon, which can-occur in any kind of economic system, but its extent and its patterns vary widely in different countries. When brought about by private interests, it is more pronounced in developed countries; but concentration caused by public authority is a feature of both developed and developing countries. As the amount of capital in~strnent required in the communication industry rises, the control of financing and the provision of equipment tends to pass into the hands of large-scale enterprises since only they are able to raise the capital needed. Obviously, where ow,.nership, operation and control of the media and communication industries are unified in central government organs, without democratic control by the public or people's representatives, concentration approaches the ultimate. In industrialized countries concentration occurs in numerous directions: (a) extension of media ownership, through partnerships between owners of different mass media organizations and the rise of multi-sector conglomerates; (b) increase in size of individual enterprises in several areas (news production, cultural products, software production, manufacturing of communication equipment); (c) growth of newspaper chains:U> (d) concentration not only of daily newspapers, but of various (l) Since 1945, the number of newspaper groups- ranging in size from two to 80 dailies under the same ownership -has grown from 60 to 165 in the United States. These groups own more than 60

263

264

The Political Economy of the Media I CONCENTRATION

The Political Economy of the Media I 105

journals (dailies, weeklies, monthlies specialized papers, entertainment publications, etc.) by a single publishing house; (e) mergers between newspapers and distribution companies; (f) control of the press by various industries or banks; (g) mergers of the press and other media;(!> (h) growth in the relative importance of some media operations since a decreasing percentage of firms share an increasing proportion of the total circulation<2>etc. Many people are concerned by the phenomenon of concentration, <3>which in their view constitutes an extremely serious threat to the existence of a free and pluralistic press as well as to journalists' opportunities for employment. <4>Press concentration per cent of the 1812 daily newspapers. This trend to growth of chains continues; in 1978, of the 53 daily newspapers that changed ownership, 4 7 went into groups. In the UK, by 1963 there were 51 cities with competing newspaper firms, only 43 by 1968, 37 by 1973. Fifty years before, the number had been over 500. Twelve Western European countries now have fewer daily newspapers than a decade ago, with precipitous drops in Belgium, Denmark, Switzerland (-30%) and France (-20%). Circulation patterns also point to concentration of news sources, as in the United Kingdom where nine out of Ill newspapers account for 60 per cent of the daily circulation. In the Federal Republic of Germany the number of copies sold has increased, while the number of independent newspapers (editorial units) decreased from 225 in 1960 to 134 in 1973. In Japan, three large Tokyo-based newspapers dominate the scene: with their satellite papers in five other cities, they have between them, a daily circulation of almost 27 million, which represents 50 per cent of the total circulation of all daily newspapers published in Japan. In some countries, the monopoly newspaper has passed from being an exception to the rule. (Sources: The Mass Media: Aspen Institute Guide to Communicalfon Industry Trends. Praeger Publishers, 1978; Editor and Publisher, January 6, 1979, Unesco Stalfstical Yearbook, 1977). This is also clearly illustrated in the following table showing the trend of over half a century in the USA: Year

No. ofDaDiea

No. of Cbelnl

No. of Chain-owned Dallies

1923 1930 1935 1940

2036 1942 1950 1878 1749 1785 1763 1754 1749 1765

31 55 59 60 76 95 109 156 157 168

153 311 329 319 368 485 552 794 879 1061

1945 1953 1960 1966 1971 1976

Source: C. H. Sterling and T. R. Haight: The Mass Media: Aspen lnst/lule Guide to Communication Industry Trend.r, Table 221-A (Praeger, 1978}.

(I) In the USA, groups and individual newspaper and magazine publishers also own some 650 radio and some 190 television stations. There are about sixty communities where newspapers own television stations transmitting in the same area and 200 where newspapers own radio stations. (2) By the beginning of the seventies the top five firms in the respective sectors in the United Kingdom accounted for 71% of daily newspaper circulation, 74% of the homes with commercial lelevision, 78% of the admissions to cinemas, 70% of paperback sales and 65% of record sales. (Source: Mass Communicalfon and Society, edited by Curran, Gurevitch and WooUacott; Edward Amold in association with the Open University Press, London, 1977).

(3) A typical example is that of a spokesman for a group of publishers protesting against the acquisition of a local newspaper by a large communications conglomerate in the United States who stated "(This sale) radically altered competitive balance and raised questions on how it will affect the diversity of editorial opinion. We are concerned about freedom of information and how the First Amendment (to the United States Constitution) is being served by this type; of concentration of power ..•" Edflor and Publisher, August 11, 1979. (4) At its twelfth congress in March 1974, the International Federation of Journalists adopted a resolution on press concentrations which urged governments to take legislative and other mea~ures

MANY VOICES, ONE WORLD

106

has been viewed as harmful and dangerous to the readers, the journalists, and the owners of smaller units alike. The falling number of dailies diminishes the variety of views in the press, narrows the choice open to readers, limits the range of opinion and the field of debate, promotes conformity and the acceptance of the values of a dominant minority and thus can be a serious threat to the intellectual pluralism that is vital to democracy. Where the same companies produce multiple-audience publications, say, dailies for general consumption, women's magazines, child~en's periodicals, economic weeklies, large circulation evening papers, photo-magazmes, comic-strips, etc. press concentration is yet further increased. Concentration of ownership is also promoted by the growing integration of the whole communicatio~, in which informatics, the press, radio and television, the cinema and live popular entertainment- sharing the same technology·and thus dependent on heavy capital resources - can become units in one gigantic machine. Large corporations, through subsidiaries which are not always easily identified, acquire interests which pave the way to the emergence of a new oligopoly. Indeed, this unification at the level of financing and equipment can present dangers of centralization and uniformity under public as well as private ownership. In some countries it has proved necessary to take new rigorous measures to prevent a concentration of power through the acquisition of press, radio and television enterprises by consortia, particularly because there are signs of ~onopolistic mechanisms which are difficult to identify with the means presently available under anti-trust laws. Others feel that the phenomenon o~centration in the industrialized countries should not be presented in a simplistic way or in a totally negative light. It should be considered in terms of the total volume of information available in a given society; indeed cases may be quoted where newspaper mergers lead to the dissemina~on of more abundant, and more diversified, information. There is also much truth m the argument that the number of newspapers is by no means necess~y. equivale~t to diversity of opinion. Those favouring the view that press concentration ts benefictal to the public also claim that it leads to more efficiency through rationalization of organization, management and production and by placing central resources at the disposal of smaller units, all of which leads to providing more information to more consumers. They believe that modernization of the press may lead to increased sales, and that press concentration may permit newspapers to obtain information more rapidly and from wider sources. 4. Transnationalization

At the international level, communication patterns closely follow other sectors of economic life, in which the general expansion of transnational companies in the most vital fields is one of the significant recent trends affecting the world market, trade, employment, and even the stability and independence of some countries. The phenomenon known as "transnationalization" or "transnationality" has affected practically the whole field of communication. Indeed, one can speak of a transnational communication phenomenon. Just as in other sectors of the transnational economy, it is possible to identify in the industrial and finan.cial operations of mass communication, centres which control production and servtces designed to foster the existing diversity of newspapers and to adopt all measures which rank the mission to inform above the interests of newspaper owners.

265

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and the peripheral markets to which they are addressed. Film companies are a long-standing example of the transnational process. In the early days when films were silent, they nevertheless "spoke" an international "language" of image, story and action: it was possible for Charlie Chaplin to be as familiar a figure in Russia or France as in the English-speaking world, Later, in the heyday of big Hollywood productions, films depended for their appeal on spectacle on the grand scale - battles, shipwrecks, burning cities - while the stars, celebrated for their personal beauty rather than their acting ability, might be of almost any nationality. Economically, a film of this kind earned its costs in the major American market but made its extra profits by world-wide distribution even years later. (It is still possible to see a revival of Gone With the Wind, made in 1939, in Lahore or Lagos.) The major studios in this era were businesses on a considerable scale, wellorganized and heavily capitalised, and often financially linked with film distribution. Since the advent of television, which has taken over the dominant place of the cinema in mass entertainment (at least in developed countries) there has been a change in the structure of the film industry. In the US, the process of concentration was reversed, and the production centres were obliged to give up their distribution interests under anti-trust legislation. The independent producer came to the fore. A producer; wishing to make a certain film, raises money from banks and other sources outside the industry, perhaps in several countries which will constitute the eventual market. Since control is now in the hands of the film-maker, and the film is not an item in the production line of a company, the result has been a general improvement in artistic quality and originality. However, it has increased the transnational character of the film-making process. If a film has an Italian director, a British scriptwriter, American actors, and a location in Yugoslavia, and if its audience is intended to be cosmopolitan, it is hard to establish its national character. eo-production between national producing centres adds to the intricacies. In the final analysis, a film is marketed as a commodity. This generalization should not obscure the fact that - with films as with books - there are various markets because there are various audiences, some of a minority nature and some on a mass scale. But there is a flow from countries which are rich in financial resources and production experience to countries which merely supply an audience. The volume of film production in this or that country is not the dominant factor in distribution; thus, the USA is far from being the largest producing country bpt is the principal exporter of films (followed by Italy, France, Britain, India and the USSR). The domestic product still has the largest slice of the market in many countries, if only for reasons of language. But imported films, made with greater resources and sophistication and popular among national elites, have a disproportionate influence on cultural patterns. Publishing was the first mass medium to develop an export trade, with European book publishers opening up markets and, later, subsidiaries in former colonies. However, for book publishers, export was a minor sideline until fairly recently but has undergone rapid expansion, so that it is now essential to the profitability of certain major firms. This is especially the case with books in the English language, so widely distributed in Asia and Africa as well as in Europe. American book exports are valued at $300 million and British book exports - which represent 40 per cent of sales - at $250 million. Educational, scientific and technical books predominate in these exports, and educational advances in developing countries have been a major factor in the boom. To the statistics of export, one must add the considerable volume of books produced by publishers which are subsidiaries of firms in developed countries, such as Macmilllin/India, Longman/Africa, Orient/Longman, and the

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Hachette group with investments in various publishing houses in French-speaking Africa. As an example of concentration of ownership, it may be mentioned that one financial "umbrella" covers the firm of Longman and its overseas subsidiaries, the leading paperback firm of Penguin Books, several British newspapers, and the US publishing house of Viking Books. Those publishers who are strongly involved in the educational field have also become producers of films, video-cassettes and other material, drawing on the resources of informatics and new technologies, while the need for capital has led them to establish links with newspapers, magazines and television. This expansion in markets and products has fostered the growth of publishing as an international industry and the growth of multinational media operations generally. Thus, the industry is characterized both by horizontal and vertical integration as well as transnational investments. Investment has .been supplied by such large corporations as ITT, CBS, RCA; an Italian publishing group is owned by the car firm FIAT, and Paramount Pictures (USA) has a 20 per cent share in a publishing house. There are also joint ventures, such as the investment in video by six leading European publishing firms. The example of certain big news agencies is another illustration of how activities of national companies (or cooperative undertakings) become transnationalized in character, and the case of radio and television presents a different phenomenon in the transnational structure of communication. First radio and then television emerged as national enterprises. Along with their expansion, the need arose for greatly increased production of programmes for transmission. This fostered the transnational expansion of the record industry (in the case of radio) and of "canned" television programmes. So television has a strongly transnational face, especially in the sphere of popular entertainment which constitutes a large part of its output. Situation comedies and long-running series, originally made for a national (in most cases American) audience, reach the screen with dubbing or sub-titles in various languages. In many countries, the volume of imported material is so great- given the popularity and influence of television- as to raise serious issues of cultural dependence. Britain and Canada are two countries which have made a certain proportion of nationally-produced material mandatory on the screen, but for less developed nations the home-produced material is often a poor second to imports in their daily programming. In fact, a few international television operations are providing most countries with news and entertainment programmes. Here, transnational television corporations act as producing branches of national information industries and make national mass media extremely dependent on foreign component-producing industries. Problems are also presented by the amounts of news, film and documentary programmes offered by a few transnational film agencies. The version of world events transmitted to developing countries, and, conversely, the picture of life in developing countries shown to viewers in Europe or North America may be distorted or culturally biased, and in any case lacks the variety that could be supplied only by a diversity of sources. The transnational corporations have created models of productive efficiency with high-capacity technologies. The high rate of their profits stimulates further investment in communication industries. These are companies with high capital intensity and high research and design costs. In the electronics production industry, particularly, most of the firms who manufacture equipment for the production, transmission and reception of radio and television are based in the industrialized countries, are typically transnational and characterized by vertical integration. Fifteen transnational corporations, controlling in different ways the largest part of

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operations in international communication, are located in five countries: Rank I 2 3 4

5

Corpora don IBM (USA) General Electric (USA) ITI(USA) Philips (Netherlands) Siemens (FRG) Western Electric (USA) GTE(USA) Westinghouse (USA) AEG-Telefunken (FRG) North American Rockwell (USA) RCA(USA) Matsushita (Japan) LTV(USA) XEROX (USA) CGE (France)

Sales (In mnllon $)

Employees

14,436 13,399 11,367 10,746

288,647 375,000 376,000 397,000 296,000 152,617 187;170 166,048 162,100 122,789 113,000 82,869 60,400 93,532 131,000

1,159

6,590 6 5,948 7 5,862 8 5,187 9 4,943 10 4,789 11 4,677 12 4,312 13 4,094 14 4,072 15 Quoted by Cees HamcUnk, The Corporate Village (Rome: IDOC Europe Dossier 4, 1977)

One of the most lucrative sectors of the-communication industry is advertising, with national and transnational ramifications and channels. Although the colossal size and ever-growing extent of advertising firms in the United States creates the impression that it is primarily an American phenomenon, it has become an enormous world-wide activity. Annual expenditure on advertising is now reckoned at $64 billion a year. More than half of this is spent in the USA, but several other countries- Britain, France, Federal Republic of Germany, Japan, Canada- account for over one billion dollars each. (I) The dependence of the mass media on advertising is also growing. Few newspapers in the world of private enterprise could survive without it. As for radio and television, advertising provides virtually the sole revenue for the privately-owned broadcasting companies which are dominant in the US and in Latin America and is an important source of financing in various other countries. <2> (I) From 1960 to 1971 the number of US advertising agencies with overseas operations increased from 59 to 260. Per capita advertising expenditure in 1974 still put the United States far ahead of other industrialized market economies, (US, $126.32; Switzerland, $114.49; Canada, $76.06; Denmark, $69.67; Netherlands, $56.75; Federal Republic of Germany, $40.70; France, $37.75; Japan, $37.95). But the gap is narrowing. Japan, for example, has catapulted its advertising outlay from $483 million in 1970, to $4.1 billion in 1975, a more than eightfold increase without taking price change into account. (2) The press is still the medium which gets the largest share of advertising. Nevertheless, the example of broadcasting shows that advertising represents a constantly growing source for financing in all parts of the world. Advertising revenues of radio and television broadcasters in the United States total almost 10 billion dollars (about 20% of all expenses for advertising). In Western Europe most broadcasting stations depend more or less on advertising. (There are exceptions: the BBC depends solely on licence fees; Switzerland permits advertising on TV, not on radio, etc.). In Latin America, advertising overwhelmingly supports the radio and TV services, to such an extent that in certain countries advertising accounts for more than 40 per cent of the airtime. For some broadcasting stations in the USA and Latin America advertising revenues contribute almost 100% of their total budgets. Developing countries are also using advertising as a support for broadcast financing. Around the world, in 71 out of 91 developing countries, broadcasting services gained some part of their revenue from advertising. (According to E. Katz and G. Wedell, Broadcasting in the Third World, Harvard University Press, 1977). Another study of broadcasting financing in 43 English-speaking countries showed only four (Australia, Botswana, Gambia and the U.K.) with no

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Advertising undoubtedly has positive features. It is used to promote desirable social aims, like savings and investment, family planning, purchases of fertilizer to improve agricultural output, etc. It provides the consumer with information about possible patterns of expenditure (in clothing and other personal needs, in house purchase or rental, in travel and holidays, to take obvious examples) and equips him to make choices; this could not be done, or would be done in a much more limited way, without advertising. Small-scale "classified" advertising- which, in the aggregate, fills almost as much space in some newspapers as "display" advertising by major companies- is a useful form of communication about the employment market, between local small businesses and their customers, and between individuals with various needs. Finally, since the advertising revenue of a newspaper or a broadcaster comes from multiple sources, it fosters economic health and independence, enabling the enterprise to defy pressure from any single economic interest or from political authorities. Nevertheless, what distinguishes advertising from the editorial content of newspapers and from radio or television programmes is that its avowed purpose is that of persuasion; a balanced debate in advertising is a contradiction in terms. Because advertising is overwhelmingly directed toward the selling of goods and services which can be valued in monetary terms, it tends to promote attitudes and life-styles which extol acquisition and consumption at the expense of other values. A particular material possession is elevated to a social norm, so that people without it are made to feel deprived or eccentric. The resources of commercial advertising can greatly exceed those at the disposal of individuals or groups in disagreement with the selling campaign, even of the public authorities; thus, the advertising budgets of tobacco companies dwarf the sums spent by governments on warning consumers of the health dangers of smoking. Various controls and safeguards exist in most countries, such as codes of conduct for advertisers, legislation to ensure accuracy in factual statements, and acceptance policies< 1l by radio and television authorities which bar some forms of advertising (thus, tobacco advertising in several countries is permissible by poster and in the press but not over the air). These controls modify, but do not eliminate, the overall effects of advertising. Small countries, and developing countries especially, face a special problem. commercial revenue to help finance the public broadcasting services. In a similar study of 31 French-speaking countries, only seven (Belgium, Burundi, Comores, Guinea, Haiti, Upper Volta, Madagascar) were found with no broadcast advertising. (Study made by the Canadian Broadcasting Corporation, 1976). Other countries, such as Tunisia, also broadcast no advertising. Even a number of publicly-owned broadcasting authorities, e.g. in western European nations and in Canada, carry advertising and are at least partially dependent on it. There is also advertising in several socialist countries. Indeed, the only developed countries with no advertising on television or radio are Belgium, Denmark, Norway and Sweden. (I) Comment by Ms. B. Zimmerman: "Many broadcasting organizations have commercial acceptance policies. The objective of these policies is to ensure that advertising scheduled on broadcast facilities is presented with integrity and good taste, and is appropriate to the national culture. Many such policies require material to be truthful, non-political, non-controversial, and be suitable for broadcast in word, tone and for viewing in the intimacy of the home. These policies often limit the number of minutes per clock hour of commercial messages, as well as the frequency of scheduling of messages. Some broadcasting organizations consider certain types of products and services inappropriate for broadcast advertising and do not allow such commercial material. Advertising in or adjacent to programmes for children may be prohibited. Often certain types of programmes, due to their very nature, are not allowed to be sponsored or interrupted for commercials, e.g. news broadcasts, public affairs and consumer information programmes, ceremonial broadcasts, etc."

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Control of advertising is vested to a considerable .extent in a few big agencies, of which four (three American and one Japanese) engage in expenditure of more than one billion dollars a year each. These agencies are transnational corporations; they produce advertising, either directly or through subsidiaries, for newspapers, radio and television in many countries throughout the world. Hence, some developing countries depend for the financing and indeed the existence of their broadcasting systems, not merely on advertising, but on imported advertising. In this situation, codes of conduct in advertising become more difficult to enforce. Therefore, advertising is seen by many as a threat to the cultural identity and self-realization of many developing countries: it brings to many people alien ethical values; it may deviate consumer demands in developing countries to areas which can inhibit development priorities; it affects and can often deform ways of life and life-styles. Moreover, the threat to withdraw advertising- by private interests or by a government - can jeopardize press freedom. We can sum up by stating that in the communication industry there is a relatively small number ofpredominant corporations which integrate all aspects ofproduction and distribution, which are based in the leading developed countries and which have become transnational in their operations. Concentration of resources and infrastructures is not only a growing trend, but also a worrying phenomenon which may adversely affect the freedom and democratization of communication. Concentration and transnationalization are the consequences, perhaps inevitable, of the interdependence of various technologies and various media, the high costs of research and development, and the ability of the most powerful firms to penetrate any market. The trends have their counterparts in many industries; but communication is not an industry like any other. Transnational corporations have a special responsibility in today's world for, given that societies are heavily dependent upon them for the provision of information, they are part of the structure that fosters the development of economic and social models, as well as a uniformity in consumer behaviour unsuitable to many local environments. Transnational media have a major influence on ideas and opinion, on values and life-styles, and therefore on change for better or worse in different societies. The owners or managers have a unique kind of responsibility, wlzich society has a right to insist they assume. Public awareness of the structures of ownership is a necessary starting-point. But we are inclined to draw two conclusions for communication policies in developed and developing countries to help safeguard internal democracy and strengthen national independence; one, that some restrictions on the process of resource concentration may be in the public interest; second, that some norms, guidelines or codes ofconduct for transnational corporations' activities in the field of communication might well be developed to help ensure their operations do not neglect or are not detrimental to the national objectives and socio-cultural values of host countries. In this connection, the UN Commission on transnational corporations should pay particular attention to the communication, information and cultural implication of their activities.

[11] PREFACE TO THIRD EDITION OF GOOD TIMES, BAD TIMES This is the third edition of Good Times, Bad Times. The decade since it was first published has celebrated the birth of The Independent, the first new national quality newspaper in Britain in the twentieth century; the emancipation of journalism from the decadent print unions; and a unique enlargement of the power of the central figure of this story, Rupert Murdoch, made possible only with the complicity of Margaret Thatcher. She performed as his poodle in 1987 and in 1990, as she did in 1981. All these developments have their seed in the characters and events described in this book. The Independent, launched in 1986, gained its moral ground (and a good number of its staff) when The Times manifestly abandoned its own political independence as part of the Thatcher-Murdoch relationship that I describe. Paradoxically, The Independent was also nourished at birth by . Murdoch's redemptive blow for press freedom early in 1986 when he finally defeated the print unions at Wapping. This triumph, fashioned from the original conception of Today by Eddy Shah in 1984, broke the disruptive power of the chapels. and altogether transformed the economics of the British press. The carnivore, as Murdoch aptly put it, liberated the herbivores. Of course, if the print unions had behaved a whit less treacherously and corruptly in the seventies and early eighties, when their anarchy forced out the most enlightened commercial ownership a newspaper group has ever known, Murdoch would never have got his chance to take over Times Newspapers from the Thomson Organisation in the first place. And he would never have succeeded in that chance if the print union leaders had stayed faithful to the staff buy-out we planned with them under the aegis of the former Prime Minister, James Callaghan. They took Murdoch's shilling and he put them to the sword. It was an equitable sequel. Murdoch's acquisition of Times Newspapers in 1981, and his xvii

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ability to manipulate the newspapers after 1982, despite all the guarantees to the contrary to Parliament, were crucial elements in his apparently inexorable rise. His later triumphs in adding Eddy Shah's Today newspaper to his clutch of two dailies and two Sundays in 1987, and in the way he became the dominant figure in satellite television broadcasting in 1991 have their piratical precedents in the way Times Newspapers fell into his hands in 1981. The artful dodge which worked then to evade the Fair Trading Act's provision for a reference to the Monopolies Commission, that the newspapers were in imminent danger of closing, was dusted off again for Today, then owned by Lonrho, with about as much justification: none. The Ministers responsible for enforcing the law, John Biffen in the first case and Lord Young in the second, fully lived up to Murdoch's classification of politicians as invertebrates. They were both, of course, hardly free agents. At their back they could always hear Boadicea's chariot hurrying near. Whatever the anti-monopoly law might enjoin and the public interest in pluralism might require, Mrs Thatcher would tolerate no defence of competition when the would-be press monopolist was her faithful flak. And when he appeared in the role of interloper, as he did with satellite television, she would tolerate no defence of monopoly. In this case the monopoly was one her own government had approved when the Independent Broadcasting Authority awarded British Satellite Broadcasting the licence from among seven competitors, including Murdoch. The groups owning BSB, having risked hundreds of millions of pounds, discovered their exclusive contract was not worth the paper it was written on the moment Murdoch challenged them. He beamed into Britain his panEuropean satellite service, Sky, whose satellite was under Luxembourg ownership, and did it before a fumbling BSB was ready with its satellite. The BSB directors protested to Mrs Thatcher and had their ankles bitten: competition was good for them. Once again, Murdoch was to prove above the law. The crossownership regulations provided that a national newspaper could not own more than 20% of any British television company. There was never a prayer that Mrs Thatcher would force Murdoch to abandon either medium. In 1990, when he negotiated a merger between Sky and the BSB partners with a 50% stake for himself, the cross-ownership rules made the deal plainly illegal. It was also

a clear breach of ass's contract with the Independent Broadcasting Authority. The Home Secretary, David Waddington, conceded the unlawful nature of the merger in Parliament. But Murdoch had seen Mrs Thatcher privately four days before the deal was announced and once again the fix was in. The Government washed its hands of the affair. A murmur of regret that the law could be broken with the prior knowledge of the Prime Minister might have given a touch of decency to the proceedings, but it would have taken a bolder spirit than Mr Waddington. The Independent pinned down the essential hypocrisy:

Why not? The reasons for Mrs Thatcher's perverse interventions on all matters concerning Murdoch may be more diverse than the simple wish to entrench a political ally. Murdoch is the kind of freebooter she admires; she may have been seduced by his dash, and his contempt for the liberal intelligentsia, into thinking that what is good for Murdoch is good for the country. It would be interesting to know her reasoning, but on her elevation to the Lords she took the title of Lady Amnesia: one searches in vain in her 1993 memoir for any explanation of her contradictory actions, or even a mention of Murdoch. The period when Murdoch flung himself into the battle against BSB demo11strated the force of his concentrated energy and his relish in gambling for high stakes. It also demonstrated his disdain for independent journalism. His five newspapers, including The Times and Sunday Times, blatantly used their news columns to plug their proprietor's satellite programmes and undermine the competitor. It was left to the Finandal Times to show that a commercial interest need not entail a sacrifice of integrity. Its owners, the Pearson Group, had a stake in BSB, but the readers would never have known it from the Frs treatment of the news. The FT journalists should have petitioned for the canonization of their chairman, Lord Blakenham, who in 1987-8 had seen off a bid by Murdoch to add that newspaper to his collection. The British story has parallels in the United States. When

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The fact is that Mr Murdoch employs his media power in the direct service of a political party, which now turns a blind eye to what it has itself depicted in Parliament as a breach of the law in which Mr Murdoch is involved. So much for Mrs Thatcher's lectures on media bias.ln other spheres she endorses the principle that accumulations of power are bad for democracy. Why not in this one?

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Murdoch bought Metromedia's six big city television stations in 1985, the Federal Communications Commission, with a Reaganappointed chairman, gave him an unprecedented two-year waiver of cross-ownership rules so that in New York, Chicago and Boston he could run television stations and newspapers. Nobody, however, could waive for him the requirement, on acquiring a television station, of forsaking Australia and taking American citizenship, but arrangements were made to spare him the egalitarian stress associated with it. Instead of sitting it out for an hour or two with the huddled masses in the courtroom, he emerged from the judge's chambers just before the judge herself. The secret of Murdoch's power over the politicians is, of course, that he is prepared to use his newspapers to reward them for favours given and destroy them for favours denied. The way the cross-ownership struggles worked out provided an intriguing demonstration of this in 1993. Murdoch hoped that the two-year waiver on cross-ownership agreed with the Fee might become permanent, but in 1987 Senator Edward Kennedy slipped a latenight amendment on an Appropriations Bill resolution that had the effect of killing the deal. Murdoch had to sell the New York Post, a paper he was loathe to lose. He had never been able to make a success of it, but he valued the political base it gave him. Kennedy's amendment was defended in the press by committee chairman Senator Ernest Hollings on the high ground: 'The airwaves belong to the public. Concentration of media ownership threatens free speech. No man is above the law.' But Kennedy's tactic was also widely seen as revenge for his years in the Murdoch pillory: he had been regularly savaged in the Post, the Boston Herald and the supermarket tabloid Star. The Herald was pleased to refer to Kennedy as Fatso. The surprising sequel in 1993 was that this war looked to be over. Who should back Murdoch when he offered to save the bankrupt Post if he could also keep New York's WNYW, part of the Fox network? Kennedy. Kennedy who had forced him to sell the Post in the first place. But why? The first clue came the day Murdoch took over the Post. He announced that he had secured an option to buy back the television station in Boston WFXT), and not long afterwards that he was ready to give up the Herald, Kennedy's tormentor. Allan Sloan surely had it right in his Newsday column: 'What we've got here is a your typical winking and nodding mutual-back-scratching deal. If you doubt that

Kennedy and Murdoch have come to terms, I've got a bridge I'd love to sell you.'

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Murdoch had bad times as well as good in the past decade. His record of broken promises was much bruited in 1983-4 when he tried to buy Warner Brothers and failed, and did buy the Chicago Sun-Times. The Chicago deal had echoes of the Times Newspapers sale: a consortium headed by the publisher Jim Hoge was betrayed by its owners, the Field family. Murdoch's chameleon charm was brilliantly deployed in appearing square and safe to Marshall Field v and maverick to his racier brother Ted. The Sun-Times journalists were not so biddable. Hoge quit and the columnist Mike Royko crossed the street to the Tribune with the Roykism that no selfrespecting dead fish would want to be wrapped in a Murdoch newspaper. It was a sour experience for Murdoch. He sold the paper, profitably, in 1986, after moving into television. He had a happier time acquiring a controlling interest in Fox movie studios and using the former Metromedia television stations to build a fourth national television network with the creative genius of Barry Diller. That was a considerable achievement, but he was spending other people's money like a Master of the Universe. In October 1988 he paid just under $3 billion for TV Guide and precipitated his worst time. The man so apt to eviscerate a manager for a minor miscalculation took his company into a debt of more than $7 billion that it could not service and did it on the advent of a recession and a credit squeeze. By 1990 his international holding company, News Corporation, was on the brink of bankruptcy. At the same time a Channel 4 television expose and a subsequent book by Richard Belfield, Christopher Hird and Sharon Kelly stripped away some of the mystique. At a critical time the programme demonstrated how News Corporation, headquartering itself in Australia, had for years concealed its true condition. It had exploited the lax accounting and taxation standards of Australia to create a web of intercompany debt and avoid taxation. Murdoch had seemed unstoppable, but in his sixtieth year he was obliged to go on a humiliating global roadshow, in the words of Australian Business Monthly, exhorting and pleading with bankers to give him breathing space. It was touch and go. He had to sell assets, including New York

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magazine and Premiere in America, he had to launch even more draconian cost-cutting programmes, and he had to dilute his equity below 40%. But Murdoch is no Maxwell, though at that time it was natural to regard the two as tabloid twins. Maxwell was the meat axe, a muddler, a volatile sentimentalist, a bully and a crook. Murdoch is the stiletto, a man of method, a cold-eyed manipulator. Using all his persuasive talents and power of concentration, he held on to his newspaper holdings in Britain and to Sky, and to Fox and Channel5 in the United States, and by 1993 he had bounced back. He was again one of the world's most powerful media barons, and certainly the dominant force in British communications. He controlled Sky Television and HarperCollins publishing, and nearly 33% of national newspaper sales. Somehow he had also convinced the BBC, in the prone personages of Marmaduke Hussey and Michael Checkland, to let Sky have a monopoly of live premier league soccer on television. Both ITV and BBC were bidding high for live premier league soccer (and less for recordings), but the BBC is said to have indicated that its offer- to pay for the right to broadcast Match of the Day recordings was confined to an FA deal with Sky. ITV executives could be forgiven for thinking that Murdoch's personal relationship with Hussey - he had made the gesture of keeping him on a consultant at Times Newspapers in 1981 -had as much to do with this debacle as BBC rivalry with ITV. In any event, terrestrial viewers of both BBC and nv were deprived of the long-time excitement of watching the highest level of the national sport as it happens. To William Shawcross, who had remarkable access to Murdoch for his 1992 biography, nobody should lose any sleep over this accumulation. Shawcross is particularly dismissive of the criticisms I made in the first edition of Good Times. Bad Times, about the conduct of Times Newspapers. 'If Murdoch had been running a chemical company and Harold Evans had been a dismissed foreman, his complaints would never have gained such wide currency. Much of the criticism of him [Murdoch] by journalists and media experts has been repetitive and uninteresting. Students of the British class system, on show in the Shawcross lexicon, will be amused to note that I am put in my place as a foreman. It is never to be forgiven that a horny-handed son of toil somehow got to edit The Times. But there are other more important

curiosities about this Murdochian statement. The whole point, as the journalist and author Robert Harris remarked in a review in The Independent, is that Murdoch is not running a chemical company, but seeking to become the most powerful disseminator of opinion and entertainment in the world, 'and a different standard of judgement must apply'. Not one of Murdoch's five national newspapers, read by ten million, deviated from his antiLabour party line in the British General Election of 1992, a decisive feature of the bias in the British press whereby the Conservative Party can count on 70% of the total circulation of national dailies. The second curiosity of the Shawcross-Murdoch defence is that he is at pains, here and throughout, to skip over the fundamental issue at Times Newspapers. A newspaper owner who imposes a political policy and fires a recalcitrant editor can invoke his right to do what he will with his property. At Times Newspapers Murdoch had unequivocally forsworn that right. Parliament, the Thomson Organisation cmd the Times board would never otherwise have agreed to his purchase. It was the breach of all the guarantees he gave that made the case rather more interesting than Shawcross is willing to concede. How did Murdoch get away with it? How did he? It is an important question about Times Newspapers, but it is one to be asked of many of Murdoch's initiatives. Shawcross objects to the repetitious nature of journalists' complaints about Murdoch, but it never seems to dawn on him that the repetition is produced by a significant repetition in Murdoch's behaviour. He makes solemn promises, then breaks them when it suits him. He pledges loyalty to people, then double-crosses them. He commits a wrong, but disguises his motives in a smoke trail of disinformation. There are scores of instances on three continents, but one need only consider the case of William Collins Publishing, which in 1988 so closely followed the parallel at Times Newspapers in 1981-2. In 1981 he had failed in a hostile bid for Collins, but held on to a 19% shareholding that gave him 42% of the voting stock. He made a significant promise to Ian Chapman, the Collins chief executive and architect of its fortunes, in the presence of Lord Goodman, representing Murdoch, and of Sir Charles Troughton, deputy chairman of Collins. He swore he would never again make a hostile bid for the company. (He also said that he would not

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exercise his right to acquire in the market 2% a year of the stock and he didn't.) Collins flourished under Chapman. His good name and his recommendation of Murdoch were decisive in persuading the board of Harper & Row in New York to sell control to Murdoch in 1987. Chapman was rewarded the following year in exactly the same manner other Murdoch benefactors have been rewarded: he was betrayed and traduced. Murdoch broke his pledge of 1981. He made a hostile take-over bid, he suborned Chapman's deputy, and he denounced Chapman's management. When Chapman and the board resisted, Murdoch charged, in an unpleasant offer document, that staff morale was low and the performance of the core business was bad- charges, as Chapman retorted, that had been manufactured for the bid. The Collins board finally capitulated when Murdoch raised his offer from £290 to £400 million and gave the directors promises about the future editorial and management autonomy of Collins, London, and HarperCollins in the United States. These promises, too, were soon forgotten. The global trail of recidivism was less distinct in 1981, when Murdoch sought to acquire control of The Times and Sunday Times, but I have come to regard the judgements I made then as the worst in my professional career. The first blunder was not to campaign against Murdoch, the second to be tempted from my power base at The Sunday Times where, with a world-class staff behind me, I would have been much harder to assail. My professional vanity was intrigued; I thought I could save The Times. In the event, I did not save anything. Two of the most important newspapers lost their cherished independence. The anti-Labour bias of the press was given a further twist. A proprietor who had debauched the values of the tabloid press became the dominant figure in quality British journalism. There was a critical opportunity, as I describe, to block Murdoch in 1981. At five to midnight, the Sunday Times journalists chapel were on the verge of applying to the courts for a Writ of Man dam us to force the Government into referring the take-overs to the Monopolies Commission; the Fair Trading Act provided that in principle all newspaper take-overs should be referred. If Murdoch had persisted, he would have had to testify publicly about his international dealings, his cross-ownership of media, and his record of promise-keeping. The Thomson Organisation would

have had to defend its cooked-up presentation of The Sunday Times as a loss-maker. All the issues which have subsequently become key to the Murdoch question would have been brought into the daylight. The Sunday Times journalists voted down that initiative at the eleventh hour by more than a hundred votes, but the fourteen dissenters of the so-called Gravediggers' Club felt the result might have been different if I had given a lead. As editor and chairman of the Sunday Times executive board. I was not a member of the chapel. but I believe they are right in their assessment. I did give the chapel every financial statement I possessed so that they could debate the issue in the crucial meeting and prepare evidence if they decided to go ahead with a Writ of Mandamus, but I did not try to persuade any of them to vote for it. That was a mistake. Short of sitting in the stocks in Gray's Inn, I do not know what more I can do to acknowledge the error of my ways. I did not then know that the Thomson Organisation had given the Government a set of figures at variance with those presented to our Times Newspapers board meeting and at variance with the Warburg prospectus in their successful attempt to make the Sunday Times appear a loss-maker. Knowledge of that squalid stratagem might well have changed my attitude even at that late stage. The circumstances are set out in the following pages for the reader to judge. My decision was to resist Murdoch from within rather than challenge him in public. One of the leading Gravediggers, Magnus Linklater. now editor of the Scotsman. has written to say that in my position he would probably have taken the same actions. This is generous. It is, as Maitland remarked, hard for historians to remember that events now past were once in the future. The reasons for the decisions I took seemed good at the time: the determination of the Thomson organisation, and especially Gordon Brunton and Denis Hamilton, to sell only to Murdoch and to sell The Times and Sunday Times together; the mutual distaste for each other, as a body, of journalists on The Times and Sunday Times, which militated against The Times' editor, William Rees-Mogg. and myself joining forces-as we should have done from the start; the unprecedented editorial guarantees we had secured from Murdoch; the risk of a secondchoice purchaser closing The Times: the Daily Mail, which bid £8 million more than Murdoch, insisted on the freedom to do this. (John Grigg, in his 1993 The History of The Times, says Lord Rothermere confirmed this to him.)

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None of these risks was as great as the risk we took with Murdoch. It was not that we trusted him. The outgoing board and both editors thought we had shackled him, locked him in a trunk in an inviolable castle tower, given one key to a group of honourable men and entrusted the other to the highest court in the land, Parliament. But Murdoch is the Houdini of agreements. With one bound he was free. His machinations are almost Jacobean in their strategic cunning. How all this occurred and how it seemed at the time are worth describing in detail because it suggests the manner in which institutions are vulnerable when they rest on moral assumptions which a determined, clever man can exploit. My own abrupt and painful severance from The Times is the least of it, though emblematic. I was the twelfth editor in nearly 200 years. Murdoch is on his fifth editor in eleven: the late Charles Douglas-Home was the thirteenth, Charles Wilson the fourteenth, Simon Jenkins the fifteenth, and Peter Stothard the sixteenth. Perhaps the values of tradition and continuity have been exaggerated; certainly that body of Times journalists which affected to uphold them in my day have hardly been conspicuous on the ramparts since. In any event, the twelth editor wishes the sixteenth well. I declare an interest in this. I recruited Stothard to journalism on The Sunday Times and took him with me to The Times in 1981. He was one of the new men whose appointments were said to have aroused resentment. How he and Andrew Neil at The Sunday Times work out their responsibi.lities with Rupert Murdoch hovering over them on the satellite is something I hope they will one day share with us as I share my own experiences with readers of this book. When I first told of the pressures I had resisted, which are described in this book, there was some disbelief. It is still the stance of M urdoch, to judge from his interviews with William Shawcross, that these were fictions of my imagination. It is no pleasure, in this instance, to be so vindicated by events. I had not dreamed up the idea that my principal difficulty with Murdoch was my refusal to turn the paper into an organ ofThatcherism. That is what The Times became. No doubt Charles Douglas-Home was more in sympathy with Thatcherism than I was, but a succession of editors struck the identical note and, as Shawcross concedes, Murdoch's voice soon resonated in other editorial opinions designed to appease him. Shawcross mentions 'constant sniping criticisms of such Murdoch

betes noires as the BBC and the British television establishment in general'. I had not dreamed up the row I had over insisting on the proper reporting of Parliament. Under my successor, who had felt as keenly as I did, the famous Parliamentary page and its team disappeared overnight. I had not dreamed up the way Murdoch, under pressure, would subordinate editorial independence to his other commercial interests, as he did when he secretly transferred the corporate ownership of the Times titles and then suggested I suppress the news in The Times itself. In the following decade extraneous commercial pressures became manifest, especially in the reporting of his ambitions for Sky Television and his take-over of Collins. The convictions supposedly animating the crude campaign against the BBC vanished the moment it agreed to a commercial partnership with Murdoch. I had not dreamed up the proprietor's determination to give orders to staff. in breach of the guarantees. It was by his direct instruction that Douglas-Home, soon after becoming editor, dismissed Adrian Hamilton as editor of the Business News at The Ti111es. I had not dreamed up the scandal of the eviction of his father, Sir Denis Hamilton, as chairman of Murdoch's national directors; on that gallant man's death, The Times obituary suppressed this entire period of his life. I had not dreamed up the threats to the reputation for accuracy and fairness. When Murdoch lied about the circulation of The Times in my editorship, The Times published the falsehood. and then DouglasRome refused to publish my letter of response or any form of correction. The same lie was retailed to Shawcross. Douglas-Home suffered a tragically early death, but the truth is that he was the fig-leaf behind which Murdoch began the rape of The Times as an independent newspaper of unimpeachable integrity. I am often asked my feelings about Murdoch today. My concerns are professional rather than personal. I am happily fulfilled in a career in magazines and book publishing in the United States, and when I come across him socially in New York I find I am without any residual emotional hostility. He is for his part agreeable and sometimes vividly amusing. I have to remind myself, as he wheels about the universe of 'The Big Deal', that Lucifer is the most arresting character in Milton's Paradise Lost. There are many things to admire: his courage in taking on the unions at Wapping (though not his taste for Stalag Luft architecture), in challenging the big three television networks in the U.S.

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with a fourth, and altogether in pitting his nerve and vision against timid conventional wisdom. If only these qualities could be matched by an understanding of journalistic integrity, he would be a towering figure indeed. I am still in one respect in his debt. On my departure from The Times I became a non-person, and it proved a very happy experience. For years my birthday had been recorded in The Times, a matter I felt more and more to be an intrusion into private grief. After my resignation, my name was left out of the birthdays list. I then came to regard each passing year as not having happened since it had failed to be recorded in the paper of record, an<~ I adjusted my stated age accordingly. More recently my name has been put back in the birthdays list, which is a pity. Perhaps this new edition of Good Times, Bad Times will generate another act of rejuvenation.

[12] THE ENDLESS CHAIN

For where your treasure is, there will be your heart also. Matthew 6:22

Harold Evans 1994

GEORGE ORWELL in his novel, 1984, fictionalized Big Brother, intruder into privacy and the one big owner of all the mass media in his society. Big Brother used his control of news, information, and popular culture to achieve Big Brother's vision of a conforming society. Most critics understandably thought of Communist societies where, indeed, everyone was surrounded by One Big Owner of the mass media. Among the many social ironies of the 1980s is the change in the world's mass media. Many Communist societies have discovered that they are forced to move away from centralized control of information, though the change is slow and tentative. At precisely the same time the developed democracies of the world, including the United States, have begun moving in the opposite direction, toward centralized control of their mass media, this time not by government but by a few private corporations. No single corporation controls all the mass media in the United States. But the daily newspapers, magazines, broadcasting systems, books, motion pictures, and most other mass media are rapidly moving in the direction of tight control by a handful of huge multinational corporations. If mergers, acquisitions, and takeovers continue at the present rate, one massive firm will be in virtual control of all major media by the 1990s. Given the complexities of social and economic trends, it is unlikely to result in one owner. It is, however, quite possible-and corporate leaders predict-that by the 1990s a half-

Selected Bibliography

The History of The Times, vol vi, The Thomson Years John Grigg (Times Books 1993) Murdoch William Shawcross (Chatto & Windus, 1992)

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4 I Chapter One dozen large corporations will own all the most powerful media outlets in the United States. Given the striking similarity in the private political and economic goals of all of the owning corporations, and given the extraordinary combined power of all the forms of modern mass media, it is not particularly comforting that the private control consists of two dozen large conglomerates instead of only one. Predictions of massive conso1idation are based on extraordinary changes in recent years. At the end of World War 11, for example, 80 percent of the daily newspapers in the United States were independently owned, but by 1989 the proportion was reversed, with .80 percent owned by corporate chains. In 1981 twenty corporations controlled most of the business of the country's 11,000 magazines, but only seven years later that number had shrunk to three corporations. Today, despite more than 25,000 outlets in the United States, twenty-three corporations control most of the business in daily newspapers, magazines, television, books, and motion pictures. The same dominant corporations in these major fields appear in other' often newer' media. It is the open strategy of major media owners to own as many different kinds of media as possible-newspapers, magazines, broadcasting, books, movies, cable, recordings, video cassettes, movie houses, and copyright control of the archival libraries of past work in all these fields. Rupert Murdoch says that is now his basic worldwide strategy of acquisition and takeovers. Lee Isgur, media analyst for the investment house PaineWebber, has said, "The good companies must be integrated." Major owners of cable systems are corporations also dominant in newspapers, magazines, books, and broadcasting. Increasingly they insist on owning part or all of the programs they transmit on their cable channels. After Sony bought CBS Records, it also purchased a company that had exclusive rights to 35,000 songs. Time Warner, the largest media corporation in the world, owns copyright to thousands of other songs, including "Happy Birthday." An alarming pattern emerges. On one side is information limited by each individual's own. experience and effort; on the other, the unseen affairs of the community, the nation, and the world, information needed by the individual to prevent political powerlessness. What connects the two are the mass media, and that system is being

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The Endless Chain I 5 reduced to a small number of closed circuits in which the owners of the conduits-newspapers, magazines, broadcast stations, and all the other mass media-prefer to use material they own or that tends to serve their economic purposes. Because they own so many of the different kinds of outlets, they have that golden commodity they speak of with financial joy, a "guaranteed audience." But the term "guaranteed audience" is another way of saying "captive audience." Why do the corporations fight for so much dominance, spending most of their executive time and billions of dollars in ferocious bidding battles, mergers, acquisitions, leveraged buyouts, and takeovers? The answer is an ancient one: money and influence. Money: "Market dominant" firms simply make a higher percentage of profit out of every dollar than less dominant firms. A four-year study of 2,746 corporations by the advertising agency Backer Spielvogel Bates showed that companies with 1.5 times the sales of their nearest rival were 52 percent more profitable than market followers. And market leaders averaged 31 percent return on investment compared to 11 percent for those ranked fourth to fifth. It is not necessary to be an old-fashioned monopoly, the only firm in the business; one needs to be merely one of a small number of firms that have a larger . proportion of the business than all the others combined. The study adds, "It is not sufficient to have superior quality." Influence: "Market dominant" corporations in the mass media have dominant influence over the public's news, information, public ideas, popular culture, and political attitudes. The same corporations exert considerable influence within government precisely because they influence their audiences' perception of public life, including perceptions of politics and politicians as they appear-or do not appear-in the media. Few investors believe that the process of tightening control will stop soon. An investment banker, Christopher Shaw, chairman of Henry Ansbacher, Inc., has negotiated more than 120 media acquisitions. When asked where it will all stop, Shaw likes to quote a client, saying that by the year 2000 all United States medi~ may be in the hands of six conglomerates. Robert Maxwell, a British publisher, said in 1984, "In ten years' time, there will be only ten global

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6 I Chapter One corporations of communications. I . . . would expect to be one of them." J. Kendrick Noble, media analyst of PaineWebber, believes that by the end of the century the largest media properties in the country will be owned by a half-dozen huge companies. If executives of dominant media corporations are personally silent about dangers of concentrated ownership, it is not surprising: the process benefits them in terms of both money and power. But the media they control also are silent. The silence is not convincing evidence that the media never reflect the corporate and political interests of their owners. Today, the chief executive officers of the twenty-three corporations that control most of what Americans read and see can fit Lr1to an ordinary living room. Almost without exception they are economic conservatives. They can, if they wish, use control of their newspapers, broadcast stations, magazines, books, and movies to promote their own corporate values to the exclusion of others. When their corporate interests are at stake-in taxes, regulation, and antitrust action-they use that power, in their selection of news, and in the private lobbying power peculiar to those who control the media image-or nonimage-of politicians. In a democracy, the answer to government power is accountability, which means giving voters full information and real choices. In the media business it is not different; monopoly and concentrated control diminish real choices. Dominant corporations in the media usually claim that the merger process improves the country's media. The record of improvement of media quality after their acquisition by big firms or Wall Street takeovers is not impressive. A few newspapers under major corporate ownership have been improved in journalistic quality, but not most. The largest chain owner in terms of circulation is Gannett, whose new chief executive officer has said in 1989 what others in the business have long recognized, that many of the chain's papers are journalistically "embarrassing," what Business Week magazine called "slick but . . . mediocre journalism." The largest chain in number of individual papers is International Thomson, whose papers a Canadian parliamentary commission called "a lackluster aggregation of cashboxes." The deterioration of quality, after takeovers by Rupert Murdoch, in newspapers,

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The Endless Chain I 7 magazines, television, books, and movies, descending, almost without exception, to ever more sex and violence, is now legendary. After the Wall Street turbulence in changing ownership of the national television networks by Capital Cities/ABC, General Electric's purchase of NBC, and real estate operator Lawrence Tisch's takeover of CBS, all suffered dismantling of experienced news staffs and draconian layoffs and loss of journalistic and entertainment quality. When a corporation buys a local monopoly or market domination, few can resist the spectacular profits that can be made by cutting quality and raising prices. This is not what they talk about in public. But in private Christopher Shaw, the merger banker, speaking at a session of potential media investors in October, 1986, said that a daily monopoly newspaper with a 15 percent annual operating profit, can, within two years of purchase, be making a 40 percent profit by cutting costs and raising advertising and subscription prices. The investors were told,· "No one will buy a 15 percent margin paper without a plan to create a 25-percent-45-percent margin." When large corporations claim, for example, that they bring superior management skills to the smaller media they buy, most of the time "management skills" means top-heavy administrative costs, and because they enjoy market domination, quick increases in prices to consumers, and quicker and easier content. Chain newspapers charge higher subscription and advertising rates than counterpart papers owned by independent companies. The television oligopoly of three networks has increased advertising rates despite reduction of their audience shares. After cable was deregulated, cable rates charged by dominant firms rose as much as 50 percent faster than production costs. When the same corporations expand their control over many different kinds of media, they speak glowingly of providing richer public choices in news and entertainment. But the experience has been that the common control of different media makes those media more alike than ever. Movies become more like television series. Cable, once thought to be a fundamental alternative to programs on commercial television but now under control of companies also in television and other media, is increasingly an imitation of commercial television.

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8 I Chapter One The claim that large corporations can better resist incursions of government into freedom of information can be true. Some-not all-have done so. But when they have to choose between, on the one hand, candidates who will dispense governmental favors in the form of corporate taxes and relaxed business regulation, or, on the other hand, candidates who support freedom of information, the record is not encouraging. The history of Big Government and Big Corporations is more one of accommodation than of confrontation. Richard Nixon and Ronald Reagan, during their terms in the White House, made the most severe attacks in this century on freedom of information and of the press. But both made extraordinary moves to support corporate concentration and increased profit-taking in the media; newspaper publishers overwhelmi.ngly endorsed both Nixon and Reagan for reelection, and while in office President Reagan received stunningly uncritical coverage by the Washington news corps. (See chapter 4.) The claim by corporate owners of greater resistance to advertiser pressures has mixed validity. Greater public sophistication and professional journalistic standards have reduced clumsy practices of the past in which many "news stories" were masqueraded publicity for advertisers (though the practice has not disappeared). Instead, the basic form and content in newspapers, magazines and television programs have been altered to create editorial content not primarily for the needs and interests of the audience but for the audiencecollecting needs of advertisers. The added pages in the average American newspaper and magazine since World War IT have been designed primarily to serve advertising. The basic strategy in designing programs on commercial television and cable is not primarily what is perceived as the highest needs and wants of the audience, but what is perceived as the most likely to attract advertising. That priority has become more intense under corporate ownership and its greater insistence on immediate, maximum profits. (See chapter 9.) It is a favorite axiom of large media operators that, while they have great power, if they abuse it the public will reject them. But in order to have the power of rejection, the public needs real choices and choice is inoperative where there is monopoly, which is the case in 98 percent of the daily newspaper business, or market dominance

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The Endless Chain I 9 of the few, which is the case with television and most other mass media. New corporate owners of newspapers and television stations commonly reduce staff and news space. Few build for long-term development of audience loyalty. Even when the most blatant deterioration of news takes place the public has little power to force changes. In 1977, when the local paper was owned by the Panax chain, a respected editor in Escanaba, Michigan, was fired when he balked at obeying orders to run the owner's personal propaganda as news on page 1. The communityRepublicans and Democrats, conservatives and liberals-were outraged. They formed an organized boycott of the paper. It failed. There was no other source of local news, advertisers would not or could not withdraw all their ads, and during the boycott the owner could subsidize the Escanaba paper with proceeds from his other newspapers. Neither in practical improvement of service to the public nor in added independence from government is the record of corporate ownership of the media sufficiently impressive to counter the dangers of tightening control of public information. There are conspiracy theories to explain the rapid concentration of media power, but in modern times actual conspiracy is not necessary. The absence of a conspiracy, however, does not mean that large media corporations lack power or fail to use it in a unified way. They have shared values. Those values are reflected in the emphasis of their news and popular culture. They are the primary shapers of American public opinion about events and their meaning. And through that, and their organization in large poweiful corporate units, they are a major influence on government. It is not accidental that one factor stimulating the growth of newspaper chains was a favorable government tax ruling. A company's accumulated annual profits enjoy a forgiving tax rate if the profits are for "a necessary cost of doing business," usually assumed to mean contingencies for future problems. But the Internal Revenue Service decided that a newspaper using its accumulated profits to buy another newspaper is "a necessary cost of doing business." Many media giants have grown through leveraged buyouts and junk bonds

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10 I Chapter One that burden their captured corporations with huge debt. The practice has the hidden economic effect of adding to the tax burden of the average citizen because the enormously increased corporate interest payments are deductible from corporate taxes. This is not the stuff of the mainstream news about mergers and acquisitions. The resulting public unawareness and the private lobbying power of the media corporations and their bankers have made Congress and the White House loath to alter it, though it is a significant factor in the continuing burden of "the budget deficit." Historically, media power has been purchased by those who wished to use it for their personal political ambitions. There have been media owners who lusted after high office. William Randolph Hearst wanted to be president. James M. Cox, publisher of a paper in Ohio, became Democratic candidate. for president in 1920, only to be defeated for the presidency by another Ohio newspaper publisher, Warren Gamaliel Harding. Today, the desire of most corporate leaders is not to become president of the United States; it is to influence the president of the United States. The magnitude of that influence depends on the magnitude of media power. The local publisher of the Coffeyville, Kansas, Journal (circulation 7 ,000) cannot expect to see the president of the United States or influential members of Congress anytime he or she wishes. But that access does exist for the chairman of the board of the corporation that owns the Coffeyville Journal, the Gannett Company, which also owns other newspapers with combined circulation of more than six million, and substantial broadcasting and television production power. (See chapter 5.) Small media companies also want governmental favors. The local newspaper owner may have wanted tax and zoning favors from the local City Hall. But modem multinational corporations want them for their national and worldwide interests and for that they go to the heart of the national economic and the political system. Furthermore, many media owners have financial connections-through ownership, interlocking directorships, and banking partners-with defense production, banking, insurance, gas and oil. They have unified attitudes toward basic issues that separate policies favorable to large financial interests as opposed to those favorable to the individual taxpayer and consumer. President Eisenhower called attention to the ominous

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The Endless Chain I 11 power of what he called the "military-industrial complex." The new corporate domination of the mass media has created a media-industrial complex. Media lobbyists work the corridors of government as do lobbyists for other industries, but they speak with special power because politicians fear the media. Sheila Kaplan, writing in the Washington Monthly, wrote that the man who is president of the Magazine Publishers Association gave $12,000 to Republican candidates in a "Victory 88" fund. A vice-president of Gannett's billboard division made campaign contributions to members of the Senate committee that regulates billboards (Gannett makes about $200 million a year from its billboards, most of it from tobacco and alcohol ads). The National Cable Television Association gave $446,000 to federal candidates between 1985 and 1988, and the National Association of Broadcasters gave $308,000 in the same period. When General Electric bought RCA in 1986 (and with it NBC News), it combined its media power with its other industrial and financial interests. General Electric is a major defense contractor-it manufactures and sells electronic, electrical generating, and nuclear systems worldwide, produces aircraft and spacecraft components, and is in the insurance and banking business, with sales exceeding $40 billion a year. Its multinational operations are sensitive to both governmental foreign policy and the news. In 1986, the Wall Street acquisition expert, Christopher Shaw, told potential media investors two reasons they should buy newspapers, magazines, broadcast stations, or book publishing firms. The first reason was "profitability." The second was "influence." Beginning in the mid-1960s, large corporations suddenly began buying media companies. It did not require a conspiracy. The trigger was Wall Street's discovery of the best-kept secret in American newspapering. For decades American newspaper publishers cultivated the impression that they presided over an impoverished institution maintained only through sacrificial devotion to the First Amendment. The image helped reduce demands from advertisers for lower rates and agitation by media employees for higher wages. The truth was that

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12 I Chapter One most daily papers were highly profitable. But that was easy to conceal when newspapers were privately owned and no public reports were required. The golden secret was disclosed by an odd combination: the fertility of founding families and the inheritance taxes. Most of the country's established newspapers were founded in the late nineteenth century, including the New York Times, the Washington Post, and the Los Angeles Times. At the time of their formation they were modest, local operations. But by the 1960s, thanks to the country's population growth, affluence, heightened literacy, mass advertising, and local monopolies, they had become substantial enterprises. Papers started decades ago with small investments (Adolph Ochs bought the New York Times in 1896 with only $75,000 of his own money) were now worth millions. Inheritance taxes for family owners can be avoided for three generations; a person could leave the estate in trust for grandchildren, but not beyond. By the 1960s, the three generation grace period for hundreds of papers was about to end and owners looked for a way to avoid overwhelming taxes (and possible forced sale of the paper) on the death of the third generation. One answer was to spread the ownership by trading shares on the stock market, thereby relieving family members of inheritance taxes on the entire property. Or the family could sell the paper outright to an outside corporation. For some papers the transfer to outside investors came because the family ran out of heirs, or, given sexism in the trade, they ran out of that standard fixture in newspaper history, appropriate sons-inlaw. In other cases, the heirs fought among themselves. Typically, a paper was started by a strong patriarch, but by the third generation dozens of his descendants' families were living off the dividends. Most of the relatives were not emotionally involved in the paper and lavish offers for their inherited stock became irresistible. In Louisville, Kentucky, for example, the Bingham family had created one of the country's more distinguished papers. In 1986 their children quarreled over the properties and one daughter, who had been drawing $300,000 a year in dividends, sold her minority stock to the Gannett chain for $84 million. (Gannett eventually acquired the whole paper.) Major papers began offering their stock publicly in the early

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The Endless Chain I 13 1960s. Firms selling stock to the general public are required by the Securities and Exchange Commission to disclose company finances. Furthermore, Wall Street investment houses who make the major investments in such firms dislike mysteries about properties in which they may invest billions, so they demand even more inside information than the SEC. Suddenly in the 1960s the investing world discovered that the newspaper industry, like the legendary Hetty Green, had assiduously presented itself to the public in mendicant rags, but was now exposed, as Mrs. Green had been, as fabulously rich. The media race was on, and concentrated ownership followed. (The high annual profit margins of individual local papersoften in the 20 to 40 percent pretax range-are still concealed by embedding them in general data for the parent corporation, and for· the traditional purpose of preventing rebellions of local advertisers and employees. Curiously, most journalists, ordinarily skeptical of institutional secrecy,. remain ignorant of the large profit margins of the papers and broadcast stations they work for.) By the 1960s, television was already concentrated in ownership. The three networks and their wholly owned and affiliated stations continue to have more than two-thirds of the audience. Broadcasters enjoy a "natural monopoly" in the sense that there is a limited number of frequencies available in each community and the government protects each station's channel from competition. Concentrated ownership was in broadcasting's corporate genes. The industry began as a private cartel in 1919 when the Radio Corporation of America (RCA) was formed as an umbrella monopoly under which General Electric, Westinghouse, AT&T, and United Fruit Company agreed to divide the newly emerging radio market among themselves. The National Broadcasting Company was their radio network. CBS did not enter the field until 1927, and not until 1943 did an activist Federal Communications Commission force RCA to divest itself of one of its two radio networks, thus creatingABC. Television, in the jargon of Wall Street, is a "semimonopoly," not only because of the limited number of owners, but because in most cities the dominant stations have virtually guaranteed high profits; the ratings simply determine which company gets the most. Recent events in broadcasting have further concentrated owner-

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14 I Chapter One ship in television. Initially, no company was permitted to own more than seven radio and seven television stations. Under the political drive for deregulation, the FCC in 1984 permitted each company to expand its holdings to twelve AM and twelve FM radio stations and twelve television stations. Magazine groups became important when mass advertising did. A century ago, when the country's new mass production industries began turning out vast quantities of consumer goods, they needed sales promotion on a national scale. In the era before broadcasting, magazines were the only national advertising medium, since newspapers were strictly local. Magazines became the major carrier of expensive ads, a practice made easier because, unlike newspapers, they could produce quality color on heavy paper. As the magazines became high profit centers, they attracted larger operators who formed groups. Magazines of general interest (Life, Look, Saturday Evening Post, etc.) died in the 1960s when the advertising power of color television replaced them, but specialized magazines, including those devoted to women, remain profitable. Like the other media that have become heavily concentrated in ownership, their rates of profit have increased-the result of market domination by a few corporations. In recent years, the dominant groups, notably Time Warner, have so increased their dominance that although there are 11 ,000 magazines in the country, three corporations have more than half the business. Many book companies became properties of outside firms in the 1960s when major electronic and defense industries (ffiM, ITT, Litton, RCA, Raytheon, Xerox, General Electric, Westinghouse, and General Telephone and Electronics) entered textbook publishing. At the time, these firms believed that instruction in American classrooms would soon be centered around computers; control of book publishing firms would put them in a position to sell schools and colleges the software for the new hardware, which some of them also sold. Computers have not taken over the classrooms to the extent expected, but the entry of outside corporations into the book world had begun. Hollywood studios, long concentrated in ownership, remain so, and with added complexity. Conglomerates came to appreciate the

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The Endless Chain I 15 power to create national styles and celebrities (and extra profits) when combinations of different media reinforced each other in unified promotional campaigns. Today, most of the leading movie studios are also owners in other media, and, thanks to the free-market amnesia about antitrust law, have once again started buying up movie houses to guarantee audiences for their own films and keep out competitors' pictures. In 1948 the United States Supreme Court found ownership of movie theaters by the major movie studios a violation of antitrust law. The U. S. Department of Justice in recent years has ignored that finding and by 1988 a few major studios had bought control of more than a third of all the movie screens in the country. It is possible that large corporations are gaining control of the American media because the public wants it that way. But there is another possibility: the public, almost totally dependent on the media for such things, has seldom seen in their newspapers, magazines, or broadcasts anything to suggest the political and economic dangers of concentrated corporate control. It is also possible that the public image of owners' selfish use of their media power is obsolete, based on the historical notoriety of the crudities of nineteenth-century "yellow journalism." Most owners and editors no longer brutalize the news with the heavy hand dramatized in movies like Citizen Kane or The Front Page. More common is something more subtle, more professionally respectable and more effective: the power to treat some unliked subjects accurately but briefly, and to treat subjects favorable to the corporate ethic frequently and in depth. Another evidence of the change from the shrillness of a century ago is the periodic appearance of news or criticism that does not reflect owners' private values. With dramatic national news (though not local news) there is competition between local newspapers and broadcast stations, so omissions of obvious news breaks would be embarrassing and ineffective. But there are two kinds of impact on public opinion, one brief and transient, the other prolonged and deep. The first is the single news item, soon obscured by dozens of new ones, each day tending to obliterate the impact of what went before. A compelling study of the ephemeral quality of isolated news accounts is Deborah Lipstadt' s

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16 I Chapter One book, Beyond Belief, which reveals that American newspapers from 1933 to 1945 printed numerous reports showing that something horrendous was happening to European Jews under Hitler. But the news stories were brief, isolated, and seldom on the front page. They were not pursued with continuity, never drawn together to form a coherent picture, and newspapers did not press to discover the difference between official denials and reality. Consequently, the atrocities did not become important in the public mind and, probably as a result, they did not provoke strong government action. Far more effective in creating public opinion is pursuit of events or ideas until they are displayed in depth over a period of time, when they seem to form a coherent picture and therefore become integrated into public thinking. Continuous repetition and emphasis create high priorities in the public mind and in government. It is in that power-to treat some subjects briefly and obscurely but others repetitively and in depth, or to take initiatives unrelated to external events-wh ere ownership interests most effectively influence the news. In all the media, it is normal and necessary to decide what to include and what to exclude, what to treat with emphasis and what to relegate to minor display, when to treat something in depth and when to keep it superficial. It is the legitimate task of the professional editor. Because these discriminations are normal and necessary, it is difficult for the public, and often for individual journalism professionals, to detect when, among the elements that go into legitimate news selection, private ownership interests become a factor. Fifty years ago, executive editors spoke openly to their staffs about owners' sensibilities. Today most editors do not-ironic confirmation of raised professional standards. When protection of an owning corporation's private interests intrudes into news decisions, other professionally acceptable reasons are given (such as "Nobody's interested"). The barrier is seldom absolute: there is merely a higher threshold for such stories. News stories that cast doubt on the corporate ethic must be more urgent and melodramatic than stories sustaining that ethic. Gradually, the total news picture of society is skewed in favor of corporate interests. The central interests of owners are clear to executive editors who know that there are limits to their freedom and who thus perform

The Political Economy of the Media I

The Endless Chain I 17 varying degrees of self-censorship. Periodically, an executive editor takes literally an owner's encouragement to edit "without fear or favor," and periodically the editor is fired or squeezed out. There are always stories that will require the editor to exercise his or her unstated function of applying the second-hand weight of the owner's thumb on the scale of the news. Some industrialized democracies have more concentrated ownership than the United States, but no other developed country has the peculiar need of the United States for a different pattern. Every other developed country has a national press and a relatively unimportant local press. In those countries the dozen or more national papers, headquartered in the national capital, are the only ones to carry serious political and economic news. They are available in every locality and-crucia lly important- each competing national paper is different in its political and economic orientation. Readers have a real choice among the differing papers, in which a wide spectrum of public issues is aired and debated and can thus enter the national discourse. The United States has never had a true national daily press. American politics is more local than in other countries. Major decisions that are left to the national government in other countries-e ducation, police, land use, property taxes, and much else-are voted on by local communities in the United States. No national news medium can, by itself, serve the American voter. Consequently, there are 1,600 local newspapers and no truly national ones. The Wall Street Journal comes closest to a national paper, but it is a specialized one. The New York Times is only slowly expanding toward general availability throughout the country. USA Today is a national paper but it is a daily magazine that does not pretend to be a primary carrier of all the serious news. In the United States, unlike elsewhere, when a handful of corporations gain control of most daily newspapers, they are collecting local monopolies. Television (which does little systematic local reporting of the kind done by local newspapers) is a semimonopoly of the three affiliated stations. There is more competition in magazines, books, and motion pictures, but as their ownership has become more

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18 I Chapter One concentrated over the years, their social and political orientation has become more uniform. For a few years radio has been in a state of rearrangement around the new and more popular FM stations. But now radio groups also are increasing in concentrated ownership. If broadcasting revenues and audience share are combined, as is done by many industry calculations, the three major television corporations still have most of the revenues and access to the total broadcast audience. (An earlier edition of this book included radio owners, which led to the figure, at the time, of fifty corporations that had most of the business in all major media. Had radio been excluded in that edition, or combined with television as it is in this one, there would have been forty-six dominant corporations instead of fifty. Consequently, it is more accurate to compare the twenty-three corporations dominant in the media today with forty-six seven years earlier. If one combines the revenues of radio and television, as do some industry calculations, then the three networks-ABC, CBS, and NBC-still have a majority of the combined revenues. There are fourteen dominant companies that have half or more of the daily newspaper business (seven years ago there were twenty), three in magazines (seven years ago there were twenty), three in television (seven years ago there were three), six in book publishing (seven years ago there were eleven), and four in motion picture production (seven years ago there were four). Today the dominant firms in each medium total thirty. But some corporations are dominant in more than one medium. For example, Newhouse and Thomson are dominant in newspapers, magazines, and books; Paramount Communications, Inc. (until mid-1989 called Gulf+ Western)* in books and motion pictures; Time Warner in magazines, books, and movies; Murdoch in newspapers, magazines, and movies. Because of the dominance of some firms in more than one medium, the total number of corporations dominating all major media is twenty-three.

* Elsewhere in this book Paramount Communications, Inc., is referred to by its original name, Gulf+ Western. The two dominant operations of the newly named corporation remain the same: Simon & Schuster books with its associated book houses, and Paramount Pictures.

The Political Economy of the Media I

The Endless Chain I 19 If one considers total revenues from all media, including recordings, cable, and videocassettes, seventeen firms receive half or more of all that revenue. That calculation expresses the collective media power of the seventeen firms. But it does not show which corporations dominate each individual medium, which is the basis of this book. The corporations listed in this book as "dominant" have control of half or more of all the activity in their particular medium. A few dominant firms always establish the nature of any market, and universally they do it with advantage to themselves-in pricing .and distribution, in promotion, in obtaining sympathetic government policies, in increasing their control of product beyond consumer choice, and in overwhelming or preventing new competition. It is claimed by defenders of dominant media firms that there are still many smaller firms, which is often the case. They like to cite the 25,900 different "publishers" listed in Bowker's Books in Print. A more realistic figure is closer to 2,500 if one counts only American firms that regularly issue one book or more in any one year. If half or more of the book business is held by six firms, each of the giants would, if equal in strength, have revenues of more than $500 million to enter the field; each of the remaining 2,494 firms would, if equal in strength, have less than $3.5 million with which to compete against the $500 million owners. If one uses the giants' preferred figure of 25,000 publishers then the monopoly power of the giants is even more overwhelming. It is clear which firms will win in the competition in what makes for effectiveness in the book business; credit from big banks for expansion and acquisitions, bidding for manuscripts, negotiating and paying for shelf space and window displays in bookstores which increasingly are owned by national chains, mounting national sales staffs, buying advertising, and arranging for author interviews in the broadcast media. Obtaining publicity for books and their authors is especially easy if the publishing house also owns television stations, newspapers, or magazines that print book reviews and stories about writers, a combination enjoyed by four of the six dominant book publishing corporations. In any field, whether the. media or detergents, when most of the business is dominated by a few firms and the remainder of the field is left to a scattering of dozens or hundreds of smaller firms, it

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20 I Chapter One is the few dominant ones who control that market. With detergents it means higher prices and lowered choice. With the media it means the same thing for public news, information, ideas, and popular culture. The measure of half-or-more-of-the-business varies by medium. For daily newspapers, this book has used average daily circulation because the papers are all issued daily and their circulation is carefully audited by an independent agency. (If gross revenues per company were applied to newspaper companies, the dominance of the top corporations would be even more highly concentrated than if listed by circulation alone; but since accurate figures for the revenue for individual newspapers is seldom available, circulation has been used.) Magazines, on the other hand, are issued at different intervals, from weekly to quarterly, so varying circulations are not comparable as measures of strength; annual revenues, the standard of that industry, are therefore used. Television dominance is measured by audience reach, which is regularly surveyed by rating agencies; initial possession of revenues is also used for television and radio. Book and motion picture corporations are measured by annual revenues. Only the audiences and revenues of a particular medium involved are counted, not revenues of the parent firm, which may be in other media or in nonmedia enterprises. Many of the firms listed oelow are significant players in other media, but unless they are part of a group that has half or more of one medium, they are not listed as "dominant." In recent years, ever-mounting levels of media conglomeration worldwide have made it more complicated to determine how much absolute equity each large corporation (or its bank and investment house) has in which combination of properties. The large magazine group, Diamandis, until its sale in 1988, was 70 percent owned by Prudential Insurance Company. It was once owned by CBS, which also had other businesses, including defense. Recently, Diamandis, in turn, was sold to the large French publishing firm, Hachette, whose chairman is also chairman of the largest defense contractor in France. Some large firms remain private (Hearst, Newhouse, Reader's Digest Association) without legal need to make public financial filings. For them, market share comes from educated guesses by media specialists on Wall Street and by general knowledge of their

The Endless Chain I 21 audited circulation and advertising pages. Other firms, like Rupert Murdoch's News Corp. Ltd., have complex mixtures of private subsidiaries that operate in a number of different nations. More and more the dominant firms exchange properties to fill out their particular domination patterns or cooperate on mutually beneficial ventures. They have participated in the 1980s phenomenon of the creation of ambiguous forms of debt-junk bonds, preferred stocks treated as bonds, and other new forms of Wall Street paper. The highest levels of world finance have become intertwined with the highest levels of mass media ownership, with the result of tighter control over the systems on which most of the public depends for its news and information. Narrow control has advanced rapidly. In 1981 , forty-six corporations controlled most of the business in daily newspapers, magazines, television, books, and motion pictures. Today, these media generate even la,rger amounts of money, but the number of giants that get most of the business has shrunk from forty-six to twenty-three. The dominant twenty-three corporations are: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

Bertelsmann, A.G. (books) Capital Cities/ABC (newspapers, broadcasting) Cox Communications (newspapers) CBS (broadcasting) Buena Vista Films (Disney; motion pictures) Dow Jones (newspapers) Gannett (newspapers) General Electric (television) Paramount Communications (books, motion pictures) Harcourt B~ace Jovanovich (books) Hearst (newspapers, magazines) Ingersoll (newspapers) International Thomson (newspapers) Knight Ridder (newspapers) Media News Group (Singleton; newspapers) Newhouse (newspapers, books) News Corporation Ltd. (Murdoch; newspapers, magazines, motion pictures)

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22 I Chapter One 18. 19. 20. 21. 22. 23.

New York Times (newspapers) Reader's Digest Association (books) Scripps-Howard (newspapers) Time Warner (magazines, books, motion pictures) Times Mirror (newspapers) Tribune Company (magazines)

Newspapers Most of the fourteen corporations that dominate the daily newspaper industry have acquired additional daily newspapers (and other media) in the last seven years. The number of daily papers in the country has continued to shrink, from 1,763 in 1960 to 1,643 in 1989, but total national daily circulation has risen slightly from 62 million to 62.9 million and is dominated by a smaller number of firms, from twenty-seven years ago to fourteen today. The fourteen, in order of their total daily circulation as of September 30, 1988, were: Gannett Company: USA Today and 87 other dailies Knight-Ridder, Inc.: Philadelphia Inquirer, Miami Herald, and 27 others Newhouse Newspapers: Staten Island Advance, Portland Oregonian, and 24 other papers (Newhouse also owns Conde Nast magazines and Random House book publishing) Tribune Company: Chicago Tribune, New York Daily News, and 7 others Times Mirror: Los Angeles Times and 7 others Dow Jones & Co.: Wall Street Journal and 22 Ottaway newspapers International Thomson: 120 dailies and book publishing New York Times: New York Times and 26 others Scripps-Howard Newspapers: Denver Rocky Mountain News and 22 others Hearst: San Francisco Examiner and 13 others Cox: Atlanta Journal and 19 others News Corp. Ltd. (Murdoch): Boston Herald and 2 others Media News Group (Singleton): Dallas Times Herald and 17 others Ingersoll Newspapers: New Haven Register and 36 others

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The Endless Chain I 23 Magazines Tightening concentration was most dramatic in magazines, which from 1981· to 1988 went from twenty dominant corporations to three. The chief cause was the further enlargement of Time, Inc., which in mid-1989 merged with Warner to form Time Warner, the largest media firm in the world. Similarly, Rupert Murdoch's purchase of Waiter Annenberg's Triangle Publications made him dominant in yet another field, when combined with his existing magazine holdings. The purchase price of $3 billion was a reminder of how the media field has become an arena open only to giants. In 1979 when Gannett Company bought Combined Communications Corporation (billboards, newspapers, and broadcasting) it was the largest amount of money ever involved in a media acquisition up to that time-$340 million. The three dominant corporations, in order of estimated annual revenues, are: Time Warner: Time, People, Sports Illustrated, Fortune, and others News Corp. Ltd.: TV Guide, Seventeen, New York, and others Hearst: Good Housekeeping, Cosmopolitan, and others Television The three television networks-Capital Cities/ABC, CBS, and NBC-despite mergers, attempted takeovers, extreme corporate turbulence, and declining prime-time viewing, still dominate the field. Cable and home ownership of VCRs has grown, but the three networks still have more than two-thirds of the audience. When all radio and television revenues are counted, the three networks still have most of the revenues. ABC is still owned by Capital cities, a rich but undistinguished newspaper chain. CBS, after incurring massive indebtedness in fighting off hostile takeovers, finished by being controlled by a real estate operator who instituted draconian costcutting and reduction of its most distinguished activity, news and documentary units. General Electric, the tenth largest United States corporation and a major defense contractor, bought RCA, owner of the National Broadcasting Company, for $6.3 billion.

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24 I Chapter One Book Publishing Book publishing, less driven by the commanding force of mass advertising on which newspapers, magazines, and broadcasting depend, is still highly concentrated. The 2,500 companies that regularly issue one or more books a year are dominated in revenues by six corporations that grossed more than half of book revenues. In books, as in other media, there is the growing presence of corporations that dominate in other media. Of the six largest book publishing firms, five are active in other media. The six companies are: Paramount Communications (Simon & Schuster, Ginn & Company, and others) Harcourt Brace Jovanovich (Academic Press and others) Time Warner (Little, Brown; Scott, Foresman; and others) Bertelsmann, A.G. (Doubleday, Bantam Books, and others) Reader's Digest Association (Condensed Books and others) Newhouse (Random House and others)

.

Motion Pictures The motion picture industry has always been volatile in its corporate convolutions, but through it all the major studios, in one incarnation or another, have remained dominant. In 1988, in terms of share of box office grosses for their films, there were four firms with most of the business: Buena Vista Films (Disney) Paramount Communications (Paramount Pictures) 20th-Century Fox (Murdoch) Time Warner (Warner Brothers) Like other iarge media companies, General Electric brings yet another complication that distinguishes it from small, local companies: it has, through its board of directors, interlocks with still other major industrial and financial sectors of the American economy, in wood products, textiles, automotive supplies, department store chains, and banking.

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The Endless Chain I 25 Under law, the director of a company is obliged to act in the interests of his or her own company. It has always been an unanswered dilemma when an officer of Corporation A, who also sits as a director on the board of Corporation B, has to choose between acting in the best interests of Corporation A or of Corporation B. Interlocked boards of directors have enormously complicated potential conflicts of interest in the major national and multinational corporations that now control most of the country's media. A 1979 study by Peter Dreier and Steven Weinberg found interlocked directorates in major newspaper chains. Gannett shared directors with Merrill Lynch (stockbrokers), Standard Oil of Ohio, 20th-Century Fox, Kerr-McGee (oil, gas, nuclear power, aerospace), McDonnell Douglas Aircraft, McGraw-Hill, Eastern Airlines, Phillips Petroleum, Kellogg Company, and New York Telephone Company. The most influential paper in America, the New York Times, interlocked with Merck, Morgan Guaranty Trust, Bristol Myers, Charter Oil, Johns Manville, American Express, Bethlehem Steel, mM, Scott Paper, Sun Oil, and First Boston Corporation . Time, Inc. (before it became Time Warner) had so many interlocks it almost represented a Plenary Board of directors of American business and finance, including Mobil Oil, AT&T, American Express, Firestone Tire & Rubber Company, Mellon National Corporation, Atlantic Richfield, Xerox, General Dynamics, and most of the major international banks. Louis Brandeis, before joining the Supreme Court, called this linkage "the endless chain." He wrote: 'This practice of interlocking directorates is the root of many evils. It offends laws human and divine. . .. It tends to disloyalty and violation of the fundamental law that no man can serve two masters . . . . It is undemocratic, for it rejects the platform: 'A fair field and no favors.'" As media conglomerates have become larger, they have been integrated into the higher levels of American banking and industrial life, as subsidiaries and interlocks within their boards of directors. Half the dominant firms are members of the Fortune 500 largest corporations in the country. They are heavy investors in, among other things, agribusiness, airlines, coal and oil, banking, insurance,

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254 I Notes

26 I Chapter One defense contracts, automobile sales, rocket engineering, nuclear power, and nuclear weapons. Many have heavy foreign investments that are affected by American foreign policy. It is normal for all large businesses to make serious efforts to influence the news, to avoid embarrassing publicity, and to maximize sympathetic public opinion and government policies. Now they own most of the news media that they wish to influence.

NOTES

6

A few newspapers. Chicago Tribune, 1 August 89, 1-E; and Business Week, 8 May 1989, 119.

7

When a corporation. presstime, November 1986.

7

When a large corporation. William B. Blankenburg, "A Newspaper Chain's Pricing Behavior," Journalism Quarterly (Winter 1986), 275ff.

7

When the same corporations. Advertising Age, 9 November 1988, 10.

8

The claim that. See Mark Hertsgaard, On Bended Knee (New York: Fnrrar, Straus & Giroux, 1988).

9

Even the most. From CBS-TV documentary, "The Business of Newspapers," producer, Irina Posner, July 1978.

11

Media lobbyists. Sheila Kaplan, "The Powers That Be," the Washington Monthly (December 1988), 36ff.

11

In 1986. Executive Enterprise Briefing Book, 20-21 October 1986, New York City.

12

Most of the country's. Frank Luther Mott, American Journalism, 3d ed. (New York: Macmillan, .1962), 550.

13

Concentrated ownership. Erik Barnouw, A Tower of Babe/, vol. I (New York: Oxford University Press, 1966), 57ff.

15

But there are. Deborah Lipstadt, Beyond Belief (New York: The Free Press, 1986).

18

There are fourteen. John Morton Newsletter, 10 March 1988, 5, with updating for later mergers and acquisitions. Magazine data from Advertising Age, 26 December 1988, with updating. Radio and television from Advertising Age, ibid. Book data from BP Report, 3 November 1986, with updating. Motion picture studio dominance data from A. D. Murphy data in Variety, 10 January 1989.

19

If one considers. Advertising Age, 26 December 1988, 11.

19

It is claimed. Books in Print (R. R. Bowker, 1988-89).

1. The Endless Chain (pages 3-26) 4

Predictions of massive. John C. Bustema, "Trends in Ownership of Daily Newspapers," 1920-1986, Journalism Quarterly (Winter 1988), 833, plus updating for later mergers and acquisitions; Forbes, 5 November 1986, 111; Washington Post, 21 November 1988, 1ff. See also The Media Monopoly, 2d edition (Boston: Beacon Press, 1987).

4

The same dominant. New York Times, 23 January 1989, C-9; and Los Angeles Times, 4 January 1989, C-l.

5

Money: Market dominant. Financial Times, 12 January 1989, 24.

5

Few investors believe. presstime, November 1986.

[253]

20

In recent years. Wall Street Journal, 14 April 1988, 34.

22

Newspapers. '89 Facts About Newspapers (Washington, D.C.: Newspaper Publishers Association, April 1989).

25

A 1979 study by Peter Dreier. "Interlocking Directorates," Columbia Journalism Review (November/December 1979), 51-68.

25

Louis Brandeis. Louis Brandeis, "The Endless Chain," Harper's Weekly, 6 December 1913, 13.

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[13] PART ONE

TRANSFORMING MEDIA STRUCTURES Ownership, Policy and Regulation

1 Redrawing the Map of the Communications Industries: Concentration and Ownership in the Era of Privatization Graham Murdock

At the outset of the modern media age, in the first half of the nineteenth century, most commentators generally saw no contradiction between the private ownership of the press (the major medium of the time) and its public, political roles ·as a channel for strategic information and a forum for political debate. Freedom of the press was synonymous with the absence of government censorship and licensing and the freedom to operate unhinderecrTrl the marketplace. Newspapers were viewed as a voice on a par with individual voices, and the advocation of press freedom '\VaS seen as a logical extension of the general defence of free speech. This was plausible so long as most proprietors owned only one title and the costs of entering the market were relatively low. As the century wore on, however, and newspaper production became more sophisticated both technologically and operationally, rising costs increasingly restricted entry to major markets and drove smaller titles out of business, while the larger, wealthier concerns expanded their operations. By the beginning of this century the age of chain ownership and the press barons had arrived, prompting liberal democratic commentators to acknowledge a growing contradiction between the idealized role of the press as a key resource for citizenship and its economic base in private ownership. As the American writer, Del os Wilcox, author of one of the earlier systematic analyses of press content, observed in 1900: The newspaper is pre-eminently a public and not a private institution,

2

Transforming Media Structures · the principal organ of society for distributing what we might call working information .... The vital question is, from the social standpoint, the question of control. Who shall be responsible for the newspaper? It is rationally absurd that a·n intelligent, self-governing community should be the helpless victim of the caprice of newspapers managed solely for individual profit. (Wilcox, 1900: 86-9)

Wilcox's concern is more pertinent than ever as we move into an era where the combination of technological change and privatization policies are creating massive communications conglomerates with an unrivalled capacity to shape the symbolic environment which we all inhabit. Old problems, new contexts The last two years or so have seen a series of major acquisitions and mergers in the communications industries in Europe, North America and around the world. They include: Sony's acquisition of CBS's record division; General Electric's ta}ce-over of the US television network, NBC; the German multi-media group, Bertelsmann's, purchase of the Doubleday book company and RCA records; the Maxwell Communications Corporation's take-over of the New York publisher, Macmillan; and Rupert Murdoch's acquisition of a string of important communications concerns. These include the Twentieth Century Fox film interests; the major British publisher, Collins; Australia's biggest media company, the Herald and Weekly Times, and the Triangle Group of publications, which includes America's best-selling weekly magazine, TV Guide. By extending the activities of the leading media groups in such a visible way, these moves have breathed new life into long-standing concerns about concentration and ownership in the communications industries. To assess the significance of these developments, however, we must go beyond the immediate activity of bids, deals and buy-out, and analyse the longer-term movements which underpin them. As a first step we need to identify the key changes in the operating environment of the leading corporations that are facilitating the current wave of expansion and shaping its direction. Two processes have been particularly important in restructuring the corporate playing field: technological innovation and 'privatization'. The 'digital revolution' which allows voice, sound, text, data and images to be stored and transmitted using the same basic technologies opens up a range of possibilities for new kinds of activity and for novel forms of convergence and interplay between media sectors. At the same time, we must be careful not to overstress the importance of technological innovation or to assign

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components of control within media industries helps considerably in illuminating the core issues at stake in current debates about the nature of power. The second theoretical pay-off of analysing media ownership arises from the pivotal role that the communications industries play in organizing the symbolic world of modern capitalist societies and hence in linking economic structures to cultural formations. More particularly, they connect a productive system rooted in private ownership to a political system that presupposes a citizenry whose full social participation depends in part on access to the maximum possible range of information and analysis and to open debate on contentious issues. Since this dual formation of liberal democratic capitalism first emerged, ~ceptics have been asking how far a communications system dominated by private ownership can guarantee the diversity of information and argument required for effective citizenship. This question is more pertinent than ever today when the modal form of media enterprise is no longer a company specializing in one particular activity, but a conglomerate with interests in a wide range of communications industries, often linked to other key economic sectors through shareholdings, joint ventures and interlocking directorships. Before we examine the ways in which this structure facilitates certain kinds of control over cultural production, however, we need to distinguish between different types of conglomerate.

it an autonomous and determining role in the process of corporate development. New technologies create new opportunities, but before corporations can take full advantage of them there has to be a change in the political context which extends their freedom of action. And here the major force has undoubtedly been the growing momentum of privatization initiatives over the last decade. Before we examine the implications of this movement for corporate structures and strategies in more detail, however, we need to answer the prior question of why these changes matter. Media ownership and social theory Part of the answer is that investigation of the emerging patterns of media enterprise and ownership, and the tracing of their consequences for the range and direction of cultural production, is not just a specialized topic in communications enquiry. It also helps to illuminate the general relations between structure, culture and agency in the modern world. This classic problem lies at the heart not just of media research but also of the human sciences more generally, and presents both the greatest challenge to anyone specializing in the social investigation of communications and the best opportunity to reconnect our particular concerns to general developments in the social sciences to the mutual benefit of both. The relations between structure and action have moved steadily up the agenda for debate within social theory.- to the extent that they now constitute its central problem (for example, Bourdieu, 1977; Giddens, 1984). More recently, theorists have begun to examine the parallel issue of culture and agency (for example, Archer, 1988), but as yet there has been no systematic attempt to link these general concerns to a detailed investigation of the media system. This is a double loss, to social theory and to communications research. The question of mass media ownership provides a particularly pertinent point of entry into the structure-culture-agency triangle for two reasons. first, the power accruing to ownership entails both action and structural components (see Layder, 1985). The potential control it bestO\ys over production does not arise solely from specific exercises of power within the corporations directly owned or influenced. It is also a function of pre-existing and enduring asymmetries in the structure of particular markets or sectors, which deliver cumulative advantages to the leading corporations, and enables them to set the terms on which competitors or suppliers relate to them (see Mintz and Schwartz, 1985). Consequently, a close study of the interplay between the structural and action

Varieties of conglomerate On the basis of their core activities we can distinguish three basic kinds of conglomerates operating in the communications field: industrial conglomerates; service conglomerates; and communications conglomerates. Industrial conglomerates are companies which own media facilities but whose major operations are centred on industrial sectors. The Italian press provides a particularly good example of this pattern. The country's leading industrial group, Fiat, controls two major dailies: La Stampa; which it owns outright, and Corriere de/la Sera which it controls through its strategic stake in the paper's publisher, Rizzoli. The second largest group, the Ferruzzi-Montedison food and chemicals giant, controls 11 Messagero and ltalia Oggi in Milan, while the third main group, which is run through Carlo de Benedetti's master holding company, Cofide, has a controlling interest in the country's second largest publishing house, Editore Mondadori, which own 50 per cent of the best-selling daily, La Repubblica. Altogether it is estimated that over 70 per cent of the Italian press

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is controlled or significantly influenced by these three groups, with other major industrial companies accounting for significant parts of the balance. The widely read paper, 11 Giorno, for example, is owned by the state energy company, ENI. Not surprisingly, this situation has led to allegations that press coverage is coloured by the owners' corporate interests. Critics include the broadcasting magnate, Silvio Berlusconi, who recently complained that 'Our newspapers are not written by journalists but by industrial competitors with special interests' (Friedman, 1988a: 32). Berlusconi's own master company, Finivest, is a good example of the second main type of comglomerate, which is centred on service sectors such as real estate, financial services, and retailing. In addition to owning a national newspaper, a major cinema chain and Italy's three main commercial television networks, Berlusconi's interests include the country's leading property company; a substantial insurance and financial services division; a major chain of department stores, La Standa; and an advertising operation which accounts for around 30 per cent of the nation's billings. In contrast to this highly diversified structure, the major interests of communications conglomerates are centred mainly or wholly in the media and information industries. Well-known examples include Rupert Murdoch's News International; the Maxwell Communications Corporation; and Bertelsmann. Until recently it was not unusual for communications conglomerates to own companies in unrelated industries. But lately there have been signs that the leading players are shedding these marginal subsidiaries in order to concentrate on expanding their core interests. In 1988, for example, Robert Maxwell disposed of his engineering interests, Associated Newspapers sold their North Sea oil division, and Reed International shed the paper and packaging division which had been their original base. At the same time, the major communications companies have been making strenuous efforts to expand their core interests. These moves take several forms. First, there is a growing integration between hardware and software, prompted by a desire to ensure a supply of programming to service the new distribution technologies. Sony, for example, recently acquired the CBS record division, giving it a major stake in the international music industry to add to its already dominant position in the world market for compact disc players through its partnership with Philips. Second, there is a growing interpenetration between old and new media markets as major players in established sectors move into emerging areas which offer additional opportunities to exploit their resources. Newspaper and journal publishers, for example, have moved into the provision of on-line data services and broadcasting networks have branched

1 The Political Economy of the Media I

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out into cable programming. The rationale behind these moves is the desire for greater 'synergy' between the companies' various divisions so that activity in one sector can facilitate activity in another. The rise of conglomerates as the modal form of media enterprise considerably increases the major players' potential reach over the communications and information system and makes the old questions of ownership and control more pertinent than ever. Personal and impersonal possession Changes in the organization of corporate enterprise have also been accompanied by shifts in ownership, though these are by no means uni-directional. Although there is a discernible trend towards the forms of impersonal possession outlined by John Scott (1986) in which the controlling interests in major corporations are held by other companies and financial institutions, older patterns of personal ownership, where effective control remains in the hands of the founding family or group, have also proved remarkably resilient within the communications industries. According to one recent estimate, for example, sixteen of the top twenty-four media groups in the United States 'are either closely held or still controlled by members of the originating family' (Herman and Chomsky, 1988: 8). They include both old-established companies such as the New York Times (the Sulzbergers) and Dow Jones and Co. (the Bancroft and Cox families) and newer arrivals such as Turner Broadcasting. At the same time, as the recent battles for control of the Springer press empire in West Germany and the Fairfax publishing interests in Australia clearly show, maintaining family or founder control can be a precarious and often expensive business. The form of ownership is important since in combination with the structure and size of the company, it has an important bearing on the forms of control that proprietors want and are able to exercise. Although concern about the ways in which owner power may operate to curtail the diversity of publicly available information and debate can be traced back· to the beginning of the modern media system in the second half of the nineteenth century, they are arguably more important than ever now, for three main reasons. First, the fact that many of the leading communications companies command interests that span a range of key media sectors and operate across the major world markets gives them an unprecedented degree of potential control over contemporary cultural life. Second, as we shall see· presently, the process of privatization has eroded the countervailing power of public cultural institutions. This is a

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significant loss, since at their best they embodied a genuine commitment to diversity and open argument, and at their minimum they filled a number of important gaps in commercially organized provision. Third, the privately owned media are becoming both more concentrated and more homogenized at a time when a range of new social concerns and movements, around ecological issues, women's rights and racial, regional and religious identities, are emerging in a number of countries. As a consequence, 'there is a growing gap between the number of voices in society and the number heard in the media' (Bagdikian, 1985: 98). What then are the powers of ownership? In what ways are proprietors able to shape the range and direction of cultural production?

The powers of ownership Owners possess two basic kinds of potential control over the symbolic environment. First and most obviously, they are able to regulate the output of the divisions they own directly, either by intervening in day-to-day operations, or by establishing general goals and understandings and appointing managerial and editorial staff to implement them within the constraints set by the overall allocation of resources (see Murdock, 1982). Second, they may also be able to influence the strategies of companies they do not own in their roles as competitors or suppliers. In the area of direct intervention, attention has mostly been focused on proprietor's efforts to use the media outlets under their control as megaphones for their social and political ambitions. As the more perceptive commentators recognized when the trend first became apparent at the turn of the century, the movement towards conglomeration offered additional opportunities for the abuse of power. It was no longer simply a question of an individual owner giving himself and his views free publicity. As Edward Ross noted in 1910, the growing integration of newspapers into the core sectors of capital threatened to create new 'no-go' areas for critical reporting on corporate affairs and to undermine the press's role as a Fourth Estate, keeping watch over all those institutions - whether governmental or corporate..,.. with significant power over people's lives. As he pointed out: newspapers are subject to the tendency of diverse businesses to become tied together by the cross-investments of their owners. But naturally, when the shares of a newspaper lie in a safe-deposit box cheek by jowl with gas, telephone, and pipe-line stock, a tenderness for these collateral interests is likely to affect the news columns'. (Ross, 1910: 305)

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8 Transforming Media Structures Contemporary cases of such 'instrumental' abuses of power are not hard to find. In the summer of 1988, for example, Toshiba, one of Japan's leading contractors for nuclear power plants, withdrew a record protesting against the country's nuclear programme commissioned by its Toshiba-EMI music subsidiary. As is often the case in these situations, a political judgment was presented as a disinterested commercial decision, with a company spokesman claiming that 'this music is just too good to put before the market right now' (Marketing Week, 1988: 18). Direct interventions are also used to denigrate the activities of competitors. In March 1988, for exam~le, the Fiat-controlled daily, Corriere del/a Sera, carried an abustve front-page story and editorial ridiculing the attempts of one of the company's main business rivals, Carlo de Benedetti, to take control of the leading Belgian holding company, Societe Generate de Belgique. Although Fiat intervention was denied, it was clear that, however engineered, the story was designed to boost the company's position, and no one in Italy was surprised when the magazine L 'Expresso produced a mock version of the paper's front page with the title altered to Corriere del/a Fiat (Friedman, 1988b: 115-16). In both these cases we are dealing with industrial conglomerates defending their corporate interests. With service and communications conglomerates the dynamics of influence are somewhat different. Here the major impetus comes from commercial initiatives designed to maximize the 'synergy' between the company's various operations. When Silvio Berlusconi bought the Standa department store chain in July 1988, he immediately announced a programme of cross-promotion whereby his television stations would carry daily slots featuring the bargains on offer in the stores, thereby reducing the space available for other kinds of programming. When t~e publishing group Reed International acquired Octopus Books m 1987, it made no secret of the fact that it was looking to develop titles based on its substantial stable of magazines. Other publi~hing companies are actively exploring ways of making television programming for satellite distribution using the same editorial resources employed to produce newspapers and magazines (Handley, 1988). These are purely commercial decisions, but by promoting multiplicity over diversity they have a pertinent effect on the range of information and imagery in the public domain. In a cultural system built around 'synergy', more does not mean different; it means the same basic commodity appearing in different markets and in a variety of packages. But owner power does not end with these kinds of interventions. As we noted earlier, as well as determining the actions of the companies they control directly, the strategies pursued by the major

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media owners also have a considerable knock-on effect on smaller competitors operating in the same markets and on potential takeover targets. The deeper their corporate pockets, the greater their potential influence. In the autumn of 1988, for example, in an effort to strengthen its defences against the hostile attentions of Rupert Murdoch who had built up a 20 per cent stake in the company, the Pearson group (whose interests include Penguin Books and the Financial Times) entered into an alliance with the Dutch publisher, Elsevier, who had been the target of another major media mogul, Robert Maxwell. Whether this tie-up is in the best long-term interests of Pearson or whether another partner would have been more advantageous is open to debate, but there is no doubt that this link will materially affect the company's future options. The leading corporations' extensive power to shape the future of the communications and information system both directly and indirectly is not in itself new, of course. What is new is the rapid enlargement of these powers produced by a decade of privatization initiatives. Dimensions of privatization Since the term 'privatization' has acquired a variety of meanings in recent debates, I should make it clear that I am using it here in its most general sense to describe all forms of public intervention that increase the size of the market sector within the communication and information industries and give entrepreneurs operating within it increased freedom of manoeuvre. Two general features of this process are particularly worth noting. FiE.§!, although such initiatives are usually associated with conservative administrations - most notably, the three Thatcher governments in Britain and Reagan's terms of office in the United States- they are by no means confined to them. The socialist government of Spain, for example, recently used its majority in the lower house to push through legislation authorizing three new commercial television franchises in the face of strong opposition from both conservative and left parties. More significantly, both the Soviet Union and the People's Republic of China have recently allowed commercial programme providers from overseas into their broadcasting systems. The ~cond, and equally important, feature of privatization is its relative irreYersibility. Although the popularity of specific initiatives may decline in the future and the original almost messianic impetus wane somewhat, there is little doubt that the previous balance between public and private enterprise has been tipped permanently in favour of the market in a growing number of societies. It is difficult, for example,

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to imagine any socialist or social democratic government capable of being elected in Western Europe in the near future, successfully renationalizing the key communications companies that have been sold off to private investors. Privatization as I am defining it here is a multi-dimensional movement with four distinct components: de-nationalization; liberalization; the commercialization of the public sector; and the regearing of the regulatory environment. Each has important implications for the overall structure of the communications industries, for patterns of ownership, and for corporate strategies, which we need to trace, but it is important to separate them since they are not always pursued together. Denationalization: from public to private ownership Because denationalization involves selling shares in public companies to private investors, its most significant impact is on patterns of ownership. However, this varies depending on how the shares are placed. Where they are put out to competitive tender and awarded to a particular consortium, as in France under-the conservative administration of Chirac, the advantage clearly lies with companies which are already well financed and positioned and who can use the opportunity to extend their interests into areas from which they were previously locked out. For example, the group that took over TF1, which had been France's major public broadcasting network, included the Maxwell media conglomerate, the Bouygues construction group and the major banking group, Societe Generate (which also had important stakes in two other denationalized communications concerns: the Havas advertising agency, and the telecommunications and engineering group, Companie Generate d'Electricite). In contrast, the British strategy of public flotation was expressly designed to create a 'popular capitalism' in which shareholding would be widely dispersed. To this end, shares in the most important communications utility to be sold to date, British Telecom, were underpriced in order to attract fi~me investors. Not surprisingly, their value rose sharply as soon as they were traded on the Stock Exchange, and many small shareholders opted to sell and pocket the profit. In the two years between December 1984 and the end of November 1986, the total number of BT shareholders fell by almost 30 per cent from 2.1 million to 1.48 million, reducing the public's overall share to less than 12 pg_cent and leaving the bulk of BT's equity in the hands of financial institutions, many based overseas. Overall, then, denationalization has operated to reinforce and extend the power of the leading communications, service and

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Redrawing the Map of the Communications Industries . 11 industrial conglomerates rather than to disperse it, or to create new sources of countervailing power. By the same token, liberalization has enabled them to extend their reach into new markets.

Liberalization Liberalization policies are designed to introduce competition into markets that were previously served solely by publicenterprise. Here the impact depends on the terms on which this competition is allowed to proceed. Broadcasting provides a good example. Britain was the first major European country to introduce a commercial television service in competition \vith the public broadcasting system, when the ITV network was launched in 1954. However, the private sector was carefully regulated to ensure a reaso~e spread of ownership and to limit foreign programming to 14 per cent of the total output. Without these safeguards; moves to liberalize broadcasting serve to open up national markets to the major international corporations. The major shareholders in the new French commercial channels, for example, include the Italian television magnate, Silvio Berlusconi, who has a 25 per cent stake in La Cinq, and Companie Luxembourgeoise de Telediffusion (which operates the Luxembourgbased television service RTL-Plus), which owns 25 per cent of the sixth channel, M6. In addition, the rapid expansion of commercial television paved the way for a sharp rise in the amount of foreign programming imported into the system-since the proliferation of new distribution systems outstripped the supply of nationally originated material by a very considerable margin. This effect is noticeable even where broadcasting re~ins a public monopoly, as in Norway, where the decision to allow local cable systems to take advertising-supported pan-European satellite channels has already acted as a stalking horse for full liberalization by deepening the crisis of public broadcasting.

Commercializing the public sector One response to this crisis is to commercialize the public sector itself. Faced with rising costs and government ceilings imposed on the income they derive from the public purse, this has become an imperative foLm.any public institutions, but it is one which a number are now embracing with enthusiasm. It takes several forms. The first is to allow broa.d_casters to supplement their income by taking spot advertising, as the state broadcasting network RAI does in Italy. So far this option has been resisted in Britain, but as recent

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developments at the BBC show, audiences and indeed resources can be opened up to private enterprise in other ways. In the spring of 1988, the BBC offered two new services~ the corporate ~r. The first pr~vided for 1_00 n~w _data channe~s for use by retailers and other service compame~ wtshmg to advertts.e. to their customers. The second allowed a pnvate company, Bnttsh Medical Television, to use time after regular broadcasts had finished for the night to relay a programme with advertising from the ma~or pharmaceutical companies to VCRs in d~ctors: home_s and sur~e~es for later viewing. In return, the Corporatton wdl rece1ve a £1 mdhon fee in the first year. As well as gaining access to transmission resources for the first time, private corporations are also gaining a foothold in programme production as a result of the Government's decision that the BBC should move rapidly towards a situation in which at least 25 per cent of its programming is obtained from independent producers. Although the independent sectot:....has only been established for a few years in Britain, prompted by the launch of Channel Four, which buys in almost all its programming, there is already a movement towards concentration which senior figu~es in the industry expect to continue. As Charles Denton, the Chtef Executive of Zenith Productions, one of the country's most successful television independents, told an interviewer: 'I think there will be a move to agglomeration, and to cope with the economic realities there will be some very complex cross-holding. When this industry matures you will find maybe half a dozen, even fewer, large independents. And we intend to be one of them' (Fiddick, 1988: 21). Recent examples of this trend include Robert Maxwell's takeover of the creative consortium Witzend; the purchase of Goldcrest Films and Elstree Studios by the leisure group Brent Walker; and the acquisition of Zenith itself by Carlton Communications, one_of Britain's leading facilities houses. These movements, coupled ~.tth the partial relaxation of the rules governing corporate underwntmg and sponsorship for programming (particularly on cable), open the way for greater corporate influence over what appears on the domestic screen. This erosion of the traditional 'Chinese walls' separating programming from product or corporate promot~on, which we now see in a number of countries, is part of a much wider re-gearing of the regulatory environment in which the communications industries operate.

Re-regulation: from public to corporate interests This process is often called de-regulation. This is a misnof!le~. Wh~t is at stake is not so much the iium6er of rules but the shtft m thetr

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overall rationale, away from a defence of the public interest (however that was conceived) and towards the promotion of corporate interests. Communications corporations benefit from this shift at two levels. They not only gain from changes to the general laws governing corporate activity in areas such as trade-union rights but, more importantly, they have also gained considerably from the relaxation of the additional rules designed to prevent undue concentration in the market-place of ideas and to ensure diversity of expression. One of the most important changes has been the general loosening of the restrictions on concentration of ownership. In Britain, for example, Rupert Murdoch's bid for the mid-market daily Today, was judged not to be against the public interest on the grounds that, although he owned the country's most popular tabloid paper, the Sun, and one of the leading quality titles, The Times, he did not have an interest in the middle range and that his acquisition would not therefore increase concentration- a judgment that conveniently leaves aside the question of concentration in the national daily market as a whole. In the broadcasting field, changes to the rules limiting the number of stations a single owner can possess have led to a significant increase in concentration in both the United States and Australia. In America, in April 1985, the old 7-7-7 limit which had operated since 1953 was replaced by a new 12--:12-12 rule which allowed one company to own up to twelve AM and FM radio stations plus twelve television stations, providing that their total audience did not exceed 25 per cent of the country's television households. This made network ownership a more attractive proposition (despite the steady erosion of their overall audience share by cable and independent stations), and all three became the subject of bids. ABC was merged with Capital Cities; NBC was acquired by General Electric; and CBS narrowly fought off a bid from Ted Turner. A similar relaxation occurred in Australia in NQ_vember 1986 when Bob Hawke's Labour Government replaced the old two-station rule with a new arrangement which allows owners to have as many stations as they like as long as they do not reach more than 60 per cent of the national audience. Here again, the result has been a marked movement towards greater concentration of ownership as companies in the two major markets- Sydney and Melbourne- have branched out to build national networks. Between December 1986 and September 1988, twelve out of the fifteen stations in capital cities changed hands, leaving the commercial television system as a virtual duopoly divided between the media wing of Alan Bond's industrial conglomerate and Christopher Skase's Quintex Group (Brown, 1988).

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Changes to the regulatory regime are not uni-d~ional, however. At the same time as they relaxed the rule on the number of television stations that could be owned, the Australian government imposed new restrictions forbidding cross-ownership of radio stations, television stations or newspapers in the sam~. This accelerated the shake-up in newspaper ownership already under way, though here again the major beneficiaries were the leading groups. At the beginning of 1987, Rupert Murdoch successfully bid for the country's largest press concern, the Herald and Weekly Times, bringing his total share of the Australian newspaper market to 59 per cent. In the United States, in contrast, the rules on crossownership have recently been relaxed, though not without a struggle. Senator Edward Kennedy, for example, appended a clause to the Federal government's spending authorization for 1988, tightening the restrictions on owning television stations and newspapers in the same city. This was directed expressly at Murdoch whose Boston Herald had been consistently hostile to Kennedy. Murdoch contested it, and in the spring Qf 1988 it was overturned by the Circuit Court of Appeals in Washington on·. the grounds that since it was clearly aimed at one person it violated constitutional guarantees of equal treatment. This ruling was in line with the general trend of recent regulatory thinking typified by the Federal Communication Commission's decision to lift the ban on local telephone companies owning cable systems. The FCC has also been in the forefront of the drive to loosen the public service requirem~ governing commercial broadcasting so as to give station owners maximum freedom to make profits. One of the bitterest rows in this area has been over children's television, which during the Reagan years had become one more or less continuous advertisement for toys and other products both in and around the programmes. After a concerted campaign, a citizens' lobby was successful in getting a Bill passed in both the House of Representatives and the Senate, limiting a_d.llertising time during children's programmes to twelve minutes in the hour and requiring franchisees to show a commitment to education. However, in one of his last acts as President, Ronald Reagan killed the measure by the simple expedient of omitting to sign it, declaring that its provisions 'simply cannot be reconciled with the freedom of expression secured by our constitution' (The Economist, 1988: 50). This statement exemplifies the general view which sees corporate promotion as continuous with individual speech, a position neatly encapsulated in the description of advertising as 'commercial speech'. The cumulative result of these shifts, and the other dimensions of the privatization process I have outlined here, has been to strengthen

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and extend the power of the leading corporations and to pose more sharply than ever the dilemma that faces a liberal democratic society in which most key communications facilities are held in private hands. Detailing the way in which our existing maps of the cultural industries are being redrawn by the twin processes of technological changes and privatization policies and tracing their consequences for the range and nature of cultural production is a key task for future research. By the same token, anyone interested in formulating alternative policies for communications urgently needs to grapple with ways of regulating the new multi-media concerns, both nationally and internationally, and with the problem of developing novel forms of public initiative and institution which avoid the overcentralized, unresponsive structures of the past and are capable of responding creatively to the new poly-cultural formations now emerging. This is perhaps the major issue facing those of us interested in the future of communications as an essential resource for developing and deepening democracy.

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References Archer, M.S. ( 1988) Culture and Agency: The Place ofCulture in Social Theory. Cambridge: Cambridge University Press. Bagdikian, B.H. (1985) 'The US Media: Supermarket or Assembly Line?' Journal of Communication, 35(3): 97109. Bourdieu, P. (1977) Outline of a Theory of Practice. Cambridge: Cambridge University Press. Brown, A. ( 1988) Restructure ofAustralian Commercial Television, paper presented to the Oz Media '89 National Conference, Brisbane, 24 Sept Fiddick, P. (1988) 'Risk-risk at the Top-top', The Guardian, 15 Feb., p. 21. Friedman, A. (1988a) 'Putting Himself in the Picture', Financia/Tzmes, I Aug., p. 32. Friedman, A. (1988b) Agnel/i and the Network of Italian Power. London: Harrap. Giddens, A. (1984) The Constitution of Society: Outline of the Theory of Structuration. Cambridge: Polity Press. Handley, N. (1988) 'Multiple Choices in the Single Market', Marketing Week, 25 Nov., pp. 73-7. Herman, E.S. and Chomsky, N. (1988) Manufacturing Consent: The Political Economy of the Mass Media. New York: Pantheon Books. Layder, D. (1985) Structure, Interaction and Social Theory. London: Routledge & Kegan Paul. Mintz, B. and Schwartz, M. (1985) The Power Structure of American Business. Chicago: University of Chicago Press. Murdock, G. (1982) 'Large Corporations and the Control of the Communication Industries' pp. 118-50 in M. Gurevitch, T. Bennett, J. Curran and J. Woollacott (eds), Culture, Society and the Media. London: Methuen. Ross, E.A. (191 0) 'The Suppression of Important News', Atlantic Monthly, I 05: 303-1 I. Scott, J. (1986) Capitalist Property and Financial Power: A Comparative Study of Britain, the United States and Japan. Brighton: Wheatsheaf. Wilcox, D.F. (1900) 'The American Newspaper: A Study of Political and Social Science', Annals of the American Academy of Political and Social Science, 16 (July): 56-92.

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2 Publishing and Development

[14] PUBLISHING IN THE THIRD WORLD: ISSUES AND TRENDS FOR THE 21st CENTURY Philip G. Altbach The publication of books and other printed material is an important activity in any society. Books stand at the center of the knowledge dissemination systems of all societies. The developing nations of the Third World require books and other printed materials, not only for students to use in schools but for societal communication at all levels, from the most basic books for literacy to advanced scientific monographs. An independent culture requires books and other printed materials, and Third World countries, which are involved in the highly complex tasks of nation building, have especially urgent needs for published materials. I Despite the predictions of Marshall McLuhan and others, the printed word has not diminished in importance. In the Third World especia1ly, books are central because more sophisticated technologies are often unavailable. Book production and distribution are within the means of most Third World nations, using technologies that are available in most countries. An indigenous publishing industry is at the very center of the process of development. The traditional book has not been eclipsed by new technologies and remains of primary importance. We are concerned here with the special issues and problems that are involved with publishing in the Third World.2 While there are many common issues relating to publishing worldwide, and some of these are discussed in this chapter, there are specific matters that affect Third World nations. There are also significant variations among Third World nations, and these differences will be highlighted. Africa and Asia will receive the major focus here, as these two regions offer some significant contrasts-with sub-Saharan Africa experiencing severe economic problems that have dramatically affected education and publishing-as well as the lives of people in the region.3 In many ways Africa has fa1len further · behind in terms of book development, and there is now a major crisis in terms of both the supply of adequate numbers of books in schools and to the society and in the development of a viable publishing industry in most countries. In sharp contrast, much of Asia has done relatively better both in the development of publishing and in economic and infrastructural .growth. There are, however, major differences between Pakistan and Bangladesh, on the one hand, and South Korea and Taiwan on the other. Most Asian countries now have a viable publishing industry. Some, such as China, have centrally planned economies, while most have relied mainly on the

free market to develop publishing. And some Asian countries, such as Afghanistan and Laos, have yet to provide adequately for book production. Africa and Asia present useful examples for understanding the development of publishing in the Third World. TI1e publishing of books and other printed materials has never received the attention that it deserves from development specialists, government authorities, or the research community. It has traditionally been assumed that a publishing industry would somehow emerge to meet the needs of modernizing societies. It has been discovered that the development of a publishing apparatus in a society is a highly complex matter, by no means assured simply because there is a need for books. In the early period of development, it is fair to say that the provision of books received virtually no attention. However, educational planners and others discovered that, while curricula could be developed and schools built, this did not ensure the availability of the needed textbooks. It was only in 1966 that Robert Escarpit coined the term "book hunger" and called attention to the needs of the Third World in terms of book development.4 As a result, books started to receive modest attention from national authorities, development planners, and aid agencies. But publishing remained a low priority, and relatively little was done to focus attention on it as a key part of the development process. Most Third World nations have not developed a clear policy regarding the development of a publishing industry, and in many cases government policies have actually hindered the creation of a viable publishing community. This can be seen when governments centralize the publication of textbooks or when high tariffs are placed on the importation of paper, printing equipment, or supplies. Foreign aid to publishing has been sporadic, sometimes ineffective and occasionally even counterproductive.5 For example, the provision of subsidized books to Third World nations as part of foreign aid programs has often hindered the development of indigenous publishing capacity. Most of the major aid-giving nations have sponsored such programs-including the United States, Britain, and the Soviet Union. 6 Private foundations have also from time to time taken an interest in book development. Some of their programs have been effective, but most have been unsustained and uncoordinated, and few donor agencies have consistently supported book development? The Importance of Indigenous Publishing in the Third World It is our argument that all but the smallest countries need an indigenous publishing industry and the ability to produce the books and periodicals that they need. It is. simply not advisable to rely on imported books. Publishers in other countries-and particularly the multinational firms in the industrialized nations-cannot be counted on to meet local publishing needs. The key concepts here are autonomy and indigenization. Publishing is closely linked to culture and to education and these are deeply rooted in

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Issues and Trends 3 national goals. Books provide access to ideas, and are particularly crucial where the other elements of the mass media, such as television may be limited. Books are "low tech," relatively inexpensive, easy to produce, and within the capability of most countries. Publishing is a key means of communicating a culture, and there must be close links between cultural and educational development, on the one hand, and the means of communicating-publishing-on the other. Indigenous and autonomous publishing is especially important in the context of the Third World. Many Third World nations are in the process of modernizing or reinterpreting their cultures. The means of communicating these insights is of special importance. Developing countries are also creating new educational systems and the curricula to be used in the schools. Again, there must be an effective means of publishing the textbooks and other reading materials needed for educational systems. Markets for books are generally small. Populations are sometimes small, and rates of literacy are often low. Further, incomes may be limited, and there is frequently no tradition of purchasing books. In many Third World nations, a high proportion of the population lives in rural areas and has no access to books or other published material. There are, therefore, special needs to be met by publishers. The creation of a publishing industry under such unfavorable conditions presents a significant challenge. Yet, books are a key part of national development, and it is simply insufficient to have access only to imported books-books created abroad for different purposes. Third World nations need books that reflect their emerging needs, and only they can determine these needs. For example, there is often a demand to create printed material in local languages in order to provide i:he basis for sustained literacy and to provide access to the national culture to the largest possible segment of the population. The development of an indigenous publishing industry, even of modest proportions, is within the capability of most Third World countries. Publishing is neither high-tech nor high-cost, particularly when compared to other "infrastructural inputs." There needs to be coordination of the manifold elements involved in producing books-from the editorial and managerial expertise of the publisher to printing and paper and the apparatus of distributing books. In the Third World, governments must be involved in the process in order to ensure that capital will be available for investment, to permit the import of machinery and paper if needed, and in general to provide the atmosphere in which a book industry can develop.B Publishing as an International Phenomenon Publishing is an international phenomenon, and the development of a publishing industry in one country cannot be separated from international factors. This is true in the large industrialized nations, where the expansion of multinational publishers has made publishing a truly international business. Huge firms like Maxweli-Macmillan, Bertelsmann,

4 Publishing and Development

and Hachette are active in publishing in many countries, including a growing number of Third World nations. The traditional power of metropolitan publishers in the Third World remains strong as well. New technologies affect publishers everywhere. New data bases permit sharing of bibliographical and other information concerning books worldwide, and new "on line" bibliographic and reference services are available in many countries. Innovations in composition, generally using computer technology, are affecting publishing worldwide. "Desktop" publishing has revolutionized scientific publishing and has had an impact both in the industrialized nations and in some Third World nations. The new technologies are a special challenge to the Third World, since they originate in the West and often require highly sophisticated personnel and infrastructures. Nonetheless, this is a period of unprecedented technological change in publishing. Trends in copyright have international implications. Knowledge is increasingly an international commodity that knows no boundaries, and copyright is the arrangement that regulates the international flow. Book exports and imports are an important part of publishing worldwide. Britain, for example, exports a significant part of its book production. American publishers; while they export fewer books, actively sell rights to foreign publishers. Many Third World nations import most of their books, sometimes including school textbooks, from abroad. Third World nations do not control the international environment of publishing. They are basically dependent on the industrialized nations. 9 The decisions made in the industrialized nations regarding copyright, the import and export of books, the prices of products such as computer-based composition equipment and even the international price of paper are all determined in the industrialized nations. The international copyright apparat:ils is controlled by the industrialized nations.lO Decisions made by the dominant powers in the knowledge network are made, in general, with their own interests in mind and without regard to the needs of the Third World. The industrialized nations are, of course, not trying to weaken Third World book development. It is simply that the interests of publishers in the West do not always coincide with those of their compeers in the Third World. There are clearly significant inequalities in the international publishing equation, and the Third World cannot act with full autonomy in the area of book development and publishing. The structural impediments to autonomous publishing development must be fully understood in order to deal with an industry that is by its nature international. The traditional role of Western influence on Third World publishing stems in part from the heritage of colonialism. In those parts of the Third World that were under colonial domination until fairly recently, and this includes much of Africa and Asia, the impact of colonialism often remains significant. The colonial power determined the nature of the development of publishing in the country as well as the modern educational system. The

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Issues and Trends 5 French generally preferred to publish books in France and export them to their African colonies, leaving Francophone Africa without significant publishing capacity at the time of independence. The British, in general, pursued a more laissez faire policy and permitted indigenous publishing to develop, although they did not encourage it. British firms also entrenched themselves in the colonies, often dominating the most important market for books-the school text market. 11 Expatriate firms in some cases continue to be important in local publishing, while in others, such as India, governmental action forced foreign companies to sell a majority control to local . people. Patterns of commerce established in the colonial period continue to be important and these affect publishing. Commercial links, for example, tend to run between Africa and Europe rather than among African nations. Thus, it is even now often easier for book buyers in Nigeria to obtain books from Britain than from Kenya or Tanzania. Similar colonial-based patterns of book exports remain significant-until recently, commercial agreements gave the British virtual domination over their former colonies, and it is still the case that most books purchased from overseas in Anglophone Africa come from Britain. France is even more dominant in Francophone Africa. The expatriate firms, in general, no longer monopolize publishing and book sales, but they remain extremely powerful. In many Third World countries, American firms have joined with those from the former colonial power. Language is one of the most important elements in Third World publishing and it is, in significant ways, linked to the heritage of colonialism. The language of the colonizer generally became the dominant language of the colony. Used for government, the legal system, commerce and, perhaps most significantly, for education, the colonial language naturally became the main language of intellectual life and of books. The dominance of the colonial language continued after independence, and in almost every former colonial area, the issue of language remains controversial and of primary importance to publishing, education and the nation's intellectual life. Of course, colonialism was not the only factor influencing language policy and development in the Third World. In some countries-mainly, but not exclusively-in Africa, Western languages were retained after independence for both political and demographic reasons. A proliferation of local languages made the choice of a primary language very difficult. In some cases, these indigenous languages were spoken by very small populations and many had no written forms.12 Even where local languages were an option, political disputes often prevented decisive action. The politics of language in the Third World is a powerful force-sometimes leading to civil unrest. For example, there has been continuing opposition in India to using Hindi as the sole national language. English remains a key language for commerce, politics, and intellectual life-40 years after independence close to half the books published in India are in English-and English almost completely dominates scholarly and scientific publishing

6 Publishing and Development

and much of political analysis.1 3 Other countries, including Indonesia and Malaysia, moved decisively to use indigenous languages as the main media for education and publishing, and while these shifts have not been without problems, they have been successfully accomplished. Language is a part of the international equation in publishing. The link is obvious where a metropolitan language is widely used in publishing. But there are other aspects of language that play a role as well. The bulk of the world's books are published in Western languages-and the phenomenon is even greater for scientific and technical books. Thus, many Third World nations must import a significant segment of their book needs from abroad-almost always in Western languages. Further, there are many translations of books from one nation to another. The very large proportion of translations are from the major Western languages to other languages. For example, of a total of 55,618 titles translated in 1983,41,740 were originally written in just four languages-English (with close to half of the world's total), Russian, French, and German.14 The largest Third World translation source language was Arabic, with only 322 titles. Surprisingly, only 148 titles were translated from Chinese into other languages. These statistics are significant for several reasons. They indicate that the flow of knowledge and information is almost exclusively one-way-from the industrialized nations to the Third World and that creative and scientific work done in Third World languages seldom reaches an international audience. It is also true that the countries and publishers that are the source of translations control the price and the flow of translated materials for the most part. While little is known about how decisions are made regarding which books are translated and how the translation process works, this is clearly an important part of the publishing equation in the Third World and one of the key international elements. Knowledge is expanding rapidly, perhaps at an unprecedented rate. This expansion has special implications for the Third World. A very large proportion of the expansion is taking place in the industrialized nations. The bulk of the world's scientific research and publication is done in the West. Virtually all of the world's scientific publications emanate from the industrialized nations-the Third World uses scientific information but produces very little of it. The Third World must import its science-and often pays a high price for it.15 Even where scientific research takes place, as in India, which may be considered the Third World's scientific "superpower," this knowledge is not adequately communicated to other countries, since Indian journals are not widely used or cited outside of India.1 6 Third World nations are at a significant disadvantage when it comes to both the production and the utilization of science, since they must import knowledge from the West and they have little control over the channels of communication. While scientific publishing is only a small part of the total publishing industry, it

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Issues and Trends 7 is a very important element-and one that is generally ignored in analyses of publishing. Copyright Copyright controls the international flow of knowledge and is of considerable significance in any discussion of Third World publishingP Indeed, copyright has been one of the most controversial and acrimonious issues. Copyright has often divided publishers in the Third World and in the industrialized nations, but basic interests and concerns differ significantly. The main international copyright agreements, the Berne Convention, sponsored mainly by the European nations, and the International Copyright Convention, initiated after World War II by the United States, basically reflect the interests of the "have" countriesthose that produce and control knowledge. Many in the Third World have argued that the interests of development and of justice would be served by significant alterations in the copyright agreements to give more leeway for developing countries to freely copy or translate materiaJ.lS In the 1970s, there were some modest changes in the copyright agreements in an effort to meet some of the demands of the developing countries, but even these were not fully ratified and were in any case compromises that pleased neither group. It is significant that in the past decade Third World views on copyright have changed. There are very few Third World critics who now favor scrapping the entire copyright system-at one time there were quite a few opponents of the overall structure. India, which was a strident critic of the system, now finds itself an exporter of books and other copyrighted materials and has become a supporter of copyright. Countries which at one time had very weak copyright laws or no laws at all and which were engaged in piracy of books, computer software and other items have, in general, joined the system and have curtailed or eliminated piracy.19 Singapore, Taiwan, South Korea, Indonesia and Malaysia now generally adhere to copyright regulations, at least with regard· to books and published material. Only Thailand still seems to be a hotbed of piracy, · and this more in terms of computer materials and trademark products than books. The promulgation of the first copyright law in China in 1990 has meant that the last major holdout has moved to join the copyright community. Third World nations have joined the international copyright system for several reasons. The industrialized nations have applied major pressure in terms of threats of trade sanctions and other penalties-they were more concerned with violations concerning films, computer software and trademarked consumer products than with books, but books were included as well.20 The major noncomplying nations have developed their own publishing industries, and some are now exporting books or other printed materials and feel that in the long run participation in the

8 Publishing and Development copyright system regularizes both the domestic book industry and international commerce. These countries need to import not only books and journals but also scientific equipment and software, and participating in the copyright system is useful for trade relations. In short, the cost of noncompliance became too high. The fact remains, however, that the international copyright system favors the "haves" and increases both the cost and the complexity for Third World countries. It is in the short-term business interest of the major Western publishers to keep the copyright system rigid and to operate it on purely commercial terms. The Western publishing community, in general, has taken a "hard line" on copyright issues and has been reluctant to modify the rules or even bend them significantly. In terms of textbooks, scientific materials and creative writing, it would be a significant contribution to development to provide the Third World easier access to materials, to translation and reprint rights, and in general to knowledge products from the industrialized nations. Granting such access to the low per capita income countries would not be a serious financial drain on the industrialized nations. Third World Issues There are, of course, many common elements in publishing worldwide. Indeed, there are more similarities among nations than differences. Yet, some aspects of the publishing equation have special ramifications for the Third World. One of these is copyright, which has already been discussed. Copyright illustrates the interrelatedness of many of these topics-the fact that Third World publishing has strong and usually dependent relationships with the international knowledge network. It is our purpose here to highlight some of the key issues that affect Third World publishing after several decades of development in which a variety of approaches have been taken in different countries. These issues are illustrative of broader concerns and relationships as well as being important in their own right.

Paper Paper is a necessary ingredient in publishing. Without it, there are no books. Yet, Third World nations are at a distinct disadvantage when it comes to paper. Most Third World countries do not produce a sufficient amount of the "cultural paper" needed for book production, and many produce virtually no paper at all. Thus, supplies of cultural paper must be imported in a market dominated by several major industrialized nations (notably Canada and Sweden) as producers and by major Western user countries (such as the United States), which set prices.21 Further, the large Western multinational publishers and other major users in the industrialized nations can obtain paper less expensively by purchasing in bulk. While the price of paper has been relatively stable in the past

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Issues and Trends 9 decade, this has not always been the case, and prices are determined by the Western users and producers. There have been some discussions of the possibilities of using paper made from products indigenous to the Third World, and modest progress has been made in this area.22 There has been consideration of establishing "paper banks" and other coordinated schemes to ensure supplies of cultural paper to developing countries. Some Third World nations have invested in paper-producing facilities and have increased domestic supplies. In some cases, newsprint, which is less expensive and more frequently available domestically, has been used for books in Third World countries-thus reducing both cost and dependence on foreign suppliers. Governmental policies, however, sometimes work against assuring adequate paper supplies, often by imposing high tariffs on cultural paper, on the assumption that it is a luxury item, or by preventing the development of domestic paper-production capacity. Several foreign assistance agencies, most notably the Canadian Organization for Development through Education, have established programs to provide paper to Third World nations at subsidized prices.23 In terms of the total cost of production of books, paper is a significantly larger element in the Third World than in the industrialized nations, and it is likely to be imported and therefore sub!ect to import controls and the vagaries of the international marketplace. 4 Its supply is uncertain and its price fluctuating. Yet, paper is a requirement for book production, and those involved in the publishing process, from government agencies formulating overall trade and investment policies to publishers and distributors, must take the nuances of paper supply and usage into consideration.

Textbooks The fact is that the provision of school and university textbooks is the largest single element of publishing in Third World countries. Even in the industrialized nations, textbooks constitute a significant part of the publishing equation-accounting for approximately one-fourth of the total industry in the United States. In the Third World, it is fair to say that textbooks come close to dominating publishing. Not only are the book needs of the educational system immense, but other markets tend to be limited. Textbooks have received remarkably little attention in discussions of Third World publishing, despite their dominant position.25 · While it is not possible to discuss all of the elements of textbook publishing here, several issues are important to consider in a broader analysis of Third World publishing. Of considerable importance, of course, is the challenge of developing and providing textbooks to rapidly expanding educational systems. The problem is not simply one of printing and distribution but often of creating suitable books in a context where nothing at all exists. Educational expansion has been a priority of every developing nation, and textbooks are a key part of the provision of schooling-contributing significantly to the success of the educational

10 Publishing and Development enterprise.26 There is a need to create books in indigenous languages and from an indigenous perspective. Because textbooks are such a large part of the total publishing enterprise, it is important to coordinate textbook development with the broader needs of the publishing industry as well as of the educational system.27 There has been a tendency in the Third World for textbooks to be developed and published by government agencies, even where texts were previously published in the private sector. The reasons for this are evident: the desire to ensure that book development and creation (often done in government agencies or by government-sponsored organizations) are directly linked to production, the desire to keep prices low by directly controlling printing and production, and a distrust of the private sector, which was often dominated by foreign firms, and a wish to maintain direct control over the scheduling and distribution of books. Where books are distributed free to pupils, the tendency to move to government publishing has been particularly strong. Government involvement in textbook publishing was also related to the tendency in the Third World for the public sector to dominate the economy. Government textbook publishing often achieved its goals, but there are a number of questions that must be raised. It is very clear that government control of the most important (and the most financially predictable and often profitable) segment of the publishing enterprise takes from the private sector its most lucrative element. Even in industrialized nations, textbook sales often subsidize publishing of less-profitable kinds of books. Without the text market, private Third World publishers may have insufficient business to maintain full-scale publishing activities. Government textbook-publishing agencies are sometimes inefficient. While there is no convincing cross-national data on this topic, there is a good deal of evidence to indicate that highly subsidized state-run textbook units operate less efficiently than other publishing organizations. Policies with regard to textbooks have remained controversial and subject to debate. For example, the question of whether texts should be provided free of charge or whether students should pay for their books has been argued with no fully satisfactory response. Questions of textbook design and physical quality also remain actively debated. Some argue that textbooks should be cheaply printed and not expected to last, while others advocate the general Western practice of printing very durable textbooks that are expected to be used for a number of years. And, as noted above, there are arguments concerning whether the public or the private sector (or some combination of the two) should be responsible for textbook publishing. It is generally agreed that multinational firms should not dominate a Third World text market and that textbooks, insofar as possible, should not be imported. It is also generally accepted that textbooks and instruction, at least in the elementary grades, should be in the mother tongue of the pupil.

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that have an active indigenous industry, such as India, import large numbers of books from abroad. For many in the publishing business in India, there is more profit in importing and selling foreign books than in producing domestic titles. The Third World will always have to rely on imported books and periodicals in the sciences. A number of questions must be raised concerning book imports. • Why is the cost of foreign books so high in the Third World? There might be a possibility of consolidating orders and thus reducing costs. Publishers in industrialized countries have claimed that their risks are high and that therefore they must charge more. • Should more books be reprinted in Third World countries under license from the original Western publisher? Special inexpensive editions of university textbooks published by American publishers have been available for many years. Should such programs be expanded? What are the implications, in financial terms, for both the originating and reprinting · publisher? • What are the implications of book imports for indigenous Third World publishing? Do imported books take market share from domestically published volumes? Does the import trade, which is part of the business of many Third World publishers, significantly help those publishers to survive in a difficult economic environment? • How can imports be discouraged and indigenous publishing be advanced without at the same time restricting access to information? For an increasing number of Third World nations, book exports have become a significant part of the publishing equation. The publishing giants of Latin America, Argentina and Mexico, have long relied significantly on book exports to other Latin American countries.32 Brazil now exports books to Portugal and other Lusophone countries. In recent years, India has become a major exporter of books in English to Southeast Asia and Africa, largely for use as textbooks.33 An indication of the importance of the export market for Indian publishers is the fact that decisions regarding the publishing of scholarly books in India are in part determined by an estimate of the export potential for a title.34 Egypt has traditionally served as the major publishing center for books in Arabic, exporting books in large numbers to other Arabic-speaking countries.35 Singapore and Hong Kong have become key international centers for composition and printing and to a more limited extent for publishing. Their up-to-date equipment could be more frequently used for Third World publishing. Despite some S';JCCesses, it is typically very difficult for Third World books to be sold in the industrialized nations, and just as difficult to reach audiences in other developing countries. Several efforts at regional Third World publishing cooperation have failed.· There are, at present, restrictions on the flow of books between Malaysia and Indonesia despite the use of a common indigenous language. Efforts in both East and West Africa to promote regional cooperation have not been notably successful. The recently established African Books Collective is one of the most

In many countries, there is a severe shortage of textbooks. While there is still some disagreement among experts concerning the appropriate mix between pupils and books, it is clear that by any measure there are massive shortages of books. Textbook development is a complex process, involving not only publishers but also educational experts and requiring the coordination of the education system, government agencies,. and the publishing community. A significant amount of time is required for the development, evaluation and publication of texts. The World Bank, through its lending program to a number of countries, has addressed the textbook shortage-it has recognized the need to rapidly expand the supply of textbooks.28 Several things seem clear. There is a need for educators, governments, and publishers to develop workable strategies to improve the supply of textbooks in the Third World. It is important for textbooks to be integrated into the broader publishing industry so that publishers can obtain some economic benefits from textbooks-only in this way can a balanced publishing program be built. There are many different kinds of textbooks, and an appropriate textbook strategy must take these variations into consideration. For example, the texts needed for postsecondary education are of a different type than those required at the elementary and secondary levels. Supplementary school materials need additional attention. Clearly, textbooks are a crucially important segment of the Third World publishing equation-a segment often ignored in discussions of publishing.

Distribution It is universally agreed that book distribution is one of the most difficult problems for ~ublishing, not only in the Third World, but in virtually every country. 9 But for the Third World, book distribution must be seen as a top priority. The Third World faces some special problems. Low-income, largely rural populations are not in a position to purchase. books. Nor do they have access to bookstores. Some countries have attempted to use mobile bookshops in rural areas, but in general rural populations remain severely underserved. Bookshops in the Third World are generally inadequate. They do not have large stocks of books, and they are, in general, severely undercapitalized. Booksellers (as well as publishers) find it difficult to obtain credit, and they can afford to keep only small numbers of books in their shops. The discount structure for publishing in general does not permit adequate profits for booksellers. Inherent Third World problems of transportation add to the burden of book distribution. 30 It has often been said that the book distribution network is the weakest link in the Third World publishing equation.31

Imports and Exports The Third World relies to a considerable extent on imported books. Small countries and some larger nations without a significant publishing industry must import most, if not all, of their books. Even large countries

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Issues and Trends 13 significant efforts in recent years to ensure that books published in subSaharan Africa reach audiences outside the country of publication.36 The importance of making indigenous books available throughout the Third World cannot be overemphasized, for reasons of economics and also in order to promote "South-South" dialogue. At the same time, the industrialized nations are significant purchasers of Third World books now, and this market can be expanded. Typically, libraries and other institutional purchasers prefer to buy from outlets in their own countries, and it may be useful to expand stocklists and in other ways to make books available to Western purchasers. A few agencies have been developed, in the industrialized nations, to assist in this process. Several outlets, for example, distribute books from India, and at least one specializes in books from the Philippines. For both domestic use and for export purposes, the improvement of bibliographical sources for new Third World books will be very useful. The African Book Publishing Record has already made an important contribution in this area.

New Technologies The advent of new technologies for composition, reprography, printing, networking and storage is perhaps the most important set of developments in publishing in the past two centuries. The new technologies have significant implications for the Third World. In 1975, Datus Smith wrote about the ''bright promise" of publishing in developing countries, arguing that new technological innovations in publishing would permit the Third World to leap-frog existing technologies and hasten book development.37 While it is true that some of the new technological innovations have assisted publishing development in the Third World, it can be argued that these innovations have created as many problems as they have solved. It must be kept in mind that the new technologies have been developed in the West for Western use by Western companies. In many ways they have solidified Western domination of the international knowledge network.38 The current challenge is for the Third World to grasp the implications of the new technologies and to make choices concerning their use and role in indigenous publishing. It is useful to catalog some of the new technologies from the perspective of their impact on the Third World: • Reprography has permitted Third World users of published materials to photocopy easily, often in violation of copyright guidelines. Until recent vigorous copyright enforcement in Asia, unauthorized photocopying was rampant and unauthorized editions of Western books, using reprographic techniques, were common. Reprography was used in conjunction with photo-offset printing to produce unauthorized editions of many books quickly and inexpensively, from university texts and reference volumes to works of popular fiction.39 Thus, it is fair to say that the widespread use of photocopy machines (many of them manufactured in Third World countries) has been an advantage to the developing countries.

14 Publishing and Development o Data bases and computer-based means of knowledge dissemination have been a mixed blessing for the Third World. On the one hand, data bases permit users in the Third World to have immediate on-line access to the latest information in most scientific fields. Wealthier Third World nations, such as Singapore and Taiwan, have access to the major international data bases. However, data bases are expensive, and they require support facilities to provide the information that the data bases present. Users must pay for the services and must have the infrastructures to permit the data bases to function. Of course, all of the data bases originate in the industrialized nations, and they require payment for use. Some are operated by profit-making companies. Third World countries and institutions that cannot afford the data bases or which do not have the infrastructures (such as a reliable telephone system and consistent electrical power) cannot link up with the data bases, and as a result they may be more disadvantaged in terms of participation in the international knowledge network than was previously the case. Most African nations and many Asian countries are in this situation. It is also the case that the data bases are created largely for Western use, and the material that is included does not fully reflect the needs of developing nations. o New printing and composing technologies have also been a mixed blessing for the Third World. As with virtually all high-tech equipment, new printing machines are imported from the industrialized nations-and they are often expensive. In countries where a publishing infrastructure is being newly established, investment in the most up-to-date equipment may be justified. Further, computer-assisted composing equipment may be very useful for scripts, such as Urdu, that do not lend themselves easily to traditional typesetting. It is also possible that short-run books can benefit from computer composition, perhaps creating camera-ready material directly from manuscripts produced on disks. Finally, in countries with small populations and relatively high wages, such as the nations of the Arabian Gulf, the new technologies permit publishing to be done with a small staff. But it seems clear that the new technologies are not a panacea for the Third World. For many countries where traditional composing and printing are well established, the new technologies may not make economic sense. In India, for example, the existence of relatively low wages combined with skills in the older technologies means that traditional composing and printing still makes economic sense for a large part of the publishing industry. The same is true for China and for many other Third World countries. Labor-saving technologies are not necessarily an economic benefit. The new technologies may have other disadvantages as well. They all require imported equipment-computers, printers, as well as both ''hardware" and "software." This equipment is expensive and must be paid for in hard currency. In many countries, maintenance is a problem, and technical support for complex new computer-based equipment may not be available.

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Issues and Trends 15 There is considerable pressure to invest in the new technologies. The desire to be modern and up-to-date is strong. Publishers who look to exports to the industrialized nations may be under pressure to use the latest equipment in order to be able to produce books that will be acceptable in the international marketplace. In many cases, adopting the new technologies may be a wise decision-a good investment in the long-run health of the publishing firm and the industry in general. In other cases, a combination of old and new technologies may be more useful for a particular publisher. In still other instances, traditional technologies may be the most advantageous for the country or the firm. The costs and benefits of technological innovation in publishing must be carefully weighed. The pressures, from donor agencies and from many within the country, will be to move to the new technologies promptly. But care must be taken in considering the implications.

Public or Private There has been a continuing debate concerning the role of the public and private sectors in publishing. For several decades, the public sector played an increasingly important role in publishing, but this has been changing recently. In the current international economic climate, there is a strong prejudice against public-sector enterprises, and in the case of publishing, there seems to be little justification for direct public management of publishing firms. The World Bank, which has lent billions of doll~rs for textbook development, has often favored government production of textbooks despite its general bias in favor of the private sector. This is surprising since governmental control is often inefficient and always leads The collapse of the centrally to starving indigenous local publishing. planned economies in Eastern Europe has added to the arguments against government-administered publishing. Many Third World countries, in part because of the international tendency during the 1950s and 1960s to have strong state involvement in the economy at all levels, have had a strong state role in publishing. Thi~d World countries have felt that books are, at least in part, a public resource and they have been subsidized. This is particularly the case for textbooks. It was often thought that since books are being subsidized, publishing might as well be state-controlled. In many parts of the world, state involvement in publishing proved not to be fully successful. State enterprises proved not to be very efficient, waste was endemic, and there was inadequate coordination with other elements of the book trade-such as with distributors. Moreover, many have complained that state control led to state censorship of books. There has been widespread agreement that publishing was most effectively done when free of governmental bureaucracy. Some experiments were carried out to retain governmental fiscal involvement but to down play bureaucratic controls. In Africa, experiments with "para-statal publishing" were attempted.4° These firms were given a degree of

16 Publishing and Development managerial, substantive, and fiscal autonomy with the. idea that they should be professionally managed. At the same time, they continued to receive funds and sometimes overall direction from the government. Their success, however, was limited, and in many instances these experiments have been abandoned. In many developing countries, the government is involved with publishing and related issues, and many of these efforts have been highly successful. In India, the National Book Trust, a central government-funded semiautonomous agency, has sponsored a large number of programs, including translations of books from one Indian language to others, the coordinated publication of books for children using common artwork, and different language editions, as well as the publication of university-level textbooks and the like.41 The Dewan Bahasa dan Pustaka (national literature agency) in Malaysia has sponsored the translation of many titles into Bahasa Malaysia, as a means of fostering books in the national language. It has been particularly active in the textbook area, as there has been a key need for indigenous textbooks as Malaysia moved to the national language for education.42 In Singapore, as in many other Third World countries, a government agency, the Curriculum Development Institute of Singapore, develops textbook materials which are then published in the private sector. Governments have provided funds to private sector publishers and have also established public agencies to implement government book policy. Government policies also have a direct impact on the publishing industry. Tariffs, duties and restrictions on imports have a direct and dramatic impact on publishing, determining to a significant extent the future of the industry in many countries. High tariffs on paper, for example, may make it virtually impossible to publish books domestically where locally produced paper is in short supply or unavailable. In some countries, publishing is not formally classified as an "industry," and publishers are therefore not able to obtain certain benefits, including access to bank credit. As noted earlier, the "nationalization" of textbook publishing has had a serious negative impact on private-sector publishing in a number of Third World nations. Sometimes, government policies implemented for justifiable reasons have unanticipated negative implications. Publishing is not well understood by governmental authorities and generally has a low profile-thus the full ramifications of policy are sometimes not understood. Because government has a pervasive role in society in many Third World nations, its role in publishing has been substantial. It is likely, even in this period of privatization, to continue to be an important part of the publishing equation. And it is therefore especially crucial to determine government's proper role in book development so that effective use can be made of this powerful-and probably inevitable-force in Third World societies.

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Issues and Trends 17 Regional Variations: Africa and Asia It is, of course, an overgeneralization to discuss broad trends in Africa and Asia, since there are so many variations in these two large and diverse continents. Nonetheless, it may be useful to contrast some broad elements in the development of publishing. Such contrasts may be useful in understanding the broader configuration of publishing in the Third World. As a broad generalization, in many Asian countries publishing at least in many countries, has "taken off' and the basic infrastructures and capacities are in place.43 This is most dramatically the case in those Asian countries that have achieved economic success and where there are very high rates of literacy-the East Asian newly industrialized countries (NICs). Publishing has also developed impressively in low per capita income nations such as India and China.44 In contrast, sub-Saharan Africa has not developed significantly in the past two decades. Indeed, in a few major countries such as Nigeria, publishing may even have moved backward. There are a few bright spots, such as Kenya and Zimbabwe, but in general the economic downturn of the recent past has meant that publishing has been severely constrained.45

African Dilemmas It is possible to summarize some of the problems facing book development in sub-Saharan Africa.46 Clearly, not all of these issues are relevant in each country, but they are broadly applicable to the region: • The economic crisis of the 1980s has affected every aspect of African society and has been especially difficult for those segments of the economy that are dependent on imports, such as book publishing. The combination of low prices on the world market for African exports, the international debt crisis, political instability, overpopulation, and mismanagement has been an extraordinarily powerful one. World Bank statistics indicate that most sub-Saharan African countries have slid backwards in terms of per capita income and have regressed in terms of spending for education and related areas.47 Economic problems have restricted government spending for textbooks and this has harmed the book industry.48 Restrictions on imports have meant that paper and other materials needed for publishing are in short supply and very expensive or simply unavailable. The inability to import books and journals has meant that the universities no longer have access to the world's knowledge. In short, the economic crisis has affected all elements of publishing in Africa. It is at the root of most of the other difficulties discussed here. Without an improvement in the basic economic situation, it is unlikely that African publishing will fully regain its initiative-and the current world economic situation does not look promising for Africa. • Language issues are also a handicap in Africa. English and French, and to a lesser extent Portuguese, remain powerful forces in Africa, makin~ the establishment of publishing in indigenous languages very difficult.4

18 Publishing and Development There are, of course, many reasons for the role of the metropolitan languages in Africa, and these factors are useful in understanding African book development. Both the heritage of colonialism and the power of the multinational publishers clearly have played a role, but it would be a mistake to blame all problems on these external forces. It is also the case that many African countries have found it impossible to choose an indigenous language for political and tribal reasons.SO Further, in some countries, there are a large number of languages, each serving only a small population. Many African languages are not well developed for use in publishing as they do not have well-developed grammatical structures or agreed spellings. The major East African nations of Tanzania and Kenya have, however, stressed the use of Swahili as an indigenous link language, although English remains very important in publishing and in other areas as well. Swahili is not the dominant language of any indigenous group but is fairly widely used along the African coast. As a result, Swahili did not seem to be a direct threat to any ethnic or tribal groups, yet it has some legitimacy in the region.st A significant number of countries use a European language as the major or even the only language of schooling at all levels, and the upper levels of education continue to be dominated by metropolitan languages without exception. 52 This creates the need for large numbers of textbooks in these languages and instills among intellectuals a kind of loyalty to them. The metropolitan languages remain the keys to social mobility and participation in the modern sector of all African societies. There is no easy solution to the language dilemma in Africa. While language issues affect publishing in very direct ways, the key factors are much broader. • The infrastructures of publishing are in especiillly short supply in Africa. At the time of independence, most African countries had few publishing resources. Books were largely imported. The situation has only modestly improved since that time. Paper is mostly imported. Printing facilities are totally inadequate and outdated. The distribution network is insufficient and is virtually nonexistent outside of the large cities-and the few booksellers that exist tend to orient themselves toward imported Western books, which are more readily available and yield a larger profit. There are very few trained publishing professionals. It has been very difficult to import machinery, technology, or paper to build up the needed infrastructures, and in the present economic climate, such imports are virtually impossible. In short, there has been little basis on which to build · a modern publishing industry. Indeed, given the existing problems, it is surprising that there has been any progress at all. Yet, there are examples of successful indigenous African publishing ventures that have been able to establish themselves in difficult circumstances. A number of ventures in Kenya have been tried, and a few have succeeded.53 Zimbabwe, which had a fairly strong infrastructure at the time of independence, has continued to build an effective publishing industry while even under apartheid there has been a

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20 Publishing· and Development available for necessary imports. Publishing, of course, is part of the economic equation in any country, and general economic health in return encourages the growth of publishing as well. Too often, book publishing is seen in isolation from other sectors of the economy. It is clearly related to broader economic factors in a society. • Publishing infrastructures were either available or relatively easy to build up in much of Asia. A book industry already existed, and it was, for the most part, domestically controlled. Active publishing industries had existed in many Asian countries for many decades. It was possible to build on available structures and expertise. In India, there are training programs for ::mblishing professionals, and Asians in general have had access to the trainin~.frograms sponsored by the Asian Cultural Center for UNESCO in Tokyo. A few Asian countries produce printing equipment, although the most sophisticated machines come from the industrialized nations. While most Asian countries are not self-sufficient in paper, most have paper-making capacity. The Asian countries that have successfully developed publishing industries generally had printing capacity, managerial and editorial expertise, and many of the components of a successful book industry. • The role of the private sector. For most Asian countries, publishing was left largely in private hands, and the private sector has been responsible for virtually all of the growth that has taken place. In the NICs, textbooks were also generally left to private-sector publishers who worked closely with education authorities. In general, private-sector publishers received very limited assistance and subsidy from government, althou~h in many cases the imr:ortant textbook sector was left in private hands. 8 An exception to this generalization is, of course, China, which has long reco~nized the importance of books for education and for development. 9 China's publishing development has so far been exclusively in the public sector, and even with the liberalization of recent years, there is virtually no private publishing in China. Indeed, publishing remains fairly centralized, with resulting problems of lack of flexibility. The Chinese approach to publishing, as is common in Socialist countries, has stressed books as a public good. Thus substantial subsidies were given to the publishing industry and the price of books was kept artificially low. • Language issues in Asia are not quite so serious as they are in Africa. For the most part, publishing industries function in the national language of the country, although European languages, mainly English, do play an important role.60 The number of speakers is generally large enough to support an active publishing industry. Even in multilingual countries, such as India, the populations tend to be fairly large. For the most part, the languages involved have traditions of publishing and established grammatical structures and scripts. In some cases, such as Urdu, there have been composition problems but recent innovations in computer-based composition has significantly simplified the situation. Some language

significant development of indigenous and critical publishing in South ·Africa.54 • The lack of regional cooperation in publishing in Africa has been a deterrent to the growth of publishing. Africa, more than other developing areas, has small linguistic and tribal groupings that not only make the maintenance of a modern nation-state difficult, but clearly hinder book development. Some of the current national boundaries reflect colonial preferences rather than indigenous desires or logical choices. The major linguistic divisions of the continent-between Francophone and Anglophone areas-transcend national boundaries. Small countries have found it impossible to build up an indigenous book industry. In this context, regional cooperation would seem to be a logical and desirable choice. In West Africa, regional publishing on the basis of Anglophone or Francophone usage would make sense. In East Africa, cooperation based on the common use of Swahili or even English could strengthen publishing. Some efforts were made, mainly in East Africa, but almost without exception they did not succeed. In some cases, political and economic problems at the national level intervened. In others, local factors were responsible. Despite some failed efforts, it would seem that regional cooperation is a key to publishing success in Africa precisely because of the context of linguistic diversity, small and relatively poor countries, and the possibility of using the common element of the metropolitan languages. Asiatt Developments

This discussion will focus on some of the key factors that have permitted some Asian nations to develop effective publishing industries. While there is significant diversity in Asia, we focus here on the factors that have led to success.55 China and India are both very large nations with low per capita incomes.56 In these countries, there are still significant shortages of books, both for educational purposes and for general readers, at the same time that there have been great strides in publishing. Taiwan and South Korea have impressively developed in both economic and educational terms in recent years, and their publishing industries have been part of this process of development. Thus, some of the generalizations indicated here will need to be qualified. • An important element for publishing development is relatively healthy economic growth. The East Asian NICs have seen some of the world's most dramatic rates of economic growth in the past two decades, and many Asian countries have experienced reasonable growth. While the record for India and China has been mixed, there has been overall steady improvement in Asia. Economic growth permits an expansion of consumer demand for books; it encourages expenditure for education and related cultural programs both by government, by individuals and (where it exists) by the private sector. There is a larger and more entrenched urban middle class in many Asian countries. This group tends to have disposable income, enabling its members to purchase books. Foreign exchange is made

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22 Publishing and Development

groups, such as Chinese, Hindi, Bengali and a few others are very large although rates of literacy vary and purchasing power may be limited. • Rates of literacy in Asia are, overall, higher than in Africa, and this is an important factor in publishing. Even where illiteracy is still widespread-as India, where the literacy rate remains under 40 percentthere are very large numbers of people who can read and who can afford to buy books and magazines. For many Asian countries, literacy levels are similar to those in the industrialized nations despite lower per capita incomes. • There has been a greater level of political stability and consistency in much of Asia than has been the case in Africa. While there are certainly significant political shifts-including the cataclysmic Cultural Revolution in China-in Asia, there is overall more stability. When there are changes in government, either through the electoral process or by lessdemocratic means, the changes tend to be less violent and disruptive. These are some of the broader factors that differentiate Asia and Africa. Variations exist in the delimited areas of publishing and education, but perhaps more important are the significant broader political and economic factors that have contributed to the development of a publishing industry in many Asian countries, while inhibiting similar growth in Africa.

books, and as a result bibliographical control is weak. Centralized bibliographical services, including national libraries, are inadequate, and publishers do not provide sufficient cooperation. The network of bookstores, especially outside of the urban areas, is weak, and this creates problems for book distribution. Discount structures are sometimes unrealistic. There have been some interesting and occasionally successful efforts to improve book distribution, but in general distribution remains a serious problem for publishing. Indeed, the lack of adequate distribution has limited the effectiveness of the book industry.

The Lessons of the Past Two Decades

Textbooks We have learned that textbooks are central to publishing development in all countries, and especially in the Third World. There, textbooks are the largest segment of the publishing industry. The supply of textbooks is also of primary importance to the success of expanding educational initiatives and the improvement of literacy in the Third World.

Much has been learned in the past two decades in terms of book development and publishing in the Third World. It is worthwhile summarizing some of the major trends and lessons of the period.

Regional Cooperation We have learned that regional cooperation is a very useful concept in Third World publishing-and in fact probably a necessary element if publishing in smaller languages and for limited audiences is taken into account. It has also been learned that regional cooperation is difficult to implement and, more often than not, unsuccessful. Nonetheless, it remains important. Marketing and Distribution Linked to regional cooperation is the coordinated marketing of books overseas, as the African Books Collective is currently attempting. There are no such efforts in Asia. Because of the nature of export markets, and particularly the library and institutional markets in the United States and Europe, such coordinated efforts can yield co·nsiderable success in terms of sales for some kinds of books. It has also been recognized that book distribution is the weakest link in the publishing system. Many of the elements of effective distribution need improvement. In most parts of the Third World, publishers are very lax in providing information about new

Govemmental policy We have learned that government policy is a key factor in determining the success or failure of publishing in the Third World. Policies relating to copyright, photoduplication, textbook production, import and export of books, paper, and the like are crucial. Frequently, these policies are not well coordinated and have hindered the growth of the book industry. The establishment of National Book Development Councils in many Third World nations, an innovation stressed by UNESCO, has provided some coordination in the publishing industry. While publishing is not a large part of any economy, it is nonetheless important to national development and deserves significantly more attention than it has received.

Technology The new technologies have significantly affected books and publishing everywhere. Printing, composition and photocopying are all areas where new technological innovations have played a role. How the new technologies fit into the complex balance of Third World publishing is not clear yet. Considerable attention, however, must be given to the implications of technological innovation in publishing. Indigenization · Although difficult to implement in many cases, it is extraordinarily important to ensure that Third World publishing is indigenous-that it is locally controlled and directed (even if there is some foreign ownership), that it is attuned to the needs of the society and that it can reflect cultural and other developments in the country. In some cases, orienting publishing to the local language is part of such an indigenization effort.

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24 Publishing and Development World Bank, Education in Sub-Sahamn Africa: Policies for Adjustment, Re~~italization and Expansion (Washington, D. C.: World Bank, 1988).

Conclusion Third World publishing is at a crossroads. It has achieved a certain level of maturity in some countries. In others, a book "famine" remains and in fact grows more serious. Publishing has been buffeted by economic crises, technological change, and the dramatic expansion of knowledge in the industrialized nations. For the most part, inadequate attention has been given to the role of publishing and of books and printed materials in general in the development of the Third World. We have learned a great deal about what works and what may be less successful. We have seen the operation of the international knowledge network and its impact on the relatively dependent countries of the Third World. At the same time, we have seen some Third World publishing industries achieve considerable success. Countries like India now export books and have a well-developed infrastructure. At the same time, however, there are not enough textbooks for schoolchildren in India. In short, Third World publishing presents a very mixed picture. The decade of the 1990s presents an opportune time to look carefully at both the successes and the failures of the postcolonial period. A sufficient amount of time has gone by to assess the situation carefully and dispassionately. The basic direction of Third World publishing is at stake. A basic aim must be to ensure as much autonomy as possible in an interdependent world. Agencies in the industrialized countries, including foreign assistance programs, multinational institutions such as the World Bank and UNESCO, and governments can provide some assistance. Just as important, they must understand the problems and the possibilities of Third World publishing, and they must permit the maximum degree of autonomy. Those most involved, the Third World countries themselves, must make-and implement-the basic decisions. The responsibility is considerable. The challenges are substantial. But the endeavor is worthwhile since publishing is at the center of the intellectual and educational development of the Third World.

NOTES I.

Per I. Gedln, "Cultural Pride: The Necessity of Indigenous Publishing," in this volume, chapter three.

2.

The term "Third World" is used as an easy, if not totally satisfactory, means of referring to the nations of Africa, Asia and Latin America. It is recognized, however, that there are significant variations among these nations and that an increasing number of them are no longer poor and a growing number boast of high levels of literacy.

3.

The World Bank's recent report on education in sub-Saharan .!l.frica highlights how economic problems have affected all aspects of intellectual life in those countries. See

4.

Robert Escarpit, The Book Revolution (London: Harrap, 1966). This volume was published by UNESCO, which played a leadership role in the 1960s and 1970s in terms of publicizing and fostering book development in the Third World.

5.

See, for example, Stanley A. Barnett, "American Book Aid: A Critical Assessment of Two Major Programs of the 1950s-1970s," in this volume, chap. 19.

6.

For a critique of such programs in the Indian context, see Phillp G. Altbach, Publishing in India (New Delhi: Oxford University Press, 1975), 62-72.

7.

For an example of current American thinking concerning book exports and book programs abroad, see William M. Childs and Donald E. McNeil, eds. American Books Abroad: Toward a National Policy (Washington, D. C.: Helen Dwight Reid Educational Foundation, 1986).

8.

An excellent guide to the various elements needed for developing publishing in the Third World can be found in Datus Smith, Jr., A Guide to Book Publishing (Seattle: University of Washington Press, 1989).

9.

For an elaboration of this theme, see Philip G. Altbach, "Literary Colonialism: Books in the Third World," Harvard Educational Review 45 (May 1975): 226-36.

10.

Philip G. Altbach, "Knowledge Enigma: The Context of Copyright in the Third World," in The Knowledge Context, by Philip G. Altbach (Albany: Stale University of New York Press, 1987), 85-112.

11.

Samuel Israel, "The Colonial Heritage in Indian Publishing," Library Trends 26 (Spring 1978): 539-52 and Keith Smith, "Who Controls Book Publishing in Anglophone Middle Africa?" Annals of the American Academy of Sacial and Political Science 421 (September 1975): 140-50.

12.

See Abul Hasan, The Book in Multilingual Countries (Paris: UNESCO, 1978).

13.

Tejeshwar Singh, "Publishing in India: Crisis and Opportunity," In Publishing in the Third World, ed. Philip G. Altbach, Amadio A. Arboleda and S. Gopinathan (Portsmoutlt, N.H.: Heinemann, 1985), 111-30. See also Altbach, Publishing in India.

14.

UNESCO, Statistical Yearbook, 1989 (Paris: UNESCO, 1989), 7-101.

15.

A partial exception to tltis situation can be seen in the newly industrializing countries of East Asia, which are expanding their scientific research capability. See Philip G. Altbach, et al., Scientific Development and Higher Education: The Case of Newly Industrializing Cormtries (New York: Praeger, 1989).

16.

Eugene Garfield, "Science in tlte Titird World," Science Age (October/November 1983): 59-65.

17.

For discussions of the intemational copyright system, witlt special relevance for Third World countries, see Edward W. Ploman and L.Oark Hamilton, Copyright: Intellectual Property in the Information Age (London: Routledge and Kegan Paul, 1980); Altbach, "Knowledge Enigma"; and E. I. Olian, Jr. "International Copyright and the Needs of Developing Countries," Camel/ Intemationall..aw Journal 7 (May 1974): 81-112.

18.

For a Third World perspective, ·see Jaman Shah, '"India and the International Copyright Convention," Economic and Political Weekly 9 (31 March 1973): 645-48.

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For a discussion of piracy, see David Kaser, Book Pirating in Taiwan (Philadelphia: University of Pimnsylvania Press, 1969). See also Cordon Graham, "The Piracy Picture Worldwide," Publishers Weekly, 16 July 1979, 33-34.

35.

Nadia A. Rizk and John Rodenbeck, "The Book Publishing Industry In Egypt," in Publishing in the Third World, 96-109.

20.

Publications such as Copyright News provide information concerning the Western view of copyright development.

36.

Hans M. Zell, "Africa: The Neglected Continent," in this volume, chapter five.

37.

21.

See Jorg Becker, "The Geopolitics of Cultural Paper: International Dimensions of Paper Production, Consumption and Import-Export Structure" (Paper prepared for the UNESCO World Congress on Books, 1982). See also Car! Bergendahl, "The Supply of Cultural Paper in Asia," Asian Book Deuelopment 10 (March 1979): 4-9.

Datus Smith, Jr, "The Bright Promise of Publishing In Developing Countries," Atrnals of the American Academy of Political and Social Science 421 (September 1975): 130-39.

38.

Some of these themes are dealt with in Anthony Smith, The Geopolitics of Information: How Westem Culture Dominates the World (New York: Oxford University Press, 1980).

39.

John F. Baker, "Keeping Up with Copyright," Publishers Weekly, 23 June 1989, 18-19; "Copyright Turn-Round in Asia," Anti-Piracy News no. 12 (October 1987); Paul Gleason, "International Copyright Conflicts over Books-Part 1: The Problem," Society for Scholarly Publishing Letter 9, no. 2 (1987): 1-4.

40.

SeeS. A. Amu Djoleto, Books and Reading in Ghana (Paris: UNESCO, 1985), 10..14. See also Waiter Bgoya, Books and Reading in Tanzania (Paris: UNESCO, n. d.).

41.

Attar Singh, et al., "National Book Trust," Round Table 1 (19 March 1972): 28.

42.

Datuk Hassan Ahmad, "The Role of the Dewan Bahasa dan Pustaka in the Advancement of Indigenous Academic Publishing in Malaysia," in Academic Publishing in ASEAN, ed. S. Gopinathan (Singapore: Festival of Books Singapore, 1986), 150..56.

43.

See Shigeo Minowa, Book Publishing in a Societal Context: Japan and the West (Buffalo, N. Y.: Prometheus, 1990), for a Japanese perspective on the development of publishing.

44.

T11ere are, of course, some Asian countries where publishing has not developed impressively for a variety of reasons. Nations such as Afghanistan, which has a relatively small population, several main languages and has been involved in a devastating civil war for a decade has not surprisingly failed to build up much of a book industry. Similarly, Kampuchea has seen its book industry regress in recent years.

45.

Zell, "'Africa: The Neglected Continent" and Waiter Bgoya, "Autonomous Publishing in Africa: T11e Present Situation,"' Development Dialogue nos. 1-2 (1984): 83-111.

46.

An excellent overall perspective can be found in Per Gedin, "'Publishing in AfricaAutonomous and Transnational: A View From the Outside," Deuelopment Dialogue no. 1-2 (1984): 98-112.

19.

22.

Mason Rossiter-Smith, "Problems and Aladdin's Lamp," in Publishing in Africa in the Seventies, ed. Edwina Oluwasanmi, Eva-Maria McLean and Hans Zell (lle-Ife: University of lfe Press, 1975), 289-96.

23.

Paul Eastman, 'The Raw Material: Paper," in Textbooks in the Developing World, ed. Joseph P. Farrell and Stephen P. Heyneman (Washington, D. C.: World Bank, 1989), 102-12.

24.

Smith, Economics of Book Publishing, 16.

25.

The most comprehensive consideration of textbooks in developing countries from a variety of viewpoints is Farrell and Heyneman, eds., Textbooks in the Deueloping World. See also Philip G. Altbach and Gail P. Kelly, eds., Textbooks in the Third World: Policy, Content and Context (New York: Garland, 1988). For a more technical consideration of the topic, see Peter Neumann, Publishing for Schools: Textbooks and the Less Deueloped Countries (Washington, D. C.: World Bank, 1980) and Douglas Pearce, Textbook Production in Deuelopiug Countries: Some Problems of Preparation, Production and Distribution (Paris: UNESCO, 1982). For an overview, see also Philip G. Altbach, "Key Issues in Textbook Provision in the Third World," Prospects 13, no. 3 (1983): 315-25.

26.

Stephen P. Heyneman, Textbooks and Achieuement: WJzat We Know (Washington, D.C.: World Bank, 1978).

27.

S. Gopinathan, "'And Shall the Twain Meet?': Public and Private Sector Relationship in Textbook Publishing in Less Developed Countries," in The Need la Read, ed. S. Gopinathan and V. Barth (Singapore: Festival of Books Singapore, 1989), 221-50.

28.

Pacifica Aprieto, "The Philippine Textbook Project," Prospects 13, no. 3 (1983): 351-60.

29.

Amadio A. Arboleda, "Distribution: The Neglected Unk in the Publishing Chain," in Publishing in the Third World, 42-55.

30.

A classic statement of the problems of book distribution is Artur Isenberg, "Toward Better Book Distribution in Asian Countries," Indian Book Industry (August/September 1970): 35-55. See also W. Abegbonmire, "The Hazards of Bookselling in Africa," in Publishing in Africa in the Seuenties, 47-58.

47.

See World Bank, Education in Sub-Saharan Africa.

48.

In fact, the shortage of textbooks in many African countries has reached crisis proportions.

31.

For a perspective on current U. S. developments, see Center for the Book, The Future of the Book: Part Ill-New Technologies in Book Distribution, The United States Experience (Paris: UNESCO, 1984).

49.

Gunter Simon, "'The Book in Francophone Black Africa: A Critical Perspective," African Book Publishing Record 10, no. 4 (1984): 209-15.

32.

Alberta E. Augsburger, The Latin American Book Market: Problems and Prospects (Paris: UNESCO, 1981).

50.

For a controversial discussion of some of these issues, see Ali A. Mazrui, The Political Sociology of the Euglish Language: An African Perspective (The Hague: Mouton, 1975).

33.

Tejeshwar Slngh, "Publishing in India: Crisis and Opportunity," in Publishing in the Third World, 111-30.

51.

34.

Abul Hasan, "Indian Books in the World Market," in Need to Read, 251-76.

It is interesting that the choice of Bahasa Indonesia as the national language of Indonesia was based on similar circumstances. This Malay language was not the mother tongue of any of Indonesia"s main etlmic groups and yet it was widely used in the region as a commercial medium.

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Issues and Trends 27 52.

See 5. B. Bankole, "Indigenous Publishing of Tertiary Level Books in Nigeria: Issues and Problems," A{ricn11 Book Publishing Record 11, no. 4 (1985): 197-200.

53.

See, for example, Henry Chakava, "A Decade of Publishing in Kenya: 1977-1987-0ne Man's Involvement," Africnn Book Publishing Record 14, no. 4 (1988): 235-41.

54.

David Martin, "Zimbabwe Publishing House-the First Two Years," African Book Publishing Record 9, no. 4 (1983): 181-84 and Peter Randall, "Publishing in South Africa: Challenges and Constraints," Africnn Book Publishing Record 9, no. 2-3 (1983): 105-09.

55.

It is certainly true that many Asian countries have not d_eveloped successful publishil_lg industries. Countries like Nepal or Bangladesh, wh1ch have very low per cap1ta incomes, have lagged behind. 5o have Cambodia and Burma, which have seen years of war or severe economic mismanagement. A few Asian countries, for example, Laos or Mongolia, have very small populations and have found the development of indigenous publishing difficult.

56.

It should be noted that even in India, the world's eighth-largest publishing nation, there are significant problems and inequalities. In several of the regional languages, such as Assamese, there is very little publishing taking place while some of the o~er languages such as Bengali and Marathi have made significant progress. English remains entrenched as a major publishing language as well.

57.

Additional seminars were sponsored by Canadian assistance agencies in cooperation with the International Rice Research Institute in the Philippines.

58.

An exception here is India, where textbook P';lblishing at t~e ~Jem~ntary and second~ry levels is in general in the hands of the public sector. Tius situation has had negative implications for private-sector publishers.

59.

The literature on contemporary publishing in Otina is very limited. See Fang Houshu, "A Brief Account of Book Publishing in China," in Publishing in the Third World, 13137.

60.

In India, approximately half of the book titles published are in English-although fewer than 3 percent of the Indian population is literate in English. The bulk of book publishing in Singapore is in English and small segments of publishing in other Asian countries is in English as well.

JOSEPH 'l'UROW

The Organizational Underpinnings of Contemporary Media Conglomerates Synergy and related strategies have become major building blocks of the global mass media system as it moves into the 21st century. This article examines the architecture of that system, with emphasis on the United States. It describes the way that executives are responding to key changes that have af(e,cted the U.S. media system and others during the past couple of decades. Their activities are raising important challenges for members ofthe public as well as for their competitors.

The 1980s formed a decade with dramatic changes for large mass media firms operating in the United States. A few years before the start of the decade, the corporations that ruled the mass media roost followed two basic assumptions that were challenged broadly by decade's end. One of those assumptions was that a firm's overall success could be achieved through the success of its unrelated parts. Conglomerates generally tended to leave the different companies under their umbrellas to follow independent agendas. Different magazines belonging to the same firm, for example, operated independently from one another, gathering and marketing their own advertising and editorial matter. If a magazine or book division of a firm happened to purchase a story that could be fodder for the movie and record divisions of the firms, that was terrific. Corporate activities, however, were geared to increased profitability of the parts, with the idea that they would contribute individually to the growth of the whole. The second assumption guiding mass media firms was that profitability lay in being for Americans and by Americans. This "Americentric" approach to media creation was rooted in a long tradition. From the turn of the 1900s through the mid-1900s, the major media flrms operatingL."l the United States were almost without exception based in the United States and drew their materials from American sources. When they created mass media materials, COMMUNICATION RESEARCH, Vol. 19 No 6, December 1992 682-704 © 1992 Sage Publications, Inc.

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Turow • Organization of Media Conglomerates they aimed almost exclusively at American audiences. Foreign audiences were an afterthought for "subsidiary'' profits, with the belief that they had come, or would come, to accept American tastes. Both of the assumptions about the mass media were widely challenged during the 1980s. Taking their place were conceptions of the media business as a global battlefield, with major competitors based in Europe and Japan as well as in the United States. The U.S. population was still considered key to the success of many major endeavors, particularly in the movie and primetime television industries. Even in these areas, however, non-American audiences became much more than subsidiary concerns. Decades of colonizing international media markets with mainstream American products (Schiller, 1969; Tunstall, 1977) meant that many American popular culture formulas were already accepted widely in many countries. That having been said, the costs of creating Hollywood TV shows and theatrical films in the late 20th century often required producers and their lenders to consider more carefully than before how certain U.S. output would play in particular countries. Whether or not an audiovisual product using a particular formula would succeed in key international "territories" now became an issue that could make or break high-budget undertakings. Executives judged the power of the largest players on this landscape in terms of the breadth and depth of their activities across a variety of mass media industries in a variety of countries. A term they tended to use increasingly to describe the optimal mixture of organizational breadth and depth is synergy. Synergy means the coordination of parts of a company so that the whole actually turns out to be worth more than the sum of its parts acting alone, without helping one another. When the TV production division of the Walt Disney Company promotes the firm's theme parks and they drum up business for the record and video division, which, in turn, promotes the book division, which, in a circular action, abets the TV division's programming, that is synergy. The idea was not new; Disney had used it for decades. During the 1980s, however, synergy seemed to represent media firms' normative response to a tumultuous environment. It guided mergers, dictated acquisitions, justified bigness. The term was so overused that, in the 1990s, media leaders sometimes tried to avoid it. Sometimes, they even played down its importance as a strategy for growth. They pointed out that many companies have not been as successful as Disney at cross-divisional activities. Still, the process continued briskly among the biggest mass media firms in the United States and elsewhere. In fact, synergy has become a hub of a series of related strategies that companies have been using to optimize their

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COMMUNICATION RESEARCH • December 1992 presence across as many media channels as possible. Moreover, synergy's attractiveness to mass media conglomerates has not been limited to the mass media systems of their home countries. To the contrary, firms have used the approach to organize their cross-media activities across national borders. Synergy and related strategies have become major building blocks of the global mass media system as it moves into the 21st century. The following pages examine that architecture, with emphasis on the United States. A basic aim is to show how media executives' interest in cross-media undertakings built around synergy is a response to a number of key changes that have affected the U.S. media system and others during the past couple of decades. Companies are using synergy and other cross-media activities to face, and shape, their future amid these developments. As a result, the strategies are raising important challenges for members· of the public as well as for executives of the mass media system.

Synergy and Media Fragmentation The concern with synergy is the result of a number of developments in the media world that have threatened long-standing ways in which mass media firms have gotten their resources. The most important of these developments is what people who work in the business commonly call the fragmentation of audiovisual mass media. The phrase refers to the splintering of channels during the past two decades to theoretically make each channel's percentage of the audience pie smaller. The basic features of this fragmentation are well known. In 1970, the central elements of the U .S. mass media system in 1970 consisted primarily of the traditional publishing enterprises-newspapers, magazines, books, billboards-together with a few audiovisual industries: theatrical movies, vinyl discs and tapes, broadcast TV, and radio. Watching commercial TV generally meant watching a network affiliate; independent (nonnetwork) stations numbered fewer than 100 (Sterling & Kittross, 1990, p. 633). Fewer than 8% of the nation's homes were wired for cable TV (Sterling & Kittross, 1990, p. 661); VCRs for the home did not exist. Radio still mostly meant listening to AM. Audiocassettes were just beginning to compete with radios in cars. By 1990, FM radio had surpassed AM in listenership and number of stations, with the total number of radio outlets increased by over 50% (Sterling & Kittross, 1990, p. 633). The number of broadcast TV stations had climbed as well; in particular, over 300 independent TV stations existed alongside the network affiliates (Sterling & Kittross, 1990, p. 633). Cable TV

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Turow • Organization of Media Conglomerates had spread to about 60% of the nation's homes, along with channels carried only by cable (Sterling & Kittross, 1990, p. 661). VCRs could be found in over 70% ofU.S. homes, and personal computers-as well as Nintendo-style game computers-were increasingly common among the middle and upper-middle class ("VCR Penetration Reaches All-Time High," 1991, p. 90);

Threatening Long-standing Approaches This increased fragmentation of media channels has threatened long-standing ways in which media frrms have gotten resources and used them efficiently. Most prominently, the increase in audiovisual choices has tended to decrease the audiences for most individual channels as people have taken advantage of the expanded menus. According to market research, the shift in habits has been substantial. Particularly startling has been the weakening of the most widespread distributors of audiovisual entertainment, the commercial television networks. From the earliest commercial TV days of the late 1940s through the mid-1970s, the combined prime-time Nielsen shares of the ABC, CBS, and NBC networks totaled at least 90%. That means that 90% of all those watching television were watching one of the broadcast networks. By the early 1990s, however, the three networks' share had slid to around 65%. The other 35% went to a combination of independent broadcasters and advertiser-supported cable stations, with VCRs also making a showing. Executives at the major networks contested the Nielsen data angrily in the early 1990s (see, e.g., Walley, 1990). Major advertisers and their agencies by-and-large accepted the fmdings, however. For some, in fact, the reported fractionalization was convenient. It meshed with an increased interest in reaching ever-narrower slices of the population with messages tailored specifically for them. In the evolving U.S. media system, they often concluded that some of the new media vehicles, from cable TV to home computers, might be better places to find people who matched their targets than at the TV networks, or even at newspapers or radio stations. This new approach by advertisers caused a ripple effect across the producers in key industries of the U.S. media system. The situation virtually forced production organizations to design their output with an eye toward moving it across mass media boundaries. The broadcast TV networks were deeply involved in the changes. In their roles as clients for, and distributors of, prime-time programs, ABC, CBS, and even leader NBC found that they could not make their money go as far as in decades past. Firms producing comedies and dramas found network executives more reluctant than ever to pay the full cost of creating series or movies for the

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COMMUNICATION RESEARCH • December 1992 privilege of airing each episode or film only a few times. The network people had to insist that because the production firms owned the rights to material, they should cover a fair part of the expenses with the aim of making them up through linking-pin activities-in U.S. syndication, on the world market, or in other ways.

New Windows The new media system was such, however, that even the winners forced producers to move their programs across media boundaries. Ad-supported cable networks were, for example, among the types of frrms that were doing better than previously as clients for, and distributors of, programming. Compared to the early 1970s, they were flush with cash from advertising revenues as well as from cash that cable systems gave them based on the number of subscribers. 'l'hat allowed them to make deals with major production firms for series and made-for-'l'V movies. Still, those revenues did not always represent the full cost of creating the materials, and producers often had to approach cable deals with the notion that the expenditures would have to be made up elsewhere. The same was true for cable networks supported not by ads but by subscription-for example, HBO and Showtime. Producers within and outside those organizations realized that to justify the cost of creating ''network-quality" fare for those channels .they would have to find opportunities to make up costs elsewhere. An executive for the Gannett Corporation put the issue this way as early as 1982: "As audiences become fragmented, the dollars available for programming [on any one channel] will decease, because everyone's share of the audience will be smaller" (quoted in "Corporate Planning," 1982, p. 2). The best solution, he said, was not necessarily to make less expensive programming. It was to evaluate the ability of news and entertainment materials to pay for themselves when moved thro11gh different channels, or windows, of distribution. That approach was already becoming quite standard in the movie industry. When deciding whether or not a mm would make back its cost, planners at the major Hollywood studios were considering more than its ability to pull people into U .S. theaters. They were factoring into their budget estimates of the money that the movie would draw across a variety of other windowsforeign theatrical rentals, videocassettes, pay-cable TV; foreign TV sales, U.S. network TV, local U .S. TV; and basic U .8. cable. The timing of a release from one window to another was planned carefully to maximize the audience at

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The Political Economy of the Media I Turow • Organization of Media Conglomerates each stage and, by extension, the money the distributor could demand. So, for example, the time gap between movement of a film from its first theatrical window to videocassette would have to be long enough that audience would not stay away from theaters with the notion of waiting to rent it but short enough for the target audience to still remember the excitement generated about the film in its initial theatrical release. The increased emphasis on adding distribution windows because of the increased fractionalization of media led many executives to perceive a strong risk. They reasoned that, if competitors could control access to major channels, they could refuse to carry the firm's materials or exact an enormous price for doing so. That could harm the profit-making potential of the firm. On the other side of the coin, taking control over those channels themselves could be richly beneficial. For one thing, they could be sure that the material their firm produced would have at least the opportunity to make its costs back in places they considered appropriate. For another, they could accumulate a great deal of power within the mass media system and still not be subject to restrictions on monopolies that authorities might enforce if they tried to control individual mass media industries. Executives saw the globalization of mass media activities that accelerated during the 1980s as providing yet another incentive for managing many distribution channels. Changes in the international balance of trade, in international banking, and in the value of the dollar, along with increased leisure spending in Europe and parts of Asia, had drawn huge firms from outside the United States (Bertelsmann, News Corp, Maxwell Communications, Hachette, Fininvest) into worldwide competition with American firms (Paramount Communications, General Electric, Time Warner, Disney, Young and Rubicam) over production and distribution of mass media materials. The advertising and market research business took on a more global complexion as well. The international reach of major marketers, the acceptance of the idea of a "global brand," and the growth of ad-sponsored broadcasting in many countries encouraged the formation of ad agency conglomerates (WPP, Saatchi and Saatchi, Eurocom) with the goal of serving worldwide clients through subsidiaries in different countries. To executives and the trade press that addressed them, growth in an era of giant international mass media corporations seemed based on the idea that companies had to have the ability to play off their production materials in a variety of media in a variety of countries. Not having these channels at a firm's disposal meant not being able to accumulate the resources required to grow strongly. That, in turn, seemed to mean not remaining among the top tier of mass media firms in the United States or elsewhere.

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Multimedia Acquisitions Stock brokerage firms, banks, and other firms taking on the investor power role tended to agree. The general merger-and-acquisition fever throughout U.S. business during the 1980s helped fuel public and private enthusiasm for these multimedia acquisitions. Some of the biggest deals were Time, Inc.'s merger with Warner Communications to form Time Warner; the purchase of M GM's library by Ted Turner; and the buyouts by Sony, Matshushita, and News Carp of Columbia Pictures, MCA, and Twentieth Century Fox, respectively. Even these huge deals, however, do not give the flavor of the change that was going on. The reason is that the number 9f holdings alone was not the point. Many large media conglomerates-General Electric, Times-Mirrorhad existed long before the 1980s. The key change during the 1980s was that conglomeration was now seen as a way to link media holdings actively in the interest of greater profits. Power would accrue not just to those who owned vast media holdings but to those who could use them synergistically to play out materials across a gamut of holdings for the most value possible. Consider, for example, the following words from a top executive at the Time Magazines, Inc., subsidiary of Time Warner {Elliman, 1990, p. 17). Taken from a talk to college students about the months leading up to the decision to merge with Warner Communications, the remarks may well indulge in after-the-fact glorification of his firm's leadership. At the same time, the comments do reflect a view common to contemporary media executives about the prerequisites for a successful company in the fractionalized, globalized mass media environment: A media company that intended to compete successfully in this environment would have to be big enough to be heard and big enough to hold consumer attention. It would have to propose products and synergies that only a large, versatile organization could offer. It'd have to be able to move its products throughout the emerging global marketplace and amortize its costs over as many distribution networks as possible. Advertisers would be demanding more speed, responsiveness, flexibility, and teamwork. Time, Inc. was big and strong and successful, but not big enough or strong enough for the challenges we saw on the fast approaching horizon. Long term, we saw the world accommodating perhaps a half-dozen global media companies. And we intended to be one of them. Bigness for bigness sake didn't interest us very much. We certainly didn't . want to be caught up in an old Gulf & Western or ITT type of diversified conglomerate where the core business can get lost along the way. What we wanted was solid vertical integration so we could offer synergies that would bring together magazines, publishing ventures,

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Turow • Organization of Media Conglomerates studios, cable channels, and other activities into a coherent operation. We wanted to be able to offer more than the Murdochs and Maxwells of the world.

Making Synergy Work This view of the requirements of being a world-class competitor explains why synergy has been the guiding activity among mass media executives. To talk about synergy and praise its possibilities is not, however, to make it work as its strategists want it to work. In the 1990s, executives in huge conglomerates and smaller ones have been realizing that synergy brings with it problems as well as possibilities. Perhaps the most obvious difficulty is debt. Most of the giant conglomerates had to borrow tremendous amounts of money in order to carry out their multimedia acquisitions. The Time Warner merger, for example, led to an initial interest bill of $5 million per day. That kind of burden might make getting cash to respond to future opportunities quite difficult. And it poses the danger that top management can become so preoccupied with paying back debt that it loses track of the actual media business of the corporation. Another problem that synergy brings relates to implementing it. After their broadly optimistic statements about the advantages this approach will bring, even after careful strategic planning that leads to multiple acquisitions and mergers, executives have found that getting advantages out oftheir new multimedia enterprise is not as easy as it sounds. One reason is simply that the people who come from different companies, with different approaches, have no experience working together and thinking about projects that can help other parts of the firm as well. Even more of a problem, perhaps, is the difficulty of knowing how far to go with the strategy. It is not clear that synergy can or should be the core strategy for most firms just because a firm like Disney uses it to great advantage. In tackling their conglomerate's future, executives have to ask basic questions both before and after the acquisitions: • Should most of the actions of the firm's divisions be geared to crosslinkages that support the firm as a whole? • Should planners try hard to think up ways in which the firm can create cross-media activities? • Or, should cross-media work be carried out only reactively-that is, only when situations in the environment present clear opportunities for synergy?

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These basic questions have been faced directly by many mass media corporations as the 1990s have unfolded. The answers have come slowly, as executives have learned to relate their different divisions in the service of activities that mass media firms have been engaged in for a long time. It is through challenges posed by advertising, creative rights, and public relations that approaches to synergy have been evolving.

Advertising, Strategic Partnerships, and Synergy One obvious way for a mass media firm to use its holdings synergistically is to encourage advertisers to buy ads across them. A corporation that owns several newspapers might induce national sponsors to buy space across most of its dailies. A company with radio networks and billboards might sell time across both media. A firm with several magazine titles and a number of TV stations might offer that cross-title and cross-media buy. or course, alTering these deals is different from getting advertisers to accept them. To be persuaded, sponsors would have to have a good reason to feel that they will· gel n better den! when working with a multititle or multimedia company than if they approach frrms with one individual outlet. One way that they might be convinced would be charging a lower price for purchasing the package than the ii la carte approach. A multichannel offer would also be attractive if the package that the media firm put together fit the audience profiles that the marketers were targeting. If a company's radio networks and billboards tended mainly to reach nn audience of African-American consumers, for example, that might make the joint offer attractive to certain advertisers. It was not until the 1980s that many media firms began to try to fmd or create synergies among their divisions that could be used to pursue increased advertising revenues. Often, competitive pressures in the environment led executives to look in that direction.

The Case of Magazines Consumer magazines in the 1990s provide a good example. Executives in that industry faced a relatively "soft" advertising market. That was partly a result of a sluggish economy; marketers making less money were placing fewer ads. The magazine ad drop-off was also partly due to a decision by many advertisers to shift. substantial portions of their ad funds to other kinds of marketing activities.

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Turow • Organization of Media Conglomerates The grim situation led magazine executives to try to offer clients more for their money in order to attract a greater share of a shrinking magazine advertising pie. They set up ad packages across different magazines (crosstitle packages) and across different media (cross-media packages) that offered substantial discounts on costs per thousand compared to their own individual title buys as well as those of their competitors. The action that especially set the course toward package discount was an announcement by the Time Magazines, Inc., division of Time Warner that it would be offering to advertisers large discounts if they advertised in a package of the firm's very popular consumer magazines-Time, Fortune, Life, Sports Illustrated, Money, and People. The move shook up the industry. Hearst Corporation, Murdoch Magazines, and the New York Times Company's Magazine Group were among the large conglomerates with substantial magazine holdings that announced internal discount programs (Donaton, 1990, p. S-6). Another result was that executives in firms with only one or two consumer magazines felt quite threatened, especially if their titles competed directly with one or more periodicals in the lineups of the larger competitors. The solution some found was to search out marketing alliances with other, often bigger, firms that could fold the one or two periodicals into a strong package that could offer an attractive discount. Newsweek, the only periodical owned by the Washington Post Company and a direct competitor with Time for ad dollars, is an example of a magazine that felt a great deal of pressure to look for alliances. The Time Magazines, Inc., discount announcement was followed by several weeks of gloom-and-doom talk by ad industry pundits about News week's inability to survive in the wake of its archrival's discount coup. Eventually, Newsweek's executives formed a strategic sales partnership with the huge Times Mirror conglomerate's substantial magazine group to offer discounts to advertisers. The idea seemed to be catching on, within and across mass media. As a writer for the trade magazine Advertising Age noted (Donaton, 1990, p. S-6), the relationships helped both sides. "While the larger companies have been able to increase the number of ad vehicles for advertisers, smaller companies get a boost in credibility and a surge in audience by linking with bigger players."

Strategic Partnerships The last two examples highlight an important feature of the cross-media activities that conglomerates have been carrying out. Although they have

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tried to maximize the in-house synergies that can be achieved, they have gone outside the conglomerate to use the channels of other firms iflinkups can be profitable. The phenomenon is by no means relegated only to magazines. In 1991, for example, Turner Broadcasting System's Cable News Network (CNN) and Gannett's daily USA Thday newspaper began offering advertisers sponsorship of a joint Cable News Network-USA Today weekly college sports poll. Sponsors would be credited both in the print and •rv versions. About the same lime, US News & World Report magazine and NBC's Consumer News and Business Channel on cable TV announced a deal that let advertisers buy space in annual guides published by US News along with CNBC specials based on the guides (McManus & Meyers, 1990). Executives call such joint ventures strategic partnerships. In carrying them out, executives of large conglomerates have often made deals with midsize and small mass media frrms as well as other huge conglomerates. From the standpoint of the giant companies, deals with midsize and small firms often expand the conglomerate's coverage within particular media industries. As for the smaller firms, they have been shoved toward such link ups to stay alive·. Strategic partnerships with the largest frrms are often seen by executives as the best ways to stay a11oat in a tumultuous environment in which a few large companies are dictating the rules of the game within and across mass media industries. Going it alone against them seems near-suicidal. "Linking with bigger players," in fact, has seemed to be even more popular across mass media industries than within them. In the case of advertisersponsored mass media, a good deal of the encouragement to connect big and small mass media firms across industry boundaries has come from large marketers such as General Motors and Kraft General Foods. They want their advertising agencies and the mass media they use to help them maximize the efficiency with which they reach their target consumers. By efficiency, they mean hitting only those people who the marketer has determined are potential buyers for the particular product. Marketers have refined their understanding of such target consumer groups through batteries of market research techniques, including focus groups and data bases. The result is that reaching likely consumers has become a process of understanding their life activities and following them through the course of their day as they turn to different sources for news and entertainment. The chief executive of DDB Needham Worldwide, New York, a major advertising agency, noted (in Teinowitz, 1990, p. 25) that this change has been making his firm's media buyers think of mass media in new ways:

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Turow • Organization of Media Conglomerates We have 12 major clients on our personal media network, tracking prospects by using syndicated and proprietary research. We are no longer thinking media form or media vehicles until we have tracked the target consumer. We no longer think of print versus TV versus radio but, rather, in terms of how can we combine vehicles to which the consumer is extremely loyal in some sensible consumer pattern and also come out that smaller might be better and more protective. Clearly, this approach rewards companies that can help marketers send ads to targeted consumers efficiently across several of their own media channels as well as across channels with which they have established strategic advertising partnerships. Picking up on this trend, the Time Magazines division of Time Warner pioneered a technique of joining computer data bases about its magazines' subscribers to high-speed printing and binding technologies. Using the data bases, the company can single.out for an advertiser likely targets among the subscribers of Time, Sports Illustrated, People, Money, Fortune, and Life. It can then individualize the message of an ad to that subscriber so it can match the subscriber's interests or life-style. Finally, it can bind different individualized ads into the regular issue of the different magazines during the regular process of printing and mailing them. To both Time Warner and interested advertisers, this activity is a good example of taking advantage of the synergies of different subscriber data bases in the service of advertising efficiency.

Synergy Beyond Advertising As the 1990s have unfolded, marketers and mass media executives have

moved their interest in synergy beyond the realm of advertising. They have contended that setting up vehicles for efficient advertising should be only one factor guiding approaches to synergy in mass media corporations. Just as important, they have said, is the need for mass media ftrms to guide their divisions toward serving many broad marketing needs of their clients. The reason behind this broadened approach is a realization by mass media executives that marketers have begun to reevaluate their strategies to encourage sales. Advertising has long been king of the hill when it has come to marketing consumer products. Of secondary note have been various kinds of promotion and direct marketing. Direct marketing involves contacting individual prospects by phone, computer, or mailed catalogs. A promotion is a specific act that calls attention to a ftrm or its products in ways other than advertising. Examples are such

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tactics as skywriting or underwriting sporting events (activities called event marketing), creating contests, giving free gifts (premiums), offering discounts, and even giving salespeople cash incentives to persuade stores to push the products on consumers. Traditionally, companies marketing to the general public treated advertising funds as sepnrnt.e from, and more important than, promotion and direct marketing monies. In recent years, however, marketing executives in many firms have concluded that advertising should not automatically be given higher standing than other ways to reach potential customers (see Teinowitz, 1990, p. 25). One explanation for their changed attitude is the belief that modern data bases about customers allow implementation of promotion and direct marketing efforts in ways that are more precise than advertising on traditional mass media. In addition, some executives support promotion over advertising because they feel promotion holds greater credibility with the consumer. Marketers know that advertising calls attention to the fact that the marketer is trying to manipulate the consumer; people may resent that. Activities such as support of sporting.events, on the other hand, may be evaluated favorably by target customers as indicating the firm's sincere interest in their life-styles. The marketers believe that, although promotions are more subtle than advertising, they can sometimes be more effective in creating good feelings about the marketer that may translate into long-term product purchases. The increased emphasis on promotion and direct marketing, along with the decrease of advertising expenditures in some areas, has been leading executives in mass media conglomerates to work on ways in which they can profit from the trend. They have been asking two questions: How can we find synergies between our media holdings that can meet our firm's needs for promotion and direct marketing? And, how can we find synergies between our media holdings that can encourage marketers outside our firm to approach us with their promotion and direct marketing funds, in addition to their advertising funds? The executives have begun to rmd answers by exploring synergies that can result from two broad types of marketing activities that they carry out: the sale of creative rights and the use of value-added incentives.

Creative Rights and Synergy Creative rights involve the legal control that organizations exercise over characters, titles, and other original materials their personnel have generated in the course of creating mass media materials. The New Kids on the

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Turow • Organization of Media Conglomerates Block recording group owns the rights to its name and image, for example; anyone using it without permission (a license) can be sued. Children's Television Workshop controls the use of Big Bird, the name Sesame Street, and its logo (i.e., the design that expresses the organization's name). Simi~ Iarly, the Dow Jones Company owns the rights to news stories that appear in its Wall Street Journal, whether printed or carried electronically in computer data bases. The licensing of creative rights allows a production flrm to make money from its creations in forms that go beyond their initial purpose (see Carlat, 1990a, 1990b). Executives in flrms paying for the right to use the characters, titles, or logos expect a large benefit in return. They hope that the increased costs they incur for adding the images to their products will be more than made up by the instant recognition and interest the mass media images bring with them. The idea is that, for example, some parents would pay more for a pacffier with Big Bird's picture on it than one with designs that are unconnected to any personalities that they know. Although the sale of creative rights often takes place with mass· media materials that are used by children, adults have by no means been excluded. In the early 1990s, when Cher and Sheena Easton appeared in commercials for Bally's Health and Tennis Clubs, their images from fllms and records were the assets that the advertiser was buying. Such assets can become big business in the adult realm. Think, for example, of publishers that sold film rights to books they published for millions of dollars. Think, too, of the several celebrities who have clothing, perfumes, even spaghetti sauces, named after them. Despite such occasional bonanzas, creative rights were for decades considered to hold minor interest for the profit-making potential of mass media firms. Their relatively minor importance is reflected in the term by which they were called within media industries: subsidiary rights. The word subsidiary· referred as much to the marginal place of these activities within the production firm as to their monetary value. Creative rights activities were typically divorced from the larger strategic concerns of the firm. They involved merely arranging agreements with companies that wanted to use their characters or logos for their benefit. And they often were handled by a division of low status within the firm. Times have changed. In an era of mass media conglomerates, companies have increasingly found that their rights to characters, plots, images, logos, and even news can be used synergistically to fuel lucrative activities throughout the entire firm. Product development teams can concentrate on images that are exploitable in different mass media by different divisions within the

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firm or through strategic alliances with other companies. Here are some examples: • Sony Corporation, which owns both Sony Music (previously CBS Records), Columbia Pictures, and the Columbia House mail order business, has been finding ways to make the three work together. Creative rights have been an important part of executives' thinking in that area. In 1991, for example, Sony signed recording artist Michael Jackson to a feature film that would be produced and released through Sony's Columbia Pictures. At the time, Jackson was a major moneymaker for Sony's CBS Records division. It undoubtedly made sense to Sony's management to try to maximize the cross-media nature of their relationship with Jackson in the interest of both the record division and the corporation as a whole. Columbia noted that other such crossover projects were in the works (Gold, 1990). • Mass media mogul Ted Turner has made linking creative rights from his various holdings a mandatory part of the workofhis executives. To give one example of the firm's approach, in 1991 Turner Publishing and Citadel Press coproduced a book called Kisses as a St. Valentine's Day gift book. The book included 150 pages ofblack-and-white photographs from Turner Entertainment's MGM archive. At the time of its release, 1\trner's 'l'NT cable channel aired a TV special tied to the book and its subject. The strategy was clear: The firm's film library inspired the book, and the firm's cable channel would help promote it. ''Whereas a lot of big corporations talk about synergy," boasted the head of Turner Publishing (in Stevenson, 1991), "at 'I\trner synergy exists routinely." • Knight-Ridder, Incorporated, is best known to many Americans for its 28 daily newspaper holdings, including the Philadelphia Inquirer, the Detroit Free Press, and the Miami Herald. During the 1980s, however, the firm drew on the information-gathering expertise developed by its new divisions to fuel its growth as a vendor of news-related data bases for businesses. Knight-Ridder's Business Information Services Group includes a variety of divisions that can easily draw on each other and on the firm's news operations. Especially notable are Dialog Information Services, the world's largest online and full-text information source; Vu I te:ct, a data base that contains the full text of over 50 newspapers and more than 20 other publications; and Knight-Ridder Financial News, a worldwide, real-time financial news service delivered via computer to major participants in the financial marketplace (see Knight-Ridder, 1990). • Dow Jones Company, owner of the Wall Street Journal, the leading national business newspaper, andBarron's, a business weekly, has also used its expertise in creating business news to enter the information marketplace. In 1980, the ftrm started its Information Services Group to coordinate the computerization and marketing of information that Dow thought it could sell. In 1990, the group merged its electronic libraries with those of Datatimes, a firm owned by Dow Jones and the

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Turow • Organization of Media Conglomerates Oklahoma Publishing Company. As a result, Dow Jones has been selling researchers the right to search electronically through the computerized mea of 640 newspapers, magazines, news services, and fmancial data sources-its own and others (see ''Dow-Datatimes Deal," 1990). In all these examples, creative rights from particular divisions typically benefit other divisions within the conglomerate in addition to making profits on their own. A twist in this pattern that is common among entertainment conglomerates is to promote divisions' activities even further through deals with outside marketers. The Disney Company's movement of its characters across a maze ofboth Disney-owned and non-Disney-owned products is a case in point. As described earlier, Disney's children's book division, video division, store division, and theme park division reinforce each other through extensive crossovers. Yet the company also promotes its own creations by leasing the creative rights for Mickey Mouse, Donald Duck, and other characters to clothing companies, food fums, and other manufacturers. They, in turn, benefit from the cross-media exposures within the Disney conglomerate. Another tactic conglomerates such as Disney have been using to attract marketers to their cross-media promotion synergies is called product placement. That involves charging manufacturers for the use of their products as part of the action in movies. In 1992, for instance, Disney was demanding $20,000 for a visual, $40,000 for a brand-name mention with a visual, and $60,000 for an actor to use the product in one of its movies, Mr. Destiny (see Magiera, 1990). As this example suggests, most product placements are made in movies initially bound for the theaters. Still, manufacturers benefit from a movie conglomerate's synergies with its other divisions, because those movies later move through a number of the conglomerate's divisions, including home video, network television sales, and syndication. Manufacturers that link up with the film in this way often build their own ad campaigns and promotions around their product as it moves through the various media windows. They might even lease creative rights from the media firm to hype their product. Think of the presence of Teenage Mutant Ninja Turtles on Domino's Pizza boxes as a result of the Turtles' eating the food in their first live-action film.

Value-Added Incentives and Synergy Apart from the exploitation of creative rights, executives in some mass media conglomerates have been moving toward a second broad way to find synergies in their holdings. That tack is called a value-added incentive. It means that

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COMMUNICATION RESEARCH • December 1992 a mass media outlet (a specific magazine, a particular radio station) promises a marketer extra inducements if it uses the outlet for advertising. The specific kinds of incentives offered have been evolving during the past several years. As an accepted part of the media business, the activity is rather new. Traditionally, value-added inducements were considered shady and relegated to the margins of mass media industries. For instance, segments of the business periodical press were known for a value-added practice that was not considered legitimate among most media practitioners. A publisher of a trade newspaper might promise an advertiser that if the firm bought ad space in a forthcoming issue, the newspaper would write a favorable article about the firm in the issue after that. Such activities, although not infrequent., were (and generally still are) considered unethical. Since the late 1980s, however, the notion of a value-added incentive has taken on strong legitimacy and new meaning as executives in mass media conglomerates attract advertisers to individual outlets by offering benefits of synergies with other parts of the corporation. Much of this activity has been taking place in magazine divisions. A major reason is economic. In the early 1990s, many magazines were hit hard by declining advertising revenues. One cause was the nation's economic recession, which affected the earnings of companies and lowered the amount they spent on advartising. Another cause was the declining attractiveness to advertisers of several types of periodicals (notably, the m8jor women's magazines) because of declining newsstand sales. A third factor was the movement by advertisers of some funds away from magazines. The cash was used to support other mass media, such as cable TV, as well as promotion and direct marketing work. As the problems deepened, both marketing and magazine execut.ives suggested that the companies responding most creatively to this situation were those that were going beyond their roles of selling space to advertisers in the issues of individual titles. They were working with the marketer to create inserts, publicity materials, point-of-purchase tie-ins to the ads, even videos, that would help tell the marketer's story in ways that would extend the advertising. The activities sometimes encouraged magazine owners to develop mass media expertise beyond their periodicals. Meredith Publications, publisher of Metropolitmt Home, provides a good example. In an attempt to work out a lucrative advertising deal with Kraft Foods, Meredith personnel suggested to Kraft personnel that they work together to create cookbooks and contests that would extend the message of the ads beyond individual issues. Similarly, in structuring a magazine advertising sale with the Sherwin-Williams paint company, Meredith became closely involved in an extensive promotion cam-

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Turow • Organizati on of Media Conglome rates paign for the firm's products. The marketing plan included in-store displays, books, and videos in addition to the magazine ads (Cappo, Danzig, & Donaton, 1990, p. S-36). Another example is a deal that Sports Illustrated magazine announced with Diet Pepsi in 1990. Pepsi agreed to commit to 2 years of advertising in the magazine. In exchange, the magazine created an elaborate consumer promotion for Pepsi that would be highlighted in two midwinter 1991 issues. Called "Right Ones Fantasy Sports Vacation," it gave winners one of seven "fantasy vacations." Diet Pepsi paid for the trips, and Sports Illustrated's event marketing staff took care of all the logistics. As an additional link to Sports Illustrated's image, Pepsi agreed to sponsor a "Super Shape-Up" trilogy of fitness videos that Sports Illustrated was creating for release by its Time Warner home-video parent (Donaton & Winters, 1990).

Putting It All Together Just how "synergistic" such linkups could get in the service of advertising , promotion, and direct marketing can be seen in a Time Warner deal with Chrysler Corporation that was much larger than the Sports Illustrated- Pepsi linkup. When it was announced in 1990, everyone in the marketing business seemed sure that the $40-$50 million contract was the largest of its kind to that point. The agreement, which was to extend for over 2 years, opened the door for the automaker to use all of the media firm's divisions. Creative rights and value-added incentives would be interconnec ted. The theme for Chrysler's 1992 campaign, ''Rediscover America," would be tied subtly to the 500th anniyersary of Christophe r Columbus's frrst voyage to the New World. The connection would be drawn through an elaborate cross-media marketing campaign using 11 advertorial s (long ads with social points of view) inserted in five Time Warner magazines. In addition, the 'l'ime Magazines, Inc., division of Time Warner would create special issues of Fortune, People, and Life in which the automaker would be the only advertiser. Beyond using Time Warner's extensive magazine resources to get its ad messages out in these traditional and non traditional ways, Chrysler also expected to target customers using the magazine division's selective binding and ink-jet printing technologies. As incentives and premiums in this marketing effort, Chrysler would be using products from Time Warner's Warner Bros. Records, Time-Life Books, and Time-Life Videos divisions. Going beyond the Columbus theme, Chrysler also said it would be using other Time Warner divisions to help it reach likely customers. Warner Bros. Television and another Time Warner division,

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COMMUNICATION RESEARCH • December 1992 Lorimar Productions, would develop TV programmi ng for Chrysler to sponsor. Chrysler would place its cars for publicity purposes in Warner Bros. movies. And, to bring the Time Warner expertise directly to the showroom floor, Chrysler would use Time Warner Direct Marketing to aid in local dealers' sales efforts (Saraftn, 1990). People within the advertising industry heralded the deal as signifying the future. A vice president for the Ogilyy & Mather Worldwide ad agency argued that ·~oint marketing efforts with publication s are just another type of non-traditio nal media activity we must get involved in because of the changing media environmen t, the changing society" (Cappo et al., 1990, 8-36-S-37). His counterpar t at the Bozell agency agreed and suggested that mass media firms that took advantage of the synergies possible through cross-media ownerships and strategic partnership s would have distinct advantages . The challenge for mass media execut_ives and marketing executives, he noted, was in finding the most effective synergies. "Integrated communica tions programs," he concluded, "are going to become much more of a factor in the '90s and beyond" (Cappo et al., 1990, p. 8-36).

Challenge s for the Public "Integrated communica tion programs" and other new features of the mass media environmen t raise an important question for society as a whole: How will these developmen ts affect the news, information , and entertainm ent flowing through mainstream media channels as the world moves toward the next century? The answers are not clear yet. Neverthele ss, examining the evolving media system with a critical eye on this question is important if members of the public are to understand the forces that are shaping the way they think about the world and act in it. Three interrelated issues will be raised briefly here as examples of the kinds of concerns that take on new light in view of the contempora ry dynamics of the media system. These issues are conglomera tes' control over the mainstream menus of choice; the changing relationship bet~een marketing, news, and entertainm ent; and the sharing of knowledge about "society."

Conglomerates and Menus of Choice When fragmentati on of mass media because of the spread of cable TV and VCRs began in the 1970s, some observers hoped that the multitude of channels would offer a great number of options for unusual choices that challenge the boundaries of typical news and information offerings. The

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Turow • Organization of Media Conglomerates suggestion to be made here is that this seems not to be the case. To the contrary, the way mass media systems have been developing in the United States, Europe, and Japan, it is likely that menus of choice will not be nearly as diverse as might r1rst seem. The reasons are industrial, political, and economic. A counterforce to fragmentation has developed, and it is conglomeration. · By many accounts, the mainstream mass media channels in the United States and much of the world will be managed in one way or another by a small number of global firms acting to make the most of the synergies among their holdings. Exactly what the consequences of this will be remains to be seen. However, by their actions, Time Warner and other conglomerates have already indicated a number of probable consequences. One has to do with the range of choices that will be available across the most important TV stations, radio stations, newspapers, cable stations, video stores, and bookstores. Increasingly, these channels are becoming extensions of one another. VCR stores extend the reach of theatrical fllms; theatrical films extend the reach · ofbooks; music videos, on TV or on videocassette, extend the reach of compact disc and tape recordings-all in the interest of a conglomerate's synergy. The result is to offer not content diversity but time-shifting capability-that is, the capability to listen, read, or watch something at one time rather than another. This does not mean that a few companies will "lock up" and determine all the choices that face individuals when they watch TV, read books, go to movies, or watch VCRs. In democratic capitalist societies, there will always be room to start up "independent" firms with the aim of being heard. Small companies that go with the typical flow of content and make distribution deals with the conglomerates will make it into the mainstream. On the other hand, f1rms that steadfastly try to challenge the formulas of mainstream mass media will probably find it increasingly difficult to get anywhere near the busiest public outlets.

Links Between Marketing News and Entertainment Marketing needs have always shaped the kinds and amounts of news and entertainment available to different publics. Jf advertisers wanted to sponsor a TV news series, for example, it would be broadcast. If not, the company might not find the resources to air it. Stories have also long circulated about direct influences that marketers have had over the selection and display of particular news items. Powerful advertisers have, for example, occasionally used their power over newspaper publishers to get favorable mention or to exclude items that might harm them. Generally, however, such leverage has been considered disreputable. Over the decades, major mass media compa-

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COMMUNICATION RESEARCH • December 1992 nies have made a public point of not allowing direct pressures from clients to influence the presentation of specific stories. Similarly, journalistic organizations have long touted the creation of newswork as separate and distinct from the creation of entertainment. Both kinds of mass media work involve telling stories that cast up images of society for society. News executives, however, have always insisted that their creative personnel follow rules different from those followed by the creators of entertainment. Newspaper reports, broadcast· documentaries, newsmaker interviews, and evening news spots are expected to stick to the facts in ways that fictional presentntionJ do not. One reason that news organizations have kept a distance from entertainment has been to ensure the public that news holds a credibility regarding "the facts" that neither marketing nor entertainment has. The rise of synergy-oriented conglomerates that carry both news and entertainment divisions under their umbrellas has raised the strong possibility that the long-standing tradition separating news from marketing and entertainment is in danger of breaking down. The mandate of synergy may be altering the norm that newsworkers separate their stories from the stories their advertisers tell. The cross-media deals that firms such as Time Warner have formed with marketers s.uch as Chrysler and PepsiCo seem to ignore a great number of questions about the relationship between sponsorship and editorial matter that, in previous years, would have raised powerful dou.bts in the minds of news professionals about the wisdom of making such connections. How, for example, would Time editors and writers cover a story embarrassing to Chrysler or other automakers during the 2 years in which Chrysler was becoming identified with the newsmagazine and other Time Warner products? More to the point, what kind of credibility would any type of coverage of this sort have for the magazine, when it would be clearly identified with Chrysler? Continuing on the subject of credibility, what is a media observer to think when an entire special issue of Time or Fortune or Sports Illustrated sponsored by one marketer reflects on subjects that are involved intimately with that marketer's products? It may well be that these questions were asked, and satisfactorily answered, by Time Warner and its advertisers. Perhaps they were answered less satisfactorily at Meredith, Hearst, or other magazine f1rms following the same strategy. At any rate, during this period of profound change within the mass media system, readers should demand public answers to these questions. And, recognizing that the news, information, and entertainment organizations are increasingly under the same corporate umbrella, researchers

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Turow • Organization of Media Conglomerates might want to pay attention to an issue that has received scant attention: the extent to which, and the way in which, news organizations cover themselves and the companies they own (see Turow, 1992).

The Sharing of Social Knowledge The dynamics of the contemporary media system raise new questions about the knowledge about society that circulates to various groups in society via the mass media. The activities of media conglomerates incorporate conflicting tendencies with respect to fostering connections and information equity across the multitude of groups that compose the American nation. On the one hand, the emphasis on synergy, creative rights, and "integrated communication" programs means that a core strategy of the media system is to move a broad range of news and entertainment across media boundaries, through as many media and as many populations as feasible. On the other hand, increasing emphasis on "targeted communication," using data bases and narrowcast media, suggests that marketers will approach certain groups differently from how they will other groups. Those that are more attractive to marketers might well be consistently treated to different fare-with quite different worldviews-than groups that are less attractive. Similarly, important social information may travel faster and cheaper to groups that marketers and media rrrms find attractive, compared to those they care less about or do not care about at all. In what directions will these conflicting industrial impulses toward social unification and division lead, and what will be their cultural consequences? How will the growth of data bases about target audiences affect the way that mass media conglomerates create materials? Will the targeting of audiences and the fragmentation of mass media result in separation between the kinds of material that relatively poor and unattractive groups in society have access to, compared to the relatively well off and attractive? If so, what will this increasing "information gap" mean about the different pictures that people from the "preferred" and "unpreferred" parts of society have about each other and the rest of the world? Still more questions can be asked about the way that the American mass media system is developing, or ought to develop. Other questions can be asked about mass media systems that are developing around the world. The challenges that face mass media executives when they search for the most lucrative synergies for their businesses are more than matched by challenges researchers and members of the general public face when they confront the results of these synergies.

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Author's Note: Portions of the research associated with this work were supported by a grant from the University ofPennsylva~a Researc? Fou~da lion. Some oflhe themes are elaborated in my bookMedm Systems m Soc,ety: Understanding Industries, Strategies, and Power (Longman, 1992).

References Cappo, J., Danzig, F., & Donaton, S. (1990, April9). Value-added-the new medium. Advertising Age, pp. S-36-37. Carlat, L. (1990a, May !10). How it really works. Variety, p. 41. Carlat, L. (1990b, May 30). New Kids are a chip off the old block. Variety, p. 42. Corporate planning. (1982). Atari, 2(1), 2-3. Donaton, S. (1990, November 26). Magazines turn to buddy system: Books build synergy, ad pages with creative hook-ups. Advertising Age, p. S-6. Donaton, S., & Winters, P. (1990, April 9). Diet Pepsi teams up with SI. Advertising Age, p. 35. Dow-Datatimes deal. (1990, July 4). New York Times, p. 16. Elliman, D., Jr. (1990, April). Trends, synergy and the Time Warner merger. Talk presented at the Annenberg School for Communication, Philadelphia, PA. . Gold, R. (1990, November 26). Singers add reelin' to their rockin'. \hriety, P· 3. Knight-Ridder. (1990). Knight-Ridder annual report. Miami, FL: Author.. Magi era, M. (1990, December 10). Madison Avenue hits Hollywood.Advertwing Age, p. 24. McManus, J., & Meyers, J. (1990, October 22). TBS-Gannett build ad package. Advertising Age, p. 1. Sarafin, R. (1990, November 19); Chrysler ups ad budget for Time Warner. Advertising Age, p. 16. Schiller, H. (1969). Mass communication and the American empire. New York: Kelly. Sterling, C., & Kittross, J. (1990). Stay tuned: A concise history of American broadcasting. Belmont, CA: Wadsworth. Stevenson, W. (1991, January 21). 'furner and Citadel Press cut a cuddly deal with "kisses." Variety, p. 96. . Teinowitz, I. (1990, November 19). Bigger not always better: Media execs. Advertising Age, p. 25. . . . Tun stall, J. (1977). The media are American. New York: Columbia Umvers1ty Press. Turow, J. (1992). Organizational tensions and journalistic norms: Dilemmas of newswork in the new media system. Paper presented at the International Communication Association annual conference, Miami, FL. VCR penetration reaches all-time high. (1991, February 28). Variety, P·. 9_0. Walley, W. (1990, September 24). Nets force Nielsen showdown. Advertismg Age, p. 3.

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[16] The Externalities Effects of Commercial and Public Broadcasting Edward S. Herman

The balance between commercial and public broadcastin g in the West shifted steadily, and perhaps decisively, in favor of the former from the 1970s into the early 1990s. Public broadcastin g has been "under siege" from commercial interests and conservativ e governmen ts throughout ~his period (Etzioni-Halevy, 1987), with the tempo of attack stepped up m the 1980s. Public broadca§.ting monopolies have been broken in Belgium, France, Italy, Norway, Portugal, Spain, Switzerland , and elsewhere, and commercial broadcaster s have been rapidly enlarging their domains, encroachi!lg on public system advertising , putting public broadcaster s' funding by the stata.JJnder further pressure by reducing their audience shares, and forcing them to alter their programs to compete for audiences. In the United States, public broadcasting, already marg!nalize d, has been subjected to further financial pressures and politicizatio n. The internation alization of communica tions and the mass media has contributed substantial ly to the shift in balance. The enlargemen t of markets in Europe and worldwide, actual and in prospect, has produced an explosion of national and cross-borde r mergers, the integration of production and distribution facilities in a search for economies of scale, and defensive and aggressive maneuverin g for 85

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position and power. Transnatio nal transmissio ns by satellite have brought in commercial programs outside of national control, have put pressure on local public systems, and created a sense ofinevitabi lity of deregulatio n and commercial ization. The conservativ e drift of politics over the past decade or so, which has fueled the deregulatio n process, has also enhanced the political power of commercia l media entrepreneurs and shifted the ideological balance from any public service emphasis to the free market and commercial imperatives . Although many democratic and progressi~ critics of the media have been harsh on public broadcastin g, most of them have looked upon its decline as a distinctly adverse and threatening development. The most common view is that, while public broadcastin g has never realized its potential, it has nevertheles s contributed modestly to a public sphere of debate and critical discourse and has provided information and viewpoints essential to the citizenship role. By contrast, commercial Qro_adcasting is viewed as an entertainm ent vehicle that tends to marginaliz e the public sphere in direct propor1 tion to its increasing dominance anoprofitab ility. In this chapter, after a brief account of the changing balance between commercial and public broadcastin g and the reas·ons for this shift, the main focus is on the economic theory of "externaliti es" and "public goods" and their application to ~ing. It will be seen that theory itself suggests that commercial systems will tend systematically to ignore the public goods aspects of broadcastin g and are likely to produce negative externalitie s. It will be shown that this "market failure" is subsfa.ntial and consequent~!. Furthermor e, we shall see that in a mature commercial system like that of the United States, broadcaster s' power insulates these market failures from serious public debate and makes them virtually uncorrectab le through political processes. Finally, the ext~t and implication s of the internation alization of market systems of broadcastin g will be discussed.

THE DECLINE OF PUBLIC BROADCA STING IN THE WEST Public broadcastin g has been in decline in the West for the past several decades, at different rates and with some interruptio ns in the various states. The pace has been determined in part by the degree of initial grip of public broadcasti ng-its relative importance , the cultural traditions in which it evolved, and legal and institutiona l protections of its status. It has been affected also by the power and

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commitment to dismantle of its commercial rivals and political enemies. An important distinction should be made between the U .S. and other Western experience. Public broadcasting was marginalized early in the United States; with the defeat of an amendment to the Communications Act of 1934 that would have reserved 25% of broadcasting space for educational and nonprofit operations, the triumph of commercial broadcasting was confirmed, and its power was steadily enlarged thereafter. 2 A small place was carved out for educational and other nonprofit broadcasting in the 1950s and after, but federal sponsorship and funding of public broadcasting did not come about till 1967, and one of the functions of public broadcasting was to relieve commercial broadcasting of a public service programming obligation that it did not want and was sloughing off. Even in the small niche reserved for it, public broadcasting has been a steady target of conservative .attack for its excessive preoccupation with public affairs, and was subJected to a further financial crunch and politicization in the Re~gan era. Th~ ~ar~inalized position of public broadcasting in the Umted States IS md1cated by the fact that its total revenue is approximately one-fiftieth of that of the three major networks taken together. 3 With the increasing profitahi I ity and stmngt.h of commercial broadcasting in the United States, and the gradual erosion and then virtual liquidation of political/administrative regulation of broadcasters activities in the 1980s, 4 this country constitutes what we may call a "matur~" co~mercial system, and should display the full flower of ac~omplishments and failings of commercial broadcasting. It is certamly not clear that all other countries will reach this mature state but a num?er of them are moving rapidly in this direction, and th~ U.S. expen~nce shows that cultur!!_l and pol~tical baniers that appe~·:~d forn11dable can be swept aside in a surp1·isingly short time by a umh~ and powerful advertising and broadcasting fratemity (~ee below). Furthermore, the market processes at work on an international scale a~e t~nding to weaken public systems and integrate all open economies mto a global broadcasting regime (see below). In. contrast with the United States, in other countries of the West pubhc br~adcasting was initially a dominant or important part of b:oadcastmg. In a large majority of instances, state broadcasting was given mo~opoly status, with varying degrees of autonomy of the bro.adcastn~g agency and programming inputs from the private sector. Th1s grantmg.ofmonoJl.o~y rights was often done to allow the government and dommant political parties to control or at least contain this powerful new instrument. But in most cases there was also an explicit

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recognition of the public service capabilities of broadcasting-its power to educate, enlighten, and help make better citizens, as well as to entertain-and this was incorporated into charters and ideologies of state-sponsored broadcasting entities. They were legally obligated to serve a varied fare (not just entertainment, or whatever best served the interest of the broadcaster), to reach minorities as well as the largest adult audience, to serve children's special needs, and to provide universal service. These public service objectives have surely not invariably been realized in practice, and the real world performance of public broadcasting has been spotty. In states with authoritarian rule for many years like Spain, Portugal, and Greece, broadcasting was a blatantly propagandistic instrument of the ruling elite group; but even in countries like France, Italy, and Belgium, the inability of the public broadcasting service to free itself from ongoing political intervention and control greatly limited the service capability of public broadcasting.5 In a majority of democratic states, however, public broadcasting has realized its public service potential to at least a modest degree, or better. 6 In cases where public broadcasting has been institutionalized for an extended time period in moderately favorable circumstances, as in Great Britain, its public service performance has been greatly superior to that of broadcasting institutions in a country like the United States with an overwhelmingly dominant commercial sector. 7 The British public service tradition has also profoundly affected commercial broadcasting in that country, where the commercial system was obligated by contract with the state to meet public service responsibilities that U.S. broadcasters have been able to increasingly ignore. The result has been that, in Great Britain, in contrast with the United States, commercial TV has competed with the BBC in public service performance, as well as in attention to large audiences. This condition may be coming to an end, however, following the auctioning off of the commercial TV franchises in "the great TV lottery" o£1990-1991, with the heavy debts of successful bidders, new entrants, and related new instabilities and market pressures making the erosion of public service highly likely. 8 Public broadcasting is still powerful in Western Europe, Canada, and Japan. A declaration of public service broadcasters attending a European Broadcasters Union (EBU) symposium in Brussels in 1989 pointed out that European public service broadcasters reach 475 million viewers, broadcast 155,000 hours of programs per year, 85% of which are produced in Europe (Declaration, 1989, p. 15). But in country after country in Europe public broadcasters are losing market share: sometimes by the selling off of public broadcasting facilities by the

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state (France), more often by the granting of new channels to commercial interests (Spain, Belgium, prospectively in Sweden9 ), or the bypassing of traditional networks by cable or satellite transmission (Holland, Switzerland). In some countries, like Italy, France, and Belgium, public broadcasting has gone quickly from dominance to minority status. In others, like West Germany and Switzerland, it has maintained its dominance, but with a slowly eroding market share. In Great Britain, it has temporarily stabilized its position with approximately half the terrestrial broadcasting market, but it faces threats from satellite-cable systems and, even more importantly, funding shortfalls and the increasing market pressures from the auctioning and restructuring of ITV. With commercial interests providing increasing amounts of "free" broadcasting, it has become harder to justify stable, let alone increasing, license fees for the service with a shrinking (even if still large) audience}° Commercial broadcasting interests and conservative politicians are pleased to defund their competition (for broadcasters) and source of unwanted public discourse (for conservative politicians). The combination has tended to freeze or (more often) reduce in real terms public broadcasting funding. This has made it difficult for public broadcasters to improve their product quality in competition with their commercial rivals, 11 who have used their increasing ad revenues to enhance the stability of their programs. 12 This provides the basis for a cumulative process of public broadcasting decline and commercial broadcasting growth, familiar in the newspaper business. 13 The other funding option for public broadcasting is advertising. In many cases Western European public broadcasting already relied to some extent on advertising, although frequently with a ceiling level and on a bloc basis, not giving the advertiser discretion to choose programs as in the United States. When solicited under competitive conditions, public broadcasting's use of advertising as a funding source quickly erodes its public service aims, as audience size and advertiser interest becomes controlling. Thus, Spanish public. broadcasting, which relies almost exclusively on advertising, approximates commercial broadcasting in its programming (Bustamente, 1989, pp. 72~75), and RAI, the Italian public system, under intense competition with the Berlusconi empire, has also substantially lost its public service character. 14 This is in part the design of conservative political enemies of public broadcasting in the United States and elsewhere-to neutralize this potential public arena by subjecting it to commercial discipline. 15 Public broadcasting requires public subsidies to realize its full benefits. These were obtainable, even if on a frequently niggardly basis, when public broadcasting was the only available broadcasting

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medium and/or when a combination of political interest, limited commercial options, and a public service tradition were joined to sustain public broadcasting. In the 1970s and onward, conditions changed in a manner unfavorable to public broadcasting. The maturation of television made the commercial exploitation of TV audiences by advertisers a magnet to media entrepreneurs , advertisers, and the advertising industry. Technological changes made cable and satellite broadcasting economically feasible, thereby weakening the "scarcity of channels" argument for regulation, and allowing a circumvention of traditional broadcasting channels. This process was hard to oppose or limit in an age of deregulation. These developments contributed to an aura of inevitability and resignation to the commercializa tion of broadcasting. The decline of social democracy and spread of conservative governments in the West was a related and corollary development, important in paving the way for commercial interests and the deliberate weakening and partial dismantling of public broadcasting systems. This was consistent with conservative political agendas as well as deregulation ideologies, as public service broadcasting has long been distrusted by conservatives, who have discovered that "unfree" broadcasting allows more debate and dissent on public issues than the "free" variety.

EXTERNAL EFFECTS OF COMMERCI AL AND PUBLIC BROADCAST ING The economic profession has increasingly recognized that the market can produce satisfactory results only if there are limited externalities associated with the production and consumption of particular products. By definition, externalities are effects that the market does not take into account; they are "externalized" by producers and ~on sumers.16 Sometimes this is done knowingly, because costly actiOns would be required to control or eliminate them. In other cases, they occur because the external effects cannot be controlled or separated out for market assessment. Well-known traditional external effects like factory smoke became institutionaliz ed in an era when little attention was given to such social costs and where means of control were not yet available. As the social costs have become more apparent and pressing, a struggle has ensued between the polluters and society, the former striving to preserve their right to externalize costs, the latter trying to force the polluters to reduce or eliminate the externalized burden or pay for its impact on others. But where such burdens are externalized, economists classify this as a case of"market failure."

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It is important to recognize that externalities may be positive as well as negative in effects. A beautiful flower garden available to neighbors to view and smell offers a positive external effect, just as polluting smoke, or a loud transistor radio on the beach create negative effects. A public scho.ol system yields positive extern~lities of a more complex sort, in that a literate and scientifically educated population will be more productive and creative than one less well trained, with resultant gains to society beyond those of the individuals taken separately. A good school system may also make for a more politically aware populace and a better working democratic order. The inarket does not take into account such indirect and second order benefits. But these have long been recognized as providing a rationale for government subsidy of schools in the face of another potential market failure. Education fits the concept of a "public good," in that it is "endowed with the public interest" by virtue of the significant positive externalities associated with it. This is also one rationale for government subsidization of basic research, where again the private market "fails" if its investment level is lower than it would be if it took account of the benefits to "other firms" and the society as a whole from such fundamental inquiry. 17 In u more refined view of public goods, Lhey are defined a:-; Lho:-;e whose outputs are nonexclusive andnonexhaustive, so that one individual's use does not limit the use of the good by others (Mishan 1982 pp. 146-163). The standard examples are national defense and ~ubli~ parks (when use levels are not high). According to conventional ~conomic reasoning, in the case ofpure public goods the marginal (or Incremental) cost of providing the good to any particular individual is zero, and therefore the price should be zero (Bator, 1958, pp. 351-379). !he .free marke~ will therefore fail in the case of a public good, because It will have no mcentive to produce anything at a zero price. Broadcasting has long been recognized as having public good properties, in both of the scenes just described. It has a capacity for political and technical education and enlightenment comparable to that of formal schooling; that is, there is a potential for the production of large positive externalities, which were recognized in the early euphoric years of radio, and even as late as 1946 in the FCC's statement on The Public Service Responsibilities of Broadcast LicenseeS.16 Broadcast signals also have the second and more formal characteristic of a public good, as one person's reception of a signal do~s not :educe that of others. This means that the optimal price for this serviCe to the recipient of the signal is zero and the market is likely to fail. '

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Before the advent of cable and scrambling devices for broadcast signals, it was not possible to charge recipients of signals for their broadcast benefits. There could be a license imposed for the use of receivers, but this would have to be state imposed and implied a public and noncommercial service. Public broadcasting could also be funded by direct subsidies from the state. As is well known, the commercial route into broadcasting has been advertising, which is attracted by broadcasters in exchange for the advertisers' right to solicit large signal-receiving audiences, who would get the programs plus advertising at no direct charge. The externalities effects of this mode of financing, and of the fundamentally commercial and profit-making incentives of the ownership and control of broadcasting stations, clearly tend to be adverse from a theoretical standpoint. It is true that the signals are offered at a zero price, so that the market failure in the production/sale of public goods arising from positive pricing is not applicable. However, the output offered is one where the most advantageous pricing of advertisements is achieved, not the best output as seen by the recipients of signals. The actual outputs thus fall short of the optimal public goods output (Noli, Peck, & McGowan, 1973, pp. 33-42). The commercial imperative also has profound effects on the composition of broadcasting output. The force of competition and stress on the rate of return on capital, which comes to prevail in a free market, will compel firms to focus with increasing intensity on enlarging audience size and improving its "quality," as these will determine advertising rates. A recent audience decline for NBC's morning "'lbday Show," moving it a full rating point behind ABC's "Good Mor.n~ng America," is reportedly the basis of a $280,000 a day advertl~mg income differential between the shows. 19 Managements that fall to respond to market opportunities of this magnitude will be under pressure from owners and may be ousted by internal processes or takeovers. There will be no room for soft-headed "socially responsible" managers in a mature system, and in the United States the three major networks have in fact been taken over by strictly market-~riven corporate owners. 20 The resultant subordination of all other considerations to the quest for advertiser support has been impressive/1 and as Erik Barnouw has said, "The preemption of the schedule for commercial ends has put lethal pressure on other values and interests" (Barnouw, 1978, p. 95). The output compositional effect of the commercial quest for large audiences and advertiser support should be a steady shift toward noncontroversial materials that will divert, excite, and entertain. Positive externalities have no place in a mature commercial system, except where media firms occasionally program for public service with

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public_ relations benefits in mind. 22 We would therefore expect the evolution .of commercial broadcasting to be characterized by the gradual s~o.ughing off o~ these less profitable areas as profit-making opportumties appear m the niches earlier reserved for "public service." Public broadcasting, by contrast, is likely to give substantial weight to positive externalities. This is because, as described earlier, broadcasting media were from the beginning recognized as potentia~ly valuable tools of education and citizenship training, capable of umversal outreach and service to both mass audiences and minorities and p~blic broa?casting took on early responsibility for realizing thi~ potential. Most Important, public broadcasting has not been driven by the p_rofit motive or funded primarily by advertising, so that its ~un~tw~al rol~ has not been incompatible with its funding source or mstltutwnal lmkage, as the market-linked and profit-oriented commercial systems have been. It should be noted, however, that insofar as public broadcasting is forced to compete with growing commercial systems for a mass audience, with limited funding, there should be an erosion of original purpose and quality (see above). ~r?adcasting also has a potential for generating negative externalities. These may not be easy to pinpoint as they can be matters of spiritual discomfort, insecurity, and the encouragement of bad habits and aggressive behavior. To some extent, they are the negative counterparts of the foregone positive externalities (ignorance insecurity, ~~d isolation versus knowledge and improved ability t~ act and par~I~Ipate). And to soi?e extent they are the negative aspects of the pos1ti~e pleasures received from standard entertainment packages. Sometimes the_ question of sign of the externality is debatable. If spya_dven~ure thr1~lers wi~h strong political overtones integrate the ~lsten~ng-watchmg audience into the spirit of an arms mce and Imperial ~ggres~ion, t~is patriotic togetherness would be regarded as good by tmpenal pohcy makers, but as a dangerous irrational ' mobilization of bias by others. would expect a mature commercial system, with ongoing comP~tl~I~e pressure~, and with a main eye on audience size, to produce stgmf~cant negati~e externalities. Sex and violence have been longstandmg commercial formulas for attracting large audiences, and they can be offered at low cost. 23 Public broadcasting systems are not as audience-size driven, and we would therefore not anticipate the associated negative externalities as a major problem in a mature public broadcasting environment. This analysis of the likely externalities performance of commercial and public broadcasting ignores the question of whether commercial broadcasting might not produce a larger total output than public

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broadcasting and therefore better satisfy consumers' demands. According to this line of thought, public broadcasting is an instrument of elite and minority audience service and tends to neglect programming attractive to mass audiences. Commercial broadcasting is needed to realize the value of broadcasting as an entertainment vehicle and to quickly enlarge the total output of the industry. If this were true, the benefits of public broadcasting's cultivation of outputs with substantial positive externalities and limited generation of negative externalities would be offset by a major deficiency and gap in its outreach. This argument is not easy to evaluate, as public broadcasting has often been designed for educational and political services, and elite and minority audiences, leaving it to commercial broadcasters to provide entertainment. Public broadcasting systems have also often been chronically underfunded, and have simply not been assigned the function of providing popular and mass market service. If we ask what a "mature" public broadcasting system would look like if designed to achieve both entertainment and public interest aims, there doesn't appear to be any reason "in principle" why public broadcasting wouldn't satisfy mass audiences as well as other needs. 24 However, this "principle" assumes that democratic capitalism works in an unbiased fashion, and that large public goods benefits to the majority of ordinary citizens will be readily funded out of tax revenues. Unfortunately, experience under Western governments in recent decades shows that, while they are remarkably open-handed in using tax monies for producing weapons under a system of "military Keynesianism," they are extremely grudging in funding the needs of the civil society. This bias tends to be exacerbated in the area of broadcasting as many of the benefits attainable under public systems are prospective, indirect, and general, and in some cases (like the United States), not having been offered and withdrawn, are not missed. Furthermore, the growing power of commercial broadcasters provides a further and decisive addition to the normal reluctance of western governments to serve nonsecurity state demands and needs.

EMPIRICAL EVIDENCE ON EXTERNALITIE S EFFECTS The empirical evidence on externalities effects generally supports the theoretical analysis just described, but many of the suggested effects are hard to measure and the evidence is necessarily spotty and tentative. Some of the evidence I will summarize briefly is also indirect: the programming characteristics themselves from which

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provide a minimal quantity of straight public affairs programming, so that the informational programming standard could be met by 5% of programming time with "happy hour" local news. The FCC standard of 1976 was fixed so that broadcasters could easily meet it at that time; in other words, it simply accepted the existing programming structure as satisfactory, and gave broadcaslen; room for further deterioration before running into the guidelines. 2" Richard Bunce, using programming data from TV Guide, found that, by 1970, public affairs programming by TV stations had already fallen to 2%. Stations were still able to me~t a 5% quite nicely, as their news programs amounted to 9.2% of programming (Bunce, 1976, p. 27). The situation remained essentially unchanged over the next 18 years: James Donahue, also using the TV Guide as a source of data, found that total public affairs programming in 1988 by commercial broadcasters was 2.2% of program time between 6 A.M. and midnight (Bunce, 1976, p. 7). These levels are. extremely low and far below those provided by public broadcasters in Europe or by com"mercial TV in Great Britain. 29 Bunce pointed out that the shrinkage of public affairs programming to its 2% level took place at a time when the profitability of television was reaching dramatically high levels. By 1970 the profits of major station owners was in the range of 30o/o-50% of revenue, and much more on invested capital. Bunce estimated that, for the period 1960-1972, the ratio of pretax income to depreciated tangible investments for the broadcast networks never fell below 100% a year (Bunce, 1976, pp. 96-98). These staggering profits did not alleviate broadcaster pressure for further profits, because the workings of the market cause profits to be capitalized into higher stock values, which become the basis of calculation of rates of return for both old and new owners. Thus in 1984 the FCC lifted its requirement that broadcasters keep program logs and make them available for public inspection because of the terrible financial "burden" this imposed on broadcasters (FCC, 1984). This action by the FCC was also a logical corollary to the FCC's 1984 decision terminating any programming limits on the broadcasters, based on an expressed confidence and faith that the market would produce any programs the consumer demanded. 30 Experience in the United States also suggests that the maturity of commercial broadcasting brings with it a decline in variety of viewpoints and increased protectiveness of establishment interests. A telling illustration is the handling of the Vietnam war in the United States, where, as Erik Barnouw notes, "The Vietnam escalation of 1965-67 found commercial network television hewing fairly steadily to the administration line. Newscasts often seemed to be pipelines for

effects may be plausibly inferred, but where the effects remain to be proved. I will also focus disproportionately on the U.S. experience, partly on the ground that this is a mature commercial system, so that the dynamics, evolution, and results of commercialization should be most clearly evident there.

Positive Externalities Foregone or Realized In accord with theoretical expectation, commercial incentives have caused commercial broadcasting to strive to capture a mass audience with entertainment programs. Furthermore, neither U.S. nor Western European experience supports the view that proliferating channels via cable and satellite would alter this situation: economic forces have caused ~he smaller ri_va~s of the established networks to offer light entertam~ent fare similar to that of the dominant firms, and frequently With fewer nonentertainment deviations. 25 Public a~fairs. programming. Public affairs programming refers to t~lks, ?Iscusswns, and other forms of extended presentations dealmg with local, national, and international issues. 26 It is distinguished from "news," which is about current affairs, and often does not address issues at all. Public affairs per se represents broadcasting's contribution to a public forum and discussion and debate about issues, and public affairs programming is an important measure of broadcasting performance in an area where it can contribute positive externalities. ~s commercial broadcasting has consolidated its position in the U~1~ed ,states, and ad-supported programs have displaced "sust~nung programs, public affairs programming has declined in quantity and quality. As Dominick and Pearce showed in their 1976 survey of trends in TV programming, "as profit increased, diversity went down," so that by 1974, "three categories-action/adventure, movies, and ~ener~l d~ama-accounted for 81 percent of prime time, sending the diversity mdex to its lowest value ever." What they call "reality programming"-news, public affairs, and interview-talk shows-has "generally declined," displaced by "entertainment" (Dominick & Pearce, 1976, pp. 76-77). . Betwe~n 1976 and 1984, the FCC had a programming guideline that It theoretically applied to broadcasters in evaluating license renewals called the 5-5-10 rule. 27 The rule required that, between 6 A.M. and midn!ght, b_roadcasters offer at least 5% informational programming (public affairs plus news), 5% local programming, and 10% nonentertainment programming. The FCC has never asked broadcasters to

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government rationales and declarations .... Though a grounds well of opposition to the war was building at home and throughout much of the world, network television seemed at pains to insulate viewers from its impact .... Much sponsored entertainment was jingoistic" (Barnouw, 1978, pp. 62-63). The U.S. networks not only made none of the seriously critical documentaries on the war, during the early war years they barred access to outside documentaries. As Barnouw points out "this policy constituted de facto national censorship, though privately operated" (Barnouw, 1978, p. 138). But while the mass protest against the war rarely found any outlets in commercial TV, it "began to find occasional expression in NET programming in such series as Black Journal, NET Journal, The Creative Person, and-explosively- in the film Inside North Vietnam, a British documentarist's report on his 1967 visit to 'the enemy"' (Barnouw, 1978, p. 63). This pattern helps explain why Presidents Johnson and Nixon fought to rein in public broadcasting, with Nixon quite openly seeking to force it to deemphasize public affairs (see Note 15). The commercial systems did this naturally. In depth news presentations reached their pinnacle with Edward R. Murrow's "See It Now" programs in the mid-1950s. There was a resurgence of news documentaries in the early 1960s, in the wake of the quiz scandals of 1959, but subsequently the decline continued, despite occasional notable productions. Sponsors don't like controversy and depth-in entertainment as well as nonfiction. 31 When environmental issues first became of national concern, NBC nevertheless dropped the environmental series "In Which We Live" for want of sponsorship, although the major companies were all busily putting up commercials and other materials on the environment. Their materials, however, reassured, and did not explore the issue in depth and with any balance, as the NBC series did
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neutralized fragment of network television, one that can scarcely rival the formative influence of 'entertainment' and 'commercials"'
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system measure of quality-p rizes for TV shows awarded in major internatio nal competit ions-they show that Britain has done outstandingly well, whereas the United States has done only marginall y better than the distinctly smaller Sweden (p. 353).

THE DEGRADATION AND PLUTOCRATIZATION OF POLITICS It is easy to exaggerat e the quality of political life in the pre-TV era, but the maturing of commerci al TV in the United States has had several significan t negative effects on the political process. First, TV time in the United States must be purchased from the commerci al broadcast ers. This has made the quest for political office extremely expensive, as this powerful communic ations instrume nt has become a campaign imperativ e. Thomas Patterson notes that "it is no coincidence that the 1964 president ial campaign was both the first to use advertise ments heavily and the first in which overall campaign spending skyrocket ed" (Patterson , 1982, pp. 33-34). This has reduced the democrati c character ofU.S. political life by increasing ly limiting the quest and attainme nt of office to the wealthy and those willing to serve the wealthy. Extendin g the franchise increased democrati zation in the United States; the escalating requirem ents of electoral finance in the regime of commerci al broadcast ing has reversed this trend, in the process reducing the diversity of debate and political options. Second, the commerci alization of broadcast ing in the United States has further weakened its democrati c political character by centralizing and nationaliz ing politics, and, as Benjamin notes, delocalizi ng it, "because appeals made in one place or to one group may be immediately communic ated regionally or nationally . Thus the distributi ve politics of particula r appeals to particula r groups can no longer be made by candidate s without their first calculatin g the possible effects on other groups in their electoral coalitions " (Benjamin , 1982, p. 5). The individua l is more isolated, political participat ion tends to be reduced, the idea of collective social action is weakened . Third, the cost and importanc e of TV has put a premium on wellproduced and carefully packaged "spots" that provide effective imagery. Lasting 30 or 60 seconds, these spots are essentiall y advertisements that depend on images, formulas and style. In this format, issues are downgrad ed. Just as programm ing and ads have tended to merge, with public affairs sharply downgrad ed, so are politics and ads merging, with issues carefully evaded and obfuscate d. As Barnouw notes, the U.S. candidate for major political office "no longer plans

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campaign speeches; he plans and produces ' commerci' aIs"' (B arnouw, 1978, p. 76!. . . d TV news coverage of elections is also constricte d m tlme an oriented to photo opportuni ties and entertain ment values (personalities drama horse-raci ng). Frank Mankiewi cz and Joel Swerdlow point 'out that genuine intelligen t discussion is avoided as ."bad television " and, with 1 minute and 15 seconds allotted each cand~date on the eve,ning news (an extra 30 seconds on "in-depth " presentatw ns), issues are ruled out. They are also ruled out by the networks' failure to investigat e and report controvers y. t~at b_ites. Georg_e McGovern's charge in 1972 that the Nixon admimstr atwn was serwusly corru~t was true, but Nixon did not have to confront the charge on TV unttl well after the election (Mankiew icz & Swerdlow, 1979, pp. 104-105).

CHILDREN'S PROGRAMMING Broadcas ting offers a potentiall y major and efficient vehicle for educating and entertain ing children. qhildren, however, are not very importan t buyers of goods, especially small chil~~n, and_ are ther~fore of only moderate interest to advertiser s. The po~I~Ive social benefits ~f quality radio and TV to children are externaht ies, and ?.S. _expeuence demonstr ates that they will be ignored or margmah zed by commercial broadcast ers. . As in the case of public affairs programm ing, t~e U .s . commercial system eventually ghettoized children's programm mg, wtth S~turday and Sunday morning fare that was largely ~artoon e~tertamment. Between 1955 and 1970, weekday programm mg for children on network affiliated TV stations in New York City fe~l from 33 ~o 5 hours (Palmer, 1988, p. 22). Only on Saturday did the children co~tmue to get substanti al time, but not with any new or none?-terta~nment programs. A major. FCC study of children's TV pu~~Ished m _1979 concluded that children are "drastical ly underserv ed (quoted m Palmer, 1988, p. 5). 't . th The abuses on children's programs had reached sueh seven. Ym e 1960s that a number of citizens groups were ~ormed ~o. ftght the commercial system. One, Action for Childr:ns Televisi?n
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children's programs, heavy in volume and pressing sugary products, should be limited, and that the employment of hosts to make sales pitches to children should be curbed. It also suggested that children's programming should be enlarged, should educate and inform, not just entertain, and should not be confined to the schedule's "graveyards." This was, as usual, left to the voluntary actions of the broadcasters. Although the situation did not improve in the interim, on December 22, 1983, the Reagan-era FCC, in a notable decision, finally dealt definitively with the ACT petition of 14 years before, concluding that broadcasters had no responsibility to children. The situation as regards children's programming deteriorated further after 1983; the well-regarded weekday series "Captain Kangaroo" was dropped from CBS's weekly schedule, which terminated all regularly scheduled weekday programs on the commercial networks <Palmer, 1988, p. 24). The most notable feature of the past decade in children's television has been the literal integration of product advertising and programming. According to Peggy Charren, the head of ACT, there are more than 65 series that have been developed to sell children a bill of goods, including Hasbro B:radley's GI Joes, Transformers, Wuzzles, and, My Little Pony; Mattel's He-Man and the Masters of the Universe; She-Ra: Princess of Power; Kenner's Care Bears, etc. She notes that "TV programs based on merchandise-socalled 'program-length commercials'-are a phenomenon unique to children's television." There is no distinction made between programming and advertising, and advertisers "retain editorial control of the shows, making sure that every component of a particular toy-line is included in each episode" (Charren, 1987, p. 9). ACT filed petitions in October 1983 and June 1984 urging the FCC to prohibit programs that are commercials and arrangements whereby stations get kickbacks in profits from the sale of products bearing the names of programs or their characters. These petitions were rejected by the FCC in April 1985. Public broadcasting in the United States has been left with the burden of addressing the weekday broadcasting needs of 40 million children, and any weekend fare of substance. But there is no national policy or regular funding for such programs on public broadcasting channels. They are funded individually and on an ad hoc basis, even when they are of proven excellence. In Japan, where commercial networks are predominant and offer mainly animated cartoons for children, public television is allocated substantial resources for children's programming, and Japanese children "receive both in-school instruction programs, and lighter, often broadly informational and educational programming for at-home viewing" (Palmer, 1988, p. 48).

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In Great Britain, BBC has long attended to children's broadcasting needs with a mix of forms ranging from animated cartoons to news, drama and documentaries. British commercial television is also held to a BBC level of obligation to children's programming by agreement, and schedules the same amount of program time for children as BBC. In 1985, for example, the ITV stations were required to carry each week "(in hours: minutes): 7:25 of children's drama and entertainment; 3:31 of children's informative programs; 2:32 of pre-school education; and 6:55 of school instructional programs" <Palmer, 1988, p. 49). In Holland, youth-children oriented programs increased from 6% of broadcasting time in 1973 to 14% in 1986
NEGATIVE EXTERNALITIES While the failure of commercial broadcasting to produce public affairs, cultural, and children's programs that promise important positive externalities has been subject to only modest study and even less publicity, its exploitation of the audience-enlarging vehicles of sex and violence has aroused important elements of the mainstream and has received greater attention. The aggressive use ofthemes of sex and violence, often in combination, can produce externalities in the form of distorted human and sexual attitudes, insecurity, and reduced ability to function in a social order, and aggressive and violent behavior. TV violence builds audiences. It therefore makes its way onto the screen increasingly under the pressure of commercial imperatives. As Mankiewicz and Swerdlow have pointed out, violent programs "are

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viewed by lots of people," and lots of money is made, so that "when the do-gooders complain about violence, network spokesmen can point to this remunerative cycle and say that they are only 'giving the public what it wants'" (Mankiewicz & Swerdlow, 1979, p. 45J. ·The level of violence produced in the mature U.S. system is impressive. Mankiewicz and Swerdlow contend that, before he or she is 15 years old, an average American child will have witnessed between 11 and 13 thousand acts of violence. And, "If one wishes to see fifty-four acts of violence one can watch all the plays of Shakespeare, or one can watch three evenings (sometimes only two) of prime-time television"
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programs that express their world view? Is TV violence an incitement and stimulus to violence or a catharsis? Despite continuing debate, the overwhelming consensus of experts and studies over several decades, covering a number of countries and supported by a variety of models of behavior and controlled experiments, is that TV violence makes a significant contribution to real world violence by desensitizing, making people insecure and fearful, and habituating, modeling, and sometimes inciting people to violence (Gerbner & Signorielli, 1990; Huesmann & Eron, 1986; Mankiewicz & Swerdlow, 1979; Barlow & Hill, 1985; National Institute of Mental Health, 1982). COMMERCIAL BROADCASTING AND ANTIDEMOCRATIC POWER The threat of a centralized, monolithic, state-controlled broadcasting system is well understood and feared in the West. What is little recognized or understood is the centralizing, ideologically monolithic, and self-protecting properties of an increasingly powerful commercial broadcasting system. State-controlled broadcasting has always been constrained in democratic political systems by the need to accommodate multiparty systems and interests, which tend to produce some degree of autonomy, and make the public system vulnerable to political change. There is always the background threat of the unleashing of commercial competition. Commercial systems are, in principle, subject to the possibility of increasing state control and competition from public broadcasting. But U .S. experience suggests that, once a commercial system is firmly in place, it becomes difficult to challenge, and as its economic power increases so does its ability to keep threats at bay and gradually to remove all obstacles to uncompensated commercial exploitation of the public airwaves. There is competition between members of a commercial system, but it is for large audiences through offering entertainment fare under the constraint of advertisers, and, as has been stressed here, it ignores externalities as a matter of structural necessity and the force of competition. In the United States, dominance of the commercial radio broadcasting networks had been essentially achieved by 1934. Church, labor, civil liberties, educational, and public interest forces were decisively beaten with the passage of the Communications Act of 1934 and defeat of the Wagner-Hatfield amendment, which sought to reserve 25% of broadcast channels to noncommercial operations. Even at that early date, the broadca-sters' resources, influence on strategically placed

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politicians and civil servants, and attempt to identify commercial broadcasting with freedom and democracy were effective. Newspaper opposition was muted and gradually transformed into solidarity with the broadcasters by encouraging newspaper owners to acquire network affiliated stations, and by appeals to the threat of political control over the media. In the end, the bulk of the press supported the broadcasters. The primary manifestation of this support, and of the broadcasters own power to control debate, is that the Wagner-Hatfield amendment and the entire question of how broadcasting should be owned, controlled, and regulated, was simply not discussed. As Robert McChesney notes (McChesney, 1990, p. 41): Given the clear contrast between the political strength and financial wherewithal of the radio lobby and that of the opposition movement [which favored the Wagner-Hatfield amendment], the reformers obviously needed extensive (and preferably sympathetic) print coverage. Unfortunately, what little coverage the press offered was heavily oriented toward presenting the position of the commercial broadcasters. This delighted the radio lobby. Shortly after the 1934 defeat, any organized opposition to commercial broadcasting collapsed, and from that time onward it has been subject to no serious threat of structural change or effective regulation. Regulation of advertising and programming steadily eroded in the face of broadcaster demands, until the final collapse of even nominal standards in the Reagan era. As one illustration or" the power of the industry to fend off virtually any threats, in the liberal environment of 1963 the FCC leadership decided to try to impose a formal restraint on commercial advertising, but only to the extent of making as the regulatory standard the limits suggested by the broadcasters' own trade association. This enraged the industry, which went quickly to work on Congress, and the FCC quickly backed down (Krasnow, Limgley, & Terry, 1982, pp. 194-196). An equally dramatic case occurred in 1977, in the midst of another one of the periodic outbursts of protest at the extent of violence on TV. Congressional committees have regularly gone through ritual hearings on this topic, leading to the conclusion that the industry, while to be congratulated on its progress, needed to do more, voluntarily. In 1977, however, an unusually aggressive and naive House subcommittee actually drafted a report calling for investigation of the structure of the television broadcasting industry, as a necessary step to attacking the violence problem at its source! As George Gerbner describes the sequel (Gerbner, 1984, p. 170):

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When the draft mentioning industry structure was leaked to the networks, all hell broke loose. Members of the subcommittee told me that they had never before been subject to such relentless lobbying and pressure. Campaign contributors were contacted. The report was delayed for months. The subcommittee staffer who wrote the draft was summarily fired. The day before the final vote was to be taken, a new version drafted by a broadcast lobbyist was substituted. It ignored the evidence of the hearings and gutted the report, shifting the source of the problem from network structure to the parents of America. When the network-dictated draft came to a vote, members of the full committee (including thm;e who had never attended hearings) were mobilized, and the watered-down version won by one vote. As a final illustration of the commercial broadcasting industry's power, let me refer once again to the case of children's television. The country claims to revere children, and child abuse is given frequent and indignant attention. But although the erosion of children's programming, and the commercial exploitation of the residual ghettoized programs, occurred as the commercial networks were making record-breaking profits, and although substantial numbers of adults have been angered by this programming, it has taken place without audible outcry. The FCC has been pressed hard to do something about the situation by organized groups like ACT, but the mass media have not allowed this matter to become a serious issue. When, after the 13-year delay in dealing with the ACT petition, the FCC decided in December 1983 that commercial broadcasters had no obligation to serve children, this decision was not even mentioned in the New York Times. In fact, during the years 1979-1989, although many important petitions were submitted by ACT and decisions were made by the FCC that bore significantly on the commercial broadcasters neglect and abuse of children, 36 the New York Times, Washington Post, and Los Angeles Times had neither a front page article nor an editorial on the subject.37 The dominant members of the press, most of them with substantial broadcasting interests of their own, simply refused to make the huge failure of commercial broadcasters in children's programming a serious issue. It is also enlightening to see how the principles of broadcasting responsibility were gradually amended to accommodate broadcaster interests, without discussion or debate. From the time of the Communications Act of 1934, and even earlier, it was accepted even by the broadcasters that their important privilege of rights to public air channels was in exchange for and contingent upon their serving "the public convenience, interest and necessity." In the 1934 hearings, the

self~protective

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National Association of Broadcasters acknowledged that it is the "manifest duty" of the FCC to assure an "adequate public service," which "necessarily includes broadcasting of a considerable proportion of programs devoted to education, religion, labm~ agricultural and similar activities concerned with human betterment.""' The 1946 FCC report stated that the "broadcasters" themselves recognize the importance of public affairs programming (see the quote in Note 18l, and the report asserts that "sustaining programs" are the "balance wheel" whereby "the imbalance of a station's or network's program structure, which might otherwise result from commercial decisions concerning program structure, can be redressed" (FCC, 1946, p. 12l. It even quotes CBS's Frank Stanton to the same effect. The report refers to the sustaining programs as an "irreplaceable" part of broadcasting, and public service performance in the interest of "all substantial groups among the hearing public" as a fundamental standard and test in approving and renewing licenses (FCC, 1946, p. 10). As advertised programs displaced sustaining programs, and the "balance wheel" disappeared, what gave way was any public interest standard. The industry defense was in terms of "free speech" and the Alice-in-Wonderland principle that if the audience watches the public interest is served. 39 But the industry hardly needed a defense: raw power allowed the public interest standard to erode quietly, the issues undiscussed in any open debate, even as regards the enormous abuses and neglect in children's programming.

INTERNATIONALIZATION AND EXTERNALIZATION The last several decades have witnessed the increasing and accelerating integration of broadcasting into a global market. This has occurred through a variety of routes. Among the most important have been the cross border acquisition of interests in and control of program production and rights, cable, and broadcasting facilities; the sale or rental of program stocks (movies, syndicated programs), technology and equipment; and the establishment and operation of satellite transmission facilities.<" The attempt to establish positions in the EEC countries in anticipation of the 1992 unification, and in the rapidly globalizing market as a whole, with both production and distribution facilities has led to a scramble to integrate vertically as well as to establish a cross border presence. These are a function oflechnologicul

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development, market growth, and the opening of economic borders, which have created profit opportunities that media entrepreneurs have hastened to exploit. These developments have tended to increase the strength of commercial broadcasting and reduce that of public systems. Commercial systems have led the way across borders, as they have tried to reach new audiences and spread the overhead costs of domestic programs. The threat posed to public systems by some of these developments have perhaps been exaggerated-cross-border transmissions by satellite, for example, have been a commercial failure thus far 41-but the forces at work are multileveled, and public broadcasting systems are vulnerable. The crossing of borders by satellite and cable has put more pressure on states dominated by public systems to allow commercial broadcasting and to increase advertising on public channels. 42 Some public broadcasters have followed, and joined forces with commercial interests in various joint venture and syndicate operations, in an attempt to maintain cost competitiveness and protect their market shares. The nevv commercial systems in Western Europe have been crassly commercial, with the public service component of their broadcasts at negligible levels and their entertainment mainly low-grade foreign made movies and the like. They engage in what is referred to as cream skimming, trying to capture a segment of the mass audience with minimal cost while assuming no public service responsibilities • whatsoever:1" In terms of the framework used here, the services of the new commercial operations yield no positive externalities, but do produce some negative externalities. And as they skim away some of the audience of public broadcasters, the latter are put under financial pressure, as described earlier, and tend to wither by financial stringency and inability to compete, or seek and obtain commercial funding and transform themselves into commercial broadcasters in outlook and priorities. In the process, the externalities benefits made available by a mature and tolerably independent public broadcasting system erode, and the contributions that broadcasting can make to children, education more broadly, and to the democratic polity diminish. The strength and momentum of the forces of the market in the last decade of the 20th century are formidable. It therefore seems likely that the U.S. pattern of commercial hegemony over broadcasting will be gradually extended over the entire globe, although we may anticipate a strong residual presence of public broadcasting in some countries. In the short term this triumph of the market should contribute

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to more effective management of a "strong state" devoted to pursuing the interests of the business class. Its long-run implications are more obscure.

REFERENCES Bagdikian, B. (1987). The media monopoly. Boston: Beacon Barlow, G., & Hill, A. (1985). Video violence and children. New York: St. Martin's. Barnouw, E. (1978). The sponsor. New York: Oxford. Bator, E (1958). The anatomy of market failure. Quarterly Journal of Economics, 72, 351-379. Baughman, J. (1985). Television's guardians: The FCC and the politics of programming 1958-1967. Knoxville, TN: University of Tennessee Press. Bekkers, W. (1987). The Dutch public broadcasting services in a multi-channel landscape. EBU Review, 38, 32. Benjamin, G. (1982). Television and Election Strategy. In G. Benjarnin (Ed.), The communications revolution in politics. New York: Academy of Political Science. Bernhard, N. (1991). "Ready, willing, able": Network television news and the federal government, 1947-1960. Unpublished doctoral dissertation, University of Pennsylvania. Blumler, J., Bynin, M., & Nossiter, '[ (1986). Broadcasting finance and programme quality: An international review. European Journal of Communication, 1, 343-364. Bonney, B. (1983). Australian broadcasting, professionalism and national reconciliation. Media Culture & Society, 5, 263-274. Britain proposes overhaul of broadcasting system. (1989). Broadcasting, 117, 40. Burgelman, J-C. (1989). Political parties and their impact on public service broadcasting in Belgium. Media Culture & Society, 11, 167-193. Bunce, R. (1976). Television in the corporate interest. New York: Praeger. Burton, J. (1991). Swedes award commercial TV license. Financial Times, p. 2. Bustamente, E. (1989). TV and public service in Spain: a difficult. encounter. Media Culture & Society, 11, 72-75. Cardiff, D. (1983). Time, money and culture: BBC programme finances 1927-1939. Media Culture & Society, 5, 373-393. Carter, B. {1990, February 26). NBC losing money race. New York Times, pp. D-1, D-2. Charren, P. (1987, Spring). TV justice for children. The Connecticut College Alumni Magazine, p. 9. Cole, B., & Oetti11ger, M. (1978). Reluctant regulators. Reading, MA: AddisonWesley. Collins, R. (1989). The language of advantage: Satellite TV in Western Europe. Media Culture & Society, 11, 351-71

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Dominick, J., & Pearce, M. (1976). Trends in network prime-time programming, 1953-74. Journal of Communication, 26, 70-80. Donahue, J. (1989). Shortchanging the viewers: broadcasters neglect of public interest programming. Washington, DC: Essential Information. Elliot, P. (1982). Intellectuals, the 'information society' and the disappearance of the public sphere. Media Culture & Society, 4, 243-253 Etzioni-Halevy, E. (1987!. National broadcasting under siege. 13asingstoke, Hampshire: Macmillan. l''alkenherg, H. 09831. No future? A few thoughts on public broadcasting in lhe Federal Republic of Germany, Spring 1983. Media Culture & Society, 5, 235-45. Federal Communications Commission. (1946). The public service responsibilities of broadcast licensees. Washington, DC: FCC. Federal Communications Commission. (1984). Report and Order. 98 FCC 2d 1106. Gerbner, G. (1984!. Science or ritual dance? A revisionist view of television violence effects research. Journal of Communication, 34, 164-173. Gerbner, G., & Signorielli, N. (1990, January). Violence profile 1967 through 1988-89: enduring patterns. [Mimeo]. Goldman, K. {1989, October 30). Blurred lines: TV network news is making recreation a form of recreation. Wall Street Journal, p. 1. Graham, G. (1989, June 28). Never mind the quality. Financial Times, p. 8. Hayes, T., & Abernathy, W. (1980). Managing our way to economic decline. llarvard Business Review, pp. 67-76. Herman, E., & Chomsky, N. (1988). Manufacturing consent. New York: Pantheon. Hodgson, P. (1989). Public service value-passport to the future. EBU Review, 40, 19. Huesmann, L., & Eron, L. (1986). Television and the aggressive child: A crossnational comparison. Hillsdale, NJ: Erlbaum. . Kahn, A. (1971). The economics of regulation (Vol. 2)., New York: John Wiley. Kleinstuber, H., McQuail, D., & Siune, K. (Eds.). (1986). Electronic media and politics in western Europe. Frankfurt: Campus Verlag. Krasnow, E., Longley, L., & Terry, H. (1982). The politics of broadcast regulation. New York: St. Martin's Press. Landro, L. (1990, April 3). Film satirizing and industry plays to a touchy audience. Wall Street Journal, pp. B-1, B-6. Lipman, J. (1988, August 15). Advertiser-produced TV shows return. Wall Street Journal, p. 17. Lipman, J. (1989, June 16!. Barbara Waiters radio special on abortion shunned by sponsors. Wall Street Journal, p. B-1. Mankiewicz, E, & Swerdlow, J. (1979). Remote control. New York: Ballantine. McChesney, R. (1990l. The battle for the U.S. airwaves, 1928-1935. Journal of Communication, 40, 29-57. Mishan, E. !1983!. What political economy is all about. Cambridge, UK: Cambridge University Press.

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Muller, S. (1990). Logo-the ZDFs news programme for children. EBU Review, . 71, 15-16. Murdock, G., & Golding, P. (1989). Information poverty and political inequality: Citizenship in the age of privatized communications. Journal of Communication, 39, 180-195. National Association of Broadcasters. <1983). Final Report on Local Commercial Stations. NAB Television Programming Study, Appendix B. Wa::;hington, DC: NAB. National I?sti~~te of Mental Health. (1982). Television and behavior: Ten years of sczentzfzc progress and implications for the eighties. Vol. 2: Technical reviews. Washington, DC: U.S. Department of Health and Public Services. Noli, R., Peck M., & McGowan, J. (1973). Economic aspects of television regulation. Washington, DC: llrookings Institution. Palmet; E. (1988). Television & America's children: A crisis of neglect. New York: Oxford University Press. Patterson, T. {1982). Television and Election Strategy. In G. llenjamin !Ed.l, The communications revolution in politics. New York: Academy of Political Science. Pragnell, ~· 0987). Television in Europe: Quality and values in time of' c:han!fe <Media Monograph No. 5). Manchester, UK: European Institute for Media. Rahny, M. 11983). Media and politics in Socialist Fmncc. Media Culture & Hoc:iety, 5, 303-a2o. Sarkkinen, R. ~19~6). Stru.cture of TV programming in Finland (YJe. Rep/No. 34l. Helsmk1: Planmng and Research Dept. Sassoon, D. <1985). Political. and market forces in Italian broadca::;ting. In R. Kuhn <Ed.l, Broadcastzng and politics in Western Europe. London: Frank Cass. Scannell, P. (1989). Public service broadcasting and modern public life. Media Culture & Society, 11, 135-167. Sc~wcter, M. (1989). Children need good television. /WU Reuiew, '10, 22. Sc1tovsky, T. <1971). Welfare and competition. Homewood, IL: Richard D. lrwin. Sepstrup, P. (19~9). Impl.ications of current developments in West European brondcastmg. Medza Culture & Society, 11, 29-54. Snoddy, R. (1991a, July 26-27). The great TV lottery. Financial Times, p. 8. Snoddy, R. <1991b, October 17). Auction to bring shake-up in British commercial TV. Financial Times, p. 9. Snoddy, R. n991c, October 17}. Sharp picture emerges of 'I'V in the HJ90::;. Financial Times, p. 11. Snoddy, R. (1991d, October 18J. UK Commercial Broadca::;ti ng Auction: Thatcher 'mystified' by decision. Financial Times, p. 10. Snoddy, R. n992e, February 8-9). Battle for the soul of ITV. Financial Times ' ~ 7. Siune Tunstall, J. (1986). Great Britain. In H. Kleinssteuber, D. McQuail, & K. <Eds.}, Electronic media and politics in Western Europe. Frankfurt: Campus Verlag.

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Vionnet, M-C. (1990). Save children's television! EBU Review, 41, 19. Waterman, D. (1986). The failure of cultural programming on cable TV: an economic interpretation. Journal of Communication, 36, 92-107. Wirth, M., & Wollert, J. (1978). Public interest programming: FCC standards and station performance. Journalism Quarterly, 55, 554-561. Wirth, M., & Wollert, J. (1982). Deregulation of commercial TV in the USA. Telecommunications Policy, 6, 155-163.

NOTES 1 See IWiott 11982), Bonney 11983), Murdock and Golding, (1989), Barnouw, (19781, pp. 113-152, 179-182), Sepstrup (1989), and Scannell (1989). Scannell believes that the contribution of public broadcasting to the public sphere is more than modest. 2 For a good account of this early history of the consolidation of commercial broadcaster power, see McChesney <1990). 'This is based on·a comparison of the total advertising revenue of the three networks in 1988 with the total revenue of PBS for that year. It may also be noted that public broadcasting's revenue base is more uncertain and volatile than that of commercial broadcasters. From its inception till now it has depended on a combination of foundation grants, government allocations on a year-by-year or at most 3-year basis, and, increasingly, corporate funding. 4 In the Reagan era, the term of the franchises of broadcasters was increased and challenges to renewals were essentially eliminated; controls on advertising and programming, already slight, were also removed; and the Fairness Doctrine, nlso previously fairly nominal in providing a right of reply, was formally terminated. Fbr an analysis and history of the paralysis of the FCC, see Baughman (1985}; see also Cole and Dettinger 11978). "On Belgium, see Burgelman (1989); on France, Raboy (1983); on Italy, Sassoon 0985). r. This would apply to the United States, Great Britain, Japan, West Germany, Holland, Denmark, Norway, Sweden, Finland, Switzerland, Australia, and Canada. 7 See below, under Empirical Evidence of Externalities Performance, for data and citations. " See the excellent series of news articles on this process by Raymond Snoddy in the London Financial Times, including Snoddy (199la, 199lb, 1991c, 1991d, 1992). 9 Early in 1991, the ruling Social Democrats of Sweden agreed to support the introduction of a land-based commercial television station. There were already three private satellite TV channels broadcasting in Sweden. Controlling interest in the new land-based channel was granted in November 1991 to Kinnevik and the Wallenberg investment company Patricia, over the protest of the Swedish Price and Competition Office, which did not like the fact that Kinnevik already owned one of the satellite channels. See Burton !1991). 111 In the United States, also, the introduction of commercial channels devoted to cultural materials formerly the exclusive province of PBS-Arts and Entertainment channel, and Discovery (focusing on nature and science)-has further weakened the case for public subsidies to public broadcasting. " In Belgium, the public stations not only lost their monopoly, but they are not allowed to take advertising, they are required by law to produce certain programs, and their budget was cut. As Vionnet asks: "How do you fix a good meal when your hands have been cut?" (Vionnet, 1990, p. 20).

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'"Patricia Hodgson, head of policy and planning of BBC, pointed out in 1989 that the BBC license fee "brings in at the moment approximate ly two thirds of the cash avai !able to commercial television." What is more, the license fee is linked to the Retail Price Index only till April1991, after which its real value will fall with inflation
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•·• The mnjor successful systems have had to be prodded in some areas to supply popular fare, but in other cases they have been more innovative in popular programming than commercial systems (see Falkenberg, 1983, pp. 236-238!. On the gradual enlargemen t of BBC's agenda, and reasons for its lags and eventual responses, set> CardiiH19H:1, pp. :373-39:11, Tunstall 0986, pp. 110-134). "'' 11. study hy ,Jim Dnnahue of the public affairs programmin g of U.S. stations and nl'twm·ks shows that, in l!lHH, HO'Yr· nf t.hc new Fbx network's affiliated stations faill'd to meet a 5% standard for information programmin g that the FCC applied as a guidcli1H' bt>twecn 1973 and 1984 (when the guideline was abandoned). None of the three major networ.ks' affiliated stations failed to meet this standard in 1988
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a study of network TV news, 1947-1960, Nancy Bernhard (1991) stresses the great effect of sponsorship in constraining news choices. 32 CBS and NBC recently refused to accept advertising for the movie "Crazy People," which mentions and satirizes major advertising firms by name, on the ground of their offensiveness to the named advertisers (Landro, 1990). "" Statement of Gabriel de Broglie, the departing head of the national supervisory organization CNCL, in January 1989, quoted in Graham (1989). 34 On the press treatment of children's TV and other broadcasting matters, see "Commercial Broadcasting and Antidemocratic Power" below. 35 This is an important reason for the surge in cross-border and vertical mergers in the communications business, as the value, and importance to broadcasters of gaining access to, old stocks of movies and TV series, and ongoing production of such programs, have risen sharply. 36 A five-volume FCC report on children's TV, released in October 1979, was never mentioned by the New York Times, nor did it find newsworthy the FCC decision in April 1985 rejecting two ACT petitions calling for the curbing of specific abm;es in the commercialization of children's TV. 37 Only the Christian Science Monitor took this issue seriously enough to editorialize on it-this paper had two editorials on the subject. "" Quoted from an NAB statement submitted to hearings on the Communications Act of 1934, in FCC !1946, p. 10). "" I•'rom Alice-in-Wonderland: "I do," Alice hastily replied: "at lem;t-at least I mean what I say-that's the same thing, you know." "Not the same thing a bit!" said the Hatter. "Why, you might just as well :;ay that 'I see what I eat' is the same as 'I eat what I see'!" "You might just as well say," added the March Hare, "that 'I like what I get' is the same thing as 'I get what I like'!" 40 Murdoch combines under one corporate umbrella broadcasting facilities in two countries (Australia and the United States), major newspapers in three countries, and a satellite broadcasting channel emanating from Great Britain (among other interests). Berlusconi's system encompasses ownership interests in Spain, France, West Germany, and Yugoslavia, as well as in Italy. "This hns been a result, in part, of weak signals and "breaking in" problems, but the language/culture barrier has proven to be more fimniclable than anticipated, and !.he future of such transmissions is uncertain. See Coli ins (1989). ' 2 Domestic media entrepreneurs can argue that commercial broadcasting from abroad is encroaching at home and taking advertising money that should be available to residents; and domestic nonmedia companies resent the fact that advertisers from abroad can now make pitches through TV in their market that they cannot make through domestic TV. These arguments have been pressed in both Denmark and Sweden. See Kleinsteuber (1986, pp. 39, 289). "' 'l'he term cream skimming was developed in U.S. regulatory economics to describe the phenomenon of u~regulated firms coming into profitable regulated mm·ket:; only, reducing their profitability to regulated firms and thus reducing the willingness of regulated firms to serve markets that were unprofitable. 'I'he concept has applicability to unregulated markets as well (Kahn, 1971, pp. 7-11, 221-246l.

Part ill Communications, Ideology and Capitalism

[17] THE OPINION OF THE JOURNALS AND THE OPINION OF THE PEOPLE London, December 25, 1861. CoNTINENTAL po1iLicinns, who imagine that in the London press they possess a t.hermometer for the temper of the English people, inevitably draw false conclusions at the present moment. With the first news of the Trent case the English national pride flared up and the call for war with the United States resounded from almost all sections of society. The London press, on the other hand,

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TOE CIVIL WAR IN TOE lJNITED STATES

affected moderation and even The Times doubted whether a casus belli existed at all. Whence this phenomenon? Palmerston was uncertain whether the Crown lawyers were in a position to contrive any legal pretext for war. For, a week and a half before the arrival of the La Plata at Southampton, agents of the Southern Confederacy from Liverpool had turned to the English Cabinet, denounced the intention of American cruisers to put out from English ports and intercept Messrs. .1.\tiason, Slidell, etc., on the high seas, and demanded the intervention of the English government. In accordance with the opinion of its Crown lawyers, the latter refused the request. Hence, in the beginning, the peaceful and moderate tone of the London press in contrast to the warlike impatience of the people. So soon, however, as the Crown lawyers-the Attorney-General and the Solicitor-General, both themselves members of the Cabinet-had worked out a technical pretext for a quarrel with the United States, the relationship between the people and the press turned into its opposite. The war fever increased in the press in the same measure as the war fever abated in the people. At the present moment a war with America is just as unpopular with all sections of the English people, the friends of cotton and the cabbage-junkers * excepted, as the war-howl in the press is overwhelming. But now, consider the London press! At its head stands The Times, whose chief editor, Bob Lowe, was formerly a demagogue in Australia, where he agitated for separation from England. He is a subordinate member of the Cabinet, a kind of minister for education, and a mere creature of Palmerston. Punch is the court jester of The Times and transforms its sesquipedalia verba ** into

* Krautjunker, a contemptuous term for country squires.-Ed. •• Words of a foot and a half.-Ed.

The Political Economy of the Media I OPINION OF JOlJRNALS AND TOE PEOPLE 125

snappy jokes and spiritless caricatures. A principal editor of Punch was accommodated by Palmerston with a seat on the Board of Health and an annual salary of a thousand pounds sterling. The !Jf orning Post is in part Palmerston's private property. Another part of this singular institution is sold to the French Embassy. The rest belongs to the haute volee * and supplies the most precise reports for court flunkeys and ladies' tailors. Among the English people the .Morning Post is accordingly notorious as the Jenkins (the stock figure for the lackey) of the press. The !Jforning Advertiser is the joint property of the "licensed victuallers," that is, of the public houses, which, besides beer, may also sell spirits. It is, further, the organ of the Anglican bigots and ditto of the sporting characters, that is, of the people who make a business of horse-racing, betting, boxing and the like. The editor of this paper, Mr. Grant, previously employed as a ste?ographer by the newspapers and quite uneducated m a literary sense, has had the honor to get invited to Palmerston's private soirees. Since then he has been enthusiastic for the "truly English minister" whom, on the outbreak of the Russian war, he had denounced as a "Russian agent." It must be added that the pious patrons of this liquor-journal stand under the ruling rod of the Earl of Shaftesbury and that Shaftesbury is Palmerston's son-in-law. Shaftesbury is the pope of the low churchmen, who blend the spiritus sanctus ** with the profane spirit of the honest Advertiser. The !Jforning Chronicle! Quantum rnutatus ab illo! *** For well-nigh half a century the great organ of the Whig Party and the not unfortunate rival of The Times, its star paled after the Whig war. It went through meta-

* High rank.-Ed. ** Holy spirit.-Ed.

***How much changed from that l-Ed.

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morphoses of all sorts, turned itself into a penny paper and sought to live by "sensations," thus, for example, by taking the part of the poisoner, Palmer. It subsequently sold itself to the French Embassy, which, however, soon regretted throwing away its money. It then threw itself into anti-Bonapartism, but with no better success. Finally, it found the long missing buyer in Messrs. Yancey and Mann-the agents of the Southern Confederacy in London. The Daily Telegraph is the private property of a certain Lloyd. iiis paper is stigmatized by the English press itself as Palmerston's mob paper. Besides this function it conducts a chronique scandaleuse.* It is characteristic of this Telegraph that, on the arrival of the news about the Trent, by ordre from above it declared war to be impossible. In the dignity and moderation dictated to it, it seemed so strange to itself that since then it has published half-a-dozen articles about this instance of moderation and dignity displayed by it. As soon, however, as the ordre to change its opinion reached it, the Telegraph now sought to compensate itself for the constraint put upon it by outbawling all its comrades in howling loudly for war. The Globe is the ministerial evening paper which receives official subsidies from all Whig ministeries. The Tory papers, The llf orning Herald and the Evening Standard both belonging to the same boutique,** are governed by a double motive: on the one }1and, hereditary hate for "the revolted English colonies"; on the other hand, a chronic ebb in their finances. They know that a war with America must shatter the present coalition Cabinet and pave the way for a Tory Cabinet. With the Tory Cabinet official subsidies for The Herald and The • Chronicle of scandal.-Ed. ••Shop.-Ed.

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Standard would return. Accordingly, hungry wolves cannot howl louder for prey than these Tory papers for an American war with its ensuing shower of goldl Of the London daily press, The Daily News and The Morning Star are the only papers left that are worth mentioning; both work counter to the trumpeters of war. The Daily News is restricted in its movement by a connection with Lord John Russell; The llforning Star (the organ of Bright and Cobden) is diminished in its influence by its character as a "peace-at-any-price paper." Most of the London weekly papers are mere echoes of the daily press, therefore overwhelmingly warlike. The Observer is in the ministry's pay. The Saturday Review strives for esprit * and believes it has attained it by affecting a cynical elevation above "humanitarian" prejudices. To show "esprit," the corrupt lawyers, parsons and schoolmasters that write this paper have smirked their approbation of the slaveholders since the outbreak of the American Civil War. Naturally, they subsequently blew the war-trumpet with The Times. They are already drawing up plans of campaign against the United States displaying an ignorance which is hair-raising. The. Spectator, The Examiner and, particularly, Macllfillan's .Magazine must be mentioned as more or less respectable exceptions. One sees: On the whole, the London press-with the exception of the cotton organs, the provincial papers · form a commendable contrast-represen ts nothing but Palmerston and again Palmerston. Palmerston wants war; the English people don't want it. Imminent events will show who will conquer in this duel, Palmerston or the people. In any case, he is playing a more dangerous game than Louis Bonaparte at the beginning of 1859.'' Die Presse, December 31, 1861. *Vivacious wit.-Ed.

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Manipulation and Packaged Consciousness 9

[18] Manipulation and the Packaged Consciousness

Five l\1yths 1l1at Structure Content 1. The Myth of Individualism and Personal Choice MANIPULATIO N's GREATEST TRIUMPH, most observable in the United States, is to have taken advantage of the special historical circumstances of Western development to perpetrate as truth a definition of freedom cast in individualistic terms. 111is enables the concept to serve a double function. It protects the ownership of productive private property while simultaneously offering itself as the guardian of the individual's well-being, suggesting, if not insisting, that the latter is unattainable without the existence of the former. Upon this central construct an entire scaffolding of manipulation is erected. \Vhat accounts for the strength of this powerful notion? There is evidence enough to argue that the sovereign individual's rights are a myth, and that society and the individual are inseparable. As Lomax and Berkowitz have written, and many others have observed, "the beginnings of culture [were] rooted in cooperation and communication.'' 1 Yet the basis of freedom as it is perceived in the West is the existence of substantial individual choice. Personal choice has been emphasized as highly desirable and attainable in significant measure. 1l1e origin of this sentiment is not recent. The identification of personal choice \vith hmpan freedom can be seen arising side-by-side with sev8

enteenth-century individualism, both products of the emerging market economy. 2 . • • For several hundred years individual proprietorship, allied with technological improvement, increase~ output and. there~y bestowed great importance on perso~al mdependence I~ the mdustrial and political processes. The VIew that freedom IS a person~l matter and that the individual's rights supersede the groups and p;ovide the basis for social organiza~ion, g.ained credibility with the rise of material rewards and leisure time. Note, however that these conditions were not distributed evenly among all clas;es of \Vestern society and that they did not begin to exist in the rest of the world. The success of a new class of entrepreneurs seemingly confirmed the workability and desirability of the institutional changes. Individual choice and private de:ision-making w~re, at that time functio·nal activities-con structive and useful m the achievem~nt of the higher outputs, increased productiv.e e~ ciency, and soaring profits of the busi~~ss unit. Th.e sohd evidence of economic development and ns111g output 111 Western Europe helped the self-serving claims of individualism,. personal choice, and private accumulation to take root a~d fl~unsh. In the newly settled United States, few restra111ts Impeded the imposition of an individualistic private entr~preneun~l ~y~tem and its accompanying myths Of personal chmce a~1d 111diVI~ual freedom. Both enterprise and myth found a hospitable sett111g. The growth of the former and consolidation of the latter were inevitable. How far the process has been carried is evident t?day in the easy public acceptance of the giant multinational pnvate corporation as an example of individual endeav~r. . For example, Frank Stanton, until recently V1ce Cl:auman of cBs, the most important broadcasting conglomerate 111 the ~a tion, challenges the right of the United Nations t? regulate mternational sate11ite communications, though satellites may soon make it possible to broadcast messages directly in,~o in~ividual homes anywhere in the world. Stanton asserts that the nghts of Americans to speak to whomever they please, when they please,

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10 The Mind Managers are bartered away" [through such regulation]. 3 Stanton is concerned about CBs' rights to communicate with whomever it pleases. The ordinary American citizen has neither the means nor the facilities to communicate internationally in any significant way. Privatism in every sphere of life is considered normal. The American life style, from its most minor detail to its most deeply felt beliefs and practices, reflects an exclusively self-centered outlook, which is in turn an accurate image of the structure of the economy itself. The American dream includes a personal means of transportation, a single-family home, the proprietor-operated business. Such other institutions as a competitive health system are obvious, if not natural, features of the privately organized economy. In this setting, it is to be expected that whatever changes do occur will be effected through individualistic and private organizational means. In the face of the disintegration of urban life, land use remains private. When space communications were developed in the 1960s, offering the potential instrumentation for international social discourse, Comsat, a private corporation with three publicly appointed directors for window dressing, was entrusted with this global responsibility. Though parts of Southern California are practically invisible and smog clouds hang over most American cities, the nation's economy continues to be tied to Detroit production lines and the happy image of the three-car family. Though individual freedom and personal choice are its most powerful mythic defenses, the system of private ownership and production requires and creates additional constructs, along with the techniques to transmit them. These notions either rationalize its existence and promise a great future, or divert attention from its searing inadequacies and conceal the possibilities of new departures for human development. Some of these constructs and techniques are not exclusive to the privatistic industrial order, and can be applied in any social system intent on maintaining its dominion. Other myths, and the means of circulating

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11

them, are closely associated with the specific characteristics of this social system.

2. The Myth of Neutrality For manipulation to be most effective, evidence of its presence should be nonexistent. When the manipulated believe things are the way they are naturally and inevitably, manipulation is successful. In short, manipulation requires a false reality that is a continuous denial of its existence. It is essential, therefore, that people who are manipulated believe in the neutrality of their key social institutions. They must believe that government, the media, education, and science are beyond the clash of conflicting social interests. Government, and the national government in particular, remains the centerpiece of the neutrality myth. This myth presupposes belief in the basic integrity and nonpattisanship of government in general and of its constituent parts-Congress, the judiciary, and the Presidency. Corruption, deceit, and knavery, when they occur from time to time, are seen to be the· result of human weakness. The institutions themselves are beyond reproach. The fundamental soundness of the overall system is assured by the well-designed instrumentalities that comprise the whole. The Presidency, for instance, is beyond the reach of special interests, according to this mythology. The first and most extreme manipulative use of the Presidency, therefore, is to claim the non partisanship of the office, and to seem· to withdraw it from clamorous conflict. In the 1972 elections, the Republican candidate campaigned under the auspices and slogans of the Committee to Re-elect the President, not as the flesh and blood Richard M. Nixon. The chief executive, though the most important, is hut one of many governmental departments that seek to present themselves as neutral agents, embracing no objectives but the general welfare, and serving everyone impar:tially and disinterestedly. For half a century all the media joined in propagating the myth of the FBI as a nonpolitical and highly effective agency of law en-

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12 The Mind Managers forcement. In fact, the Bureau has been used continuously to intimidate and coerce social critics. The mass media, too, are supposed to be neutral. Departures from evenhandedness in news reportage are admitted but, the press assures us, result from human error and cannot be interpreted as flaws in the basically sound institutions of information dissemination. That the media (press, periodicals, radio, and television) are almost without exception business enterprises, receiving their revenues from commercial sales of time or space, seems to create no problems for those who defend the objectivity and integrity of the informational services.4 In the Nixon years the media have increasingly been questioned, but only because they have not tilted far enough toward the right. Science, which more than any other intellectual activity has been integrated into the corporate economy, continues also to insist on its value-free neutrality. Unwilling to consider the implications of the sources of its funding, the directions of its research, the applications of its theories, and the character of the paradigms it creates, science promotes the notion of its insulation from the social forces that affect all other ongoing activities in the nation. '1 'he system of schooling, from the elementary through the university level, is also, according to the manipulators, devoid of deliberate ideological purpose. Stili, the product must reflect the teaching: it is astonishing how large a proportion of the graduates at each stage continue, despite all the ballyhoo about the counterculture, to believe in and observe the competitive ethic of business enterprise. \V"herever one looks in the social sphere, neutrality and objectivity are invoked to describe the functioning of value-laden and purposeful activities which lend support to the prevailing institutional system. Essential to the everyday maintenance of the control system is the carefuliy nurtured myth that no special groups or views have a preponderant influence on the country's important decision-making processes. Conventional economics has long contended that ail agents enter the market more or less equal as buyers and sellers, workers and employers, and take their chances

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in an uncontrolled arena of independent choice-making. Manipulation in market economics is an aberration which everyone abhors and does his best to eliminate, usually by not acknowledging it. Similarly, in the marketplace of ideas, the manipulators insist that there is no ideology that operates as a control mechanism. There is only, they claim, an information-knowledge spectrum, from which the neutral scientist, teacher, government official, or individual picks and chooses the informational bits most useful to the pattern of truth he or she is attempting to construct. Daniel Bell, at the beginning of one of the most spectacular decades of social conflict and manipulative control in the United States' history, published a book proclaiming the "end of ideology."5

3. The Myth of Unchanging Human Nature Human expectations can be the lubricant of social change. When human expectations are low, passivity prevails. There can, of course, be various kinds of images in anyone's mind concerning political, social, economic, and personal realities. The common denominator of all such imagery, however, is the view people have of human nature. \V"hat human nature is seen to he ultimately affects the way human beings behave, not because they must act as they do but because they believe they are expected to act that way. One writer puts it this way: " ... the behavior of men is not independent of the theories of human behavior that men adopt ... what we believe of man affects the behavior of men, for it determines what each expects of the other . . . belief helps shape actuality." 6 It is predictable that in the United States a theory that emphasizes the aggressive side of human behavior anq the unchangeability of human nature would find approval, permeate most work and thought, and be circulated widely by the mass media. Certainly, an economy that is built on and rewards private ownership and individual acquisition, and is subject to the personal and social conflicts these arrangements impose, can he expected to be gratified with an explanation that legitimizes its operative principles. How reassuring to consider these conflictful

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14 The Mind Managers relationships inherent in the human condition rather than imposed by social circumstance! This outlook fits nicely too with the antiideological stance the system projects. It induces a "scientific" and "objective" approach to the human condition, rigorously measuring human microbehavior in all its depravities, ·and for the most part ignoring the broader and less measurable social parameters. Daily TV programming, for example, with its quota of half a dozen murders per hour, is rationalized easily by media controllers as an effort to give the people what they want. Too bad, they shrug, if human nature demands eighteen hours daily of mayhem and slaughter. 1be market for the works of authors who explain human aggressiveness and predatoriness by referring to animal behavior is booming. Well it might! No one can avoid encountering almost daily, directly or indirectly, shockingly antihuman behavior. How do the "crisis-managers" of the market economy account for the very visible tears in the social fabric? Consciousness controllers need not intentionally construct explanations that dull awareness and lessen the pressure for social change. The cultural industry, operating according to ordinary competitive principles, will produce any number of explanatory tl1eories. The information machinery will see to it, strictly as a paying proposition, that people have the "opportunity" to read, see, and hear about the latest theory linking urban crime to the mating behavior of carnivores. Fortune finds it cheering, for example, that some American social scientists are again emphasizing "the intractability of human nature" in their explanations of social phenomena. "The orthodox view of environment as the all-important influence on people's behavior," it reports, "is yielding to a new awareness of the role of hereditary factors: enthusiasm for schemes to reform society by remolding men is giving way to a healthy appreciation of the basic intractability of human nature."7 The net social effects of the thesis that human nature is at fault are further disorientation, total inability to recognize the causes of ma1aise~much less to take any steps to overcome it~ and, of most consequence, continued adherence to the status

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quo. It is, precisely, the denial of what one writer describes as "the human nature of human nature": ... To believe that man's aggressiveness or territoriality is in the nature of the beast is to mistake some men for all men, contemporary society for all possible societies, and, by a remarkable transformation, to justify what is as what needs must be; social repression becomes a response to, rather than a cause of, human violence. Pessimism about man serves to maintain the status quo. It is a luxury for the affluent, a sop to the guilt of the politically inactive, a comfort to those who continue to enjoy the amenities of privilege. Pessimism is too costly for the disenfranchised; they give way to it at tlle price of their salvation . . . men and women must believe that mankind can become fully human in order for our species to attain its lmmanity. Restated, a soberly optimistic view of man's potential (based on recognition of mankind's attainments, but tempered by knowledge of its frailties) is a pre8 condition for social action to make actual that which is possible. It is to prevent social action (and it is immaterial whether the intent is articulated or not) that so much publicity and attention are devoted to every pessimistic appraisal of human potential. If we are doomed forever by our inheritance, there is not much to be done about it. But there is a good reason and a good market for undervaluing human capability. An entrenched social system depends on keeping the popular and, especially, the "enlightened" mind unsure and doubtful about its human prospects. Among the mind manipulators, human nature doesn't change and neither does the world. Freire observes that " ... the oppressors develop a series of methods precluding any presentation of the world as a problem and showing it rather as a fixed entity, as something given~something to which men, as mere spectators, must adapt."9 This does not necessitate ignoring history. On the contrary, endless recitation of what happened in the past accompanies assertions about how much change is occurring under our very noses. But these are invariably physical changes~new means of

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I 6 The Mind Managers tra.nsportation, air conditioning, space rockets, packaged foods. m~nagers dwell on these matters but carefully refrain from considenng changes in social relationships or in the institutional structures that undergird the economy, Every conceivable kind of futuristic device is canvassed and blueprinted. ~et those who will use these wonder items will apparently contmue to be married, raise children in suburban homes, work for private companies, vote for a President in a twoparty system, and pay a large portion of their incomes for defense, law and order, and superhighways. TI1e world, except for some glamorous surface redecorations, will remain as it is· basic relationships wiii not change, because they, like human ~ature, are aiiegedly unchangeable. As for those parts of the world that have undergone ~ar-rea.ching social rearrangements, reports of these transformations, If there are any, emphasize the defects prob~ems, an.d crises, which are seized upon with relish by do: mesbc consciOusness manipulators. If f~vorable. reports do appear, they are "balanced" by negative appraisals wluch .restore the "proper" and familiar perspective. On the rare occaswns when films of Cuba or China, for example appear on d.omestic te.levision screens, a reporter's commentar; carefu.lly ~mdes the VIewer to the "correct" interpretation s of what IS bemg seen. Otherwise, it would be unsettling to the customary ways of thought so diligently cultivated in all our informational channels.

Mm?

4. The Myth of the Absence of Social Conflict Conce~trating on the blemishes of revolutionary societies is but on.e Side-tl~e international side-of mind management' s undertakmgs to veil from the public the realities of domination and exploitation. Consciousness controiiers, in their presentation of the domestic scene, deny absolutely the presence of social conflict. On the face of it, this seems an impossible task. After all, violence is "as American as apple pie." Not only in fact but in fantasy: in films, .on TV, and over the radio, the daily quota of violent scenanos offered the public is staggering. How is this carnival of

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conflict reconcilable with the media managers' intent to present an image of social harmony? The contradiction is easily resolved. As presented by the national message-making apparatus, conflict is almost always an individual matter, in its manifestations and in its origin. The sodal roots of conflict just do not exist for the cultural-informational managers. True, there are "good guys" and "bad guys," but, except for such ritualized situations as westerns, which are recognized as scenarios of the past, role identification is divorced from significant social categories. Black brown yeilow red and other ethnic Americans have ' ' ' manufactured ' always fared poorly in the cultural imagery. Sti11, these are minorities which all segments of the white population have exploited in varying degrees. As for the great social division in the nation, between worker and owner, with rare exceptions it has been left unexamined. Attention is diverted elsewhere-ge nerally toward the problems of the upward-striving middle segment of the population, that category with which everyone is supposed to identify. An unwillingness to recognize and explain the deepest conflict situation in the social order is no recent development in the performance of the cultural-informational apparatus. It has been standard operating procedure from the beginning. Authentic cultural creation that recognizes this reality is rarely encountered in the mass of material that flows through the national informational circuitry. In fact, the banality of most programming, especially that which concerns momentous social events, is attributable to the media's institutional inability to accept and identify the bases of social conflict. It is not an oversight, nor is it an indication of creative ineptitude. It is the result of an intentional policy which most cultural controllers accept without reluctance. Elite control requires omission or distortion of social reality. Honest examination and discussion of social conflict can only deepen and intensify resistance to social inequity. Economically powerful groups and companies quickly get edgy when attention is called to exploitative practices in which they are engaged. Variety's television editor, Les Brown, described such an incident. Coca-Cola Food Company and the Florida Fruit and Vegetable

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18 The Mind Managers Association reacted sharply to a TV documentary, "Migrant," which centered on migrant fruit pickers in Florida. Brown wrote that "the miracle of Migrant was that it was televised at all." Warnings were sent to NBC not to show the program because it was "biased." Cuts in the film were demanded, and at least one was made. Finally, after the showing, "Coca-Cola shifted all its network billings to CBS and ABc." 10 On a strictly commercial level, the presentation of social issues creates uneasiness in mass audiences, or so the audience researchers believe. To be safe, to hold onto as large a public as possible, sponsors are always eager to eliminate potentially "controversial" program material. The entertainments and cultural products that have been most successful in the United States, those that have received the wannest support and publicity from the communications system, are invariably movies, TV programs, books, and mass entertainments (i.e., Disneyland) which may offe·r more than a fair quota of violence but never take up social conflict. As Freire writes, " ... concepts such as unity, organization and struggle are immediately lahcled as dangerous. In fact, of course, these concepts are dangerous-to the oppressors-for their realization is necessary to actions of liberation." 11 'Vhen, in the late 1960s, social conflict erupted and protests against the Vietnamese war and demonstrations for social change became almost a daily occurrence, the communications system was briefly confounded. It recovered its poise quickly, and before the end of the decade a flood of "youth" movies, and films with "black" scenarios \vere rushed onto the nation's screens. "Shaft," "Super-Fly," "Black Gunn," and "Hit Man," termed "Modern Nigger-Toys" by Imamu Amiri Baraka, are good business. They fulfill Jim Brown's injunction to black film-makers: "The one approach that will work is to approach movies as an industry, as a business. Black people must stop crying 'Black' and start crying 'Business.' " 12 Such cultural items, it need hardly be said, offer little illumination of root causes but make up for their omission with plenty of surface action,

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5. The Myth of Media Pluralism Personal choice exercised in an environment of cultural-informational diversity is the image, circulated worldwide, of the condition of life in America. This view is also internalized in the belief structure of a large majority of Americans, which ma.kes them particularly susceptible to thoroughgoing manipulation. It is, therefore, one of the central myths upon which mind management flourishes. Choice and diversity, though ~eparate concepts, are in fact inseparable; choice is unattainable in any real sense without diversity. If real options are nonexistent, choosing is either meaningless or manipulative. It is manipulative when accompanied by the illusion that the choice is meaningful. Though it cannot be verified, the odds are that the illusion of informational choice is more pervasive in the United States than anywhere else in the world. The illusion is sustained by a willingness, deliberately maintained by information controllers, to ·mistake abundance of media for diversity of content. It is easy to believe that a nation that has 6,700 commercial radio stations, more than 700 commercial TV stations, 1,500 daily newspapers, hundreds of periodicals, a film industry that produces a couple of hundred new features a year, and a billion-dollar private bookpublishing industry provides a rich variety of information and entertainment to its people. The fact of the matter is that, except for a rather small and highly selective segment of the population who know what they are looking for and can therefore take advantage of the massive communications flow, most Americans are basically, though unconsciously, trapped in what amounts to a no-choice informational bind. Variety of opinion on foreign and domestic news or, for that matter, local community business, hardly exists in the media. This results essentially from the inherent identity of interests, material and ideological, of property-holders (in this case, the private owners of the communications media), and from the monopolistic character of the communications industry in general. The limiting effects of monopoly are in need of no explanation,

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20 The Mind Managers and communications monopolies restrict informational choice wherever they operate. TI1ey offer one version of reality-their own. In this category fall most of the· nation's newspapers, magazines, and films, \;vhich are produced by national or regional communications conglomerates. TI1e number of American cities in which competing newspapers circulate has shrunk to a handful. Vv'hilc there is a competition of sorts for audiences among the three major TV networks, two conditions determine the limits of the variety presented. Though each network struggles gamely to attract as large an audience as possible, it imitates its two rivals in program format and content. If ABC is successful with a western serial, ens and NBC will in all likelihood "compete" with "shoot-'em-ups" in the same time slot. Besides, each of the three national networks is part of, or is itself, an enormous communications business, with the drives and motivations of any other profit-seeking enterprise. TI1is means that diversity in the informational-entertainment sector exists only in the sense that there are a number of superficially different versions of the main categories of program. For example, there are several talk shows on late-night TV; there may be half a dozen private-eye, western, or law-and-order TV serials to "choose from" in prime time; there are three network news commentators with different personalities who offer essentially identical information. One can switch the radio dial and get round-the-clock news from one or, at most, two news services; or one can hear Top 40 popular songs played by "competing" disc jockeys. Though no single program, performer, commentator,· or informational bit is necessarily identical to its competitors, there is no significant qualitative difference. Just as a supermarket offers six identical soaps in different colors and a drugstore sells a variety of brands of aspirin at different prices, disc jockeys play the same records between personalized advertisements for different commodities. The media mix varies in abundance from city to city, and from urban to rural communities. The major metropolitan centcrs may have half a dozen TV channels, thirty or forty radio stations, two or three newspapers, and dozens of movie houses. Less

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urbanized communities will ordinarily have far fewer informational-entertainment facilities. The greater the number of communications sources, obviously, the larger the number of informational messages and stimuli. But whether richly or poorly supplied, the result is basically the same. The entertainment, the news, the information, and the messages are selected from the same informational universe by "gatekeepers" motivated by essentially inescapable commercial imperatives. Style and metaphor may vary, but not the essence. Yet it is this condition of communicational pluralism, empty as it is of real diversity, which affords great strength to the prevailing system of consciousness-packaging. The multich_a~I~el communications flow creates confidence in, and lends credibility to the notion of free informational choice. Meanwhile, its main ' effect is to provide continuous reinforcement of the status quo. Similar stimuli, emanating from apparently diverse sources, envelop the listener/viewer/reader in a message/image environment that ordinarily seems uncontrolled, relatively free, and quite natural. How could it be otherwise with such an a~un dance of programs and transmitters? Corporate profit-seekmg, the main objective of conglomeratized communications, however real and ultimately determining, is an invisible abstraction to the consumers of the cultural images. And one thing is certain: the media do not call their audiences' attention to its existence or its mode of operation. Writing in Scientific American, George Gerbner has observed that "the real question is not whether the organs of mass communication are free but rather: by whom, how, for what purposes and with what consequences are the inevitable controls exercised?" 13 Looking behind the fa~ade of choice, the television editor of Variety addressed himself to a couple of these fundamental questions: One of the myths about American television is that it operates as a cultural democracy, wholly responsible to the will of the viewing majority in terms of the programs that survive or fade. More

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22 The Mind Managers aptly, in tl1e area of entertainment mainly, it is a cultural oligarchy, ruled by a consensus of the advertisiug community. As it llappens, television's largest advertisers-tile manufacturers of foodstufls, drugs, beverages, household products, automobiles, cosmetics, and, until 1971, cigarettes, among others-l1ave from the first desired great circulation among the middle classes, so that the density of viewers has become the most important criterion in the evaluation of programs. Tllis emphasis on the popularity of shows has made television appear to be democratic in its principles of program selection. In truth, programs of great popularity go oH tl1e air, without regard for the viewers' bereavement, if tl1e kinds of people it readies are not attractive to advertisers. 14

TI1e fundamental similarity of the informational material and cultural messages that each of the mass media independently transmits makes it necessary to view the communications system as a totality. The media are mutually and continuously reinforcing. Since they operate according to commercial rules, rely on advertising, and are tied tightly to the corporate economy, both in their own structure and in their relationships with sponsors, the media constitute an industry, not an aggregation of independent, freewheeling informational entrepreneurs, each offering a highly individualistic product. By need and by design, the images and messages they purvey, are, with few exceptions, constructed to achieve similar objectives, which are, simply put, profitability and the affirmation and maintenance of the privateownership consumer society. Consequently, research directed at discovering the impact of a single TV program or movie, or even an entire category of stimuli, such as "violence on TV," can often be fruitless. 'Vho can justifiably claim that TV violence is inducing delinquent juvenile behavior when violence is endemic to all mass communications channels? 'Vho can suggest that any single category of programming is producing male chauvinist or racist behavior when stimuli and imagery carrying such sentiments flow unceasingly through all the channels of transmission? It is generally agreed that television is the most powerful

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medium; certainly its influence as a purveyor of the system's values cannot be overstated. All the same, television, no matter how powerful, itself depends on the absence of dissonant stimuli in the other media. Each of the informational channels makes its unique contribution, but the result is the same-the consolidation of the status quo. The use of repetition and reinforcement in all the media is sometimes admitted in curious, backhanded ways. For example, one of the nation's most influential weekly publications, TV Guide (which is examined in some detail in Chapter Four), offers some instructive insights while complaining bitterly about what it terms the negative images of the United States appearing on Western European home screens. In an article entitled "Through A Glass-very darkly," Robert Musel writes: In Monaco earlier this year [1971], I talked to Frank Shakespeare, head of the U.S. Information Agency, about the European view of the United States and the part played in it by "frames of reference." This simply means that an item about America doesn't necessarily give the same impression to a European that it does to an American. From his birth the American absorbs, consciously and unconsciously, a continuous Bow of information about llis country, and its people, and this is "the frame of reference" which slwuld enable him to evaluate, say, an opportunist radical crying woe about tl1e homeland. The European does not l1ave this background. He sees only a well-known American writer or public figure or film star probably mourning the alleged twilight of democracy in the U.S. And he finds it convincing.15 What the writer is telling us, obliquely, is that most Americans have a reliable "frame of reference," organized "consciously and unconsciously" by communications sources such as TV Guide, among hundreds of others. So fortified, the average American \Vill accept information which affirms the COnSumer SOCiety and reject material which views it critically. ~en an American has been properly "prepared," he or she is relatively invulnerable to dissonant messages, however accurate they may be. 16 No doubt

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24 The Mind Managers the "frame of reference" would be less effective if communications were in fact pluralistic, as they claim to be, and their messages actually diverse. But with multimedia reinforcement achieved through numerous but only superficially differing in.formational means, most people's consciousness is neatly packaged from infancy. TI1e myths we have been describing make up the content of the manipulative system. Let us consider briefly the form of that system.

Two Techniques That Shape Consciousness 1. Fragmentation as a Form of Communication Myths are used to dominate people. When they are inserted unobtrusively into popular consciousness, as they are by the cultural-informational apparatus, their strength is great because most individuals remain unaware that they have been manipulated. The process of control is made still more effective by the special form in which the myth is transmitted. The technique of transmission can in itself add an extra dimension to the manipulative process. What we find, in fact, is that the form of the communication, as developed in market economies, and in the United States in particular, is an actual embodiment of consciousness control. This is most readily observed in the technique of information dissemination, used pervasively in America, which we shall term fragmentation. Employing a different terminology, Freire observes, "One of the characteristics of oppressive cultural action which is almost never perceived by the dedicated but naive professionals who are involved is the emphasis on a focaliz.ed view of problems rather than on seeing them as dimensions of a totality .'' 17 Fragmentation, or focalization, is the dominant-indeed, the exclusive-format for information and news distribution in North America. Radio and television news is characterized by the machine-gun-like recitation of numerous unrelated items. News-

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papers are multipaged assemblages of materials set down almost randomly, or in keeping with arcane rules of journalism. Magazines deliberately break up articles, running the bulk of the text in the back of the issue, so that readers must turn several pages of advertising copy to continue reading. Radio and television programs are incessantly interrupted to provide commercial breaks. The commercial has become so deeply internalized in American viewing/listening life that children's programs, which, it is claimed, are specially designed for educational objectives, utilize the rapid-paced, interrupted pattern of commercial TV though there is no solid evidence that children have short attention spans and need continuous breaks.18 In fact, it may be that the gradual expansion of the attention span is a controlling factor in the development of children's intelligence. All the same, Sesame Street, the widely acclaimed program for youngsters, is in its delivery style indistinguishable from the mind-jarring adult commercial review shows upon which it must base its format or lose its audience of children already conditioned by commercial programs. Fragmentation in information delivery is intensified by the needs of the consumer economy to fill all communications space with commercial messages. Exhortations to buy assail everyone from every possible direction. Subways, higlnvays, the airwaves, the mail, and the sky itself (sky-writing), are vehicles for advertising's unrelenting offensives. TI1e total indifference with which advertising treats any political or social event, insisting on intruding no matter what else is being presented, reduces all social phenomena to bizarre and meaningless happenings. Advertising, therefore, in addition to its already recognized functions of selling goods, fostering new consumer wants, and glamorizing the system, provides still another invaluable service to the corporate economy. Its intrusion into every informational and recreational channel reduces the already minimal capability of audiences to gain a sense of the totality of the event, issue, or subject being presented. It would be a mistake, hmvever, to believe that without advertising, or with a reduction in advertising, events would receive

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26 The Mind Managers the holistic treatment that is required for understanding the complexities of modern social existence. Advertising, in seeking benefits for its sponsors~ is serendipitous to the system in that its utilization heightens fragmentation. Yet it is utterly naive to imagine that the informational machinery, the system's most vital lever of domination, would deliberately reveal how domination operates. Consider, for example, the make-up of any ordinary TV or radio news program, or the first page of any major daily newspaper. 111e feature common to each is the complete heterogeneity of the material and the absolute denial of the relatedness of the social phenomena reported. Talk shows, which proliferate in the broadcasting media, are perfect models of fragmentation as a format. TI1e occasional insertion of a controversial subject or individual in a multi-item program totally defuses, as well as trivializes, controversy. 'iVhatever is said is swallowed up in subsequent commercials, gags, bosoms, and gossip. Yet the matter doesn't end there. Programs of this nature are extolled as evidence of the system's freewheeling tolerance. The media and their controllers boast of the openness of the communications system that permits such critical material to be aired to the nation. Mass audiences accept this argument and are persuaded that they have access to a free flow of opinion. One of the methods of science that is validly transferable to human affairs is the ecological imperative of recognizing interrelatedness. When the totality of a social issue is deliberately evaded, and random bits pertaining to it are offered as "infonnation," the results are guaranteed: at best, incomprehension; ignorance, apathy, and indifference for the most part. The mass media are by no means alone in accentuating fragmentation. The entire cultural-educational sphere encourages and promotes atomization, specialization, and microscopic compartmentalization. A university course catalogue listing departmental offerings in the social sciences reveals the arbitrary separations enforced in the university learning process. Each discipline insists on its own purity, and the models most admired in each field are those that exclude the untidy effects of interac-

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tion with other disciplines. Economics is for economists; politics is for political scientists. Though the two are inseparable in the world of reality, academically their relationship is disavowed or disregarded. 'i\Then the Secretary of Commerce went to Moscow in the summer of 1972 to try to negotiate a major trade agreement with the Russians, the negotiations were stalled because the United States wanted the Russians, as a prior condition to the agreement, to bring pressure on the North Vietnamese to stop fighting. As Secretary of Commerce Peter G. Peterson admitted, "There is a relationship between economics and politics.'' 19 Try to find such connections in school economics texts that discuss trade, economic aid, development, and productivity. An additional dimension of fragmentation is achieved when the informational system avails itself of the new communications technology. TI1e flow of disconnected information is speeded up and, with some justification, complaints about "information overload" increase. Actually, there is no excess of meaningful information. Just as advertising disrupts concentration and renders trivial the information it interrupts, the new and efficient technology of information-handling permits the transmission of torrents of irrelevant information, further undermining the individual's almost hopeless search for meaning.

2. Immediacy of Information Closely associated with fragmentation and, in fact, a necessary element in its operation, is immediacy. 111is here-and-now quality helps increase the manipulatory power of the informational system. That the information is evanescent, with hardly any enduring structure, also undermines understanding. Still, instantaneousness-the reporting of events as soon after their occurrence as possible-is one of the most revered principles of American journalism. TI10se social systems that do not provide instantaneous information are regarded either as hopelessly backward and inefficient or-a much more serious charge-as socially delinquent. But speed of delivery is hardly a virtue in itself. In America,

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28 The Mind Managers the competitive system transforms news events into commodities, and advantage can be realized by being the first to acquire and dispose of this perishable commodity, the news. The case of Jack Anderson, a highly successful columnist with many wellpublicized news coups to his credit, is illustrative. He could not resist going on the air with undocumented charges against Thomas Eagleton, who was fighting to remain on the 1972 Democratic ticket as the candidate for Vice-President. Confronted with the inaccuracy of his information, after maximum damage had been done to Eagleton, Anderson apologized by blaming "the competitive situation." If he hadn't jumped the gun, someone else would have beaten him to it.2° Utilizing modern electronics and propelled by competitive drives, information dissemination in the United States and other Western societies is carried on most of the time in an atmosphere of pressure and tension. When there is a genuine or even a psuedo crisis, a hysterical and frenzied atmosphere totally unconducive to reason is created. The false sense of urgency generated by the insistence on immediacy tends to inflate, and subsequently deflate, the importance of all subject matter. Consequently, the ability to discriminate between different degrees of significance is impaired. The rapid-fire announcement of a plane crash, an NLF offensive in Vietnam, a local embezzlement, a strike, and a heat wave, defies assessment and judgment. This being so, the mental sorting-out process that would ordinarily assist in creating meaning is abandoned. The mind becomes a sieve, through which dozens of announcements, a few important but most insignificant, are poured almost hourly. Information, rather than helping to focus awareness and create meaning, results instead in a subliminal recognition of inability to deal with the waves of events that keep breaking against one's consciousness, which in self-defense must continuously lower its threshold of sensitivity. In New York City, for example, the next day's newspapers are available at 10:30 P.M. TI1e importance of tomorrow's newspaper is that it makes perishable what happened today. Having disposed of today, life moves on to the next cluster of unrelated episodes. Yet most events of significance mature over a consid-

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erable period of time. Understanding these developments is not facilitated by 90-second news flashes relayed by space satellites. Total preoccupation with the moment destroys necessary links with the past. The technology that permits and facilitates immediacy of information is not at issue. It exists and could, under different conditions, be useful. What is of concern is the present social system's utilization of the techniques of rapid communications delivery to blur or eradicate meaning while claiming that such sp~ed enhances understanding and enlightenment. The corporate economy misapplies the techniques of modem communication. As presently employed, communication technologies transmit ahistorical and, therefore, antiinformational messages. It is easy to imagine electronic formats that would use instantaneousness as a supplement to the construction of meaningful contexts. It is not so easy to believe that immediacy, as a manipulative device, will be abandoned while it serves mind managers by effectively preventing popular comprehension and understanding.

Passivity: 1l1e Ultimate Objective of Mind Management The content and form of American communications-the myths and the means of transmitting them-are devoted to manipulation. 'Vhen successfully employed, as they invariably are, the result is individual passivity, a state of inertia that precludes action. This, indeed, is the condition for which the media and the system-at-large energetically strive, because passivity assures the maintenance of the status quo. Passivity feeds upon itself, destroying the capacity for social action that might change the conditions that presently limit human fulfillment. It is appropriate, in this respect, that the group that is challenging the content of children's programs on commercial television, calls itself Action for Children's Television [emphasis mine]. In the advanced market economy, passivity has a physical and an intellectual dimension, both of which are skillfully exploited

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30 The Mind Managers by the techniques and the messages of the mind management machinery. Television is only the latest and most effective instrument for inducing individual passivity. The statistics on TV-viewing are, in themselves, paralyzing. Americans spend hundreds of mi11ions of hours a week, bi11ions of hours a year, before the set without the slightest encouragement to move out of the living room. Yet far more is involved than the massive physical inactivation of scores of mi11ions of bodies. The diminution of mental activity, the outcome of endless hours of mind-dulling programming, is incalculable. Equally unmeasurable but of enormous import is the pacifying effect on critical consciousness. As Rudolph Arnheim describes it, One of the characteristic things about television is that you turn it on and then you take whatever copJes, which implies an enormously passive attitude on the part of the viewer. It doesn't matter what is coming out of this thing-it may be a foreign language program, maybe something no one has any interest in. And a stimulation to wl1ich you're not really responding will put you to sleep. It's as if someone were petting you ... something that does not stimulate you, does not provoke you to react, but simply eliminates the necessity to be mentally active. Your brain is kept busy in a noncommittal fasl1ion. TI1e senses, wl1ic1l otllerwise would be under the obligation to do something active, are occupied. 21 To be sure, the corporate economy does not rely exclusively on television to spread passivity. Before television, there were diversions enough with similar awareness-reducing effects. Radio, the movies, mass spectator sports, parades, and a large variety of lesser events have made and continue to make their contribution to de-energizing human reactions. Though most of these entertainments demand nonparticipation, in the physical sense at least, there is nothing inherent in radio, television, or film-to take the most important of the popular recreational arts-that inevitably and exclusively creates mental torpor. There are, of course, infrequent examples of

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broadcasts that have heightened awareness and focused attention on matters of extreme relevance. But these exceptions cannot conceal the main point: that the aim of television and radio programming and films in a commercial society is not to arouse but to lessen concern about social and economic realities. Furthermore, action is quickly taken to insure that exceptions are no more than that. Fred Friendly has documented his runins with the CBS directorate in the 1950s, when he and Edward R. Morrow were producing their critical documentaries. 22 The Smothers Brothers too discovered how short their leash was when they tugged too hard by taking a few mild digs at the Establishment on their program. Their show was terminated summarily. Much of the informational machinery, in its technological aspects, has a tendency to generate passivity. It is an too easy to switch on a dial, sink back into a sofa, and allow images to pass without mediation into the mind. When this tendency of the communications hardware is supplemented by packaged programming that deliberately seeks the same paralyzing effect, the result is usually stupefying. 'Vriting about the American newsreel in its heyday, in terms totally applicable to the 1970s, one reviewer observed: " ... the American newsreel gave audiences football games, floods, bathing beauties and celebrities. The movie-goer of the 1930's would learn far more about John Dillinger or Miss America than about the Little Steel Strike or the Spanish Civil War."23 The lethal combination of intentionally devitalized programming and physically inactivating communications technology is the machinery of contemporary American mind management. Creative efforts to overcome, or at least counterbalance, this passivity-inducing system are desperately needed. An imaginative approach can promote participation and awareness, but it is unrealistic to expect the corporate economy to encourage such efforts. In any event, the first task, which may be approached modestly, is to comprehend the manipulative function in its many manifestations in the informational arts. Let us examine some of the specifics of this manipulation.

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Notes

Notes Chapter One 1. Alan Lomax and Nom1an Berkowitz, "The Evolutionary Taxonomy of Culture," Science 177 (21 July 1972): 238. 2. C. B. MacPherson, The Political Theory of Possessive Individualism (Oxford: Clarendon Press, 1962) . 3. Frank Stanton, "Will They Stop Our Satellites?," New York Times, 22 October 1972. 4. Henry Luce, the founder of Time, Life, Fortune, Sports Illustrated, and other mass circulation magazines, knew otherwise. He told his staff at Time: "The alleged journalistic objectivity, a claim that a writer presents facts without applying any value judgment to them [is] modem usage-and that is strictly a phony. It is that that I had to renounce and denounce. So when we say the hell with objectivity, that is what we are talking about." W. A. Swanberg, Luce and His Empire (New York: Charles Scribner's Sons, 1972), p. 331. 5. Daniel Bell, The End of Ideology (Glencoe, Ill.: The Free Press, 1960). 6. Leon Eisenberg, "The Human Nature of Human Nature," Science 176 (14 April1972): 123-124. 7. "The Social Engineers Retreat Under Fire," Fortune, October 1972, p. 3. 8. Eisenberg, "Human Nature," p. 124. 9. Paulo Freire, Pedagogy of the Oppressed (New York: Herder and Herder, 1971), p.l35.

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10. Les Brown, Television: The Business Behind The Box (New York: Barcourt, Brace Jovanovich, 1971), pp. 196-203. 11. Freire, Pedagogy of the 0/J(Jressed, p. 137. 12. "Black Movie Boom-Good or Bad?," New York Times, 17 December 1972. Including Jim Brown, "Approach It As Business," and Imamu Amiri Baraka, "Modem Nigger-Toys." · 13. George Gerbner, "Communication and Social Environment," Scientific American, September 1972, p. 156. 14. Les Brown, Television, pp. 59-60. 15. Robert Musel, "Through A Glass-very darkly," TV Guide, 2 October 1971, p. 12. 16. Merrill Panitt, "America Out of Focus," TV Guide, 15 January 197212 February 1972. 17. Freire, Pedagogy of the Oppressed, pp. 137-138. 18. Langboume \V. Rust, "Do Children Prefer Junk On Tv?" Variety, 13 September 1972, p. 38. 19. Hedrick Smith, "Big Issues Block U.S.-Soviet Trade," New York Times, 12 August 1972. 20. New York Times, 27 July 1972: 21. Rudolph Arnheim, "Television as a Medium," Feedback #1, The Network Project, Performance no. 3 (July I August, 1972): 16. 22. Fred Friendly, Due To Circumstances Beyond Our Control (New York: Random House, 1967), pp. 27, 59-60, passim. 23. Martin A. Jackson, review of "The American Newsreel, 19ll-1967," New York Times Book Review, 6 August 1972, p. 4.

[19] Canadianjor:mal of Political and Social Theory/Revue canadienne de thiorie politique et sociale, Vol. 1, No. 3 (Fall/ Automne 1977)

COMMUNICATIONS: BLINDSPOT OF WESTERN MARXISM Dallas W. Smythe

The argument presented here -:- that western Marxist analyses have neglected the economic and political significance of mass communications systems - is an attempt to start a debate, not to conclude one. Frequently, Marxists and those radical social critics who use Marxist terminology locate the significance of mass communications systems in their capacity to produce "ideology" which is held to act as a sort of invisible glue that holds together the capitalist system. This subjective substance, divorced from historical materiality, is similar to such previous concepts as ''ether''; that is to say, the proof of its existence is found by such writers to be the necessity for it to exist so that certain other phenomena may be explained. It is thus an ideulist, pre-scientific rather than a non-scientific explanation. But for Marxists, such an explanatory notion should be unsatisfactory. The first question that historical materialists should ask about mass communications systems is what economic function /or capital do they serve, attempting to understand their role in the reproduction of capitalist relations of production. This article, then, poses this question and attempts to frame some answers to it. Much of what follows is contentious because it raises questions not only about changes in capitalism since Mane's death but also, in some instances, about the adequacy of certain generally accepted Marxist categories to account properly for these developments. However, as Lenin remarked in a different context, one cannot make an omelette without breaking the eggs. The mass media of communications and related institutions concerned with advertising, market research, public relations and product and package design represent a blindspot in Marxist theory in the European and Atlantic basin cultures. The activities of these institutions are intimately connected with consumer consciousness, needs, leisure time use, commodity fetishism, work and alienation. As we will see, when these institutions are examined from a materialist point of view, the labour theory of value, the expenses of circulation, the value of the "peculiar commodity" (labour power), the form of the proletariat and the class struggle under monopoly capitalist conditions are also deeply involved. The literature of Marxism is conspicuously lacking in materialist analysis of the functions of the complex of institutions called the '' comciousness industry'' . 1

The Political Economy of the Media I

DALLAS W. SMYmE The blockage in recognizing the role of the consciousness industry traces back to a failure to take a materialist approach to communications. Both economic goods in general and communications goods in particular existed long before capitalism and monopoly capitalism. While sp'ecialized institutions for the mass production of communications (i.e. newspapers and magazines) appeared in capitalism in the eighteenth century, these institutions did not reach their mature form until monopoly capitalism shifted their principal economic base to advertising in the late nineteenth century. By a grave cultural Jag, Marxist theory has not taken account of mass communications. This lag in considering the product of the mass media is more understandable in European (including Eastern European) countries than in North America. There the rise to ascendancy of advertising in dominating the policy of newspapers and periodicals was delayed by custom and by law. Even in the radio-TV broadcast media, the role of the state (through ORTF, BBC, ITV, East European state monopolies, etc.) has been resistant to the inroads of monopoly capitalism - as compared with the United States and Canada. But the evidence accumulates (recent developments in British, French, West German and Italian mass media, for example) that such traditional resistance is giving way under the onslaught of pressures from the centre of the monopoly capitalist system. Europeans reading this essay should try to perceive it as reflecting the North American scene today, and perhaps theirs soon. At the root of a Marxist view of capitalism is the necessity to seek an objective reality which means in this case an objective definition of the commodity produced by capitalism. What is the commodity form of mass-produced, advertiser-supported communications? This is the threshold question. The bourgeois idealist view of the reality of the communication commodity is ''messages'', ''information'', ''images'', ''meaning'', ''entertainment'', ''orientation'', ''education'', and ''manipulation". All of these concepts are subjective mental entities and all deal with mpeificial appearances. Nowhere do the theorists who adopt this worldview deal with the commodity form of mass communications under monopoly capitalism on which exist parasitically a host of sub-markets dealing with cultural industry, e. g., the markets for "news" and "entertainment". Tacitly, this idealist theory of the communications commodity appears to have been held by most western Marxists after Marx as well as by bourgeois theorists: Lenin2 , Veblen, Marcuse, Adorno, Baran and Sweezy, for example, as well as Galbraith and orthodox economists. So too for those who take a more or less Marxist view of comrnunirations (Nordenstreng, Enzensberger, Hamelink, Schiller3, Burdock and Golding4 and me until now) as well as the conventional writers exemplified in the Sage Annual Review of Communications Research~. Also included in the idealist camp are those apologists who dissolve the reality of communications under 2

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The basic entry to the analysis of the commodity form of communications is· acceptance of the significance of the concept of monopoly in monopoly

capitalism. Baran and Sweezy' s Monopoly Capitalism 11 demonstrated how monopoly rather than competition rules contemporary capitalism, and it may be taken as the reference point from which to address this issue. Like J.K. Galbraith 12 , Baran and Sweezy emphasize the role of management of demand by the oligopolies which dominate monopoly capitalism. Both civilian and military demand are managed to provide the consumption and investment outlets required for the realization of a rising surplus. The process of demand management begins and ends with the market for the commodity - first as ''test markets'', and, when product and package production have been suitably designed and executed, as mass advertising-marketing. But Baran and Sweezy fail to pursue in :in historical materialist way the obvious issues which are raised by demand- management-via-advertising under monopoly capitalism. What happens when a monopoly capitalist system advertises? Baran and Sweezy answer, as does Galbraith, psychological manipulation. They cite Chamberlin as providing in 1931 the authoritative definition of contemporary advertising.l3 Moreover, they somewhat prematurely foreclose further investigation by stating flatly: ''The immediate commercial purposes and effects of advertising have been thoroughly analyzed in economic literature and are readily grasped.'' 14 The mass media of communications possess no black box from which the magic of psychological manipulation is dispensed. Neither bourgeois nor Marxist economists have considered it worthwhile to ask the following questions which an historical materialist approach would seem to indicate: (a) What do advertisers buy with their advertising expenditures? As hardnosed businessmen they are not paying for advertising for nothing, nor from altruism. I suggest that what they buy are the services of audiences with predictable specifications who will pay attention in predictable numbers and at particular times to particular means of communication (TV, radio, newspapers, magazines, billboards, and third-class mail).t 5 As collectivities these audiences are commodities. As commodities they are dealt with in markets by producers and buyers (the latter being advertisers). Such markets establish prices in the familiar mode of monopoly capitalism. Both these markets and the audience commodities traded in are specialized. The audience commodities bear specifications known in the business as ''the demographics''. The specifications for the audience commodities include age, sex, income level, family composition, urban or rural location, ethnic character, ownership of home, automobile, credit card status, social class and, in the case of hobby and fan magazines, a dedication to photography, model electric trains, sports cars, philately, do-it-yourself crafts, foreign travel, kinky sex, etc. (b) How are advertisers assured that they are getting what they pay for when they buy audiences? A sub-industry sector of the consciousness industry checks to determine. The socio-economic characteristics of the delivered

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the appearance of the ''medium'', such as MarshaU McLuhan.6 No wonder, as Livant says, that' 'the field of communications is a jungle of idealism''. 1 I submit that the materialist answer to the question - What is the commodity form of mass-produced, advertiser-supported communications under monopoly capitalism? - is audiences and readerships (hereafter referred to for simplicity as audiences). The material reality under monopoly capitalism is that all non-sleeping time of most of the population is work time. This work time is de;oted to t_he production of commodities-in-general (both where people get patd for thetr work and as members of audiences) and in the production and reproduction of labour power (the pay for which is subsumed in their income). Of the off-the-job work time, the largest single block is time of the audiences which is sold to advertisers. It is not sold by workers but by the mass media of communications. Who produces this commodity? The mass media of communications do by the mix of explicit and hidden advertising and "pro~ra~me" m~terial, the markets for which preoccupy the bourgeois commumcauon theoriSts. 8 But although the mass media play the leading role on the pr_oduction side of the consciousness industry, the people in the audiences pay dtrectly much more for the privilege of being in those audiences than do the mass media. In Canada in 1975 audience members bore directly about three times as large a cost as did the broadcasters and cable TV operators combined.9 ' In "their" time which is sold to advertisers workers (a) perform essential marketing functions for the producers of consumers' goods, and (b) work at the production and reproduction of labour power. This joint process, as shall be no~ed, embodies a principal contradiction. If this analytical sketch is valid, sertous problems for Marxist theory emerge. Among them is the apparent fact that whil~ t~e superstructure is not ordinarily thought of as being itself engaged m mfrastructural productive activity, the mass media of comn~unications. are simultaneously in the superstructure and engaged indtspensably tn the last stage of infrastructural production where demand is produced and satisfied by purchases of consumer goods. Chairman Mao TseTu~g provided the Marxist theoretical basis for such a development as that whtch created the contemporary capitalist mass media when he said: When the superstructure (politics, culture, etc.) obstructs the development of the economic base, political and cuh ural changes become pnncipa/ and decisive .•o

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audience/readership and its size are the business of A.C. Nielsen and a host of competitors who specialize in rapid assessment of the delivered audience commodity. The behaviour of the members of the audience product under the impact of advertising and the "editorial" content is the object of market research by a large number of independent market research agencies as well as by similar staffs located in advertising agencies, the advertising corporation and in media enterprises. 16 (c) What institutions produce the commodity which advertisers buy with their advertising expenditures? The owners of. TV and radio stations and networks, newspapers, magazines and enterprises which specialize in providing billboard and third class advertising are the principal producers. This array of producers is interlocked in many ways with advertising agencies, talent agencies, package programme producers, film producers, news "services" (e.g., AP, UPI, Reuters), "syndicators" of news "columns", writers' agents, book publishers, motion picture producers and distributors. Last but by ?o means least in the array of institutions which produce the audience commodity is the family. The most important resource employed in producing the audience commodity are the individuals and families in the nations which permit advertising. (d) What is the nature of the content of the mass media in economic terms under monopoly capitalism? The information, entertainment and "educational'' material transmitted to the audience is an inducement (gift, bribe or "free lunch") to recruit potential members of the audience and to maintain their loyal attention. The appropriateness of the analogy to the free lunch in the old-time saloon or cocktail bar is manifest: the free lunch consists of materials which whet the prospective audience members' appetites and thus (1) attract and keep them attending to the programme, newspaper or magazine, and (2) cultivate a mood conducive to favourable reaction to the explicit and implicit advertisers' messages.H To say this is not to obscure the agenda-setting function of the "editorial" content and advertising for the populations which depend on the mass media to find out what is happening in the world, nor is it to denigrate the technical virtuosity with which the free lunch is prepared and served. Great skill, talent and much expense goes into such production, though less per unit of content than in the production of overt advertisements. Only a monstrous misdirection of attention obscures the real nature of the commodities involved. Thus with no reference to the "Sales Effort'', Baran and Sweezy can say:

beyond dispute that all of them could be provided at a cost to consumers incomparably lower than they are forced to pay through commercial advertising. 18

There is not only serious question as to the value of artistic offerings carried by the mass communications media and serving directly or indirectly as vehicles of advertising; it is

Under monopoly capitalism TV-radio programs are provided "free" and the newspapers and magazines are provided at prices which cover delivery (but not production) costs to the media enterprise. In the case of newspapers and some magazines, some readers characteristically buy the media product because they want the advertisements. This is especially the practice with classified advertisements and display advertising of products and prices by local merchants in newspapers and with product information in advertisements in certain magazines (e.g. hobby magazines). Regardless of these variations, the central purpose of the information, entertainment and "educational" material (including that in the advertisements themselves) transmitted to the audience is to ensure attention to the products and services being advertised. Competition among media enterprises produces intricate strategies governing the placement of programmes in terms of types of products advertised and types of ''free lunch" provided in different time segments of the week (e.g. children's hours, daytime housewives' hours, etc.): all this in order to optimize the "flow" of particular types of audiences to one programme from its immediate predecessors and to its immediate successors with regard to the strategies of rival networks. 19 (e) What is the nature of the service performed for the advertiser by the members of the purchased audiences? In economic terms, the audience commodity is a non-durable producers' good which is bought and used in the marketing of the advertiser's product. The work which audience members perform for the advertiser to whom they have been sold is to learn to buy particular "brands" of consumer goods, and to spend their income accordingly. In short, they work to create the demand for advertised goods which is the purpose of the monopoly capitalist advertisers. While doing this, audience members are simultaneously reproducing their own labour power. In this regard, it is appropriate to avoid the trap of a manipulation-explanation by noting that if such labour power is, in fact, loyally attached to the monopoly capitalist system, this would be welcome to the advertisers whose existence depends on the maintenance of that system. But in reproducing their labour power workers respond to other realistic conditions which may on occasion surprise and disappoint the advertisers. It seems, however, that when workers under monopoly capitalist conditions serve advertisers to complete the production process of consumer goods by performing the ultimate marketing service for them, these workers are making decisive material decisions whkh will affect how they will produce and reproduce their labour power. As the Chinese

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emp~asized du~in? t~e. Cultu.ral Revolution, if people are spending their time catenng t~ their tndiVIdual mtere~ts ~n~ sensitivities, they cannot be using

the same ttme also to overthrow capitaltst mfluence and to build socialism. (f) ~.ow does demand-m anagement by monopoly capitalism, by means of adverttsmg, relate to the labour theory of value, to "leisure" and to "free time''? As William Livant puts it, the power of the concept of surplus value ''. : : rests wholly on the way Marx solved the great value problem of classical poltttcal. economy, by splitting the notion of labour in two, into labour in product~ve use. and labour .power (the capacity to labour)" .2o Labour in ~roduwve use In the production of commodities-in-general was Marx' s concern m the t~ree volumes of Capital, except for Vol. 1, chapter 6 and scattered passages m the Grundrisse. It is clear from these passages that Marx assumed that. lab~ur power is produced by the labourer and by his or her immediate family, t.e., under the conditions of handicraft production. In a word labour pow:r· was "home-ma de" in the absence of dominant brand-na~e commodities, mass advertisin~, a~d the mass media (which had not yet been inve~te? by monopoly :ap.naltsm). I? Marx's period and in his analysis, the pnncipal aspect of capttaltst producuon was the alienation of workers from the me:ns. of produ~ing commodities-in-general. Now the principal aspect of capitalist productton has become the alienation of workers from the means of produci~g and repro?ucing themselves. The prevailing western Marxist view today su~l holds the mcorrect assumption that the labourer is an independen t commodity producer oflabour power which is his to sell. Livant says it well:

What often escapes attention is that just because the labourer sells it (his or her labour power) ,does not mean that he or she produces it. We are misled by fixating on the true fact that a human must eat and sleep' into thinking that therefore the seller oflabour power must also be the producer. Again the error of two combines into one.2I

We need a dialectical materialist description of the production oflabour power of the :apacity and incapacity to labour and of the relationship of th~ productton of l~bour po:ver to our ability to live as human beings. 22 co~r:ct 111 ~ssu~mg that all ~on-sleeping time under capitalism is work ttme. W tll!am Ltvant 111 commenting on a draft of this article, points out that the assumption should be plainly stated. As he puts it, a Marxist view

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. . . sees leisure time correctly as time of production, reproduction and repair of labour power. This production, reproduction and repair are activities. They are things people must do. As such, they also require labour power. To be sure, this latter labour power you do not have to sell directly to capital. But you do have to use it to produce labour power in the form you do have to sell. Why was this hard to see? I think we can find the answer if we look at 'non-work' time. Marx points out many times (e.g. Capital, Vol. I, Ch. 6) that wage labour only becomes possible if your labour power becomes a personal possession, which it is possible for you to sell. You can do what you 'want' with it ... Non-work time is labour power which is yours not-to-sell. Hence it seems to be doubly your personal possession . . . When we see this, we can fit it within what Marx called the 'false appearance' of wage labour (citing Wages, Prices and Profit, Peking, 1973, pp. 50-1) ... I think this false appearance has its other side. Just as it appears, at work, that you are paid for all the labour time you do sell, so it appears, off-work, that the labour time you are not paid for is not sold. . . Work and non-work time bear interesting relations that need examination, to see beneath the false appearances. They in fact divide the whole world of commodities in two. For at work it is principally commodities-in-general that are made and distributed. Those who make and distribute these commodities do not sell them. But offwork, we find something else. What is being produced there is primarily the peculiar commodity, labour power. And off-work, those who make this commodity, also do not sell it. But it is sold, as surely as commodities-ingeneral made at the workplace. 24 It should be clear that for at least several generations labour power in advanced monopoly capitalist countries has been produced primarily by institutions other than the individual and his/her family. The mass media of communications and advertising play a large and probably dominant role

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through the process of consumption (by guiding the making of the shopping list) as well as through the ideological teaching which permeates both the advertising and ostensibly non-advertising material with which they produce the audience commodity. 1 ' When cosmetic counters in department stores display "Boxed Ego" (Vancouver, December, 1975), the dialectical relation of the material and consciousness aspects of the production of labour power should be evident. What has happened to the time available to workers and the way it is used in the past century? In 1850 under conditions of cottage industry, i.e. unbranded consumer goods, the average work week was about 70 hours per week (and the work force was predominantly male). 16 At about the time when Marx was writing the Grundrisse, workers' savings, under the most favourable conditions of exploitation, could make possible

Many other references may be cited from the Grundrisse to similar effect. But all this assumed that consumer goods were not monopolized by brand names and that workers could dispose of their non-work time subject only to class and customary (i.e. traditional) considerations. In 1850, the average American worker could devote about 42 hours per week {168 hours minus 70 hours on the job and 56 hours of sleep) to such "cottage industry" type of production of labour power.

By 1960, the average time spent on the job was about 39.5 hours per week.an apparent reduction in work time of almost 30 hours per week (to whtch should be added 2.5 hours as a generous estimate of the weekly equivalent of annual vacations). Capitalist apologists equated this ostensible reduction in work time with a corresponding increase in "free" or "leisure" time. The reality was quite different. Two transformations were being effecte~ by monopoly capitalism in the nature of work, leisure and consumer behav10u~. On the one hand, huge chunks of workers' time were being removed from thetr discretion by the phenomenon of metropolitan sprawl and by the nat?re of unpaid work which workers were obligated to perform. For ex~mple, m the contemporary period travel time to and from the job can be esttmated at 8.5 hours per week; "moonlighting" employment at a minimum of one hour per week; repair work around the home, at another five hours per week; and men's work on household chores and shopping at another 2.3 hours per week. A total of 16.8 hours per week of the roughly 32 hours of time supposedly "freed" as a result of capitalist industrialization is thus anything but _"free". A ~urther seven hours of the 32 hours of' 'freed'' time disappears when the correction for part-time female employment is made in the reported hours-per-week. 19 Three-fourths of the so-called' 'freed'' time has thus vanished. The second transformation involves the pressure placed by the system on the remaining hours of the week. If sleeping is estimated at eight hours a day. the remainder of the 168 hours in the week after subtracting sleeping and the unfree work time thus far identified was 42 hours in 1850 and 49 hours in 1960. We lack systematic information about the use of this "free time" for both dates. We do know that certain types of activities were common to both dates: personal care, making love, visiting with relatives and f~ie~ds: pr~pa~ing a~d eating meals, attending union, church and other associative mstituttons, meluding saloons. We also know that in 1960 (but not in 1850) there was a vast array of branded consumer goods and services pressed on the workers through advertising, point-of-sale displays, and peer group influence. Attendance at spectator sports and participation in such activities as bowling, camping, and ''pleasure driving'' of the automobile or snowmobile all promote~ for the sake of equipment sales by the consciousness industry - now take ttme that was devoted to non-commercial activities in 1850. In-house time must now be devoted to deciding whether or not to buy and then to use (by whom, where, under what conditions, and why) an endless proliferation of goods for personal care, household furnishing, clothing, music reproduction equipment, etc. Guiding the worker today in all income and time expenditures are the mass media- through the blend of advertisements and programme content. How do Baran and Sweezy deal with the use made of this illusory increase in free time? Deploying Veblen's concept of conspicuous consumption and

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... the worker's participation in the higher, even cultural satisfactions, the agitation of his own interests, newspaper subscriptions, attending lectures, educating his children, developing his taste, etc., his only share of civilization which distinguishes him from the slave . . ,11

In that simple stage of capitalist development, Marx could see that the relentless accumulative process would proliferate commodities:

Capital's ceaseless striving towards the general form of wealth drives labour beyond the limits of its natural paltriness (Naturbedurftigkeit), and thus creates the material elements for the development of the rich individuality which is as all-sided in its production as in its • consumption ... 28

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BLINDSPOT thereby emphasizing the status-seeking character of workers' consumption decisions, they treat leisure time (without quotation marks) in psychoanalytic terms as time spent willfully in passivity and idleness:

This propensity to do nothing has had a decisive part in determining the kinds of entertainment which are supplied to fill the leisure hours- in the evening, on weekends and holidays, during vacations. The basic principle is that whatever is presented - reading matter, movies, radio and TV programs - must not make undue demands on the intellectual and emotional resources of the recipients: the purpose is to provide 'fun', 'relaxation', a 'good time' -in short, passively absorbable amusement.3°

What is wrong with this partial truth is: (1) it ignores the relationship of monopoly capitalism's Sales Effort, particularly advertising, to the problem; and (2) it substitutes casual bourgeois observations3 1 for an historical materialist attack on the problem. As against the seven hours per week of apparent ''non-work'' time gained by the average worker between 1850 and 1960, how much time does he now spend as part of the audience product of the mass media - time sold to the advertisers? Here the audience-measurement sub-industry gives us some information. David Blank, economist for the Columbia Broadcasting System, in 1970 found that the average person watched TV for 3.3 hours per day (23 hours per week) on an annual basis, listened to radio for 2. 5 hours per day (18 hours per week), and read newspapers and magazines one hour per day (7 hours per week) .32 If we look at the audience product in terms of families rather than individuals, we find that in 1973, advertisers in the U.S. purchased TV audiences for an average of a little more than 43 hours per home per week.33 By industry usage, this lumps together specialized audience commodities sold independently as "housewives", "children" and "families". In the "prime time" evening hours (7:00 to 11:00 p.m.), the TV audience commodity consisted of a daily average of 83.8 million people, with an average of two persons viewing per home. Women were a significantly larger proportion of this prime time audience than men (42 percent as against 32 percent, while children were 16 percent and teenagers, 10 percent). We do not know even approximately how the worker's exposure to the mass media articulates with the other components in his/ her use of' 'free time''. It is relatively easy to determine how much radio listening and newspaper and 11

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DALLAS W. SMYTHE magazine reading takes place while travelling to and from work. But much TV and radio programming is attended to incidentally while engaged in other activities such as performing household chores, visiting with friends, reading, and now even while attending spectator sports. 34 This is the context in which we may pursue the question, how demand management by means of advertising in monopoly capitalism relates to the labour theory of value, to "leisure" and to "free time". It should now be possible to obtain some clues to the nature of work which workers perform in relation to advertising. If freedom is the act of resisting necessity, what is the nature of the process by which workers react to advertising, and why is it profitable for advertisers to advertise? An advertising theorist, Professor T.N. Levitt, says, "Customers don't buy things. They buy tools to solve problems.' '3, It appears that the purpose of advertising, from the perspective of the advertising corporation, is to establish in the worker's consciousness (1) the existence of a "problem" facing the worker (acne, security from burglars, sleeplessness), (2) the existence of a class of commodities which will solve that problem, and (3) the motivation to give top priority to purchasing brand X of that class of commodities in order to "solve" that "problem". Given this situation, the realistic process of audience-members' work can be best understood in terms of the ever-increasing number of decisions forced on him/her by "new" commodities and by their related advertising. Unfortunately, while workers are faced with millions of possible comparative choices among thousands-of "new" commodities, they lack scientifically objective bases on which to evaluate either the "problem" to be solved by buying the proffered "tool" or the efficacy of the "tool" as a solution tci the "problem". In this situation, they constantly struggle to develop a rational shopping list out of an irrational situation.36 As Linder puts it, the most important way by which consumers can cope with commodities and advertising is to limit the time spent in thinking about what to buy.

Reduced time for reflection previous to a decision would apparently entail a growing irrationality. However, since it is extremely rational to consider less and less per decision there exists a rationale of irrationalityY

Monopoly capitali5t marketing practice has a sort of seismic, systemic drift towards "impulse purchasing". Increasingly, the work done by audience members is cued towards impulse purchasing. Again, Linder is insightful: 12

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BLINDSPOT To begin with advertising is a means of making factual knowledge more accessible than otherwise. Second, it serves to provide quasi-information for people who lack time to acquire the genuine insights. They get the surrogate information they want to have, in order to feel that they are making the right decisions . . . The advertiser helps to close the information gap, at the same time ex. ploiting the information gap that is bound to remain.3 8 As the scarcity of time increases, the emphasis in advertising will be displaced in the direction of ersatz information. The object will be to provide a motive for an action for which no solid grounds exist . . . Brand loyalty must be built up among people who have no possibility of deciding how to act on objective grounds. As routine purchasing procedures gain in importance as a means of reducing decision-making time, it will become increasingly important to capture those who have not yet developed their routines.39 In this connection, the new and sophisticated interest of market researchers in the relationship of advertising to children is very significant. According to the publisher of one recent study: As the authors see it, consumption is a perfectly legitimate and unavoidable activity for children. Consequently they reject a strategy directed at protecting kids from marketing stimuli. What is necessary, then, is to acknowledge that children are going to watch television commercials and to prepare them to be selective consumers. How Children Learn to Buy provides evidence to confront existing theories in the emerging field of consumer socialization. The work is essential to everyone concerned with the effects of advertising: sponsors, ad agencies, the television industry, educators, governmental regulators, consumer researchers, and parents. 4o

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DALLAS W. SMYWE (and for whom it is, of course, a bitter mockery) and to those who are so rich that, as Linder says, for them, '• the ultimate luxury is to be liberated from the hardships of having to do one's own buying.' ' 41 For everyone else, ''free time'' and "leisure" belong only in the monopoly capitalist lexicon alongside "free world", "free enterprise", "free elections", "free speech", and "free flow" of information. What has happened to the time workers spend off-the-job while not sleeping is that enormous pressures on this time have been imposed by all consumer goods and service branches of monopoly capitalism. Individual, familial and other associative needs must be dealt with, but in a real context of products and advertising which, taken together, make the task of the individual and family basically one of coping while being constantly on the verge of being overwhelmed by these pressures. In this context, the work of the audience members which advertisers find productive for them is one of learning cues which are used when the audience member makes up his/her mental shopping list and spends his/ her income. (g) Does the audience commodity perform an essential economic functio.n? Baran and Sweezy state that "advertising constitutes as much an integral part of the system as the giant corporation itself'' 42 and that "advertising has turned into an indispensable tool for a large sector of corporate business. " 43 In this they go as far as Galbraith who said ''. . . the marginal utility of present aggregate output, ex-advertising and salesmanship is zero. " 44 But is the production and consumption of the audience commodity for advertisers a ''productive'' activity in Marxian terms? Baran and Sweezy are contradictory in answering this question. They tell us that advertising expenses " ... since they are manifestly unrelated to necessary costs of production however broadly defined - (they) can only be counted as part of aggregate surplus.' ' 4' But after some agonizing over whether finance, insurance and real estate (which account for about rwice the volume of national income as represented by advertising) are productive, they abandon their theoretical footing for rejecting expenses of circulation as unproductive of surplus:

Constrained by the ideology of monopoly capitalism, the bourgeois notion of free time and leisure is only available to those who have no disposable income

Just as advertising, product differentiation, artificial obsolescence, model changing, and all the other devices of the sales effort do in fact promote and increase sales, and thus act a~ indispensable props to the level of income and employment, so the entire apparatus of 'finance, insurance, and real estate' is essential to the normal functioning of the corporate system and another no less indispensable prop to the level of income and employment.

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BLINDSPOT The prodigious volume of resources absorbed in all these activities does in fact constitute necessary costs of capitalist production. What · should be crystal clear is that an economic system in which such costs are socially necessary has long ceased to be a socially necessary system. 46

I am aware that Capital can be and has been read frequently as denying the productivity of the expenses of middlemen in general. As I read the work, however, it seems to me that in Capital Marx was concerned to analyze the operation of capitalism under the then realistic conditions of competition and the organization of industry as being generally unintegrated from raw material p~ocessing through exchan~e to the consumption process. 47 Marx also dearly dtd no.t ~ssume the predommance of branded commodities or the prevalence of advertlstng. If one turns to Marx's "Introduction to the Critique of Political Eco?o~y", however, it seems probable that his analysis of monopoly capttaltsm, had such been possible in his time, would have answered the question of the productivity of advertising differently. Indeed the following passage accommodates the phenomena of advertising, branded merchandise, and monopoly capitalism in managing demands.

Consumption produces production in a double way ... because consumption creates the need for new production, that is it creates the ideal, internally impelling cause for production, which is its presupposition. Consumption creates the motive for production; it also creates the object which is active in production as its determinant aim ... No production without a need. But consumption reproduces the need ... Production not only supplies a material for the need, but it also supplies a need for the material. As soon as consumption emerges from its initial state of natural crudity and immediacy - and, if it remained at that stage, this would be because production itself had been arrested there- it becomes itself mediated as a drive by the object. The need which consumption feels for the object is created by the perception of it. The object of art - like every other product- creates a public which is sensitive to art and enjoys beauty. Production thus not only creates an object for the subject, but also a subject for the object. Thus production produces cons11mption (I) by

15

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DALLAS W. SMYillE creating the material for it; (2} by determining the manner of cons11mption; and (3) by creating the prod11cts initially posited by it as objects, in the form of a need felt by the cons11mer. It th11s produces the object ofconst~mption, the manner of cons11mption and the motive of cons11mption. Cons11mption likewise prod11ces the producer's inclination by beckoning to him as an aim-determining need. 4o

It is clear, firstly, that the exchange of activities and abilities which takes place within production itself belongs directly to production and essentially constitutes it. The same holds, secondly, for the exchange of products, in so far as that exchange is the means of finishing the product and making it fit for direct consumption. To that extent, exchange is an act comprised within production itself. Thirdly, the so-called exchange between dealers and dealers is by its very organization entirely determined by production, .as being itself a producing activity. Exchange appears as independent and indifferent to production only in the final phase where the product is exchanged directly for consumption. 49

On such a footing it is possible to develop a Marxist theory of advertising and of branded commodities under monopoly capitalist conditions. When the president of the Revlon corporation says: "We manufacture lipsticks. But we sell hope'', he is referring to the creation of products initially posited by it as objects in the form of a need felt by the consumer- similarly with Contac-C, the proprietary cold remedy which so disturbed Baran and Sweezy., 0 The denial of the productivity of advertising is unnecessary and diversionary: a cui de sac derived from the pre-monopoly-capitalist stage of development, a dutiful but unsuccessful and inappropriate attempt· at reconciliation with Capital. (h) Why have Marxist economists been indifferent to the historical process by which advertising, brand-name merchandise, and the mass media of communications have developed in monopoly capitalism over the past century? Why do they continue to regard the press, TV and radio media as having the prime function of producing news, entertainment and editorial opinion and not audiences for sale to advertisers? The evidence for the latter is all around us. Baran and Sweezy do indeed indicate how much advertising has grown and when, i.e., by a factor often between 1890 and 1929.11 B11t not why, how and with what connections.

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In the first three quarters of the nineteenth century, newspapers and magazines in the countries going through the Industrial Revolution were characterized by: (a) diversity of support as between readers' payments, subsidies from political parties, and advertising (most of the latter being information about commodity availability and prices and not about branded merchandise); and (b) a cyclical process of technological improvement with consequent larger printing capacity, lower unit costs, Jower unit prices of publications, larger profits, capital accumulation and reinvestment in new and more productive plants, etc. 52 In that period, marketing of consumer goods was characterized by: (a) predominance of unbranded merchandise; (b) unintegrated distribution of commodities with the middleman being the most powerful link in the production-to-consumer chain; and (c) consequently, lack of massive advertising as a means of managing demand. In the second half of the nineteenth century, capitalism faced a crisis. The first stage of the development of the factory system under conditions of competition between relatively small capitalists had succeeded in mobilizing labour supply and exploiting it crudely under conditions documented so ably by Marx in Capital. The very success of the system bred grave threats to it. Politically conscious labour unions posed revolutionary threats to capitalism. H Moreover, capitalist manufacturers were vulnerable to the power of the workers because the highly skilled workers possessed more knowledge about the production process than did their employers.54 Manufacturers were thus blocked from ready control of their work force and from innovating the new and increasingly sophisticated machine processes of mass production which the rapid progress in physical sciences and engineering made possible. When they looked at their marketing methods, manufacturers were also beset by chronic insecurities. The periodic business cycles in their crisis and liquidation phases for~ed manufacturers into cut-throat pricing (of unbranded merchandise, typically) because of the pressure of overhead costs. The result was a short life expectancy for competitive industrialists. In sum, a watershed in the development of capitalism had been reached. As M.M. Knight said, "Down to the last quarter of the nineteenth century, commerce dominated industry; after it industry dominated commerce.' 'n Capitalism's systemic solution to the contradiction between its enormous potential for expanding production of consumer goods (and the profits to be thus realized) and the systemic insecurities posed by people as workers and people as consumers was to move to large scale rationalization of industrial org.anization {through vertical, horizontal and conglomerate integration).'6 Th1s conferred control over supplies and prices in the factor markets, and in the n~arketing .of end-1~roducts. But to make such giant integrated corporations v1ahle, the1r operations had to address directly the problem of people (!) as workers at the job where they were paid, and (2) as buyers of the end prod-

ucts of industry. The systemic solution was a textbook example of the transformation of a contradiction on the principle "one goes into two". This was an ideological task and it was solved by capitalizing on the deeply held ideological reverence for scientific rationality in the pursuit of possessive individualistic material goals. After militant unions had been crushed by force between 1890 and 1910, scientific management was applied to people as workers. Knowledge about the work process was expropriated from skilled workers to management. The work process was reduced to "ladders" of dead-end "tasks" to complement which ever more sophisticated generations of mass production machines were innovated. And through varieties of ''incentive'' wage plans, linked with promotion-from-within on the basis of seniority, supported by company welfare plans (and later social insurance through government), the workplace where people got paid was transformed ideologically." People learned there that work under monopoly capitalism involves competition between individuals whose possessive needs necessarily set them in conflict with each other rather than with the owners of the means of their (concealed) cooperative production. The carrot which systemically motivated them was the pursuit of commodities, which joined this half of the ideological exercise with the next.

17

Simultaneously the system dealt with its problem of people as buyers of end products. As on the job front, science was invoked. The objective was personal satisfaction, and the rationale was efficiency. The term "consumer" was invented to describe the desired object. Advertising and the creation of mass produced communications (press, radio and 1V principally) were developed as the specialized means to this systemic end. Even if a seeming "overproduction" of consumer goods threatened the profitability of an industry the ability of a company to distinguish its products from unbranded similar products allowed its sales and profits to grow in security. If studies are done- I have been able to locate none- of the history of brand names, it will be found that this was how brand name loyalty became an essential weapon in industry when the trusts which produced the present oligopolistic empires of monopoly capitalist industry became dominant features of the industrial landscape. Certainly the Baran and Sweezy thesis that monopoly capitalism manages. demand through market controls and advertising would seem to carry as its corollary the hypothesis that something like the suction of commodities from the material production line to the oligopolistic end-product markets has replaced the atomistic circulation of commodities typical of Marx' s time as the model of monopoly capitalist marketing. While historical scholarship in marketing seems conspicuously undeveloped, fragmentary evidence from studies of marketing history tend to confirm the outline of the process here sketched. ' 8 18

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For example, Joseph Palamountain says, "Great increases in the size of manufacturers or retailers have changed much of the distribution from a flow through a series of largely autonomous markets to a single movement dominated by either manufacturer or retailer."'9 Simultaneously, the newspaper and magazine industries found themselves in a position to vastly increase the productivity of the printing trades in the last quarter of the nineteenth century. Technical advances in typesetting, printing (including colour), photographic reproduction, etc., could be financed if someone would foot the bill. The newspaper and magazine entrepreneurs (the William Randolph Hearsts and their rivals) invented the "yellow journalism" which took advantage of this situation. The cycle of capital expansion ensued in accelerated speed and scope. Production and circulation were multiplied, while prices paid by the readers were held constant or decreased. And the "mass media" characteristic of monopoly capitalism were created in the 1890's. It was these mass media, increasingly financed by advertising, that drew together the ''melting pot'' working class from diverse ethnic groups which were flooding in as migrants to the United States into saleable audiences for the advertisers. 6o The advent of radio-telephony in the first two decades of this century made possible the use of the same principle which had been proven in the print media. And so commercial radio broadcasting became a systemic innovation of, by, and for monopoly capitalism. When the pent-up civilian demand at the end of World War 11, and the generous capital subventions of a government intent on winning that war had provided electronics manufacturers with shellloading and other war plants easily convertible into TV set manufacturing; and when a complaisant FCC could be manipulated into favouring TV over FM broadcasting, 61 TV was approved and largely financed out of capital accumulated from commercial radio broadcasting's profits.6 2 Why was this media complex rather than some other mode of marketing developed by monopoly capitalism to create and control ''consumers''? Because it offered a cheaper and more efficient mode of demand management than the alternatives which could be devised. What alternatives? The obvious alternative was ''more of the same'' methods previously used in marketing: heavier reliance on travelling salesmen to push goods to retailers, heavier use of doorto-door salesmen. To calculate the opportunity cost with a hypothetical elaboration of a marketing system designed to sell branded commodities without advertising was and is a horrendous prospect. Moreover, it would be pointless because mass production of (branded) consumer goods and services under capitalism would not have happened, absent advertising. An indication of the efficiency of the audience commodity as a producers' good used in the production of consumer goods (and a clue to a possible measure of surplus value created by people working in audiences) is provided when we compare

advertising expenditures with "value added" by retailing of consumer goods and services. In 1973 in the U .S. some $25 billion was spent in advertising while personal consumption expenditures were. about $800 billion. Three percent of the sales price as the cost of creating and managing demand seems very cheap and profitable. The system also accrued valuable side-benefits. Institutional advertising and the merchandising of political candidates and ideological points of view in the guise of the free lunch and advertising messages were only appreciated and exploited systematically after World War I when propaganda and its associated public opinion polling were developed for war promotion purposes. To summarize: the mass media institutions in monopoly capitalism developed the equipment, workers and organization to produce audiences for the purposes of the system between about 1875 and 1950. The prime purpose of the mass media complex is to produce people in audiences who work at learning the theory and practice of consumership for civilian goods and who support (with taxes and votes) the military demand management system. The second principal purpose is to produce audiences whose theory and practice confirms the ideology of monopoly capitalism (possessive individualism in an authoritarian political system). The third principal purpose is to produce public opinion supportive of the strategic and tactical policies of the state (e.g. presidential candidates, support oflndochinese military adventures, space race, detente with the Soviet Union, rapprochement with China and ethnic and youth dissent). Necessarily in the monopoly capitalist system, the fourth purpose of the mass media complex is to operate itself so profitably as to ensure unrivalled respect for its economic importance in the system. It has been quite successful in achieving all four purposes. If we recognize the reality of monopoly capitalism buying audiences to complete the mass marketing of mass produced consumer goods and services much further analysis is needed of the implications of this ''principal and decisive" integration of superstructure and base which reality presents. First, the contradictions produced within the audience commodity should be understood more clearly. I refer to the contradiction as between audience members serving as producers' goods in the marketing of mass produced consumer goods and their work in producing and reproducing labour power. I think that the consciousness industry through advertising-supported mass media produces three kinds of alienation for the members of the audience commodity: ( 1) alienation from the result of their work "on the job"; (2) alienation from the commodities-in-general which they participate in marketing to themselves; and (3) alienation from the labour power they produce and reproduce in themselves and their children. It would seem that the theory of work needs reconsideration.

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Then connections to other areas need to be examined. Among such connections there come to mind those to Marxist theory about social consciousness (and false consciousness), to theory about the nature of the class struggle, the nature of the proletariat under monopoly capitalism and sex chauvinism, and to theories of the state. The last of these seems obvious if this analysis is considered in connection with the recent articles by Gold, Lo, and Wright. 63 The role of the mass media and the consciousness industry in producing the audience commodity both as commodity-in-general and peculiar commodity might provide the real sinews to the structural-Marxist model of the state of Poulantzas and to the theoretical initiatives of Claus Offe in seeking the processes within the state which "guarantee" its class character. The connection to the work of de Bord 64 regarding consciousness is proximate. The relation of industrially produced images to the "real" world of nutrition, clothing, housing, birth and death is dialectical. The mass media are the focus of production of images of popular culture under monopoly capitalism, both through the explicit advertising and the "free lunch" which hook and hold people in audiences. Because the consciousness industry produces consumable, saleable spectacles, its product treats both past and future like the present - as blended in the eternal present of a system which was never created and will never end. The society of the spectacle, however, cannot be abstractly contrasted with the "real" world of actual people and things. The two interact. The spectacle inverts the real and is itself produced and is real. Hence, as de Bord says, objective reality is present on both sides. But because the society of the spectacle is a system which stands the world really on its head, the truth in it is a moment of the false. Because the spectacle monopolizes the power to make mass appearance, it demands and gets passive acceptance by the "real" world. And because it is undeniably real (as well as false) it has the persuasive power of the most effective propaganda. 6' Finally, another example of necessary connections is that to the theory of imperialism and socialism in the present stage of monopoly capitalism. There are many ways by which a theory of commodity production through mass communications would strengthen the analysis, for example, of Samir Amin. 66 The cocacolonisation of the dependent and peripheral countries cannot be grounded in Marxist theory without attention to the production of audience commodities in the interest of multi-national corporations. It would link Amin's theory to Herbert Schiller's work on the relation of the mass media to the American empire. 67 And, when linked with analysis of the ideological aspects of science and ''technology'', it could strengthen the development of a non-economistic, non-positive, non-Eurocentered Marxism. Analysis of such connections is inviting but beyond the scope of the present essay. Communication Studies Simon Fraser University 21

Notes I.

To demonstrate this in detail would require a lengthy analysis which would deflect the present article from its affirmative purpose. Gramsci, the Frankfurt School writers (Adorno, Horkheimer, Marcuse, Lowenthal), Raymond Williams, Poulantzas, Althusser, and Marxists concerned with the problems of developing nations (e.g. Samir Amin, Clive Y. Thomas) none of them address the consciousness industry from the standpoint of its historical materialist role in making monopoly capitalist imperialism function through demand management (concretely through the economic processes of advertising and mass corn· munications). This is precisely the blindspot of recent Western Marxism. In the developing de: bate it would be useful to have: studies bearing on whether and why such writers have: or have: not dealt with this aspect of monopoly capitalism. Reality imposes a burden of proof on them as wc:U as on me.

2.

Lenin held a manipulative theory of the mass media and admitted naivete in thi~ respect. "What was the: fate of the decree establishing a state monopoly of private: advc:rrising issued in the first weeks of the Soviet govc:rnmc:nt? ... lt is amusing to think how naive: we: were: ... The enemy i.c:., the capitalist class, retaliated to this decree of the state: power by completely repudiating that state power." "Report on the New Economic Policy", Seventh Moscow Gubernia Conference of the Russian Communist Party, October 21. 1921, in Lmin About the Press, Prague, International Organization of Journalists, 1972. p. 203. Lenin's Imperialism is devoid of recognition of the relation of advertising to monopoly capitalism and imperialism.

3.

The Mind Managen, Boston, Beacon Press, 1973.

4.

"For a Political Economy of Mass Communications", The Socialist Regirtu. 1973.

5.

Sage Publications, Bc:vc:rly Hills.

6.

Cf. Finkc:lstc:in, Sidnc:y. Sense and Nonsense of ftlcLuhan, N.Y. International Publishrrs, 1968; Theall, Donald, The ftledium is the Rear View Mirror, Montreal, MrGiii/Queen's University Press, 1971; and my review of the: latter in Queen'J Quarterly, Summer, 1971.

7.

I am indebted to Professor William Livam, University of Regina, for much hard criticism which he formulated in a critique: of a draft of this paper in December. 1975.

8.

The objective reality is that the: ostensible advertisements and the material which wmcs between them, whether in the print or e-lectronic media. have a common purpose of producing rhe audience:. lt is an interesting consequence of the idealist perspenive rhar in most liberal analysis the "advenising" is considered to be separate from the "news"'. "entertainment", "educational material" which is interlarded between the advertisements.

9.

"Ibe annual cost to audience members of providing their own broadcast receivers (and paying for Cable TV), consisting of depreciation, interest on investment, maintenance and elccrrir power, amounted to slightly more rhan S 1.8 billion, while the over-the-air brnadcasrers" (Canadian Broadcasting Corporation plus private broadcasters) and Cable TV operators" com were 2 bout $631 million.

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"On Contrad ictions" , Selecte d 1¥-'orks o/Mao T.re-Tung, Vol. 1, Peking, Foreign Languages Press, 1967, p. 336. Emphasis added.

11.

New York, Monthly Review Press, 1966.

12.

The New Industria/Stale, Boston, Hough ton Mifflin, 1967.

13.

Chamberlin, E. H., The Theory ofMonopolutzi: Competition, Cambridge, Mass., 1931.

DALLAS W. SMY lliE socially organized and not left up to the individual despite cenain appearanc~", ("In Pra.ise of Socialism", Monthly Review, Septem ber, 1974, p. 8). Amin also has the bltnd spot whtch does not recognize the audienc e commodity which mass media have produced. 23.

I am perhaps wrong to exclude sleeping time from work. The dividing line berween recreation of the ability 10 work while awake and sleeping may be illusory. It may be that t~e head coach of the Washin gton, D.C. "Redsk in" professi onal football team, George Alien, ts closer to the mark than most economists when he tells his players, "Nobod y should work all the time. Leisure time is the five or six hours you sleep at night. You can combine two good things at once, sleep and leisure. " Quoted in Terkd, Louis, Working, N.Y. Pantheo n,1974, p. 389.

24.

Livant, William , "The Communications Commo dity", (Xerox, University of Regina, 25 December, 1975), p. 7.

25.

For present purposes I ignore the ancillary and interact ive processes which contribute to the production of labour power involving also the educational institutions, the churches, labour unions, and a host of voluntary associations (e.g. YMCA, Girl Scouts).

14. Monopoly Capzialz!m, p. 116. 15.

lt is argued by one of my critics that a better term for what advertisers buy would be "attention ". At our present naive stage concerning the matter, it does seem as if attentio n is indeed

what is bought. But where people are paid for working on the job, should Marxists say that what the employer buys is "labour power" or "the manual dexterity and attentio n necessary for !ending machin es"? Where I refer to audienc es as being produced, purchased and used, let tt be understood that! mean "audien ce-pow er"; howeve rit may turn out upon funher realistic analysis to be exercised .• 16. The pages of Vani!ty report on cases where the ostensibly non-advertising matter in the media, which I call the "free lunch", attracted an audienc e which had propensities incongruous with the particular product or service being advertis ed; in such cases the program is cancelled and the audience discarded. · 17. The "free lunch" concept of the mass media was first stated by Liebling AJ., The Press, N.Y. Ballantine, 1961.

26. The following analysis dr.iwso n the de Grazia, Sebastia n, OfTime , Work and Lei.Jure, N.Y., Anchor, 1964. 27.

Marx, Karl, Grundrisse, London, Pelican, 1973, p. 287.

28.

Ibid., p. 325.

29.

Pan-tim e workers (probably more female than male) amount ed in 1960 to nineteen percent of the employed labour force in the United States and worked an average of 19 hours weekly. If we exclude such workers in order to get a figure compar able to the 70 hours in 1850, we consider the weekly hours worked by the average Americ an male who worked at least 35 hours per week and find that they averaged 46.4 (as against 39.5 for all workers). ~or the _sak~ of brevity, I omit the counter part calculation of "free time" for women. No sextst imphcauons are intende d.

18. Loc. cit. 121. Or for elaborate obfuscation, see Machlup, Fritz, The Production and DiJm"bution a/Know ledge in the Unzied Stales, Princeto n, Princeton University Press, 1962. 19. See Brown, Les, TeleviJion: The Business Behind the Box, N. Y. Harcou n BraceJovanovich, 1971. 20. l.ivant, Williarn, "Notes on the Development of the Production of Labour Power", 22 March, 1975 (dittoed). 21.

Livant, William, "More· on the Production of Damaged Labour Power" , I April, 1975 (dittod), p. 2.

22.

In arguing that all non-sleeping time under capitalism is work time,I go beyond Samir Am in who says :·social time is split into non-working time and working time. But here too the former exiStS only to serve the latter. It is not leisure time, as it is called in the false consciousness of alienated men, but recuperation time. It is functional recuperation that is

30. Loc. cit .• p. 346. 31.

" ... the manufacturers of paper and ink and TV sets whose product~ are used to control and poison the minds of the people ... " (Ibid., p. 344).

32.

Blank, David M.. "Pleasurable Pursuits - The Changi ng Structure of Leisure-Time Spectator Activities", National Association of Business Econom ists, Annual Meeting, September. 1970 {ditto).

H.

Broadcasting l'earbook, 1974. p. 69.

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34. For many years p:mons at professional baseball and football games liave been listening to portable radios broadcasting the same game. In 19n I observed that patrons at professional football games are beginning to watch the same game on portable TV sets for the "instant repl:ays".

35.

Levitt, T.N., "The Industrialization of Service", HaroardBusiness Review, September, 1976, pp. 63-74,73.

36.

I use the term "rational" here in the common sense usage, that the result should be one which can be "lived with", is "the right decision", which "makes sense". I imply no Benthamist calculus of utilities or pleasure or pain.

50.

Referring to a reponed $13 million advenising budget which produced $16 million in drug store sales, expressed in wholesale prices, they say: "Allowing for a handsome profit margin, which of course is added to selling as well as production cost, it seems clear that the cost of production can hardly be more than a minute proportion of even the wholesale price." (Op. cit., p. 119).

51. Ibid.,Monopoly Capitalism, p.118.

37.

Linder, Staffen B., The HamedLeisure Class, N.Y. Columbi:a University Press, 1970, p. 59.

38.

Ibid., pp. 70-71.

52.

Cf. Aspinall, A.,PoliticsandthePress, 1949.

53. The young and conservative Richard T. Ely, writing in 1886 presented a sympathetic and respectful account of the radicalism of the existing union movement in the United States. Ely, RichardT., TheLabourMovementinAmeni:a, N.Y., T.Y. Crowd!& Co. 1886. 54. Stone, Catherine, "The Origins of Job Structures in the Steel Industry", Rev1ew of Radical Poltili:a/Economy, Summer, 1974, p. 113-173.

39. Ibid., p. 71.

40.

Publisher's blurb forWard, Scott, Wackm:an, Daniel B., and Wanella, Ellen, How Children Leam to Buy: The Development of Consumer Information-Processing Skills, Beverly Hills, Sage Publications, 1977.

41.

Linder, op. cit., p. 123.

42.

Ibid., Monopoly Capitalism, p. 122.

43. Ibid., p. 119.

44.

Galbraith,J.K., The Affluent Society, Boston, Hough ton Mifflin, 1958, p. 160.

45.

Ibid., Monopoly Capitalism, p. 125.

46.

Ibid., p. 141.

47.

At the outset of Volume II, Capital, Marx says: "It is therefore taken for granted here not only !~at the commoditie~ are ~old ~t their values but also that this takes place under the same cond1110ns throughout. LtkewJSe diSregarded therefore are any changes of value which might occur during the movement in circuits." (Marx, Karl, Cap1ial, Vol. 11, Book 11, p. 26. Moscow, Progress Publishers, 1967 .)

48.

Marx, Karl. Grundri.ru. London, Pelican Books, 1973, p. 91-2. Emphasis added.

55.

Knight, M.M., Barnes, H.E. and Flugd, F., Econom1i: History of Europe, N.Y., Houghton Mifflin, 1928.

56.

Brady. Roben A., The Rationalization Movement in German Indwtry. Bcrkclcy, Univ. of Calif. Press, 1933, and his Business as a System a/Power, N.Y .. Columbia University Press, 1943. Also Veblen, T., The Theory o[Businm Enterprise, N.Y., Viking Press, 1964.

57. Jeremy Bemham and Charles Babbage had publicized the ideas: Taylor and his successors were the expens who applied them. See Braverman, Harry, Labour and Monopoly Capital. N.Y., Monthly Review Press, 1974: Stone, Catlterine, "The Origins ofJob Structures in the Steel industry", op. cit., and Palmer, Bryan, "Class, Conception and Conflict: The Thrust for Efficiency; Managerial Views of Labour and the Working Class Rebellion, 1903-1922.", Review o[Rad1i:al Politti:al Economy, Summer, 1974, p. 31 - 49.

58.

25

Edwin H. Lewis argues that: "Prior to Civil War, in the United States, the wholesaler was typically the dominant factor in the channel. Small retailers and frequemly small manufacturers as well, depended on the wholesaler to carry stocks and to give credit or financial support. Following the Civil War, large scale retailers became the dominant elemem in the distribution of convenience goods and certain shopping goods. As manufacturers have grown larger and as oligopolistic conditions have prevailed in many imlumies, the manufacturer has held a position of strength in the channeL" Lewis, Edwin 11., lt!arketing Channe/s,N.Y.McGrawHill,1968,p.16 3. According to Philip Kotler: "A c~ange began in the 1890's with the growth of national firms and national advenising media. The growth of brand names has been so dramatic that todav, in the United States, hardly anything is sold unbranded. Salt is packaged in distincti~c manufacturers' containers, oranges are stamped, common nuts and bolts are packaged in cellophane with _a_distributor's label, ~nd various pans of an automobile- spark plugs, tires. filters -:- bear VJStble brand names dtfferent from that of the automobile." Kotler, Philip. Marketzng Management, 2nd ed., Englewood Cliffs, New Jersey. Prentice Hall, 1972. p. 446.

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BLINDSPOT 59.

Palamountain,Joseph C.Jr., "Vertical Conflict" in Stem, Louis W., Distribution Channels: BehavsoraiDimensions, N.Y., Houghton Mc:ffiin, 1969, p. 138.

60.

Sruart Ewc:n, in Captains ofConSCtousneJS (N.Y., McGraw-Hill,_l976) provides abundant documentation of the: purposivc:nc:ss with which monopoly capitalism used advertising and the: infant mass media for this purpose: in the: period around and following World War I.

61.

Lessing, L.P. Afan o/High Fidelity: E. A. Armstrong.

62.

Why did the: cinema, generally conceded to be part of the mass media, not become producers of audience products as part of the: systemic bulge of the consciousness industry after 1875? To this, there are several obvious answers. The cinema requires an audience assembled outside: the home. It is in the ancient traditional mode of the theatre, arena, assembly, etc. As such it had its own momentum and defmed its prime product as the sale of a seat at a particular location and rime in relation to the exhibited film. What the advertisers needed - and what capitalism developed as a spc:ci21ized part of the process of mass producing and mass marketing consumer goods- was a method of mobilizing people to work at being consumers in their alienalt!d separalt! homes. This advertising supported media made possible. The motion picture indusrry is not so isolated from the marketing process as this explanation might suggest. ''Tie-ins'' for consumer goods are a normal part of the planning and receipts (often unreported for tax purposes) of the producers, directors, writers and star performers in theatrical films.

63.

Gold, David A., Lo. Clarence Y.H., and Wright, Erik Olin, "Recent Developments in Marxist Theories of the Capitalist State". Monthly Review, October 1975, p. 29-43. November, 1975, p. 36-52.

64.

de Bord, Guy, The Society ofthe Spectacle, Detroit, Black and Red, Box 9546, 1970.

65.

Ibid., p. 6-9.

66.

Amin, Samir, Accumulatson on a World Scale, N.Y., Monthly Review Press, 1974, and "Toward a Structural Crisis of World Capitalism", Soc:zlist Revolulton, April1975, p. 9-44.

67.

Schiller, Herbert I. AfaJS Communicatsom and Amencan Empire, N.Y. Augustus Kelley, 1971. Communication and Cultural Domination, White Plains, !ASP, 1976.

Canadian journal of Political and Social Theory/Revue canadienne de theorie pofitique et sociale, Vol. 2, No. 2 (Spring-Summer/Printemps-Ete 1978).

BLINDS POTS ABOUT WESTERN MARXISM: A REPLY TO DALLAS SMYTHE

Graham Murdock Dallas Smythe's recent article, "Communications: Blindspot of Western Marxism'' deserves serious attention from anyone interested in the possibilities for a viable materialist theory of mass communications. According to Smythe, not only do we not have such a theory at present- we do not even have a firm basis for its development. And this, he argues, is principally because western Marxism suffers from a fatal blindspot on the subject. It is not only that communications has been a relatively underdeveloped area of work with Marxism; it is also that the attempts at analysis made so far have been fundamentally misconceived. They have treated the mass media primarily as part of the ideological superstructure and ignored or underplayed their integration into the economic base. Smythe argues that we need to reverse this emphasis and return economics to the centre of Marxist cultural analysis. For him, "The first question that historical materialists should ask about mass communications systems is what economic function for capital do they serve, attempting to understand their role in the reproduction of capitalist relations of production'' (pl italics in the original). It is a bold polemic, delivered with panache, and embracing almost all of the currently fashionable variants of European Marxism. His list of the "blind" includes, Adorno and Horkheimer, Gramsci, together with leading contemporary writers such as Louis Althusser, Hans Enzensberger and Raymond Williams. Smythe is undoubtedly right about the underdevelopment of economic analysis in western Marxist work culture and communications. However, he is by no means alone in this perception. A number of European Marxists would wish to go a good deal of the way with him. Raymond Williams' recent writings, for example, are peppered with attacks on versions of Marxism which over-emphasise the ideological role of communications. As he put it in a recent article then, "the main error" is that they substitute the analysis of ideology "with its operative functions in segments, codes and texts" for the materialist analysis of the social relations of production and consumption. 1 In his latest book, Marxism and Literature, he insists that "the insertion of economic detcrminations into cultural studies is the special contribution of Marxism, and there are times when its simple insertion is an evident advance. " 2 Moreover, questions of economic determination have recently provided the

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focus for several Marxist and Marxisant analyses of the British mass media. 3 However, these studies part company with Smythe on the question of the value and relevance of the western Marxist tradition. Whereas for him it is an obstacle to be cleared away, for Williams, for myself and for many others in Britain and Europe it is a resource to be drawn upon. Certainly it needs to be rigorously reworked and the dross jettisoned, but I want to argue that a critical engagement with western Marxism is still indispensable to the development of a comprehensive and convincing Marxist analysis of mass communications. Not least, this is because the central topics of western Marxism are precisely those which were left underdeveloped in the work of Marx and of classical Marxism: the nature of the modern capitalist state; the role of ideology in reproducing class relations; the problematic position of intellectuals; and the formation of consciousness in conditions of malis consumption. Smythe acknowledges the continuing importance and centrality of these issues and itemises them as areas. requiring further development at the very end of his essay. Yet paradoxically he turns his back on the rich sources of insight and conceptualisation offered by European Marxism. This wholesale rejection seems to me to be rooted in an over-simplified view both of the tradition itself and of the historical experience to which it speaks. This is Smythe's own blindspot. Before I elaborate on this point however, it is necessary to outline his argument a little more fully. As noted above, Smythe is not alone in insisting that contemporary mass communications systems must be analysed as an integral part of the economic base as well as of the superstructure. At its simplest this is so because communications are now big business with mass media companies featuring among the largest corporations in the major western economies. Indeed, some commentators have argued that recent developments, particularly the general shift from manufacturing to service industries and the investment switch from armaments to communications, have made the information industries "one of the economic leading edges of developing multi-national capitalism. " 4 Smythe's primary interest though, is not so much in the emerging structure of contemporary capitalism as in its underlying dynamics. For him the crucial question concerns the role of mass communications in reproducing capitalist relations of production. His answer centres on the part they play ''in the last stage of infrastructural production where demand is produced and satisfied by purchases of consumer goods" (p3). In particular he focuses on their articulations with advertising and on the way that the mass media create "audiences with predictable specifications who will pay attention in predictable numbers and at particular times to particular means of communications'' (p4). In order to generate these stable consumer blocs he argues, media entrepreneurs offer their audiences inducements in form of hews and entertainment material designed to keep their attention and induce a favourable response towards the products being advertised. Hence, while he recognises

that mass media content plays an important role relaying and reproducing dominant ideologies, for Smythe this is less important than their prime task of creating audiences-as-commodities for sale to monopoly capitalist advertisers. Through their exposure to mass media audience members learn to buy the particular goods advertised and acquire a general disposition to consume, thereby completing the circuit of production. Moreover, while they are doing this they are simultaneously reproducing their labour power through the relaxation and energy replacement entailed in consumption. Despite the reservations which I will come to presently, Smythe deserves credit on at least two counts. Firstly, in contrast to most Marxist discussions of communications which start from Mane's more obvious statements about ideology, notably The German Ideology and the 1859 Preface, his analysis is firmly grounded in the central economic works; Capital and the Grundrisse. This redirection of. attention enables him to highlight a number of formulations which have been passed over previously and which deserve the attention of Marxists interested in communications. Secondly, Smythe's own attempt to apply these insights to the contemporary situation succeeds well in demonstrating their importance for a full understanding of the role of the mass media in capitalist societies. Unfortunately though, his argument suffers somewhat from overselling. In part the problem stems from his treatment of the North American situation as paradigmatic. "Europeans reading this essay", he argues, "should try to perceive it as reflecting the North American scene today, and perhaps theirs soon" (p2). Today New York, LA. and Vancouver, tomorrow London, Paris and the world. Of course there is a measure of truth in this assertion. North America does occupy a pivotal place in the world media system; as a source of ownership and investment, as an exporter of products, technologies and organisational styles, and as a key market for English language material. Certainly no analysis of the media systems of Britain and continental Europe would be complete without an analysis of their various links with the systems of North America. At the same time though, the European situation displays important differences which are reflected in the emphases and preoccupations of Marxist theorising. Smythe's failure to acknowledge and come to terms with these departures has produced his own blindspots about western Marxism. There are three particularly important omissions in his presentation. 1. He drastically underestimates the importance and centrality of the state in contemporary capitalism. True he refers in passing to the recent work of Nicos Poulantzas and Claus Offe, but only on his last page and then very much as an afterthought. Certainly the implications of their work are not explored in the body of the essay. The continuing crisis of profitability has produced two contradictory movements within European capitalism. Firstly, a number of industries in-

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eluding mass communications have witnessed a marked concentration of ownership as the large firms have absorbed smaller concerns in a variety of sectors. In an effort to maintain profit rates these emerging multi-media conglomerates have sought out new markets, thereby further extending their reach and influence. Examples include: the institution of aggressive export policies, the opening up of new outlets such as commercial radio in Britain and so-called "free" television in Italy, and the incursion of competition and market criteria into hitherto public communications sectors such as French television. At the same time however, as the crisis has deepened, so the state has assumed a. larger and larger role in formulating and directing economic activity and policy in order to guarantee the necessary conditions of existence for continued accumulation. The result is an indissoluble but contradictory relationship between the centralised capitalist state on the one hand and concentrated monopoly capital on the other. Consequently, as Bob Jessop has recently noted, "the analysis of the state ... is an absolute precondition of adequate economic theorising today"., Indeed, the very notion of a.materialist political economy presupposes the centrality of state-economy relations. How exactly these relations are best analysed remains the subject of pointed debate among European Marxists, but it is a debate which is missing from Smythe's presentation. Nor are the questions to be settled solely economic. The problematic relations between capital and the capitalist state have important social and cultural repercussions. They are mapped onto the ideological conflict between criteria of profit as against need and onto the political struggles between public and private ownership and control. In Britain at the moment, for example, protracted struggles are being waged around the allocation of resources for the fourth television channel, and for local community radio and cable TV. And to varying degrees this pattern is repeated in the rest of continental Europe. But more is at stake than a better account of the contempoary situation in Europe. If Marxism is to go beyond the critical analysis of capitalism to develop a genuinely comparative analysis of social formations it urgently needs an adequate framework for conceptualising the complex and shifting relations between modes of production and forms of the state. There are signs that this difficult but necessary enterprise is now gathering momentum within Marxism, with the revival of investigations into European Fascism, the spate of postmortems on the fate of Chile, and the growing interest in the nature of socialist states and the problems of transition. This last is particularly crucial, for as Tom Bottomore has emphasised, an adequate "Marxist sociology at the present time would have to be capable of providing not only a 'real' analysis of capitalist society, but also a 'real' analysis of those forms of society which have emerged from revolutions inspired by Marxism itself, but which display many features that are problematic from the standpoint of Marxist theory.' '6 On this problem

Smythe is entirely silent. His analysis applies only to advanced capitalist economies. 2. Smythe's preoccupation with the relations between communications and advertising leads him to underplay the independent role of media content in reproducing dominant ideologies. This is particularly clear in the case of those sectors with minimal dependence on advertising revenue - the cinema, the popular music industry, comic books, and popular fiction. True, they are still articulated to the marketing system through equipment sales (you need a record player to play records), through the use of film and pop stars to endorse consumer products, and through the manufacture of commodities based around film and comic book characters- Star Wars T-shirts, Mickey Mouse soap and so on. But selling audiences to advertisers is not the primary raison d' etre of these media. Rather, they are in the business of selling explanations of social order and structured inequality and packaging hope and aspiration into legitimate bundles. In short, they work with and through ideology - selling · the system. These .non-advertising based media are almost entirely passed over in Smythe's presentation in favour of the press and commercial television which are the exemplars par excellence of his thesis. Although secondary, the sectors he neglects are not exactly marginal. Certainly an adequate analysis would need to incorporate them, and here again western Marxism has. much of offer. Pertinent work includes: Adorno's writing on the music industry; Gramsci' analyses of popular literature; Dieter Prokop's investigations of contemporary cinema; and Armand Mattelart' s dissection of the ideology of Disney comics. Alongside these analyses of content and production others have worried away at the problem of understanding how ideologies become internalised and fixed in the consciousness of audiences. The various efforts to explore the relationships between Marxism and the ideas of Freud are probably the best-known. These range from the early work ofWilhelm Reich and of the Frankfurt School to the recent appropriations ofJ acques Lacan. 7 While these attempts have not always been particularly successful or convincing, they have at least grappled with the crucial problems of mediation and reception, and tried to explain how exactly the ideas of the ruling class come to constitute the ruling ideas of the epoch. In his eagerness to purge every last trace of idealism from his analysis, Smythe has abolished the problem of ideological reproduction entirely. This is a serious oversight. Materialist analysis needs to begin by recognising that although integrated into the economic base, mass communications systems are also part of the superstructure, and therefore they play a double role in reproducing capitalist relations of production. They complete the economic circuit on which these relations rest and they relay the ideologies which legitimate them. This second function is not reducible to the first. Indeed, as several recent commentators have emphasised, the successful reproduction of

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ideology is one of the key conditions for the continued existence of prevailing productive relations. 8 Therefore it is not a question of choosing. between theories of ideology and theories of political economy, but of finding ways of integrating the two into a more adequate and complete account. To quote Tom Bottom ore again: ''This phenomenon, the maintenance of capitalist society through the reproduction of bourgeois culture'' still ''needs to be investigated in detail. "9 3. Smythe tends to present the operations of mass communications systems as relatively smooth and unproblematic. Not only is this somewhat surprising theoretically, given Marxism's stress on contradiction and struggle; it does not fit the facts of the present situation. As mentioned earlier, the British media system is currently the site of protracted struggles over questions of use and control. There are demands for the extension of nationalisation and municipal ownership, for greater decentralisation and regionalisation, for various forms of worker control, and for greater public participation in planning and production. Similar demands are also being made across the rest of western Europe. Moreover, these struggles are mapped onto the broader patterns of class conflict: between different factions of capital, between owners and production personnel, between intellectual and technical workers within media organisations, and between producers and consumers. Smythe acknowledges the problem of class struggle as an important area requiring examination, but he gives no indication of how it might be accommodated within his framework. Once again however, some of the most fruitful pointers have come from western Marxism, particularly from the work ofGramsci. Given that these issues of state economy relations, of ideological reproduction and of class struggle, appear to be central to an adequate materialist theory of mass communications, why does Smythe give them such short shrift. The obvious reason is lack of space. Clearly it is unreasonable to expect a single article to offer a fully comprehensive framework. However, it is reasonable to expect a degree of balance between the important elements. Unfortunately Smythe's presentation is clearly unbalaned. In his eagerness to jettison western Marxism he reverses its priorities and treats its preoccupations as peripheral. Partly this is polemics, but I think it is also symptomatic of a real failure on Smythe' s part to come to grips with the tradition. He doesn't settle accounts, he simply refuses to pay. What then is western Marxism and what does it have to offer? At its broadest, the term "Western Marxism" covers all the variants of Marxism which developed in western Europe· after 1918. Hence it stands in contrast to the other great current- Soviet Marxism. Although scrvicable, this distinction has a tendency to blur around the edges. For example, one of the most influential western Marxist, Georg Luk:lcs, spent long periods in the Soviet Union, an experience which is reflected in his writings. Conversely,

Trotsky is often eo-opted as a sort of honourary western Marxist. But even if we leave these ambiguous cases to one side, western Marxisn:t still presents a remarkably complex and varigated intellectual tradition. While it is broadly true that western Marxists have tended to concentrate their attentions of ideology and culture (for reasons we shall come to presently) there has always been a vigorous though subsidiary current of work on economics. Indeed, we are only just now beginning to explore this legacy; to come to terms with Austro-Marxism and particularly Hilferding, 10 to work through the implications of Pierre Sraffa' s writings, u and to recognise the important contributions of neglected figures such as Sohn-Rethel. 12 Smythe is however correct in suggesting that the insights generated by Marxist economists have never been systematically applied to the analysis of mass communications. Among those mainly interested in culture and ideology however, other important divisions are evident, most notably the split between those who involved themselves in political activity and those who remained disengaged. Where the first group found their main base and audience within the left parties and the workers' movement, the latter found theirs primarily within the universities and the literary establishment. Hence the break was roughly between the activists and the academics. The first group includes Gramsci, Brecht and a number of lesser figures like the Trotskyist FranzJakubowski, 13 while the second includes Adorno, Goldmann, Althusser, and Raymond Williams (in his later phase). From the list Smythe offers (p22) it is clear that it i~ this academic group that he has most in mind as representatives of western Marxism. Once again however, this distinction is not as firm as it first appears. Louis Althusser for example, is usually counted among the more theoreticist of contemporary western Marxists, yet he is also an influential member of the French Communist Party whose works are permeated albeit surreptitiously, by party polemics. Nevertheless, Smythe's assertion that "professorial Marxists" have been preoccupied with questions of philosophy, ideology and culture is broadly correct. 14 He poses the question of why this should be so, and expresses the hope that others will try to suggest an answer. An even half-way adequate reply would take at least a book, but for the moment some sketchy suggestions will have to serve. To understand the blindspots and idees ]zxes of western Marxism we need to place its development in the context of the history which formed it. As a beginning it is useful to distinguish three broad phases: the interwar years, the period from 1945 to the end of the 1960's and the years since. Although certain themes are common to all three, each has inflected them in a distinctive way. The central problematic of the interwar years was formed by the failure of the revolutionary initiatives in the advanced western economies. One after another, promising advances were turned back and crushed. Later, with capitalism facing an unprecedented crisis, instead of a resurgence of socialism, Fascism

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took root and flowered in the very places where revolution had seemed most possible: in Germany, in Austria and in Italy. Not surprisingly, explaining this spectacular reversal became a major priority among western Marxists. Since economic crisis had clearly failed to fuel the revolution, attention turned to the forces maintaining cohesion and domination .. Some, like Trotsky, Franz Neumann and Sohn-Rethel,u focused on the new fascist forms of the capitalist state and their coercive apparatuses. Others, notably Gramsci, Adorno and Horkheimer highlighted the part played by communications and culture in engineering the consent of the governed. This second line of inquiry was given added impetus by the massive expansion of the communications industries. These were the years that saw the rise of radio as a mass medium, the introduction of talking "pictures", the sophisticated deployment of photo journalism, and their wholesale eo-option into the ideological apparatuses of the fascist states. Against this background of escalating propaganda management, censorship and repression the question of the mass media's economic and commercial role seemed relatively unimportant. Once ideology was viewed as a key weapon in the arsenal of class domination, critical intellectuat work on culture could be regarded as a crucial contribution to the general struggle against fascism and the capitalist system which supported it. For Horkheimer and Adorno this meant preserving the gap between the actual and the possible; for Gramsci it meant constant educational work to build a radical counter culture among the dominated. This emphasis on the importance of critical intellectual work and cultural practice provided a convenient occupational rationale for Marxist intellectuals. For, as Pierre Bourdieu has wryly pointed out, nobody believes more fervently in the transforming power of ideas than the professional intelligentsia who owe their class position to their intellectual skills. 16 In a number of cases this occupational ideology was further reinforced by biographical experience. Adorno for example, came from a milieu where cultural activity and accomplishment was a central value. He had dabbled at composing and music criticism. Similarly it was not particulary surprising that Gramsci should value educational activity, given that it had provided his own escape route from poverty and his entry ticket into the radical intelligentsia. After the initial period of post-war reconstruction, the advanced capitalist economies of western Europe entered a cycle of boom which generated a rapid expansion in the consumption of leisure and entertainment goods. Many of these developments were dominated by American style products and organisations, and were firmly articulated to the advertising ~nd marketing system which Smythe describes. Why then did western Marxists generally pay less attention to these aspects than to the problems of cultural form and ideologital transmission?

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Part of the answer has to do with the classification of Soviet Marxism. The concentration on culture among western Marxists at this time can be seen as an over-reaction to the economism of the official Soviet line and to the Stalinist political practice that stemmed from it. Against the Soviet tendency to red~ce cultural forms to reflections of class position and class interest, western Marxists stressed the relative autonomy of ideological production and the complexity of its internal dynamics. Raymond Williams, for example, left the British Communist Party in the late 1940's to begin a long interrogation of the British socialist tradition in an effort to find non-reductionist ways of conceptualising culture-society relations. Elsewhere, others were independently engaged on the same task. In France, for example, Sartre was struggling to marry his existentialism with his growing commitment to Marxism; Lucien Goldmann was exploring to the possibilities offered by Lukacs' work, and Roland Barthes was trying to integrate Sassurian linguistics with a Marxist account of domination and to apply the resulting framework to the analysis of French popular culture. Once again, this general intellectual project was underpinned by occupational and biographical considerations. It is certainly no accident, for example, that a number of prominent European Marxists of the post-war period began either as professional philosophers (Goldmann and Althusser), or as writers and literary critics (Sartre and Williams). Another part of the explanation however, lies in the changing texture of social conflict. The expansion of consumerism was accompanied by a dampening down of industrial conflict and class struggle. The contradiction between Capital and Labour receded from the centre of attention and its place was taken by conflicts grounded in age, in gender, in nationality, in race, and above all in the yawning gap between the developed and underdeveloped worlds between the colonisers and the colonised. Moreover, these conflicts appear~d primarily as political and cultural struggles for self determination, political liberation and cultural autonomy. To many observers on the left it seemed that culture was not just one important site of struggle among others, but perhaps the most important. This misreading of history reached its height during 1967-1968, when for a brief moment it seemed that the construction of a radical counter culture coupled with the control of key institutions of transmission would bring about a bloodless transformation of capitalism. The seventies have provided a sharp corrective to this utopianism, and as the economic crisis has deepened so the intellectual pendulum has begun to swing back, and questions of economic dynamics and determinations have reemerged at the centre of Marxist debate. The reappropriation ofMarx's mature economic works, the renewed attention to the core problems of crisis and the falling rate of profit, and the revival of interest in figures such as Sraffa, all indicate a resurgence of Marxist political economy. This development in turn has opened up new issues in the other key areas of contemporary debate; the 117

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structure and role of the state in contemporary capitalism, the dynamics of class structuration and class struggle, and the nature of legitimation processes. At the present time then, Marxism in Europe is at a point of transition. It is simultaneously assimilating the cttlturalist legacy of western Marxism and confronting the implications of the emerging political economy. Certainly a choice has to be made, but it is not as Smythe would have it, a choice between a theory of economic processes on the one hand and a theory of ideology on the other. Rather it is a choice between different ways of conceptualising the complex relations between the economic, ideological and political dimensions of modern capitalism. Western Marxism still has an indispensable role to play in this enterprise. Firstly, it speaks to real theoretical silences within classical Marxism, silences which cannot be adequately filled by Smythe's schema. Secondly, because it is grounded in historical processes which are still unfolding themselves it provides points of entry into the analysis of contemporary experiene. The problem of understanding the resurgence of neo-Fascism within Europe is one obvious example of its continuing relevance. To react to western Marxism's over-emphasis on culture and ideology as Smythe does by jettisoning it completely and calling for a new improved ''nonEurocentred Marxism" (p21) seems to me to be an over-reaction which substitutes one set of biases and blindspots for another. Rather than rejecting the European tradition tout court, we need to critically rework it, to confront the theoretical problems and possibilities that it opens up, to sort out the concepts and insights that remain viable, and to consign the rest to the history of ideas. There is no doubt at all that Marxism needs to be overhauled if it is to produce convincing analyses of contemporary mass communications systems. As part of this task we shall certainly need to develop the fertile line of analysis sketched by Smythe, but we shall also need to assimilate and build on the contributions of Gramsci, Althusser, Williams and others. For without them, the Marxism of the 1980's will be very much the poorer.

Notes 1.

Raymond Williams, Notes on Marxism in Britain since 1945. New Left Review, No. 100, January/February 1977, p. 90.

2.

Raymond Williams,llfatrirm and Literature, London: Oxford University Press.-1977, p. 138.

3. See Graham Murdock and Peter Gelding, 'Capitalism, Communications and Class Relations', inJames Curran et a/ (eds.) Mass Communication and Society, London: Edward Arnold, 1977. See also John Westergaard's contribution to the same volume. 4.

Nicholas Garnham, 'Towards a Political Economy of Culture', New Univenity Quarterly, Summer 1977, pp 341-2.

5.

Bob J essop, 'Remarks on Some Recent Theories of the CapitalistS tale'. Unpublished paper, University of Cambridge, 1977, p. 40.

6. Tom Bouomore, Marxist Sociology, London: Macmillan 1975, p. 22. 7.

8.

Thi.~ argument is put with particular force in Anthony Cutler, Barry Hindess, Paul Hirst and Athar Hussain, Marx's Capital and Capitalism Today, London: Routledge and Kegan Paul, 1977.

9. Tom Bouomore, op. cit., p. 30. 10. See Anthony Cutler et al. op. cit., Part I. 11. See Ian Steedman, Marx After Sraffo, London: New Left Books, 1977. 12.

A work by Sohn-Rethel on one of his major preoccupations ('Intellectual and Manual U;bour') is due for publication by Macmillan later this year.

13. Jakubowski's major work, Ideology and Superstructure in Historical Materialism, was published in English in 1976 by Alisonand Busby. 14. This argument is also central to Parry Anderson's recent analysis and critique of the western Marxist tradition, Considerations on Western Marxism, London: New Left Books, 1976. 15.

Franz Neumann's Behemoth: The Structure and Practice of National SocialiJm has been available in English since the early 1940's. Trotsky's writings on the fascist state were only published in English in 1971 under the title: The Struggle Against Fascism in Gen:zany. Sohn-Rethel's major work, Okonomie und Klassenstruktur des Deutschen Faschumus, remains as yet unavailable in translation.

16.

Pierre Bourdieu, 'Cultural Reproduction and Social Reproduction', in Richard Brown (ed.) Knowledge, Education and Cultural Change, London: Tavistock Publications, 197 3.

Centre for Mass Communication Research University of Leicester, England

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See for example, Rosalind Coward and John Ellis, Language and Materialism. London: Routledge and Kegan Paul, 1977.

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[21] IDEOLOGY AND THE MASS MEDIA: THE QUESTION OF DETERMINATION

Peter Golding and Graham Murdock

Our central argument in this paper is that sociologists interested in contemporary mass communications need to pay careful and detailed attention to the ways in which the economic organisation and dynamics of mass media production determine the range and nature of the resulting output. In proposing this we are not arguing that economic forces are the only factors shaping cultural production, or that they are always and everywhere the most significant. Nor are we assuming 'a tight and necessary correspondence between market forces and decisions on the one hand, and the nature of the media's ideological output on the other' (Connell, 1978, p. 71). We do not deny the importance of the controls and constraints imposed by the state and the political sphere, or the significance of the inertia exerted by dominant cultural codes and traditions. Nor do we deny the 'relative autonomy' of production personnel and the pertinent effects of professional ideologies and practices. Nevertheless, for us the crucial term in t!J..is couplet is 'relative'. Hence, while we fully endorse Stuart Hall's view that 'the level of economic determination is the necessary but not sufficient condition for an adequate analysis' (Hall, 1978a, p. 239), we would underline the term 'necessary'. In our view, any sociological analysis of the ways in which the mass media operate as ideological agencies which fails to pay serious attention to the ·economic determinants framing production is bound to be partial. However, despite the considerable upsurge of academic interest in the mass media in Britain over the last decade or so, it is precisely t!J..is 'necessary' element that has most obviously been missing from much recent work. The significance of this absence for a more adequate analysis has been made both more conspicuous and more damaging by recent developments in the structure of the British mass media. The last two decades have seen a massive expansion of the mass media in Britain. The great bulk of this growth has taken place within the private sector, firstly through the development of new products and markets (as in the rapid expansion of the record industry), and secondly through the penetration of advanced capitalist operations into pub198

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lishing where older styles of enterprise had previously predominated, and into the hitherto entirely public, broadcast sector (initially through the introduction of independent television and latterly with the takeoff of local commercial radio). By contrast, the countervailing developments wit!J..in the public sector - the initiation of BBC2, the establishment of BBC local radio, and the experiments with municipal cable networks - have been nowhere near sufficient to re-establish parity between the two sectors. As we have pointed out elsewhere (Murdock and Gelding 1977b) t!J..is expansion of the private sector has been headed and dominated by a relatively small number of large corporations, with significant interests in a range of core communications sectors and in the cognate areas of leisure and information provision, operating on an increasingly international scale. Far from weakening or dispersing the control that the major communications corporations are able to exercise over cultural production therefore, rece1_1t developments have consolidated and strengthened it. The BBC remains the single significant exception to this emerging pattern of conglomerate dominance. It is however an exception. It is not paradigmatic. Indeed there is evidence that in key areas of its operations the Corporation's activities are increasingly governed by essentially capitalistic criteria. Taking the field of mass communications in contemporary Britain as a whole then, the centre of gravity lies decisively with the communications conglomerates. Consequently, we would argue, sociological analysis must begin by confronting this emerging economic structure and exploring the ways in which its organisation and underlying dynamics shape the range and forms of media production. Ironically however, at the same time that this process of conglomerate domination has accelerated and extended, so the question of economic determination& has been displaced from the centre of academic analysis, and in much recent writing on the media in Britain has disappeared altogether. One influential justification for this displacement is provided by the various versions of pluralism. Here the links between the cultural and the economic are dissolved, by arguing that possession of the means of production has become a progressively less important source of cultural control in contemporary capitalism, and by emphasising the significance of alternative and countervailing sources of power. In pursuing this argument pluralists usually draw on some version of the 'managerial revolution' thesis. In the case of the mass media t!J..is takes the form of emphasising the relative autonomy of production personnel, their monopoly of operational control and the resulting ideological plurality

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of media output. External constraints on production are seen to stem primarily from the various controls imposed by the state. Despite the consistent barrage of criticism aimed at it by radical commentators, versions of pluralism retain a considerable currency within discussions of the mass media in Britain. In its popular variants it furnishes the basic concepts with which owners and practitioners legitimate the present structure of the communications industry (see for example Whale, 1977).In more sophisticated forms it is strongly entrenched in academic studies of mass communications. It underpins the work of one of the most distinguished mass communications researchers in Britain, Professor Jay Blumler (see for example, Blumler, 1977). Here the displacement takes the form of ;t concentration on the relations between the mass media and political and state institutions, both domains being regarded as independent power blocs essentially separate from the economic structure. Hence for Blumler, pertinent questions about the political and cultural role of the mass media can be adequately examined without reference to the economic structures and dynamics underpinning them (see Gurevitch and Blumler, 1977). A separate but related mode of displacement is offered by the recent work of Daniel Bell with its powerful argument that the economic, political and cultural spheres of modern capitalism now constitute distinctive realms, separated from one another and governed by different and increasingly antagonistic axial principles (Bell, 1976). These assertions of dissociation are not particularly surprising. Indeed they are an integral and necessary element in liberal and conservative critiques of Marxist sociology. What is surprising however, is the appearance of analogous arguments within the Marxist sociology of culture itself. As Stuart Hall has recently pointed out, the insistence on the im· portance of economic de terminations is 'the cardinal principle of Marxism without which it is theoretically indistinguishable from any other "sociology"' (Hall, 1977d, p. 23). 'When we leave the terrain of "determinations" ' he argues, 'we desert not just this or that stage in Marx's thought, but his whole problematic' (Hall, 1977b, p. 52). And yet, the dominant British currents of Marxist work on the sociology of culture, Hall's included, have persistently failed to explore this question of economic deterrninations with any degree of thoroughness. To a large extent, this deletion of determination as a significant focus of analysis is rooted in a reaction to the crudities of the reductionist position which presented the mass media as instruments of the capitalist class, and saw their products as a more or less unproblematic

relay system for capitalist interest and ideologies. This position had its hey-day in the inter-war years and in the early 1950s. Even so it lingers on and continues to fmd powerful academic supporters. Ralph Miliband's presentation of the role of the media, for example, is often strongly tinged with reductionism, as in this extract from his recent book, Marxism and Politics:

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Whatever else the immense output of the mass media is intended to achieve, it is also intended to help prevent the development of class consciousness in the worklng class ... the fact remains that 'the class which has the means of material production at its disposal' does have 'control at the same time of the means of mental production'; and that it does seek to use them for the weakening of opposition to the established order [Miliband, 1977, p. 50]. Over and against the limitations of this kind of reductionism, contemporary Marxist sociologists of culture have emphasised the relative autonomy and specificity of the cultural sphere, and its irreducibility to class interests and class control, and have looked for the central connections binding the mass media to tl1e power structure, not in its relations to monopoly capital but in its relations to the capitalist state. Both these thrusts have been immensely valuable in that they have addressed crucial but underdeveloped areas in Marxist sociology. The decisive rejection of crude reductionism which they represent was both important and necessary, and continues to be so. However, in its attempts to purge itself of economism, much contemporary work, we would argue, has been 'led to what can be seen as an increasingly debilitating neglect within ideological analysis of precisely the economic level' (Garnham, . 1977, p. 345). The result is a curious paradox. On the one hand sociologists of communications working from within a Marxist framework are obliged to evoke economic determ.ination, since this is what distinguishes their position from others. At the same time, the fact that they fail to investigate how these determinants operate in practice severely weakens both the power and the distinctiveness of their analysis. Determination becomes a kind of ritual incantation rather than a necessary starting point for concrete analysis. In the next section we will look more closely at this paradox in action in the work of the two most important and influential Marxist theorists of communications currently working in Britain Raymond Williams and Stuart Hall.

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The members of the Birmingham Centre for Contemporary Cultural Studies have recently described their main aim as 'developing theories of cultural and ideological formations within the broad framework of a Marxist problematic, without resorting either to economism or idealism' (Chambers et al., 1977, p. 109). This aptly characterises not only their own work, but the principal thrust of Marxist cultural studies in Britain more generally. The battle against economism has had various outcomes. It has led Edward Thompson, for example, to reject the central metaphor of base and superstructure altogether and to replace it with a conception of the economy and culture as adjacent domains interacting dialectically. As he put it in a recent interview, 'There are certain value systems that are consonant with certain modes of production, and certain modes of production which are inconceivable without consonant value systems. There is not one which is dependent on the other . ; . these two things are different sides of the same coin' (quoted in Mason, 1977, p. 229). · A similar position underpins the argument which Raymond Williams developed in one of the seminal books of modern communications studies, The Long Revolution (1965). He presents the 'long revolution' in culture, initiated by the extension of the education and communications systems, as a third current of change alongside the industrial revolution in the economy and the democratic revolution in the political sphere. These three processes together, he argues, defme the texture and tempo of contemporary experience. They interact continuously, dialectically, with no one sphere exercising a determining influence over the others. Consequently he argues, it is necessary to study the complex interactions between the spheres of culture, polity and economy 'without any c0ncession of priority to any one of them we may choose to abstract' (Williams, 1965, p. 62). However, in the concrete and polemical analysis of mass communications in contemporary Britain which he published the following year, he is constantly tugged back towards acknowledging the pivotal position of the economic structure and the de terminations it exerts on cultural production. He concedes that the growing concentration of control in the hands of the large communications corporations is the key defming characteristic of the emerging situation, and that as a result 'the methods and attitudes of capitalist business' have penetrated more deeply into more and more areas and 'have established themselves near the centre of communication' (Williams, 1968, p. 31). Confronted with these facts his solution is to propose an extension of public ownership as the single most significant lever for change (Williams, 1968, p. 155).

The tension between Williams' general theoretical stance and his concrete analysis of contemporary mass communications systems has been further sharpened in his later work. Consider these extracts from two of his recent writings: The insertion of economic de terminations into cultural studies is of course the special contribution of Marxism, and there are times when its simple insertion is an evident advance. But in the end it can never be a simple insertion, since what is really required, beyond the limiting formulas, is restoration of the whole social material process, and specifically of cultural production as social and material [Williams, 1977a]. It was impossible, looking at new forms of broadcasting (especially television) and at formal changes in advertising and the press; to see cultural questions as practicably separable from political and economic questions, or to posit either second-order or dependent relations between them [Williams 1976b, p. 90].

Here is the paradox in action. On the one hand he argues forcefully that a close attention to economic determinations is indispensable to a thoroughgoing Marxist sociology of culture. On the other he insists that it is impossible to posit 'second-order or dependent relations' between cultural production and economic dynamics. Once again, however, when it comes to the concrete analysis of the contemporary mass media he is obliged to concede the centrality pf expanding corporate economic control and to recognise its enormous potential for determining the range and form of the coming mass communications system. As he forcefully points out in his book, Television: Technology and Cultural Form (1974), the new electronic technologies of data processing, video, satellite communications and cable television. can be used to affect, to alter, and in some cases control our whole social process ... These are the contemporary tools of the long revolution towards an educated and participatory democracy, of the recovery of effective communication ... But they are also the tools of what would be, in context, a short and successful counterrevolution, in which a few para-national corporations could reach further into our lives, at every level from news to psycho-drama, until individual and collective response to many different kinds of

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204 Ideology and the Mass Media experience and problem became almost limited to choice between their programmed possibilities [Williams, 1974, p. 151]. In that last sentence particularly, determination returns with a vengeance albeit through the back door of polemics and in a form which is never systematically explored in Williams' more theoretical work. As we have already noted, Stuart Hall, like Williams, maintains that questions of economic determination are central to a Marxist sociology of culture. However, unlike Williams they make no significant appearance in his substantive analysis of the contemporary mass media. They are announced and placed in a theoretical bracket. This is principally because he locates his central problematic elsewhere, drawing extensively on Gramsci and Althusser, whom he argues, 'constitute the really significant contribution, post Marx, Engels and Lenin, to the development of a Marxist "theory of the superstructures" and of the base/ superstructure relation' (Hall, 1977b, p. 64). Both thinkers have exerted a complex and continuing influence on the course of British cultural studies and it would require at least another paper to do justice to this process of assimilation. For the present though, we simply wish to indicate some very basic points of influence. Both Gramsci and Althusser present the sphere of culture and ideology as increasingly central to the maintenance of modern capitalism's relations of production, but both are at pains to emphasise that the domain of ideology is relatively autonomous and has its own specific dynamics and its own unique effectiveness. Within this defmition of the situation, therefore, the field of ideological analysis can be seen not only as a crucial area for analysis in its own right, but as an area whose internal dynamics can be uncovered independently of a consideration of the economic contexts in which it is embedded. In one of his recent articles, for example, Stuart Hall has forcefully argued that the growth of the modern mass media 'coincides with and is decisively connected with everything that we now understand as characterising "monopoly capitalism" ' and that in their latest phase of development 'the media have penetrated right into the heart of the modern labour and productive process itself'. Nevertheles~,he argues 'these aspects of the growth and expansion of the media historically hal'e to be left to one side by the exclusive attention given here to media as ideological apparatuses' (Hall, 1977a, p. 340; our italics). We would argue to the contrary, tl1at the ways in which the mass media function as 'ideological apparatuses' can only be adequately understood when

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they are systematically related to tileir position as large scale commercial enterprises in a capitalist economic system, and if tilese relations are examined historically. Given tile way in which Hall defines his central problematic, however, this separation of tile ideological and the economic dimensions of media operations is entirely understandable. Nevertheless, we would argue that it necessarily results in a partial and truncated explanation of ideologicai production. Althusser's influence is also very evident in the phrase 'ideological apparatuses'. Indeed, the extension of what was to be included under the conceptual umbrella of 'ideology' constitutes Althusser's second great contribution to cultural sociology. Within this widened definition, ideology 'was not only a description of a system of relatively formal beliefs; it was ratiler a description of a body of practices, relationships and institutions' (Williams, 1977b, p. 13). Consequently, as Pierre Macherey has pointed out, 'to study tile ideology of a society is not to analyse tile systems of ideas, thoughts and representations. It is to study tile material operation of ideological apparatuses to which correspond a certain number of specific practices' (quoted in Mercer and Radford, 1977, p. 5). In point offact, however, most work on the media conducted under this rubric has not examined the 'material operations of ideological apparatuses' and the practices corresponding to them. At least, it has not done so directly. Rather it has approached them obliquely, as they are refracted through the forms of particular media products. Here the decisive influences have come from the various styles of semiological analysis. Semiology has been, in Althusser's phrase, the 'pup' that has consistently slipped 'between the legs' of contemporary Marxist analyses of ideology (Hall, 1977c, p. 30). Starting from the very reasonable assumption that 'every text in some sense internalises its social relations of production' (Eagleton, 1976, p. 48), this approach takes tile argument a stage further and suggests that these relations can be retrieved and explicated through a reading of the text. In order to become cultural goods for public consumption, the raw materials of media output- the events, sets of relations and general ideologies -have to be translated into cultural forms- soap opera, news items, documentary programmes - each of which is governed by particular processes of signification employing a range of codes and sub-codes. Hence media products are messages in code, messages about the nature of society, about the nature of productive relations within the media themselves, and about the nature of the relations between media organisations and other institutional domains and social processes (see Hall, 1973 and 1975).

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The analysis of media products is therefore essentially an act of decoding, an attempt to excavate the various levels of social and ideological relations which are embedded in the form. It is a kind of archaeology of social knowledge. One of the best examples of tltis technique applied to the contemporary media is Stuart Hall's analysis of the centre piece political discussion in the special edition of Panorama before the crucial election of October 1974. As Raymond Williams has pointed out, 'the television discussion is not only a political event but also a cultural form, and that form indicates many overt and covert relationships' (Williams, 1976a, p. 38). Hall extends tltis point and uncovers the way in which the programme form contains and reproduces both the structure of the legitimate political domain pivoted upon parliament, and the structure of tlte relations between broadcasting organisations and tlte sphere of politics and the state (see Hall et al., 1976 and Hall 1976). Despite its fertility the analysis is, however, ultimately unsatisfactory. In the flrst place the programme chosen is atypical of television output in general in at least two important respects. The fact that the fmal processes of production take place 'live' in tl1e studio means that they are much more clearly visible than in the case of say plays, series or documentaries, where production is fully accomplished before transntission and where the underlying relations of production are concealed ratlter than revealed by the form. Secondly, the fact that tlte programme is embedded in a set of public and highly formalised relations, between broadcasters and the political and state apparatuses, makes the reproduction of these relations witltin the form of the programme relatively easy to detect. More often than not, however, the crucial relations between production personnel and other significant sources of determination and constraint, particularly those in the econontic domain, lack tltis degree of codification and tend to work more covertly and surreptitiously. Consequently it is not just a question of devising more adequate modes of textural analysis and applying tltem to a comprehensive range of media output. In addition to the problems of typicality common to any case study there is a fundamental methodological difficulty in approaching social and structural relations through the analysis of texts. However well conceived and executed, textural readings remain a variety of content analysis and as such they suffer from the familiar but intractable problem of inference. It is one thing to argue that all cultural forms contain traces of the relations of production underlying their construction, and of the structural relations wltich suHound them. It is quite another to go on to argue that an

analysis of form can deliver an adequate and satisfactory account of these sets of relations and of the deterntinations they exert on the production process. They can't. In our view the sociology of culture and communications has been seriously incapacitated by the tendency to over-privilege texts as objects of analysis. Textural analysis will remain important and necessary, but it cannot stand in for the sociological analysis of cultural production. Indeed, if sociology is to make an important contribution to contemporary cultural analysis, then it is primarily in the analysis of social relations and social structures that its strongest claim to significance can and should be. staked. In addition to highlighting problems of methodology, the Panorama piece also exemplifies the key conceptual focus of much contemporary British work- namely its concern with the relationship between the media and the state. Here again the twin influences of Gramsci and Althusser have been seminal. Hall and his colleagues follow Gramsci in arguing that, 'in capitalist social formations, the state is the site where the "unity" of the dominant ideology, under the dontinance of a leading faction of capital, is constructed, and thus where hegemony is secured' (Chambers et al., 1977, p. 114). This emphasis on the pivotal role of the state in organising and orchestratiiig legitimation processes is further reinforced by Althusser's very influential conception of the 'ideological state apparatuses'. There is no space here to debate the adequacy of these formulations or to explore the important and complex differences between them. We simply wish to indicate their general influence. Firstly and most obviously, they have concentrated attention on that sector of the media which is most closely and formally bound to the state and to the political sphere - broadcasting. With the exception of the news coverage in the press, the exclusively commercial sectors of the media have been largely ignored. Secondly, the areas of content singled out for sustained analysis are primarily those concerned with presenting aspects of the political system or state apparatuses - the coverage of parliamentary politics, the legal and judicial systems, the role of the state in industrial relations. Thirdly, within these chosen areas, analysis has concentrated predominantly on actuality presentations - news, current affairs and editorials, and documentaries- and neglected the wealth of pertinent fiction. Once more these skews in attention raise important questions of typicality and generalisability, and these questions are touched in turn by a central problem of conceptualisation. By displacing economic dynamics from the centre of analysis and concentrating so centrally on the relations between the media and the

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208 Ideology and the Mass Media state, this general thrust necessarily results in a partial account of the contemporary situation. Firstly it ignores or glosses over several very important developments. It fails to analyse the growing economic interpenetration of the different media sectors and the consequences of this movement for the structure of control and for the range and forms of the resulting products. Similarly, it ignores the growing internationalisation of the British mass media and the concomitant theoretical problems raised by their position in the global economic system of communications. Despite the theoretical overtures to continental Europe, in its concrete practice the Marxist sociology of culture in Britain remains remarkably parochial. This is a logical but nonetheless regrettable consequence of taking the relations between the media and the nation state, rather than those between the media and trans-national corporate capitalism as the central focus of analysis. However, it is not simply that the prevailing perspective contains important imbalances and hiatuses; it is also that it is unable to produce a convincing account of those areas and processes that it chooses to concentrate. on. As we shall suggest with the case of news production, the failure to explore the nature and consequences of economic determinations has produced a partial and truncated explanation. It is not that the role of the state is not a significant dimension of analysis. Clearly it is. However, as we shall argue in more detail in our discussion of cultural imperialism,. its role and significance can only be adequately grasped and incorporated into analysis when it is systematically related to the structure and operations of the economic system, both nationally and internationally. Despite the gaps and problems with their analyses, both Hall and Williams attempt to combine an emphasis on the specific dynamics and effectivity of cultural production with at least an insistence on 'determination in the last instance by the (economic) mode of producton'. Recently however, this general project has come under fire from two opposed directions, represented by Barry Hindess and his colleagues on the one side, and Dallas Smythe on the other. According to Hindess and his collaborators, the attempt to retain both 'determination in the last instance' and the relative autonomy of the cultural sphere is irredeemably flawed at root. Ultimately, they argue, there are only two choices; either you take determination& seriously in which case you are inevitably involved in some variant of reductionism, or you take the tenet of relative autonomy a stage further and treat the cultural sphere as genuinely autonomous. As Barry Hindess has recently put it, 'Either we effectively reduce ideological phenomena to class interests detennined elsewhere (basically in the

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economy) ... Or we face up to the real autonomy of ideological . phenomena and their irreducibility to manifestations of interests determined by the structure of the economy' (Hindess, 1977,-p. 104). According to this view then, anyone who continues to hold to the tenet of economic determination is inevitably tugged back towards forms of analysis which, however disguised, are fundamentally economistic and reductionist. 1 In order to avoid this undertow it is therefore necessary to reconceptualise the connections between relations of production, and ideological and cultural forms, and to conceive them 'not in terms of any relations of determination "in tlie last instance" or otherwise, but rather in terms of conditions of existence' (Cutler et al., 1977, p. 314). Consequently, they argue, while certain ideological and cultural forms provide some of the necessary conditions of existence for the continued reproduction of capitalist relations of production, these forms are in no way determined by the economic mode of production. Rather they are generated from within the sphere of culture and ideology itself. Although arrived at by a very different route, this formulation is strikingly similar to Edward Thompson's position outlined earlier. Both are based on a decisive rejection of economic determi.Itations. A diametrically opposed criticism of the position exemplified by Hall and Williams has come from Dallas Smythe. For him the problem is not that they retain a notion of economic determination, but that they do not follow its implications through in their concrete analysis. According to Smythe, the 'first question that historical materialism should ask about mass communications systems is what economic function for capital do they serve' (Smythe, 1977, p. 1). His answer is that the media's primary function is to create stable audience blocs for sale to monopoly capitalist advertisers, thereby generating the propensities to consume which complete the circuit of production. For Smythe then, the media's role in reproducing ideology is essentially secondary: What is the nature of the content of the mass media in economic terms under monopoly capitalism? The information, entertainment and 'educational' material transmitted to the audience is an inducement (gift, bribe or 'free lunch') to recruit potential members pf the audience and to maintain their loyal attention. [Smythe, 1977, p. 5]. While we endorse Smythe's general project of restoring economic dynamics to a central position in the analysis of mass communications,

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the way he develops his argument is seriously flawed in several crucial respects (see Murdock, 1978). Firstly his analysis is skewed. It concentrates exclusively on the American press and commercial television, both of which have a clear and obvious articulation to consumer advertising. It entirely ignores a number of very important media sectors with a minimal dependence on advertising revenue - notably, paperback publishing, the cinema and the popular music industry. This is no accident. It is symptomatic of Smythe's severely truncated conception of the relations between economic dynamics and cultural production. Ironically, despite his emphasis on the centrality of the economic, his presentation succeeds in severing the crucial links between the economic and ideological dimensions of media production. In his concern to highlight the role that the media plays in the circulation of economic commodities he completely ignores their independent role in reproducing ideologies, and consequently fails to explore the ways in which economic determination& shape the range and forms of media production and its resulting products. He reduces the media entirely to their economic function. We do not accept that the effective choice is between economism and reductionism on the one hand, and the 'necessary non-correspondence' proposed by Hirst and his colleagues on the other. Rather, we wish to argue for a position that retains the necessary stress on the relative autonomy of cultural production which characterises the work ofWilliams and Hall, but which takes the question of economic determinations as a central category and focus of analysis. When Ian Connell argues that 'the media belong first and foremost to the region of ideology' (Connell, 1978, p. 75), he is speaking not only for himself, but out of the dominant tendency of Marxist cultural theory examined above. Clearly the mass media do play a central ideological role in that their products are a key source of images, accounts and legitimations of British capitalism and of the structured inequalities in wealth and power which it generates. Our quarrel, however, is with the phrase 'fust and foremost'. For us the mass media are 'first and foremost industrial and commercial organisations which produce and distribute commodities' within a Late Capitalist economic order (Murdock and Golding, 1974a, pp. 205-6) Consequently, we would argue, the production of ideology cannot be separated from or adequately understood, without grasping the general economic dynamics of media production and the determinations they exert. These economic dynamics operate at a variety of levels and with varying degrees of intensity within different media sectors and different

divisions within them. At the most general level the distribution of economic resources plays a decisive role in determining the range of available media. For example, as we have argued elsewhere, the absence of a mass circulation radical daily newspaper in Britain is primarily due to the prohibitive costs of market entry and to the maldistribution of advertising revenue (Golding and Murdock, 1978). Economic imperatives also help to determine the general form of available media. The lack of fit between the media systems of many Third World countries and the social needs of their populations - the institutionalisation of domestic, studio-based television in communally oriented outdoor cultures for example - is due in large measure to the historical and economic dominance of the major multi-national corporations. Similarly, dispersed rural populations are not particularly well served by urban-based daily newspapers. Within individual media organisations economic imperatives may play an important role in determining the allocation of productive resources between divisions with varying ratios of costs to audience appeal, as between sports coverage and educational broadcasting, or between foreign and crime news for example. And lastly, as two recent studies of television fiction production have clearly shown, economic considerations may penetrate and frame the forms of particular productions (see Alvarado and Buscombe, 1978, Murdock and Halloran, forthcoming). How these various levels of determination, either singly or in combination, impinge on particular production situations is a matter for empirical investigation. However it is our contention that such investigations should form a focus of future sociological work on the contemporary media. To illustrate the contrast between the approaches we have been describing and our own perspective we will look briefly at two particular areas. The fust is news, and particularly broadcast journalism, which has attracted the attention of analysts working from a variety of theoretical and methodological positions. The second example is cultural imperialism, which by contrast to news, has been largely neglected by sociologists of culture and communications. This oversight seems to us symptomatic of the limitations of approaches which divorce cultural analysis from political economy.

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News is an account of events in the world produced for public consumption, and as such is bound to attract analysts interested in the ideological nature of media output. There is certainly no originality in displaying the partial view of affairs included in the news, whatever the medium. It is over fifty years since Waiter Uppmann's brilliant essays

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212 Ideology and the Mass Media showed how and why 'news is not a mirror of social conditions but the report of an aspect that has obtruded itself' {llppmann, 1965, p. 216). But more recent research has attempted to show that this partiality is ideological in the sense that it creates a coherent view of reality, and furthermore a view that is derived from and functional for prevailing structures of power. There are many problems in demonstrating the links between news, ideology, and power structures, and we cannot review all of them in this paper. We do wish, however, to suggest one or two gaps in recent discussions and briefly indicate an alternative approach. It is interesting that many writers have focused their attention on the BBC, and have sought explanations for its output in terms of the complex relationship of the corporation to the state. This is to be expected since much of this work derives from a concern with the theory of the state. It does present problems, however, when examining the news media as a whole, the majority of course being in the private sector. One recurrent theme in recent analysis of news is the detection of frameworks of understanding within which news is constructed. These are discovered in the analysis of texts by a circumspect reading of the assumptions and nuances of routine journalism. This work is often brilliant and insightful. It does not, however, tell us anything of the social derivation of such frameworks; by whom are they shared and how do they come to be part of the very rhetoric and character of news? It only begs the question to invoke the refrain that news media are part of a system which is 'structured in dominance'. A common instance of such textual inspection is that of industrial relations news. But the st.ructures discerned in such news, the meticulous balancing of CBI and TUC, the emphasis on disruption and the disturbing effects of strikes on the public, the avoidance of rank and me spokesmen, all add up to a partiality which is not so easily displayed in other areas of news as the implication that such analysis is generalisable would suggest. Far from being a paradigm instance, industrial relations news is exceptional in the clarity with which the limitations of news can be discerned. This clarity invites far too easy an explanation of the sources of news structures. In Bad News, 2 the most important of recently published accounts of industrial relations news, the authors are anxious to get beyond economic explanations of media behaviour. They see such explanations as simply based on a view of the influence of commercialism. Thus far theoretical analysis of the mass communications industry

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has revealed that critiques which simply stress commercialism are in themselves too limited ... Although for instance in the buying of receivers and the paying of licences it can be admitted that the mass media or the consciousness industry is in many areas highly profitable and is generally subject to the logic of commercialism, it does serve another and no less important function at the cultural level, a function which is unaltered by the private or public ownership of the medium. This second function, the cultural legitimation of the consensus and the status quo is not subject to the narrow confines of commercialism. It is the role of television as a front-runner medium of cultural legitimation that is served by institutions of broadcasting however funded, whether privately or state owned (Ibid., pp. 13-15]. There are many problems with this view. Not least it is a very constricted view of the realm of the economic, which is rather more than the incidental matter of funding. Second, it is an oddly essentialist view which seems to attribute the ideological character of television culture to something in the nature of the medium. Third, and related to this, it blanks out any discussion of practice in and control of the pro· · duction process, ruling out, apparently, any voluntarism in the work place. Most importantly, where do these roles and functions come from? For Stuart Hall the immediate explanation is the power of 'accredited spokesmen', elite sources who prpvide news in a form acceptable to the dominant view of social order. 'In short the media reproduce the event, already presignified, and they do this because they obey the require· ment on them to report 'impartially' what the decision makers say and do, and because the structure of news values orients them in certain predictable and practised ways to these privileged sources of action and information' {Hall, 1975, p. 131). This is the exercise of cultural power, which consists of: '{a) the power to define which issues will enter the circuit of public communications; {b) the power to define the terms in which the issue will be debated; (c) the power to define who will speak to the issues and the terms; (d) the power to manage the debate itself in tlte media' {Ibid., p. 143). In this account the link between the news and ruling ideologies is explained in two ways, by the shared perspec· tives of journalists and sources, and the institutional connections between their social milieux, most crucially broadcasting and the state. For a sociologist this begs many questions. Significantly a recent examination of BBC news, based on a study of actual newsroom practice,

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214 Ideology imd the Mass Media returns to a position akin to our own. In this study Philip Schlesinger argues for the importance of 'the context within which television news is itself produced. This is, despite genuine public service features, a preeminentiy commercial one, ... Nor can such news be divorced from the political economy of the society and state in which it is produced' (Schlesinger, 1978, p. 245). Another study, even more concerned with the politics of the BBC's interaction with the state, nonetheless emerges from studying production with a focus on the congruence between programme making routines and the needs and interests of ruling groups, and on the way in which commercial imperatives provide a framework which 'underpins the programme-making process and the premises upon which political television rests' (Tracey, 1977, p. 245). A displacement of analysis to the purely political results in a view of the state as the arena of critical struggle in the search for cultural democracy. Command and control of both the means and the practice of cultural production disappear from view as critical points of conflict. Oddly, this is an approach which is forced to see the media as inert, passive, neutral transmission belts for ideological distribution. Not surprisingly the structures of ownership, control, production, and indeed the complex interplay between the media and other blocs in the power structure all have to be abandoned. By implication any media, in any configuration, would play this role. Power is reduced to influence. This view says that 'it is in politics and the state, not in the media, that power is skewed' (Hall et al., 1976, p. 92). But how then does this skew occur? This limited account of control is a recurrent problem. Thus Hall is left arguing that the media 'install themselves' as dominant in the production and distribution of culture, so that, as we have noted, the historical and economic explanation for this process can be 'left to one side'. He poses the crucial question 'what are ti1e actual mechanisms which enable the mass media to perform this "ideological work"?'. Yet ti1e answer he suggests merely poses the question in a different form. The selection of codes ... casts these problematic events, consensually, somewhere within the repertoire of the dominant ideologies ... Hence though events will not be systematically encoded in a single way, they will tend systematically to draw on a very limited ideological or explanatory repertoire, and that repertoire ... will have the overall tendency of making things 'mean' within the sphere of the dominant ideology [Hall, 1977a, pp. 343-5 J. In oilier words, the news is in the mode of the dominant ideology be-

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cause it draws on the ideology that is dominant for its framework. To begin to account for these links between ruling ideas and news demands an explanation of the actual processes of production, and of the control of resources which are in the last instance the ultimate boundary of those processes. The relationship of occupational beliefs and practices in journalism is a complex one, but it is only discoverable by reference to the history and political economy of news production. Broadcast journalism draws many of its assumptions and practices from the press. In the early days of newspapers, after an initial period when publisher-printers seek freedom from licensing or other forms of control, growing commercial prosperity secures the independence of ilie press and eventually some form of constitutional guarantee of its autonomy. The transformation of a 'political' press, particularly a party-based press, to a mass circulation popular press, is a complex process and it would be misleading to present it as a clear process common to all countries. But there are essentially similar features that can be abstracted. The major change is in the economic base of the press. The 'retail revolution' results in competitive selling of branded products and an advertising industry to promote them. Newspapers are the ideal medium to convey such advertising to their consumer-readers, and advertising gradually replaces sales to a greater or lesser extent as a source of revenue. Consequently, newspaper prices can be reduced and the seeds of the popular mass circulation press are sown. The political party-based press often persists through this 'revolution', though normally forced to concede to the economic logic of the process. Where advertising is limited, political parties may be the only source of subsidy, thus sustaining a party-based press. The journalistic consequences of this process are important. The search for readers draws newspapers away from a strident factionalism and towards a central neutrality of comparative inoffensiveness. Fact and opinion are distinguished. Their new relative value is captured in the famous 1921 dictum of C.P. Scott, editor of the English Manchester Guardian, that 'Comment is free, facts are sacred'. Opinions are caged in editorial columns, facts command the news pages. The distinction is institutionalised in the contrast between the reporter and ilie journalist, correspondent, or columnist. Broadcasting began as a technical novelty, and only later was it developed commercially by the more opportunist members of the radio and telecommunications industry, until finally it became the major entertainment form of the twentieth century. It became a news medium at the same time, and news broadcasting was universally advanced to

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the front line in the scheduling considerations of broadcasting executives. Nonnally television news is the fixed point in a kaleidoscopic world of dramas, quizzes, soap operas, documentaries, and education. Three problems face broadcast journalism in its evolution as a distinct form of programming. Firstly, broadcasting organisations are normally sanctioned by law and have their operations and structures defmed by statute. Legal requirements have to be translated into routine practice, and it is in the consequent attempts to operationalise the generalities of the law that broadcast journalism falls back on the conventions of the press. Secondly, broadcast journalism has to establish a degree of autonomy from the press. Initially it is seen as a competitive threat, particularly to evening newspapers, and it is common for the press to demand limitations on the timing and extent of news broadcasting. Broadcast journalists were usually dependent on the press as a source of news in the early years, and it was only gradually recognised that broadcast news was potentially other than newspaper news distributed in a new way. For many journalists the trend to autonomy became too advanced and threw up a conflict of identity between the role of broadcaster and of journalist. Thirdly, broadcast journalism had to come to tenns with the highly regulated distinction between fact and comment which it was constrained to observe by its centrality, close relationships with government, and constitutional position. Newspaper journalism had produced the creed of objectivity. Broadcast journalism had to be more than honest about the debate; it had to be above it. Gradually new creeds of impartiality and balance were developed while the distinction between fact and comment was institutionalised in organisational form by the separation of 'news' and 'current affairs'. Broadcasting was involved with government from its inception. What was thought to be a technical necessity for national monopoly control of the new medium brought it to the attention of licensing authorities almost as soon as it was weaned from its inventors. This emphasis on the distribution system of the new medium displaced concern with its content. What was licensed was the reception and dissemination technology. As a result the controls seen as suitable for broadcasting were derived, by default, from the understanding and ideologies already evolved by earlier media, especially the press. Broadcasting was different in two vital respects; its output was heterogeneous- both infonnation and entertainment - and it was almost universally organised in a monopoly service closely wedded in one fonn of relationship to the state. Yet the difficulties and fundamental problems these differences were

to create went unforeseen in the early- years of broadcasting. Among the many complexities these origins generated was frequently a confused set of regulations governing the production of news. A variety of constitutional, legislative, and administrative strictures circumscribe not merely what news operations may be conducted, but what fonn news may take. What becomes apparent very often in a careful examination of these, is their studied vagueness, forcing television journalists back on their own definitions of correct professional practice and standards. Journalistic notions of what is and is not news have been forged in the workshops of a commercial press serving historically particular needs and interests. It is in this process that news values are created. Discussions of news values usually suggest they are surrounded by a mystique, an ~penetrable cloud of verbal imprecision and conceptual obscurity. Many academic reports concentrate on this nebulous aspect of news values and imbue them with far greater importance and allure than they merit. News production is rarely the active application of decis~ons of rejection and promotion to highly varied and extensive material. On the contrary, it is for the most part the passive exercise of routine and highly regulated procedures in the task of selecti!l.g from already limited supplies of infonnation. News values exist and are, of course, significant. But they are as much the resultant explanation or justification of necessary procedures as their source. News values are used in two ways. They are the criteria of selection from material available to the newsroom of those items worthy of inclusion in the final product. Second, they are guidelines for the presentation of items, suggesting what to emphasise, what to omit, and where to give priority in the preparation of the items for presentation to the audience. News values are thus working rules, comprising a corpus of occupational lore which implicitly and often expressly explains and guides newsroom practice. It is not as true as often suggested that they are beyond the ken of the newsman, himself unable and unwilling to articulate them. Indeed, they pepper the daily ex~ changes between journalists in collaborative production procedures. Far more, they are terse shorthand references to shared understandings about the nature and purpose of news which can be used to ease the rapid and difficult manufacture of bulletins and news programmes. News values are qualities of events or of their journalistic construction, whose relative absence or presence recommends them for inclusion in the news product. The more of such qualities a story exhibits, the greater its chances of inclusion. Alternatively, the more different news

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218 Ideology and the Mass Media values a story contains, the greater its chances of inclusion. We cannot here describe in detail the linkages between social values, news values, and news itself. Research into broadcast news (see Golding and Elliott, forthcoming), based on the approach we are advocating, suggests that the resultant product lacks two crucial dimensions, power and process, and is thus structurally incapable of providing other than an uncritical and consensual view of the world. The invisibility of power, both within and between nations, is caused by many factors; the geography of news gathering, the simplification of the dramatis personae of news and the limited arenas which news can survey, which leads to an emphasis on formal political events. Social process similarly disappears as the exigencies of production mould a view of reality which is fragmented and ahistorical. Analyses which see news as necessarily a product of powerful groups in society, designed to provide a view of the world consonant with the interests of those groups, simplify the situation too far to be helpful. The occupational routines and beliefs of journalists do not allow a simple conduit between the ruling ideas of the powerful and their distribution via the air-waves. Yet the absence of power and process clearly precludes the development of views which might question the prevailing distribution of power, or its roots in the evolution of economic distribution and control. A world which appears fundamentally unchanging, subject to the genius or caprice of myriad powerful individuals, is not a world which appears susceptible to radical change or challenge. There are three ways in which broadcast news is ideological. First it focuses our attention on those institutions and events in which social conflict is managed and resolved. It is precisely the arenas of consensus formation which provide both access and appropriate material for making the news. Second, broadcast news, in studiously following statutory demands to eschew partiality or controversy, and professional demands for objectivity and neutrality, is left to draw on the values and beliefs of the broadest social consensus. The prevailing beliefs in any society will rarely be those which question existing social organisation or values. News will itself merely reinforce scepticism about such divergent, dissident,or deviant beliefs. Thirdly broadcast news is, for historical and organisational reasons, inherently incapable of providing a portrayal of social change or of displaying the operation of power in and between societies. It thus portrays a world which is unchanging and unchangeable. The key elements of any ruling ideology are the undesirability of change, and its impossibility; all is for the best and change

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would do more harm than good, even if it were possible. Broadcast news substantiates this philosophy because of the interplay of the three processes we have just described. News evolves then in response to a range of imperatives in its market situation which become incorporated in the working routines and beliefs involved in its production. Occupational ideologies make a virtue of necessity, and such necessities are born of the markets for which news was and is designed. There is, in effect, an evolutionary coincidence between the conventions which define what we mean by news and the ruling ideology. Cultural stratification is thus a function of the emerging structure of ownership and control over the means of cultural production. Tllis is very much more obvious in the case of the press, as we have described at length elsewhere (see Murdock .and Golding, 1974a and Golding and Murdock, 1978). Much remains to be done in charting the relationship between news, ideology and the reproduction of social order. Such work cannot progress, however, by confining the analysis of ideology to its determination by the state. To display the history and economic infrastructures of news media is not to explain the form and function of the ideology they produce. It is quite obviously true, for example, that if British television news is ideological, it is equally so, and in similar ways, on both the commercial and public networks. However to understand the form news takes it is essential to account for its origins as a commodity both within a production process and in history. In an earlier article we have suggested some ways in which the form of ideological statements within news is constructed, and outlined the kinds of factors which may explain these forms (Murdock and Golding, 1974a, pp. 228-230). It is important, too, to understand which news media are available for the articulation of particular ideologies. It is a major task of a media political economy to explain the constricted range of communication outlets and the systematic relationship between this range and prevailing distributions of power and economic control. It is both politically defeatist, and methodologically essentialist, to assume that news is inherently composed of a particular set of ideological formulae. Why,.are some witnesses 'accredited' and others less so? The operation of the market and its response to changing forces in the organisation and control of production are the crucial mechanisms to explore if we wish to explain the unavailability of particular channels of communication to radical or politically dissident views. It is this task that a political economy of news media can attempt.

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The international diffusion of media companies and their products has become a major feature of mass communications in recent years. In fact this is only an exaggeration of an aspect of the culture industries which has always been present, most notably in publishing. This international growth should be central to the sociology of the media for two reasons. First, contemporary capitalism is characterised by the emergence of multinational companies and the variety of economic relations loosely labelled neo-colonialism. If we are interested in the relationship between the media and structures of power and dominance it is essential to examine the multinational media in this context. Second, if we are concerned to locate the media in an overarching structure of cultural production it is important to make the linkages with language and education. These linkages are starkest in the history of colonial relations and the subsequent development of these relations in the current period. To focus on texts as ideology is to remain blind to the forces which lie behind the production of these texts. It is interesting that many of the writers discussed earlier in this paper were concerned with language. Yet cultural dependency is a critical arena in which to examine the ties between media, language, culture, and structures of domination (see, inter alia, Tuns tall, 1977, Mazrui, 197 5, and Cardona et al.). This would require both an historical and economic approach, analysing the role of indigenous elites in dependent societies, the education industry, as well as news and culture as export commodities. Similarly a limited concern with the link between culture and the state relies on a sociology of the state which is unable to relate the nation-state to the international economy. It is symptomatic of the misplaced concern of many in the recent rediscovery of cultural.sociology that their discussions of the media have totally ignored this international dimension, We suggest this is not merely a question of priorities or interests, but a missing dimension which is bound to result from extracting cultural sociology from the context of political economy. Most major cultural producers are related to multi-national corporations. Several writers, most notably Schiller (1976), Mattelart (1976), Hamelink (1977) and Varis (1976) have demonstrated the acceleration of this trend in recent years. Yet their work is largely ignored by analysts of the media and the state. It is not that the state is irrelevant. But the relationship of the state to the international economy is a complex question to be explored not ignored, even if one's initial concern is with the state. It is not possible, for example, to analyse the role

of American media in the American state without discussing the place of the electronics and telecommunications industries in twentieth century American expansionism. Nor is it realistic to relate the British media to the production of class ideologies without an understanding of the changing role of British capital in the post-imperial period. The context of the ebb and flow of state power is its relation to the international economy, particularly flows of capital controlled by international firms; this is precisely what has been referred to as the crisis of incorporation faced by British capitalism in the last thirty years. It is ironic that the priority given to analysis of the state by some writers on the left mirrors an outmoded liberal visio'n of a global web of nationstates in perpetual political balancing acts. Murray has summarised this development as follows:

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Certainly there is a tendency in twentieth century Marxist writing on the world economy to infuse the nation-state with an independence set apart from the range and power of its own national capital. Nation-states become an entity without substance. This, in part, reflects the predominantly political treatment which the state has received in Marxist literature. Until recently it was primarily the repressive role of the state in capitalism which has been emphasised: two recent works by Miliband and Poulantzas have brought out its ideological function. What is remarkable is how little attention has been given to the economic role of the state in capitalism, and it is this which seems to me to be central to any discussion on the robustness of the nation-state in an era of interpenetration of national capitals ... [Murray, 1975, p. 61]. Even if one wishes to concentrate on the political rather than the economic as a context for the study of ideology, the growth of cultural imperialism should be a particular concern. For many Third World countries the attempt to construct a 'new information order' has become not merely a complement to, but an intrinsic part of the struggle toward a new economic order. Beginning with minor rumblings in the forum of UNESCO in the late 1960s, cultural decolonisation has become a major theme in the 'north-south' dialogue. In important statements at the Algiers non-aligned countries conference in 1973, at the UNESCO General Assemblies in 1974 and 1978, and at major gatherings in Quito, Lima, Tunis, and most controversially Nairobi and New Delhi, the demand for a 'new international order for information' has emerged as a focal point of struggle. 3

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The objection is to the flow of cultural goods, such as news and 4 television programmes, and to the flow of practices and institutions, 5 which act as a 'Trojan horse' for economic domination, or which in themselves constitute a threat to cultural autonomy or authenticity. None of this debate surfaces in recent work on the politics of the media, even by those writers apparently concerned to exhume the state as a central issue. One of the most interesting lines of inquiry to follow is the role of culture in securing the power of the 'new bourgeoisie' in dependent countries. The link between this group and the wider structure of dependence is very much bound in to the international structure of cultural flows. Their role as cultural brokers, using their membership of a cosmopolitan and mobile elite to lubricate the diffusion of cultural goods and values, is a key function in the international spread of the culture industries. The link between education and publishing exemplifies this. Publishing, though traditionally a small-scale, even cottage industry, has followed the paths of the other rnedia into diversified conglomerate industries (see Golding, 1978). The largest producers of educational books and materials include such firms as Xerox, CBS, ITT, Westinghouse and so on. Publishing is an international business. In 1977 exports accounted for 36 per cent of British book sales, and increasingly profits are further derived from sales oflocal subsidiaries in Third World countries. Most books in the Third World are college or school texts. The education and publishing industries are thus inextricably entwined, and both are central to the structure of cultural dependency. To fully explain the relationship of the capitalist state to dependency such links have to be explored. Cultural dependency is itself, however, an aspect of a more fundamental system of economic domination, and only comprehensible as such. A political economy of cultural dependency is thus best developed by working from theories of imperialism or dependency. Many of these links have been explored by Latin American theorists. Their prime concern is with the historical evolution of capitalism from colonial to imperialistic, to neo-imperialistic phases, and with the corresponding structures of mercantilism, industriallaissez-faire and monopoly capitalism. By concentrating on the conquest and colonisation of Latin America, these writers reject approaches to development in terms of necessary and ubiquitous stages, and concentrate on the role of foreign investment and fmance in creating a global structure in which develop· ment and underdevelopment are two sides of the same coin. In looking at the cultural components of this process such theorists, even those

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with a particular interest in the media, have kept the economic context in close focus. Faraone notes that ... in Latin America the press and other media support the hierarchical power structure of society, the ideology of the ruling class. This kind of role of the mass media is a consequence of capitalist class society and the function of international imperialism [Faraone, 1974, p. 23]. Corradi similarly argues that the task is to analyse the social structures of Latin America and their processes in terms of changes that have taken place in the more inclusive system of international stratification. Social structures and idea-structures can then be studied as substructures of this more inclusive system. In other words what is being developed is a theory of dependent capitalism [Corradi, 1971, p. 40]. Other theorists in the field have stressed similarly the ultimate determining role of economic relations, seeing their own work as dealing ... with questions concerning the nature and dynamics of a superstructure that is the expression of a dependent economic system ... It is in this context that the cultural and ideological system assumes major importance. For it must fulfil a strong need for holding together a system that is heavily divided by inequalities in the distribution of resources [Dagnino, 1973, pp. 129-31]. Duner, similarly, in looking at cultural dependency in the light of his studies of Colombian education, concludes that: the ideological factor, however, is not a totally independent variable but can well be understood in the light of the prevalent dependency structure. The latter can be seen as expressing the interests on which ideologies rest [Duner, 1973, p. 10]. As yet, work on cultural imperialism has been inconsistent and theoretically uncertain. But enough has been done to suggest that even, in fact particularly, if one's initial concern is with the state or with language, then the international culture industries are a crucial domain to explore. To ignore this area is more than a mistake of emphasis or a

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Bibliography

choice of interests. It is only possible if the links between ideology and power are sought outside the structures of material control, structures whose uncovering must now be an urgent priority for any serious sociology of culture.

Note: Unless specified otherwise place of publication is London.

Conclusion The media make a major contribution to the legitimation of continuing inequalities both within and between nations. It is for this reason that we see the study of mass communications as occupying a central position in the heartland of traditional sociological inquiry into the maintenance of social order. We have suggested two weaknesses in recent attempts to analyse this question. The first derives from an un· due emphasis on the links between the media and the state, an emphasis which leaves aside the massive evidence for the historical and political importance of capitalist ownership and control of the means of communication throughout the range of the cultural industries. The second weakness derives from the classic difficulty of inference from content analysis, which in recent guise has led to too much authority being given to the circumstantial evidence provided by qualitative textual analysis. 1he new emphasis being given to the study of culture and ideology within sociology is a welcome one. We have suggested in this paper, however, that to make the most of this revival such studies must start by developing a political economy of the culture producing industries. Only then will we have tl1e scaffoiding on which a secure account of the relationship between tl1e media and ideology can be built.

Notes 1. The general case has been argued by Paul Hirst in (Hirst, 1977, 131) and it has been applied to the work cf the Birmingham Centre by Rosalind Coward (Coward, 1977a, p. 90). 2. Glasgow University Media Group (1976). For a more extensive study, as yet unpublished, seeP. Hartmann (1976). We are not able here, obviously, to enter in to a general discussion of either of these studies. 3. Behind the growing debate about 'communications policies' lies a whole complex of issues relating the state to the media multinationals. Por a brief critical look at this debate see Schiller (1976, eh. 4.) 4. There is a massive amount of literature on news flows. For a summary and discussion see Harris (1974, 1975). On the flow of TV programmes see Varis (1973). 5. See Cruise O'Brien (1976), Golding (1977), and Pilsworth's paper at the 1978 British Sociological Conference on Culture, at which the papers in this volume were presented.

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The Political Economy of the Media I Hirst, P.Q. (1977), 'Economic classes and politics', in A. Hunt, ed. Hunt, A., ed. (1977), Class and class structure, Lawrence and Wishart Lippmann, W. (1965), Public opinion, Free Press, New York (orig. 1922) Mason, T. (1977), 'Enthusiasms: Radical History Review', History Workshop, no. 4 (Cf. Thompson, E.P., 1976) Mattelart, A. (1976), Multinationales et systemes de communications, Paris Mazrui, A. (1975), The political sociology of the English language: an African perspective, Mouton, The Hague Mercer, C. and Radford, J. (1977), 'An interview with Pierre Macherey', Red Letters, no. 5 Millband, R. (1977), Marxism and politics, Oxford University Press Murdock, G. (1978), 'Biindspots about Western Marxism: a rejoinder to Dallas Smythe', Canadian journal of political and social theory, vol. 2, no. 2 and Gelding, P. (197 4a), 'For a political economy of mass communication', Socialist Register 1973, Merlin Press, 1974 - (1977b), 'Beyond monopoly: mass communications in an age of conglomerates', in P. Beharrell and G. Philo, eds., Trade unions and the media, Macmillan Murdock, G., and Halloran, J.D. (forthcoming), 'Contexts of creativity in television drama', in H.D. Fischer, ed., Entertainment communication, Hastings House, New York Murray, R. (1915),Multinational companies and nations~ates, Spokesman Books, Nottingham Poulantzas, N. (1976), Classes in contemporary capitalism, New Left Books Schiller, H. (1976), Communication and cultural domination, International Arts and Sciences Press, New York Schlesinger, P. (1978), Putting 'reality' together: BBC news, Constable Smythe, D. ( 1977), 'Communications: blindspot of Western Marxism', Canadian journal of political and social theory, vol. 1, no. 3 Tracey, M. (1977), The production ofpolitical television, Routledge and K. Paul Tunstall, J. (1977), The media are American, Constable Varis, T. (1973), International inventory oftv programme structure and the flow of tv programmes between nations, Institute of Mass Communications, University ofTampere - ( 1976), 'Aspects of the impact of transnational corporations on communication', International social science journal, vol. 28 Whale, J. (1977), The politics of the media, Fontana Williams, R. (1965), The Long revolution, Penguin (1968), Communications, rev. ed., Penguin (1974), Television: technology and cultural form, Fontana

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(l976a), 'Communications as cultural science', in C.W.E. Bigsby, ed., Approaches to popular culture, Edward Amold - (1976b), 'Notes on British Marxism since the war', New Left Review, no. 100 - (1977a), Marxism and literature, Oxford University Press - (l977b), 'The paths and pitfalls of ideology as an ideology', Times Higher Educational Supplement, 10 June

[22] Power, Hegemony, and Communication Theory

Leslie T. Good But anyway, on this particular summer day Bernabe Montoya walked out of Rael's just as Onofre's mottledgreen, 1953 Chevy pickup with the three-legged dog on top hiccupped to a stop at the town's lone parking meter and, with a dispirited - call it a lonely" Ai, Chillllalwa!" the sheriff reached for his citation pad. Bitterly he began to write, thinking as he did so that if ever all the cantankerous streaks in people like Amarante C6rdova, Joe Mondrag6n and Onofre Martineze were united behind a common cause, there would be much more than all hell to pay. John Nichols, The Milagro Beanfield War

Introduction

Shortly after the airing of the ABC mini-series polemic, Amerika, a viewer wrote to the TV Guide editor: "Amerika was thought-provoking, challenging and debate-inspiring.... Unfortunately, one of the premises of democracy is that people not only be able but willing to think about and discuss things for themselves. If this is an unrealistic expectation, then the best we can hope for is an efficient and relatively enlightened tyranny, whether of the right or the left. The point of the show, after all, is that we get the government we deserve."I This viewer, probably innocently and unwittingly, in just these few simple sentences, provides a theory of "power," one which is strikingly close to what Martin Carnoy has called the "official ideology of capitalist democracies"- pluralism.2 Put briefly, the pluralist thesis of power says that power is a diffuse and empirically verifiable outcome of healthy conflict among competing interest groups, usually manifested as individual consumer-like decisions; and even though based on "conflict," 51

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power-as-pluralism works for the "common good," integrating us into our social environment, ultimately producing social stability by easing social tensions. In the absence of overt conflict, consensus reigns in a state of equilibrium, and "power" becomes irrelevant. Power simply exercises itself out of business. At the same time, embedded in the viewer's letter are statements that might, at first blush, look like critiques of that pluralist ideology, but which are actually qualified criticisms that ultimately form an ironic articulation of apology for a "common good" view of power. The viewer betrays one of the uncritical biases of pluralism - that we can unproblematically "choose" our own relations of power, or we can at least identify the manifest obstacles to our participation in the system. By extension, we deserve what we get if our apathy prevents us from attempting to exercise the power of choice that we all have at our disposal. Hence, while we might criticize our failure to take control of the process, criticism of the process itself is rendered inapposite. In contrast to general "common good" notions of power- either in pure or apologetic form- of which pluralism is exemplar, are views of power that question the notion of social integration as social "stability." Instead, they interpret stability as control, and provide a critical opening for examining the nature of domination and struggle. This general contrast forms the basis for a number of parallel and ongoing debates within the social and behavioral sciences, most explicitly within social and political theory. The debate over contrasting conceptions of power is also found in communication theory in the form of the conventional contrast made between "mainstream" (i.e., common good) and "critical" approaches to communication studies. While one might quarrel with the wisdom of reducing the underlying debate to method or research purpose, the implicit substantive debate is one grounded in the nature of the concept of "power." In particular, the debate rests on ways that the intimately related notion of "consensus" becomes implicated and interpreted by competing theories of power. What are generally taken to be "mainstream" approaches to communication include those views that argue or assume that communication plays a socially integrating role. Power is seen as an ultimately integrative force, and communication is functional in not only exercising power, but also, in turn, in producing and maintaining social stability. Traditional development communication campaigns and the field of journalism, for example, make such functional, integrative assumptions. To some extent, those views do not test or even acknowledge their own theories of power, but simply take them as given. The assumptions they make about the nature of power are often quite opaque - only implicit in their theories of communication.

At the same time, ironically, their assumptions about power suggest that power itself is transparent. That is, their embedded, hidden theories of power assume that power is essentially a phenomenon that can somehow be made empirically available for our inspection and criticism - power is something that cannot hide from us. And since power is potentially transparent to all, perhaps that is why such "mainstream" approaches to communication studies do not perform a thoroughgoing explicit analysis of the nature of social power and the role that communication plays in creating and sustaining certain forms of power. More explicit are criticisms from within what I call a "politic" tradition of communication theory, in which one might locate many - though certainly not all - contemporary American academic communication studies, as well as a number of recent European studies. Such criticisms of the role that communication plays in power relations are still rather genteel in that they amount to a bemoaning of the failure of social integration. Those polite critiques essentially languish for power-as-pluralism as an ideal model, and note the failure of communication - for example, the failure of the news or the dearth of public debate - to perform its consummate functional, integrative, socially stabilizing work. Though system grievances are systematically exposed, their theories are not theories of social control - they remain implicit theories of social integration and contain biases in favor of social "stability." Their analyses are analyses - indeed, critiques - of relations of communication, but fall short of being thoroughgoing, explicit analyses and critiques of the nature of power relations by extension. Their assumptions about the nature of power remain relatively opaque while still implying that power is relatively transparent. So, while ostensibly "critical" in their approach, they tend to be located within the broadly defined "mainstream" category of communication studies by virtue of their implicit apologetic stance toward power as a functional "common good" force in society. "Critical" communication studies, on the other hand, make few apologies for the nature of power relations, and also make explicit their complex assumptions about power. In fact, a "critical" approach to communication is critical largely because it assumes that social relations of communication are inseparable from social relations of power. The "integrative" role of communication in the exercise of power is analyzed and critiqued as a form of social control, rather than stability, partly in an effort to create the possibility for process and social change. Furthermore, I argue that critical approaches to communication also assume that all theories of social relations - whether political, social, economic, social-psychological, cultural, etc. - are also theories of power, explicitly or implicitly. The buried assumptions about

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power found in more traditional approaches are excavated and laid bare. Hence, the "critical" purpose of such broadly defined critical approaches to communication is not only to analyze and critique- in short, to demystify- the nature of power relations as social control and the role of communication in creating and sustaining those relations, but also to demystify theories of social relations. While more traditional approaches to communication presume a kind of apolitical objectivity or autonomy from the social practices they examine, critical studies presume a "moral" imperative of demystification as creating "possibility"that is, as creating a climate of questioning all that is otherwise taken for granted about social action. Such a climate of questioning potentially opens sites for struggle to break the stasis of social control. The three very general views about power and communication that I have introduced above - the thoroughly integrative view, the apologetically integrative view, and the critical view - are reflected historically within political theory in Stephen Lukes's classic treatise, Power: A Radical View. 3 ln that work, Lukes defines three basic views of power essentially in terms of three dimensions of opacity: (1) the onedimensional view a pluralistic view of entirely transparent decisionmaking behavior: (2) the two-dimensional view- a qualified critique of the overt behavioral focus of pluralism; and (3) the three-dimensional view - a thoroughgoing critique of pluralism, where power is assumed to be quite opaque, found, for example, in latent, and thus unobservable, conflict. Below, I use Lukes's three categories of the concept "power" not to define, but to help elaborate the assumptions of the three general approaches to the study of communication and (thus) power that I have described. I provide several general examples as illustrations.

to this view, power is evenly diffused throughout society and citizens rule as consumers within the free marketplace of ideas. Historically, this general pluralist model (as well as other "common good" conceptions of power and the State) has taken (and continues to take) the individual as the focus of it analysis.4 As empirically verifiable behaviors -i.e., conscious, intentional decisions that express policy preferences power is an option that is assumed to lie transparently on the surface of social action in the face of overt conflict. Consensus and inaction render power irrelevant, since power requires easily seen conflict. Implicit within the model of power-as-pluralism is the assumption that the decision-making process described above works for the "common good." Power is thus functional for preserving the general stability of the system where stability is viewed as highly desirable. The notion of stability, or social integration, enjoys a long history in traditional American communication theory within its parent disciplines. In many senses, the template was set early in this century when social philosopher, John Dewey, and sociologists, Charles Horton Cooley and Robert Park, argued· that communication media could be harnessed for democratic purposes. "Together, they construed modem communication essentially as an agent for restoring a broad moral and political consensus to America ... "s This general integrative vision of power's (and communication's) purpose later made itself evident (if sometimes only implicitly so) in development communication, normative models of the "social responsibility" of the press, and functional studies of media uses and gratifications, all in which the audience ultimately reins as rational, intentional "consumer." The emphasis on rational, informed decisions, particularly consumer-like "buying" or "adopting" behaviors, has traditionally driven much development, diffusion, and communication-campaign research. In many respects, diffusion and educational communication campaigns are not unlike typical marketing campaigns for commercial products; the objective is generally to persuade individuals to adopt new behaviors (for example, adopt an innovative agricultural practice) or change existing behaviors (stop smoking, for instance). Similar strategies have been used (most often by researchers from highly developed nations) to diffuse innovative forms of political participation in developing nations. Until recently, development communication has concentrated its efforts on "modernization," both economic and political, preferring to diffuse pluralist political structures with their extant "free" economies.6 Such structures are premised on open debate and conscious decision-making behaviors by individuals. One of the primary - indeed, "necessary" - vehicles presumed to effect open debate is a "free press." In the United States, the normative

Communication as Social Integration: The Thoroughly Integrative View I didn't know why I done it, and I don't know what good it would have done me if I had. Knowing wouldn't have made it any less done. (Molly, in Larry McMurtry's Leaving Cheyemze)

The first model of power described by Lukes is what he calls a one-dimensional view that focuses on overt decision-making behavior as the principle manifestation of power. This ideal model of "pluralism" assumes that the important social issues are those key issues clearly on the public agenda. Power is defined by overt, manifest conflicts over those issues - as, for example, with traditional political participation in public debate and elections and other ballot measures. According

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model of the "social responsibility of the press" clings tenaciously to pluralist ideals when it holds that it is the job of the press to keep a heterogeneous public informed to objectively, imp~tially reflect a pluralist world- so that individual citizens may then participate rationally in an open political system. In its assumptions about diffuse, visible power - following from its presumptions of "objectivity" and "impartiality" - this ideal view of the press disregards the many complexities of the agenda-building process, such as technical and practical newsroom routines, constrained source-reporter relationships, and market pressures, all of which tend to work against less-entrenched opinion. And, as John Westergaard has argued, the notion of "social responsibility" inherently contradicts itself. Journalists deny their own influence, as objective purveyers of the "news," but claim responsibility for public education and, in the end, social integration. That "responsibility" of course, entails some authority.7 The integrative flavor of this general implicit model of one dimensional power is perhaps most conspicuous in functional studies of media uses and gratifications. In general, this approach argues that people choose to use media to gratify basic human needs- in particular, the need to be connected with one's social environment. But, as Philip Elliott observes, it considers neither the source of those needs nor the peculiar distribution of social power and opportunity. Since needs develop within an existing set of social relations, such an approach- based on simply identifying and describing needs and their gratifications inevitably supports those existing relations, hiding and suppressing alternatives. 8 And by emphasizing use (i.e., decision-making), this approach, as with more overt politically pluralist approaches to communication, obscures less obvious covert or latent forms of power and conflict played out through complex social arrangements and "logics" that ultimately define and limit the parameters within whicl1 individuals are able to make choices. The following view of power provides at least a limited alternative.

The two-dimensional view of power that Lukes describes is represented primarily by Peter Bachrach and Morton S. Baratz's qualified critique of the behavioral fetishism of pluralism.9 The "second face of power" identified by Bachrach and Baratz is nondecision-making. What is key to this view is that not all consensus is "real" - some consensus is merely apparent and takes the form of covert conflict. In other words, this model of power accounts for the suppression of challenges to the interests of a decision-maker as another important way of exercising power. When one prevents another from making a decision with regard to a policy grievance, one has gone beyond simple decision-making behavior with regard to explicit, key issues. Potential issues are now at stake. And those issues may be kept off the public agenqa, as when marginal social groups are prevented from gaining access to mass media. Thus, the process of agenda-building, rather than merely the agenda itself, becomes relevant. The "agenda" is no longer presumed to be an unrefractive mirror of a pluralist world, but a more selective representation of that world. Still, in spite of the added critical complexity, the two-dimensional view of power, according to Lukes, remains merely a qualified critique of the behavioral focus of pluralism because it presents nondecisionmaking as yet another form of decision-making. The individual is thus retained as the unit of analysis. 'Furthermore, it retains the empirical focus of pluralism in that power continues to be defined in terms of manifest conflict - whether overt or covert. By failing to escape the essential limitations of the pluralist model - its individualism and empiricism - this ostensible critical view of power, I argue, ultimately works as an apology for "common good" conceptions of power by first displaying its working inefficiencies and imperfections, but then rescuing the ideal model by falling back upon its own limiting assumptions. Michael Shapiro has exposed and critiqued the rhetoric of apology as a genre of discourse, and I extend the analogy here to examine a similar genre of communication and power.1o Often, criticisms of a particular mainstream area of communication study come from within its own bounds when historical and material reality motivate researchers to reconsider the questions they ask. For example, although the assumptions and political biases of traditional development and diffusion research have been criticized sharply from outside on both substantive and empirical grounds, scholars working in that tradition have also noted some of the limitations of their earlier work. Everett Rogers, for instance, notes the passing of the older behaviorpersuasion paradigm wifu its built-in assumption that development results in t,he equitable distribution of resources; in its place, a growing concern with inequitable gaps in knowledge and effects - and how to

The Failure of Communication as Social Integration: The Apologetically Integrative View A little "confessed" evil saves one from acknowledging a lot of hidden evil . . . . it is well worth the price of an immunization. What does it matter, after all, if margarine is just fat, when it goes further than butter, and costs less? What does it matter, after all, if Order is a little brutal or a little blind, when it allows us to live so cheaply? (Roland Barthes, "Operation Margarine," in Mythologies

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correct them - has emerged. 11 Still, such criticisms tend to focus on the failure of campaigns due to their incorrect structure or strategy, rather than to provide a thoroughgoing critique of the underlying model of pluralism upon which such campaigns are intimately premised in the first place. Similarly, recent research areas within journalism and political communication provide challenges to the strictly pluralist bent of traditional ancestors. For example, studies of news "gatekeeping" examine the agenda-building process and consider ways in which issues are prevented - through the editorial process especially- from ever reaching the public agenda. 12 Those studies probe a deeper level of power than do their pluralist progenitors; they excavate "apparent" consensus and expose its grounding in covert conflict. The suppression of social voices assumes a certain spotlight as an object of study- nondecision-making, in Lukes's terms, is recognized as another face of power. But, as in Lukes's scheme, nondecisionmaking, such as gatekeeping, is regarded as yet another form (if more complex and hidden) of decision-making. Immanent within this view of power, the active suppression of voices (whether intentional or merely incidental to the exigencies of production) operates much like a "bad apple," spoiling the "barrel" of otherwise pluralist diversity. The barrel provides both the context and limiting assumptions, but the apple becomes the primary object of analysis and critique. The imperfections of the journalistic process are discussed at length, but neither the reasons for those "imperfections" nor the larger paradox of the notion of a "free press" in this society are addressed adequately. The growing interest in socialization and the construction of social reality (or our image of the social world about us) provides- from within the research "mainstream"- another significant, if sometimes limited, challenge to the static functional, behavioral model of pluralism. This general research area provides a significant corrective for the lack of context of functional "media-use" oriented studies. For example, studies of social identity make an explicit attempt to identify the links between internal psychological processes and external social . processes at different levels of analysis.I3 Such an approach potentially provides a way of explaining how needs and wants, expressed socially, come into being within a complex social milieu. Similarly, studies of socialization examine the social process of integrating individuals into a larger "legitimate" role structure. Legitimation- a way of explaining or justifying a given social structure and the ideas that support it mystifies by preventing people from recognizing the conventional, changeable basis of such a social creation.I4 Hence, power implicitly takes on a form of mediation within this approach that is suggestive of

the Gramscian view of "hegemony" (which I discuss below). Still, many studies of social reality seem reluctant to take the critical step of tackling and analyzing the underlying limiting assumptions of t~e notion of social integration itself. Rather, they often seem content With describing the process and how it can sometimes go wrong. Perhaps "Cultivation Analysis," especially of television violence, provides a notable exception from within the research "mainstream." Cultivation theory turns explicitly the entire notion of "consensus" on its head by arguing that resistance to the system is prevented by the cultivation of fear and acquiescence to authority via symbolic representations of power. In other words, we accept authority in the name of safety.I 5 Clearly, the theory reinterprets the notions of "integration" as control and containment of change, and of consensus as consent. Thus, the approach opens the door to the analysis of Intent conflict and the complex exercise of power through social arrangements. In the following section, I present an elaboration of just such a compelling critical alternative to the pluralist thesis and its apologies, which takes a more sophisticated form in the concept of "hegemony." Communication as Social Control: The Critical View "Why do you keep telling me that things are going from bad to worse on my estate, my dear fellow?" the landlord says to his steward. "I know it without you; can't you talk about something else? You should let me forget about the state of things, leave me in ignorance of it, then I shall be happy." (Nikolai Vasilievich Gogol, Dead Souls)

Critical approaches to communication have in common not merely that all social relations and relations of communication are also relations of power; they also assume that those relations of power take some form of domination within a complex contextual social web. In other words, "social integration" is explicitly recast as "social control." But the shapes that social control is presumed to take, and the ways relations of domination are accounted for take many different forms. In other words, there is no single "critical" approach to the study of communication, much less social theory: the many and varied approaches that fall within this rubric have drawn from and built upon a wide range of sometimes deeply conflicting intellectual traditions. For example, political-economic approaches to media studies are. grounded in a long tradition of historical materialism. They search for both direct and mediated connections between economic power and cultural forms, leading to questions of media ownership and the role of

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cultural production itself. In general, such analyses provide a material context for interpreting the role of culture in reproducing social relations and identities; they provide an explicit account of the dynamics behind the production of ideas and the mystification of the whole production process, as opposed to explaining only content or effects.I6 A more static, functional approach to explaining the nature of social domination is represented by Structuralist Marxism, associated perhaps most strongly with Louis Althusser and Nicos Poulantzas (in his earlier works). In contrast with the historical focus of political-economic analyses, structural analyses in general search for objective structures (economic, political, ideological) that social action presupposes. According to Althusser' s anti-existentialist argument, power is effected through individuals' willing subjugation to ideology, which defines them and locates them within a social structure.17 Post-structuralist approaches take a very different tack, preferring criticism of manifest social practices, rather than analysis of the underlying structures that give rise to them. Michel Foucault, for instance, focuses on the relationship between power and knowledge in his criticisms of the privileged discursive practices of institutions (such as medicine) and who gets to ".talk" those discourses. Rather than seeking the deep structure of discourse (i.e., language), as a semiotician might, Foucault has stayed with its surface structures, its "rules of formation" at given historical moments. In general, Foucault has been more concerned with criticizing the use of power to dominate - where social practices are represented in discursive practices - and less concerned with theorizing about the origin of power relations. Is All critical approaches to power, such as those illustrated here, cast social relations as relations of domination, thus directly challenging pluralist assumptions about "diffuse" power. Further, all confront more or less directly the notion of ".consensus" with, for example, arguments about mystification or willing subjugation to ideology. Since a thoroughgoing critique of "consensus" is crucial for a thoroughgoing critique of the inadequacy of the pluralist thesis for explaining power relations, it is important to single out here the critical approach that most explicitly takes apart "consensus" - not only "apparent" consensus, but also "real" consensus - at a useful level of abstraction. Such an approach embraces the Gramscian theory of ".consent." Thus, that is the approach on which I focus here. And that is also the critical alternative and thoroughgoing challenge to pluralism reflected in Lukes' s third model of power. Unlike Bachrach and Baratz's ".second face of power" (the suppression of grievances), the third dimension of power involves the conditioning of consensus by the prevention of grievances in the first place rather

than simply the prevention of their expression. This process allows the manipulation of the public agenda by the presentation of a paradigm of society that seems natural, inevitable, and unchangeable. "Decisions are choices consciously and intentionally made by individuals between alternatives, whereas the bias of the system can be mobilised, recreated and reinforced in ways that are neither consciously chosen nor the intended result of particular individuals.n19 Hence, latent conflicts become important foci for the exercise of power, and their suppression is no longer adequately characterized as an individual-level activity, but as na function of collective forces and social arrangements.nzo The complexity of this view of power lies in its assumptions about the opacity of power. Power is relatively hidden because it is not necessarily observable (it may be located in latent conflict) and is exercised through an obscure web of sometimes abstract social relations. Such an argument provides both a penetrating critique of and an alternative to the empiricism and individualism of the pluralist model of power, much more so than the politic criticisms reviewed in the previous section. Lukes' s general three-dimensional view of power is not unlike the complex concept of "hegemony". found in critical social-theoretical literature. "Hegemony,u though used by some to refer simply to "ideological domination," is more correctly a conceptual tool for understanding and potentially subverting the "consent" of the masses to their own oppression, especially under late monopoly capitalism. Associated most seminally with Antonio Gramsci, the concept goes beyond both the "liberal" idea of consent as ".consensus" and the economistic Marxist notion of consent as "false consciousness.n21 "Antonio Gramsci's major contribution to Marxism is that he .systematized, from what is implicit in Marx, a Marxist science of political action." 22 There are two general (intimately related) uses of the idea of hegemony by social theorists: (1) as a theory of consent, which exposes the process; and (2) as a political strategt), a way of searching for access points for struggle. The first goal of the critical model of power-as-hegemony is the project of demystification by theoretical activity. The theory of hegemony i.e., of consent- goes far beyond pluralist theories of social integration because it does not stop with the observation that we can, indeed, empirically observe a kind of "consensus." Rather, it poses the problem of how that consensus is produced and who produces it, how it is that governed classes "freely consent" to the rule of more powerful governing classes. As such, the concept of hegemony also recasts the notion of "dominance" no longer as one of coercion, but rather as a much more complex, more subtle and dynamic process. Stuart Hall, most conspicuously identified with British cultural studies; argues that:

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Power, Hegemony, and Communication Theory I 63 development of a working-class consciousness, such a c~cial ele~~nt in Marxist theory, is for Gramsci the principle moment m explammg both capitalist domination and its overthrow. 26

Hegemony implied that the dominance of certain formations was secured, not by ideological compulsion, but by cultural leadership . . . . The critical point about this conception of "leadership" - which was Gramsci's most distinguished contribution - is that hegemony is understood as accomplished, not without the due measure of legal and legitimate compulsion, but principally' by means of winning the active consent of those classes and groups who were subordinated within it.2J

Hall also argues that the concept of hegemony became important to communication studies precisely because of the observation that media are neither autonomous social actors nor merely reflective of dominant ideologies or consensus. Instead, media are key actors in the production of consent- at once free of direct control by powerful social groups while also subject to working within limits and conditions neither of their own choosing nor within their direct control. Media tend to give weight to well-established opinion (which they help to establish as well), but not by virtue of force - and not unproblematically. Todd Gitlin uses the notion of hegemony" to explain how the American New Left was both "made" and "unmade" in the news media during the mid-1960s.241n the struggle over images, conventional framing devices were used by media to first marginalize and trivialize that political movement, and then later to absorb and domesticate its conflicting values and definitions of reality - a process entered into, in some senses, by the movement itself. Gitlin argues that, in journalism, social conflict is brought into the news and reproduced, but reproduced in terms of prevailing "common sense" definitions of reality. "As the mass media have suffused social life, they have become crucial fields for the definition of social meaning - partially contested zones in which the hegemonic ideology meets its partial challenges and then adapts."25 And the process of adaptation can be highly contradictory. The second goal of the model of power-as-hegemony is strategically political, which follows partly from the general "moral," reflexively educational imperative of many critical studies. But it also follows from the interpretation of the concept of hegemony itself - not only from Gramsci's notion of "leadership," but also from the ever-changing, imperfect, contradictory nature of the process of hegemony. The imperfection of hegemony is precisely what opens up sites of access for the struggle over images and discourses in culture. Martin Carnoy argues: Gramsci, in the last analysis, was, like Marx and Lenin, an educator. Yet, unlike Lenin, he believed in the intellectual qualities of the masses and their capability to create themselves the hegemony of their class rather than have it done for them by an elite vanguard party or an elite bureaucracy responsible for revolutionary theory and tactics. The

~

In particular Gramsci's ideas on revolution focus on the concept of hegemon;- as counterhegemony. ~he struggle ag~inst bourgeois dominance requires a strategy by whtch an alternative concept of society is created -one that assaults bourgeois hegemony in a "war of position."27 For Gramsci, the key strug.gle takes place .not in ~he realm ~f militancy, but, instead, in the realm ofldeology: !hat IS, the_ hege~omc crisis" leads to a struggle over competing defimtions of soc1a~ reality .. In addition to asking questions about power that refer to Its location - "who-whom" questions that get at the ideas of "responsibility" ~nd "gain"- Lukes recently suggested that we might also"ask the quest~on "Who can secure the achievement of collective goods? 28 That questl~n permits us to identify critical access poin.ts i~ the s~ggle over med1a images and· representations. In commumcation studies, Hall h_as long affirmed the importance of the politicizing role of confronting the .. . " problem of ideology. 29 In particular, Hall's "theory of articulatiOn has po!JtJcal consequences in that it informs us about cultural transform~twns and the creation of new political subjects through the use of medta; an example Hall has given is the Rastafarian movement in Jamaica. Othe:s, too, have attempted to provide strategies for the struggle over meamng and political action, such as Ernesto Laclau and Chantel ~ouffe's attempt to find a politics of discourse.3o In general, the theonst ~.ho uses the concept of hegemony tends to be more enga~:~ roiitically - as self-reflexive "educators" and by virtue of the pohtlctzmg nature of the concept itself- than pluralists or other political theorists who tend to . . . presume a certain distance from their subject. The theory of power-as-hegemony, whose u~e IS Illustrate~ m communication studies, provides a greater compleXIty of explanation abo.ut power in its opacity than do the plur~list t~~sis and its ~pologJa. But in addition to providing a penetrating cnttque of pluralism, the complexity of the concept of hegemony also provides _a ~ubstant!ve alternative. In fact, "hegemony" turns the notion of social mtegratwn on its head and escapes pluralism's fetishism of the individual a~d the observable, allowing us to acknowledge the roles of latent conflict and obscure social actors in power exercised as social control. The concept thus demystifies those roles, potentially opening avenues for access. Further, "hegemony" makes explicit its assumptions about the proce~s indeed, the politicizing nature of the concept hegemony IS of power use. its in inherent

519

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64 I Empire and Consumption

In general, using the concept of hegemony allows us to ask questions about power that might be obviated by the use of the pluralist thesis or its politic critiques. Analogously, critical approaches to the study of communication and power carry the same advantages over pluralist and quasi-critical approaches. In general, critical communication studies explicitly conceptualize relations of communication as problematic relations of power- that is, power becomes something more than a state or relation to be taken for granted or merely described. Power becomes the central problem for analysis. Notes to Chapter 4 4. Power, Hegemony, and Communication Theon; 1. 2. 3.

4.

5. 6.

7.

8.

9. 10.

11. 12.

13. 14.

TV Guide, 34, No. 11 (March 14, 1987). Martin Camoy, The St11te and Political Theory (Princeton: Princeton University Press, 1984), p. 10. Steven Lukes, Power: A Radical View (London: Macmillan, 1974). Carnoy, State and Political Theory, p. 34. Daniel J. Czitrom, Media and the American Mind: From Morse to McLuhan (Chapel Hill: University of North Carolina Press, 1982), p. 91. Everett M. Rogers, "Communication and Development: The Passing of the Dominant Paradigm," in Communication and Development: Critical Perspectives, ed. Everett M. Rogers (Beverley Hills: Sage, 1976), pp. 121-148. John Westergaard, "Power, Class and the Media," in Mass Communication and Society, ed. James Curran, Michael Gurevitch, and Janet Woollacott (Beverly Hills: Sage, 1977), pp. 95-115. Philip Elliott, "Uses and Gratifications Research: A Critique and a Sociological Alternative," in The Uses of Mass Communications, ed. Jay G. Blurnler and Elihu Katz (Beverly Hills: Sage, 1974), pp. 249-268. Peter Bachrach and Morton S. Baratz, Power and Poverty: Theory and Practice (New York: Oxford University Press, 1970). Michael J. Shapiro, "Literary Production as a Politicizing Activity," Political Theory, 12, No. 3 (1984), 387-422. See Rogers "Communication and Development." George A. Donohue, Philllip J. Tichenor, and Clarice N. Olien, "Gatekeeping: Mass Media Systems and Information Control," in Current Perspectives in Mass Communication Research, ed. F. Gerald Kline and Phillip J. Tichenor (Beverley Hills: Sage, 1972), pp. 41-69. Theodore R. Sarbin and Karl E. Scheibe, Studies in Social Identity (New York: Praeger, 1983). Peter L. Berger and Thomas Luckrnann, The Social Construction of Reality (New York: Anchor, 1966).

The Political Economy of the Media I 15.

16. 17.

18.

19. 20. 21.

22. 23. 24. 25.

26. 27. 28. 29. 30.

George Gerbner, Larry Gross, Michael Morgan, and Nancy Signorielli, "The 'Mainstreaming' of America: Violence Profile No. 11, Joumal of Communication, 30, No. 3 (1980), 10-29. Nicholas Garnham, "Contributirm to a Political Economy of Mass-Communication," Media, Culture and Society I (1979), 123-146. Louis Althusser, "Ideology and Ideological State Apparatuses: Notes Toward an Investigation," in his Lenin and Philosophy and Other Essays, trans. Ben Brewster (New York: Monthly Review Press, 1971), pp. 127-186. Michel Foucault, Power/Knowledge: Selected Interviews and Other Writings 1972-1977-, trans. Colin Gordon, Leo Marsh all, John Mepham, and Kale Soper, ed. Colin Gordon (New York: Pantheon, 1980). Lukes, Power: A Radical View, p. 21. Lukes, Power: A Radical View, p. 22. Stuart Hall, "The Rediscovery of 'Ideology': Return of the Repressed in Media Studies," in Culture Society and the Media, ed. Michael Gurevitch, Tony Bennett, James Curran, and Janet Woollacott (London: Methuen, 1982), pp. 56-90. Camoy, State and Political Theory, p. 65. Hall, "Rediscovery of 'Ideology'," p. 85. Todd Gitlin, The Whole World is Watching: Mass Media in the Making and Unmaking of the New Left (Berkeley: University of California Press, 1980). Gitlin, Whole World is Watching, p. 292. Camoy, Stale and Political Theory, pp. 87-88. Christine Buci-Glucksmann, "Hegemony and Consent," in Approaches To Gramsci, ed. Anne Showstack Sassoon (London: Writers and Readers, 1982), pp. 116-126. Steven Lukes, "Introduction," in Power, ed. Steven Lukes (New York: New York University Press, 1986), pp. 1-18. Larry Grossberg, ed., "On Postrnodernism and Articulation: An Interview with Stuart Hall," Journal of Communication Inquiry, 10, No. 2 (1986), 45-60. Etnesto Laclau and Chantel Mouffe, Hegemony and Socialist Strategy: Towards a Radical Democratic Politics, trans. Winston Moore and Paul Cammack (London: Verso, 1985).

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[23] Excerpt from Television and the Crisis of Democracy. 1.3 Contested Terrain and the Hegemony of Capital In contrast to postmodern media theory and the study by Horkheimer and Adorno (1972), I shall take a multidimensional approach, discussing both the regressive and progressive potential of new media and forms of culture. According to the first-generation thinkers of the Frankfurt School and many of their followers, the very forms of mass culture are regressive, exemplifying commodification, reification, and ideological manipulation. Commodity culture, from this viewpoint, follows conventional formulas and standarized forms to attract the maximum audience. It serves as a vehicle of ideological domination that reproduces the ideas and ways of life in the established order, but it has neither critical potential nor any progressive political uses. The classic "culture industry" analysis focuses on mass culture as a cultural form. Whereas the critical theory of the 1930s developed a model of social analysis rooting all objects of analysis in political economy, the critical theory of mass culture neglects detailed analysis of the political economy of the media, conceptualizing mass culture merely as an instrument of capitalist ideology. My aim, by contrast, is to develop a critical theory that analyzes television in terms of its institutional nexus within contemporary U.S. society. Moreover, rather than seeing contemporar y U.S. society as a monolithic structure absolutely controlled by corporate capitalism (as the Frankfurt School sometimes did), I shall present it as a contested terrain traversed by conflicting political groups and agendas. In my view, televisionfar from being the monolithic voice of a liberal or conservative ideologyis a highly conflictual mass medium in which competing economic, political, social, and cultural forces intersect. To be sure, the conflicts take place within well-defined limits, and most radical discourses and voices are rigorously excluded; but the major conflicts of U.S. society over the last several decades have nonetheless been played out over television. Indeed, contrary to those who see the logic of capital as totally dominating and administering contemporar y capitalist societies, I contend that U.S. society is highly conflictual and torn by antagonisms and struggles, and that

15

television is caught up in these conflicts, even when it attempts to deny or cover them over, or simply to "report" them. My response to the first generation of critical theorists ~A~orno, Horkheimer Marcuse and so on) is the argument that the capttahst system of produ~tion and its culture and society are mor~, riven_ with. conflicts. an~ contradictions than are present in the models of one-dtmenstonal soctety or the "totally administered society" presented by earlier critical theorists. In addition, I stress that U.S. society is not only a capitalist society but also (in part) a democratic one. Democracy is perhaps one o_f t~e ~ost loaded and contested terms of the present era. In its broadest stgmficatton, democracy refers to economic, political, and cultural forms of self-management. In an "economic democracy," workers would control the work place, just as citizens would control their polity through elections, referenda, parliaments, and other political processes. "Cultural democracy" wo~ld provide everyone access to education, information, and culture, enabhng people to fully develop their individual potentials and to become manysided and more creative. "Political democracy" would refer to a constitutiona l order of guaranteed rights and liberties in a system of political decisionmaking, with governance by rule of law, the consent of the governed, and public participation . in elections and referenda. The form of representational democracy operattve in the United States approximates some, but not all, of these features of political democracy. (See Barber 1984 for another model of "strong democracy.") While I admit that full-fledged democracy does not really exist in the United States, I shall argue in this book that conflicts between capitalism and democracy have persisted throughout U.S. history, and that the system of commercial broadcasting in the United States has been produced by a synthesis of capitalist and democratic structures and imperatives and is therefore full of structural conflicts and tensions (see Chapter 3). As we shall see, television is its contradictions. Furthermore , I stress the importance of conflicts within the ruling class and challenges to liberal and conservative positions by radical movements and discourses more than do previous critical studies of television. Given the ubiquity and power of television, it is a highly desired prize for ruling groups. Unlike most critical theorists, however, I attempt ~o specify bot? the ways in which television serves the interests of dommant econo~uc and political forces, and the ways in which it serves to r~produce confl~cts among these groups and to mediate the various antagomsms and confhcts that traverse contemporar y capitalist societies. Accordingly, I shall attempt to present a more comprehensive and multidimensional theoretical analysis than the standard Marxist and neo-Marxist accounts, which tend to conceptualize the media and the state simply as instruments of capital. I shall also discuss current efforts at restructuring capitalist society in relation

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to the movements of the 1960s and 1970s, the world economic crisis of the 1970s, and the challenges of utilizing new technologies and media as additional sources of profitability and social control. In contrast to mechanistic "instrumentalist" accounts, which conceptualize the media merely as instruments of capital and of the ruling class and class domination, the "hegemony" model presented in this book provides an analysis of the ways in which television serves particular class interests in forging specific forms of hegemony at specific points in time. Hegemony, Counterhegemony, and

Instrumentalist Theories The hegemony model of culture and the media reveals dominant ideological formations and discourses as a shifting terrain of consensus, struggle, and compromise, rather than as an instrument of a monolithic, unidimensional ideology that is forced on the underlying population from above by a unified ruling class.8 Television is best conceptualized, however, as the terrain of an ever-shifting and evolving hegemony in which consensus is forged around competing ruling-class political positions, values, and views of the world. The hegemony approach analyzes television as part of a process of economic, political, social, and cultural struggle. According to this approach, different classes, sectors of capital, and social groups compete for social dominance and attempt to impose their visions, interests, and agendas on society as a whole. Hegemony is thus a shifting, complex, and open phenomenon, always subject to contestation and upheaval. Ruling groups attempt to integrate subordinate classes into the established order and dominant ideologies through a process of ideological manipulation, indoctrination, and control. But ideological hegemony is never fully obtained; and attempts to control subordinate groups sometimes fail. Many individuals do not accept hegemonic ideology and actively resist it. Those who do accept ideological positions, such as U.S. justification for the Vietnam war, may come to question these positions as a result of exposure to counterdiscourses, experiences, and education. Accordingly, hegemony theories posit an active populace that can always resist domination and thus point to the perpetual possibility of change and upheaval. Hegemony theories of society and culture can therefore be contrasted with instrumentalist theories. The latter tend to assume that both the state and the media are instruments of capital, and to play down the conflicts among the state, the media, and capital. Examples include the structuralist Marxist theories of Althusser (1971) and Parenti (1986). Instrumentalist theories tend to assume a two-class model of capitalist society divided into a ruling class and a working class. These theories see the state and media as Instruments used to advance the interests of the ruling class and to

525

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17

control the subjugated class. The model assumes a unified ruling class with unitary interests. A hegemony model, by contrast, posits divisions within both the working class and the ruling class and sees the terrain of power as a shifting site of struggle, coalitions, and alliances. Instrumentalist theories of television tend to be ahistorical in their assumption that television, under capitalism, has certain essential and unchanging functions. The hegemony model, by contrast, argues that media take on different forms, positions, and functions in different historical conjunctures and that their very constitution and effects are to some degree the result of the balance of power between contending groups and societal forces. Hegemony itself takes different forms at different historical junctures. After the disruption of the conservative hegemony of the 1950s in the United States by the radical political movements of the 1960s, the 1970s witnessed intense struggles among conservatives, liberals, and radicals. The radicals were eventually marginalized and the liberals defeated with the victory of Ronald Reagan in 1980. During the 1980s it became clear that television had been taken over by some of the most powerful forces of corporate capitalism and was being aggressively used to promote the interests of those forces (see secti~n 2.5 and Chapters 3 and 4 for documentation).

Gramsci and Hegemony The term hegemony is derived from the work of the Italian Marxist theorist Antonio Gramsci. 9 In analyzing power relations, Gramsci (1971) distinguished between "force" and "consent," two ways in which the ruling class exercises power and maintains social control. Whereas institutions such as the police, military, and prisons use force to maintain social control, ideology wins consent for the social order without force or coercion. Hegemonic ideology attempts to legitimate the existing society, its institutions, and its ways of life. Ideology becomes hegemonic when it is widely accepted as describing "the way things are," inducing people to consent to the institutions and practices dominant in their society and its way of life. Hegemony thus involves the social transmission of certain preconceptions, assumptions, notions, and beliefs that structure the view of the world among certain groups in a specific society. The process of hegemony describes the social construction of reality through certain dominant ideological institutions, practices, and discourses. According to this view, experience, perception, language, and discourse are social constructs produced in a complex series of processes. Through ideological mediation, hegemonic ideology is translated into everyday consciousness and serves as a means of "indirect rule" that is a powerful force for social cohesion and stability. For a hegemony theory, therefore, all beliefs, values, and so on, are socially mediated and subject to political contestation. In every society,

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Toward a Critical Theory of Television

there is a contest over which assumptions, views, and positions are dominant. In Gramsci's (1971) analysis, ideologies "cement and unify the social bloc" and are embodied in everyday experience. Specific cultural forms-such as religion, philosophy, art, and common sense-produce consent and serve as instruments of ideological hegemony. In Gramsci's view, hegemony is never established once and for all but is always subject to negotiation and contestation. He pictures society as a terrain of contesting groups and forces in which the ruling class is trying to smooth out class contradictions and incorporate potentially appositional groups and forces. Hegemony is opposed and contested by efforts to produce a "counterhegemony" on behalf of such groups and forces. For Gramsci, it was the communist movement and party that provided the genuine progressive alternative to bourgeois/capitalist hegemony. A counterhegemonic movement would thus attempt to fundamentally alter the existing institutional arrangements of power and domination in order to radically transform society. The concept of hegemony has recendy been reconstructed by theorists such as Laclau and Mouffe (1985), who root counterhegemony in new social movements struggling for democracy. Television in the United States helps establish capitalist hegemony-the hegemony of capital over the state, media, and society. Because of the power of the media in the established society, any counterhegemonic project whatsoever-be it that of socialism, radical democracy, or feminism-must establish a media politics (see Chapter 5). According to the hegemony model, television thus attempts to engineer consent to the established order; it induces people to conform to established ways of life and patterns of beliefs and behavior. It is important to note that, from the standpoint of this model, media power is productive power. Following Foucault (1977), a hegemony model of media power would analyze how the media produce identities, role models, and ideals; how they create new forms of discourse and experience; how they define situations, set agendas, and filter out appositional ideas; and how they set limits and boundaries beyond which political discourse is not allowed. The media are thus considered by this model to be active, constitutive forces in political life that both produce dominant ideas and positions and exclude appositional ones. Media discourse has its own specificity and autonomy. Television, for instance, mobilizes images, forms, style, and ideas to present ideological positions. It draws on and processes social experience, uses familiar generic codes and forrrs, and employs rhetorical and persuasive devices to attempt to induce consent to certain positions and practices. Yet this process of ideological production and transmission is not a one-dimensional process of indoctrination, but, rather, is an active process of negotiation that can

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be resisted or transformed by audiences according to their own ends and interests. Gramsci's work is important because it provides as a model of society one that is made up of contending forces and groups. It thus avoids the monolithic view of the media as mere instruments of class domination. The two most prolific radical critics of the media, Herman and Chomsky (1988), come close to taking an instrumentalist position, assuming that the media are "adjuncts of government" and the instruments of dominant elites that "manufacture consent'' for the policies that support their interests. Herman and Chomsky also argue that a series of "filters" control media content, beginning with the size of the media and their ownership and profit orientation, and continuing through advertisers, media sources, pressure groups, and anticommunist ideology. All of these forces filter out content and images that would go against the interests of conservative powers and characterize the media as a propaganda machine. To document their thesis, Herman and Chomsky carry out a detailed analysis of mainstream media coverage of U.S. foreign policy, including studies of television coverage of Vietnam and Indochina, Central America, and the alleged plot to assassinate the pope, as· well as studies of the individuals deemed worthy or unworthy to be represented as victims of their respective governments. Lacking a theory of capitalist society, Herman and Chomsky tend to conceptualize the media as instruments of the state that propagandize on behalf of ruling elites and their policies. Whereas they see ownership of the media and commercial imperatives as filters that exclude views critical of established institutional arrangements of power, I would argue that the media are organized primarily as capitalist media and only further foreign policy and other perspectives that are perceived to be in the interests of the groups that own and control the media. Nonetheless, Herman and Chomsky quite rightly contest the self-image of the media as robust and feisty critics that help maintain a balance of power and promote liberal democracy. Arguing instead that the media are primarily propagandists for the status quo, they conclude: A propaganda model suggests that the "societal purpose" of the media is to inculcate and defend the economic, social, and political agenda· of privileged groups that dominate the domestic society and the state. The media serve this purpose in many ways: through selection of topics, distribution of concerns, framing of issues, filtering of information, emphasis and tone, and by keeping debate within the bounds of acceptible premises. (1988, 298)

The concept of hegemony, rather than that of propaganda, better characterizes the specific nature of commercial television in the United States. Whereas propaganda has the connotation of self-conscious, heavy-handed,

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Toward a Critical Theory of Television

intentional, and coercive manipulation, hegemony has the connotation, more appropriate to television, of induced consent, of a more subtle process of incorporating individuals into patterns of belief and behavior. By the same token, the propaganda model assumes that its ~ubjects are malleable victims, who willy-nilly fall prey to media discourse. The hegemony model, by contrast, describes a more complex and subtle process whereby the media induce consent. It also allows for aberrant readings and individual resistance to media manipulation (Hall et al. 1980). The ideological effects of television are not limited to its content, contrary to the dictates of the propaganda model. The forms and technology of television have ideological effects too, as I shall argue in this book. I therefore present perspectives different from those of Parenti (1986) and Herman and Chomsky (1988), who tend to utilize a somewhat monolithic model of capitalist society in their interpretation of the media as mere instruments of class rule and propaganda. My viewpoint also differs from that of radical critics of the media who focus on cultural imperialism and on the nefarious effects of the importation of U.S. television throughout the world. I supplement this important work by emphasizing the roles of commercial television within contemporary U.S. society, and my case study (Chapter 4) indicates the ways in which television has processed domestic politics during the 1980s. Much of Parenti's work, and almost all of Herman and Chomsky's work focuses on how U.S. television presents foreign affairs and how its anticommunist bias reflects the dominant lines of U.S. foreign policy while ignoring, or obscuring, unpleasant events that put U.S. policy and alliances in question. The works ofParenti and ofHerman and Chomsky are indeed valuable as damning indictments of U.S. foreign policy and of the ways in which the media serve the interests of dominant corporate and political elites in these areas. But a more comprehensive theoretical perspective on television would focus on television's domestic functions and political effects and the ways in which it is structured by the conflicting imperatives of capitalism and democracy.

Critical Theory and Television This book provides a more differentiated model of power, conflict, and structural antagonisms in contemporary capitalist societies than previous radical accounts. Although television can be seen as an electronic ideology machine that serves the interests of the dominant economic and political class forces, the ruling class is split among various groups that are often antagonistic and at odds with one another and with contending groups and social movements. Under the guise of "objectivity," television intervenes in this matrix of struggle and attempts to resolve or obscure conflict and to advance speCific agendas that are prevalent within circles of the ruling strata whose positions television shares.

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Because television is best conceptualized as a business that also has the function oflegitimating and selling corporate capitalism, a theory of television must be part of a theory of capitalist society. Contrary ·to those who view television as harmless entertainment or as a source of the "objective" information that maintains a robust democratic society, I interpret it as a "culture industry" that serves the interests of those who own and control it. Yet, in contrast to Horkheimer and Adorno (1972), whose theory of the culture industry is somewhat abstract and ahistorical, I analyze television's mode of cultural production in terms of its political economy, history, and sociopolitical matrix. In the process, I stress the interaction between political, economic, and cultural determinants. From the perspective of critical theory, in order to adequately understand a given object or subject matter, one must understand its historical genesis, development, and trajectory. Chapter 2 accordingly outli9es the history of television in the United States, focusing on the ways in which powerful economic and political forces have determined the course of the established commercial broadcasting system. Indeed, the broadcast media have served the interests of corporate hegemony from the beginning and took on even more blatantly pro-corporate agendas and functions during the 1980s. Chapter 3 follows with a sketch of my theoretical perspectives on television in the United States. Here I discuss the ways in which the capitalist mode of production has structured contemporary U.S. society and the system of commercial television. I also analyze the methods and strategies with which corporations and the state have attempted to control broadcasting; the ways in which commercial imperatives have shaped the organization, content, and forms of commercial broadcasting; the structural conflicts between capitalism and democracy in constituting the system of commercial television in the United States; and the major conflicts among broadcasting, government, and business over the past several decades. A critical theory of society must not only ground its analyses in historical and empirical studies but also develop a comprehensive theoretical perspective on the present age. Chapter 4 accordingly reveals the role of television in maintaining conservative hegemony in the United States during the 1980s. In this chapter I document the conservative turn in the media during this decade arid suggest that television promoted the Reagan/Bush agenda of deregulation, tax breaks for the rich and for the biggest corporations, and pursuit of a pro-business and interventionist foreign policy agenda. Television's role in the 1988 election, especially, dramatizes the current crisis of democracy in the United States. Indeed, television has increasingly reinforced conservative hegemony during an era in which corporate capitalism was aided and abetted by a political administration that was aggressively pro-business and hostile to the interests of working people as well as to those of progressive organizations and social movements.

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Normative and political perspectives are also crucial to the conception of critical theory, which has traditionally been structured by a dialectic of liberation and domination that analyzes not only the regressive features of a technology like television but also its emancipatory features or potential. Critical theory promotes attempts to achieve liberation from forces of domination and class rule. In contrast to the classic critical theory of the Frankfurt school, which is predominantly negative in its view of television and the media as instruments of domination, this book follows Benjamin {1969), Brecht {1967), and Enzensberger (1977), who conceptualize television as . a .·potential instrument of progressive social change. My studies thus maintain a doubled-edged focus on the media in which the progressive and democratic features are distinguished from the negative and oppressive aspects. 10 Critical theory is motivated by an interest in progressive social change, in promoting positive values such as democracy, freedom, individuality, happiness, and community. But the structm:e and system of commercial network television impedes these values. In Chapter 5, I have proposed an alternative system that promotes progressive social transformation and more democratic values and practices. This alternative system embodies such values as democratic accountability of the media, citizens' access and participation, increased variety and diversity of views, and communication that furthers social progress as well as enlightenment, justice, and a democratic public sphere. In short, critical theory criticizes the nature, development, and effects of a given institution, policy, or idea from the standpoint of a normative theory of the "good society" and the "good life." Capitalism defines its consumerist mode of life as the ideal form of everyday life and its economic and political "marketplace" as the ideal structure for a society. Critical theory contests these values from the standpoint of alternative values and models of society. In this way, critical theory provides a synthesis of social theory, philosophy, the sciences, and politics. Accordingly, I shall draw on a range of disciplines to provide a systematic and comprehensive critical theory of television. To elucidate the nexus between television and the crisis of democracy, I begin by situating television within the fundamental socioeconomic processes of corporate capitalism and by charting its growing influence and power in contemporary U.S. society.

Notes 8. This position is elaborated in Kellner (1979, 1980, 1982), in Best and Kellner (1987), and in Kellner and Ryan (1988). By contrast, the present book provides a more critical/institutional analysis of television. (I shall later devote a separate book to analysis of television as a cultural form.)

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9. On hegemony see Gramsci (1971) and Boggs (1986), and on ideology arid hegemony see Kellner (1978, 1979). Among those others who utilize a hegemony approach as opposed to a capital logic or instrumental approach to conceptualizing the media in relation to the economy and society are Stuart Hall and the Birmingham school (see Hall et al. 1980) as well as Gitlin 1980, and Rapping 1987. 10. Brecht (1967), Benjamin (1969), and Enzensberger (1974, 1977) developed perspectives in which new technologies, as in film and broadcasting, could be used as instruments of liberation-by "refunctiorung" the media to serve progressive goals. The present volume follows this tradition, which attempts to develop progressive uses for existing technologies and media. I should note that the first generation of the Frankfurt school also discussed emancipatory uses of popular culture and new technologies (Kellner 1989a), but for the most part they took a negative stance toward mass culture and communication.

Bibliography Althusser, Louis (1971) Lenin and Philosophy. New York: Monthly Review Press. Barber, Benjamin (1984) Strong Democracy. Berkeley: University of California Press. Benjamin, Waiter (1969) Illuminations. New York: Schocken. Best, Steven, and Douglas Kellner (1987) "(Re)Watching Television: Notes Toward a Political Criticism." Diacritics (Summer), pp. 97-113. Boggs, Car! (1986) Social Movements and Political Power. Philadelphia: Temple University Press. Brecht, Bertolt (1967) "Der Rundfunk als Kommunikationspparat." In Gesammelte Werke, Vol. 18. Frankfurt: Suhrkamp. Enzensberger, Hans Magnus (1974) The Consciousness Industry. New York: Seabury. - - (1977) "Television and the Politics of Liberation." In Douglas Davis, ed. The New Television: A Public-Private Art. Cambridge, Mass.: MIT Press. Foucault, Michel (1977) Discipline and Punish. New York: Pantheon. Gitlin, Todd (1980) The Whole World's Watching. Berkeley: University of California Press. Gramsci, Antonio (1971) Prison Notebooks. New York: International Publishers. Hall, Stuart, et al. (1980) Culture, Media, and Language. London: Hutchinson. Herman, Edward, and Noam Chomsky (1988) Manufacturing Consent. New York: Pantheon. Horkheimer, Max, and Theodor Adorno ( 1972; orig. 1947) Dialectic ofEnlightenment. New York: Seabury. Kellner, Douglas (1978) "Ideology, Marxism, and Advanced Capitalism." Socialist Review, Vol. 42, pp. 37-65. - - (1979) ''TV, Ideology, and Emancipatory Popular Culture." Socialist Review, Vol. 45, pp. 13-53. - - (1980a) "Television Research and the Fair Use of Media Images." In Lawrence and Timberg 1980; 1989, pp. 146-164.

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The Political Economy of the Media I - - (1980b) "Television Images, Codes, and Messages." Television, Vol. 7, No. 4, pp. 2-19. - - (1982) "Television Myth and Ritual." Praxis, Vol. 6, pp. 133-155. - - (1989a) Critical Theory, Marxism, and Modernity. London and Baltimore: Polity Press and Johns Hopkins University Press. Kellner, Douglas, and Michael Ryan (1988) Camera Poiitica: The Politics and Ideology of Contemporary Hollywood Film.Bloomington: Indiana University Press. Laclau, Emesto, and Chantel Mouffe ( 1983) Hegemony and Socialist Strategy. London: Verso. Marcuse, Herbert (1964) One-Dimensional Man. Boston: Beacon Press. Parenti, Michael (1986) Inventing Reality. New York: Saint Martin. Rapping, Elayne (1987) The Looking Glass World of Nonfiction TY. Boston: South End Press.

[24] Culture industry reconsidered

The term culture industry was perhaps used for the first time in the book Dialectic of Enlightenment, which Horkheimer and I published in Amsterdam in 1947. In our drafts we spoke of 'mass culture'. We replaced that expression with 'culture industry' in order to exclude from the outset the interpretation agreeable to its advocates: that it is a matter of something like a culture that arises spontaneously from the masses themselves, the contemporary form of popular art. From the latter the culture industry must be distinguished in the extreme. The culture industry fuses the old and familiar into a new quality. In all its branches, products which are tailored for consumption by masses, and which to a great extent determine the nature of that consumption, are manufactured more or less according to plan. The individual branches are similar in structure or at least fit into each other, ordering themselves into a system almost without a gap. This is made possible by contemporary technical capabilities as well as by economic and administrative concentration. The culture industry intentionally integrates its consumers from above. To the detriment of both it forces together the spheres of high and low art, separated for thousands of years. The seriousness of high art is destroyed in speculation about its efficacy; the seriousness of the lower perishes with the civilizational constraints imposed on the rebellious resistance inherent within it as long as social c.ontrol was not yet total. Thus, although the culture industry undeniably speculates on the conscious and unconscious state of the millions towards which it is directed, the masses are not primary, but secondary, they are an object of calculation; an appendage of the machinery. The customer is not king, as the culture industry would have us believe, not its subject but its object. The very word mass-media, specially honed for the culture industry, already shifts the accent onto harmless terrain. Neither is it a question of primary concern for the masses, nor of the techniques of communication as such, but of the spirit which sufflates them, their

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Culture industry reconsidered master's voice. The culture industry misuses its concern for the masses in order to duplicate, reinforce and strengthen their mentality, which it presumes is given and unchangeable. How this mentality might be changed is excluded throughout. The masses are not the measure but the ideology of the culture industry, even though the culture industry itself could scarcely exist without adapting to the masses. The cultural commodities of the industry are governed, as Brecht and Suhrkamp expressed it thirty years ago, by the principle of their realization as value, and not by their own specific content and harmonious formation. The entire practice of the culture industry transfers the profit motive naked onto cultural forms. Ever since these cultural forms first began to earn a living for their creators as commodities in the market-place they had already possessed something of this quality. But then they sought after profit only indirectly, over and above their autonomous essence. New on the part of the culture industry is the direct and undisguised primacy of a precisely and thoroughly calculated efficacy in its most typical products. The autonomy of works of art, which of course rarely ever predominated in an entirely pure form, and was always permeated by a constellation of effects, is tendentially eliminated by the culture industry, with or without the conscious will of those in control. The latter include both those who carry out directives as well as those who hold the power. In economic terms they are or were in search of new opportunities for the realization of capital in the most economically developed countries. The old opportunities became increasingly more precarious as a result of the same concentration process which alone makes the culture industry possible as an omnipresent phenomenon. Culture, in the true sense, did not simply accommodate itself to human beings; but it always simultaneously raised a protest against the petrified relations under which they lived, thereby honouring them. ID so far as culture becomes wholly assimilated to and integrated in those petrified relations, human beings are once more debased. Cultural entities typical of the culture industry are no longer also commodities, they are commodities through and through. This quantitative shift is so great that it calls forth entirely new phenomena. Ultimately, the culture industry no longer even needs to directly pursue everywhere the profit interests from which it originated. These interests have become objectified in its ideology and have even made themselves independent of the compulsion to sell the cultural commodities which must be swallowed anyway. The culture industry turns into public relations, the manufacturing of 'goodwill' per se, without regard for particular firms or saleable objects. Brought to bear is a general uncritical consensus, advertisements produced for the world, so that each product of the culture industry becomes its own advertisement. 86

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Culture industry reconsidered Nevertheless, those characteristics which originally stamped the transformation of literature into a commodity are maintained in this process. More than anything in the world, the culture industry has its ontology, a scaffolding of rigidly conservative basic categories which can be gleaned, for example, from the commercial English novels of the late seventeenth and early eighteenthth centuries. What parades as progress in the culture industry, as the incessantly new which it offers np remains the disguise for an eternal sameness; everywhere the ch:mges mask a skeleton which has changed just as little as the profit motive itself since the time it first gained its predominance over culture. Thus, the expression 'industry' is not to be taken too literally. It refers to the standardization of the thing itself - such as that of the Western, familiar to every movie-goer- and to the rationalization of distribution techniques, but not strictly to the production process. Although in film, the central sector of the culture industry, the production process resembles technical modes of operation in the extensive division of labour, the employment of machines and the separation of.the labourers from the means of production expressed in the perennial conflict between artists active in the culture industry and those who control it - individual forms of production are nevertheless maintained. Each product affects an individual air; individuality itself serves to reinforce ideology, in so far as the illusion is conjured up that the completely reified and mediated is a sanctuary from immediacy and life. Now, as ever, the culture industry exists in the 'service' of third persons, maintaining its affinity to the declining circulation process of capital, to the commerce from which it came into being. Its ideology above all makes use of the star system, borrowed from individualistic art and its commercial exploitation. The more dehumanized its methods of operation and content, the more diligently and successfully the culture industry propagates supposedly great personalities and operates with heart-throbs. It is industrial more in a sociological sense, in the incorporation of industrial forms of organization even when nothing is manufactured - as in the rationalization of office work - rather than in the sense of anything really and actually produced by technological rationality. Accordingly, the misinvestments of the culture industry are considerable, throwing those branches rendered obsolete by new techniques into crises, which seldom lead to changes for the better. The concept of technique in the culture industry is only in name identical with technique in works of art. In the latter, technique is concerned with the internal organization of the object itself, with its inner logic. In contrast, the technique of the culture industry is, from the beginning, one of distribution and mechanical reproduction, and

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Culture industry reconsidered therefore always remains external to its object. The culture industry finds ideological support precisely in so far as it carefully shields itself from the full potential of the techniques contained in its products. It lives parasitically from the extra-artistic technique of the material production of goods, without regard for the obligation to the internal artistic whole implied by its functionality (Saclzliclzkeit), but also without concern for the laws of form demanded by aesthetic autonomy. The result for the physiognomy of the culture industry is essentially a mixture of streamlining, photographic hardness and precision on the one hand, and individualistic residues, sentimentality and an already rationally disposed and adapted romanticism on the other. Adopting Benjamin's designation of the traditional work of art by the concept of aura, the presence of that which is not present, the culture industry is defined by the fact that it does not strictly counterpose another principle to that of aura, but rather by the fact that it conserves the decaying aura as a foggy mist. By this means the culture industry betrays its own ideological abuses. It has recently become customary among cultural officials as well as sociologists to warn against underestimating the culture industry while pointing to its great importance for the development of the consciousness of its consumers. It is to be taken seriously, without cultured snobbism. In actuality the culture industry is important as a moment of the spirit which dominates today. Whoever ignores its influence out of scepticism for what it stuffs into people would be naive. Yet there is a deceptive glitter about the admonition to take it seriously. Because of its social role, disturbing questions about its quality, about truth or untruth, and about the aesthetic niveau of the culture industry's emissions are repressed, or at least excluded from the so-called sociology of communications. The critic is accused of taking refuge in arrogant esoterica. It would be advisable first to indicate the double meaning of importance that slowly worms its way in unnoticed. Even if it touches the lives of innumerable people, the function of something is no guarantee of its particular quality. The blending of aesthetics with its residual communicative aspects leads art, as a social phenomenon, not to its rightful position in opposition to alleged artistic snobbism, but rather in a variety of ways to the defence of its baneful social consequences. The importance of the culture industry in the spiritual constitution of the masses is no dispensation for reflection on its objective legitimation, its essential being, least of all by a science which thinks itself pragmatic. On the contrary: such reflection becomes necessary precisely for this reason. To take the culture industry as seriously as its unquestioned role demands, means to take it seriously critically, and not to cower in the face of its monopolistic character.

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Culture industry reconsidered Among those intellectuals anxious to reconcile themselves with the phenomenon and eager to fmd a common formula to express both their reservations against it and their respect for its power, a tone of ironic toleration prevails unless they ha~e already create:d a new mythos of the twentieth century from the tm.posed regressxon. After all, those intellectuals maintain, everyone knows what pock~t novels, films off the rack, family television shows rolled out into senals and hit parades, advice to the lovelorn and horoscope columns are all about. All of this, however, is harmless and, according to them, even democratic since it responds to a demand, albeit a stimulated one. It also bestows all kinds of blessings, they point out, for exam~le, through the dissemination of information, advice and stress reducmg patterns of behaviour. Of course, as every soci~logical study me~u: ing something as elementary as how politically informed the public IS has proven, the information is meagre or indifferent. ~oreove:, the advice to be gained from manifestations of the culture mdustry IS vacuous, banal or worse, and the behaviour patterns are shamelessly conformist. The two-faced irony in the relationship of servile intellectuals to the culture industry is not restricted to them alone. It may ~o b~ supposed that the consciousness of the consumers themselves IS split between the prescribed fun which is supplied to them by the culture industry and a not particularly well-hidden doubt about its blessings. The phrase, the world wants to be deceived, has beco~e truer than had ever been intended. People are not only, as the sayxng ~oes, fal!ing for the swindle; if it guarantees them even the most fleetmg gratification they desire a deception which !s nonetheles~ tran_sparent to them. They force their eyes shut and vmce approval, m a kind of selfloathing for what is meted out to them, knowing fully the purpose for whi~h it is manufactured. Without adxnitting it they sense that their lives would be completely intolerable as soon as they no longer clung to satisfactions which are none at all. . The most ambitious defence of the culture mdustry today celebrates its spirit, which xnight be safely called ideology, as an .order~g factor. In a supposedly chaotic world it provides human bemgs wxth something like standards for orientation, and that al?ne .see~ worthy of approval. However, what its defenders xmagme xs preserved by the culture industry is in fact all the more thoroughly destroyed by it. The colour film demolishes the genial old t~vern t~ a greater extent than bombs ever could: the film extermmates .xts imago. No homeland can survive being processed by the films v:rhxc~ celebrate it, and which thereby turn the unique character on which xt thrives into an interchangeable sameness. That which legiLimatcly could be called culture attempted, as an

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Culture industry reconsidered expression of suffering and contradiction, to maintain a grasp on the idea of the good life. Culture cannot represent either that which merely exists or the conventional and no longer binding categories of order which the culture industry drapes over the idea of the good life as if existing reality were the good life, and as if those categories were its true measure. If the response of the culture industry's repres~ntativ~s is that it does not de~~~r art at all, this is i~elf the ideology With which they evade responsibility for that from which the business lives. No misdeed is ever righted by explaining it as such. The appeal to o_rder ~o~e, without concrete specificity, is futile; the appeal to the dissemmation of norms, without these ever proving ~emselves ID: re~lity o~ b~fore consciousness, is equally futile. The Idea of an objectively bmding order, huckstered to people because it is so lacking for them, has no claims if it does not prove itself internally and in confrontation with human beings. But this is precisely what no product of the culture industry would engage in. The concepts of order which it hammers into human beings are always those of the status quo. They remain unquestioned, unanalysed and undialectically presupposed, even if they no longer have any substance for those who accept them. In contrast to the Kantian, the categorical ~perative of the culture industry no longer has anything in common With freedom. It proclaims: you shall conform, without instruction as to what; conform to that which exists anyway, and to that which everyone thinks anyway as a reflex of its power and omnipresence. The power of the culture industry's ideology is such that conformity has replaced consciousness. The order that springs from it is never confronted with what it claims to be or with the real interests of human beings. Order, however, is not good in itself. It would be so only as a good order. The fact that the culture industry is oblivious to this and extols order in abstracto, bears witness to the impotence and untruth of the messages it conveys. While it claims to lead the perplexed, it deludes them with false conflicts which they are to ex~hange for their own. It solves conflicts for them only in appearance, m a way that they can hardly be solvedin their real lives. In the products of the culture industry human beings get into trouble only so that they can be rescued unharmed, usually by representatives of a b.enevo;ent collective; and then in empty harmony, they are reconciled With the general, whose demands they had experienced at the outset as irreconcileable with their interests. For this purpose the culture industry has developed formulas which even reach into such non-conceptual areas as light musical entertainment. Here too one gets into a 'jam', into rhythmic problems, which can be instantly disentangled by the triumph of the basic beat. Even its defenders, however, would hardly contradict Plato openly

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Culture bujustry reconsidered who maintained that what is objectively and intrinsically untrue cannot also be subjectively good and true for human beings. The concoctions of the culture industry are neither guides for a blissful life, nor a new art of moral responsibility, but rather exhortations to toe the line, behind which stand the most powerful interests. The consensus which it propagates strengthens blind, opaque authority. If the culture industry is measured not by its own substance and logic, but by its efficacy, by its position in reality and its explicit pretensions; if the focus of serious concern is with the efficacy to which it always appeals, the potential of its effect becomes twice as weighty. This potential, however, lies in the promotion and exploitation of the egoweakness to which the powerless members of contemporary society, with its concentration of power, are condemned. Their consciousness is further developed retrogressively. It is no coincidence that cynical American film producers are heard to say that their pictures must take into consideration the level of eleven-year-aids. In doing so they would very much like to make adults into eleven-year-olds. It is true that thorough research has not, for the time being, produced an airtight case proving the regressive effects of particular products of the culture industry. No doubt an imaginatively designed experiment could achieve this more successfully than the powerful financial interests concerned would find comfortable. In any case, it can be assumed without hesitation that steady drops hollow the · stone, especially since the system of the culture industry that surrounds the masses tolerates hardly any deviation and incessantly drills the same formulas on behaviour. Only their deep unconscious mistrust, the last residue of the difference between art and empirical reality in the spiritual make-up of the masses explains why they have not, to a person, long since perceived and accepted the world as it is constructed for them by the culture industry. Even if its messages were as harmless as they are made out to be- on countless occasions they are obviously not harmless, like the movies which chime in with currently popular hate campaigns against intellectuals by portraying them with the usual stereotypes - the attitudes which the culture industry calls forth are anything but harmless. If an astrologer urges his readers to drive carefully on a particular day, that certainly hurts no one; they will, however, be harmed indeed by the stupefication which lies in the claim that advice which is valid every day and which is therefore idiotic, needs the approval of the stars. Human dependence and servitude, the vanishing point of the culture industry, could scarcely be more faithfully described than by the American interviewee who was of the opinion that the dilemmas of the contemporary epoch would end if people would simply follow the lead of prominent personalities. In so far as the culture industry

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Culture industry reconsidered arouses a feeling of well-being that the world is precisely in that order suggested by the culture industry, the substitute gratification which it prepares for human beings cheats them out of the same happiness which it deceitfully projects. The total effect of the culture industry is one of anti-enlightenment, in which, as Horkheimer and I have noted, enlightenment, that is the progressive technical domination of nature, becomes mass deception and is turned into a means for fettering consciousness. It impedes the development of autonomous, independent individuals who judge and decide consciously for themselves. These, however, would be the precondition for a democratic society which needs adults who have come of age in order to sustain itself and develop. U the masses have been unjustly reviled from above as masses, the culture industry is not among the least responsible for making them into masses and then despising them, while obstructing the emancipation for which human beings are as ripe as the productive forces of the epoch permit.

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Part IV Communication and the Global Order

[25] Electronics and Economics Serving an American Century It is now more than a quarter of a century since Henry Luce in a Life editorial, urged Americans "to accept wholeheartedly our duty and our opportunity as the most powerful and vital nation in the world and in consequence to exert upon the world the full impact of our influence, for such purposes as we see fit and by such means as we see fit." What is more, he said then that "it now becomes our time to be the powerhouse from which the ideals spread throughout the world.... " 1 It was appropriate that the arrival of an American Century should have been announced by the controller of one of the most powerful communicatio ns complexes in the United States. As its director, Luce understood, earlier than others, that the fusion of economic strength and information control or image-making, public opinion-forma tion, or call it what you will, is the new quintessence of power, international and domestic. Fortune, another Luce publication, put the international significance of the matter squarely before its readership in a 1944 war-time article on "World Communicatio ns." It stated: "Upon their (U.S.owned international communicatio ns) efficiency depends whether the United States will grow in the future, as Great Britain has in the past, as a center of world thought and trade ... Great Britain provides an unparalleled example of what a communicatio ns system means to a great nation standing athwart the globe ...." 2 l"The American Century", Henry R. Luce, Farrar &: Rinehart, Inc., New York, 1941, p. 2!!. 2 Fortune, "World Communications" , May, 1944, pp. 129 and 178.

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To "own" a century is to own an empire. Yet this is no simple matter in a world only now escaping from unabashed colonialism and in which the patterns of the past are still vivid in the minds of former subjects still alive. How difficult would be the task of a new usurper of national independence behaving as a traditional conqueror? What small prospects for success would face a society which openly announced its intention of imposing a second imperial tutelage on a newly-liberated people? Imperial domain is an inconvenient and troublesome notion also to most Americans who have long regarded themselves, quite justifiably, as the children of the first anticolonial outburst. All the same there are some offsets to what otherwise would be a trying situation for a fledgling empire-accumulator. The world leadership syndrome which has been so prominent in American decisionmaking in the post-World War 11 years has had a unique instrument to support its inclinations. Unavailable to expansionists of earlier times, modern mass communications perform a double service for their present-day controllers. At home, they help to overcome, by diversion in part, the lack of popular enthusiasm for the global role of imperial stewardship. Abroad, the antagonism to a renewed though perhaps less apparent colonial servitude, has been quite successfully (to date) deflected and confused by the images and messages which originate in the United States but which How con~ tinuously over and through local informational media. The domestic and international sides of the imperial coin are thus both distinct and related. Domestically, the realm is governed confidently by a propertied managerial-industrial corps, instructing a consumer community stratified by income and race. A combination of media supply the primary ideological ingredient of the affiuent society; the concept of the good life. The period of capital accumulation in America which emphasized prudence, restraint, thrift and saving has long since terminated. The developed and glut-prone state has found new virtues to dignify and explain popular behavior operating in a high-capacity market economy. The mass media, openly in its advertising and less obtrusively in its general "entertainment" features, inform and instruct their audiences on the social patterns that are indispensable for relieving the unbearable pressure on market-oriented enterprises. Conse-

quently, a high premium is placed on personal economic reactions favoring impulse and immediacy. Spending and asset acquisition are stimulated and, for a quarter of a century at least, they have with some slight pauses, served to keep the factories running. The entire operation, bordering often on psychic chaos and material indigestion, is presented to the average citizen as a reasonable and unmanipulated system. Moreover, its beneficiaries reassure both the public and themselves that the apparent lack of direction, and the billions of individual (and generally insignificant) decisions that make up the national demand and supply maps, are evidence of the country's freedom. Commercial television, for instance, which literally sells its audiences to goods producers with carefully-determined ratios of so many thousands of viewers per advertising dollar, warns against those who would tamper with "free" television. The impact abroad of the domestic pattern is equally far-reaching, though some time has had to elapse for its effects to be manifest. An American international domain, represented by a visible 55 billion dollars of private capital invested overseas (and untold billions not identified) and another 55 billion dollars of annual foreign trade, is organized by an extremely concentrated group of commercial commanders. Extending across all continents, the sphere grows significantly larger year by year. A powerful communications system exists to secure, not grudging submission but an open-armed allegiance in the penetrated areas, by identifying the American presence with freedom-freedom of trade, freedom of speech and freedom of enterprise. In short, the emerging imperial network of American economics and finance utilizes the communications media for its defense and entrenchment wherever it exists already and for its expansion to locales where it hopes to become active. Communications material from the United States offers a vision of a way of life. The image is of a mountain of material artifacts, privately furnished and individually acquired and consumed. The emphasis in the programming and advertising is on the first and last elements in the American tryptych. The private character of production is generally though not always overlooked. The imagery envelops all viewers and listeners within the range of electronic impulses patterned after the American model and that radius is untiringly being enlarged. Simultaneously, the behavioral sciences in the United States supply the expertise for the great promotion and

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academic research turns its attention to these matters with great vigor.• What is the nature of the post-colonial world that so readily adapts itself to American influence and penetration? Some very powerful historical currents have contributed to the onrushing tide of American power. The international community that has emerged in the last quartercentury presents a vastly different complexion from the one prevailing before World War Il. The new age is defined by a massive shift in the global distribution of power points. More than matching the recession of European authority, once exercised internationally, has been the upsurge of American industrial strength. Alongside this sweeping power transfer have occurred two other significant developments. One is the extension of the state-directed sector from the isolation of its initial, quarantined Soviet base to a position that embraces half of Europe and much of Asia. The countervailing influence on world affairs of this, for the most part, vast and contiguous territory, which applies some principles of social planning, is considerably diminished in recent years, as evidence of its own serious disagreements on development policy have become worldwide knowledge. There is also the transition of a good portion of the rest of the world from a state of formal total subordination, colonialism, to a condition of political independence and national sovereignty. Following the breakdown of the Western European colonial system twentyfive years ago, scores of new states have emerged. The membership of the United Nations, reflecting these changes, has doubled since its founding in 1945. Independence notwithstanding, the frontiers, the human and material resources and the social structures of the new nations continue to reflect their colonial experience and past servitude

· Diminished European strength, an expanded but defensive Socialist geographical and material base and the newly-independent but economically feeble "third" world provide the environmental setting in which the contemporary expansion of American power occurs. What lends sophistication to the still-youthful American imperial structure is its dependence on a marriage of economics and electronics, which substitutes in part, though not entirely, for the earlier, "blood and iron" foundations of more. primitive conquerors. Recognition that economic might and communications know-how could complement each other to effectively promote the creation of an American century evolved slowly. The acceptance of United States economic power as an instrument of international influence came first. Communications possibilities were appreciated much later. In 1944, while the war still was being fought, J. B. Condliffe, in a paper titled prophetically "Economic Power As Ail Instrument of National Policy", called the attention of the nation's economists, assembled at their annual meeting, to what was going on before their unseeing eyes. He noted that "For the first time in many decadesindeed for the first time since the earliest years of the enfant republicattention is now being paid by soldiers and political scientists, but little as yet by economists, to the power position of the United States in the modern world."s Actually, what may not have been apparent to American academic economists was certainly no secret in London and Washington. British leaders for some time had been aware of the hard and driving edge of American economic power, exhibited during their war-time negotiations for United States economic assistance. More than one commentary at the war's end mentioned the tough, uncompromising objectives of American business and governmental representatives, itching to put their weakened English competitors to the financial wall.' The outlines of a national expansionist economic policy, evident in the bits and pieces of war-time negotiations, took some time to be

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• A recent issue of Broadcasting reported about the research to be undertaken at Wayne State University in Detroit. It asked this question: "Will some of the next major advances in creative programming and advertising come out of the university laboratories of the nation before they are discovered in the broadcast studio or advertising agency?" It noted some of the research that will be undertaken at Wayne State: "subliminal advertising techniques in television . • • (and) "compressed, and expanded, speech and music. Newly refined and rather expensive equipment is now available to make long commercials or short ones fit a prescribed time precisely ..." Broadcasting magazine, June 5, 1967, p. 56

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Washington, D. C., January 1944, p. 307. ' Read for instance the views of J. M. Keynes and L. S. Amery, two Englishmen of very different outlooks, who agreed on what the English were up against in their dealings with America.

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formulated into an all-embracing theoretical structure. By 1947, however, the patterns were firm and secure and capable of being articulated comprehensively. To an appreciative audience, gathered at Baylor University in Texas in March, 1947, President Truman addressed himself publicly, and with the unmistakeable accent of authority to the new American world role. He began by noting that "We are the giant of the economic world. Whether we like it or not, the future pattern of economic relations depends upon us. The world is watching to see what we shall do. The choice is ours." The Presi" dent's words are worth quoting in some detail because their message, it will be seen, has been the basis of American policy-making for an uninterrupted twenty-year span and continues to illuminate and guide national decisions. Unequivocally, Truman declared that "There is one thing that Americans value even more than peace. It is freedom: freedom of worship-freedom of speech-and freedom of enterprise." He made it quite clear that it was the last freedom (of enterprise) which weighed most heavily on his mind at that moment, and which, incidentally has been determining in United States economic relationships throughout the last four presidential administrations. Freedom of speech, however, interpreted to signify the unrestrained opportunity for the dissemination of messages by the American mass media in the world arena, has developed in the years since Truman spoke as an equally significant support in the American imperial arch. Truman called for a pattern of international trade that would be "most conducive to freedom of enterprise ... one in which the major decisions are made not by governments but by private buyers and sellers, under conditions of active competition, and with proper safeguards against the establishment of monopolies and cartels. Under such a system", he stressed, "buyers make purchases, and sellers make their sales, at whatever time and place and in whatever quantities they choose, relying for guidance on whatever prices the market may afford. Goods move from country to country in response to economic opportunities. Governments may impose tariffs, but they do not dictate the quantity of trade, the sources of imports, or the destination of exports. Individual transactions are a matter of private choice. This is the essence of free enterprise." Americans valued these arrangements, Truman asserted, higher than peace-a curious preference, we might observe, in a nuclear age. Any other value scale, he

noted parenthetically, "is not the American way. It is not the way to peace.'' 11 What assistance communications could provide to these objectives the President didn't specify. All the same, his declaration viewed in retrospect, included arguments that could and later would be made explicit. In this respect, if "information" or "communications" is substituted for "trade" in the passages of the Truman-Baylor speech, we have a clue to the contemporary mechanics of American expansionism. Arranged thusly, we are seeking a pattern of international communications that would be "most conducive to freedom of enterprise .. !' et al. That there are grounds for regarding this a warrantable substitution, consider the recent words of Robert Sarnoff, RCA's president, who predicts a time, not far in the future, when "information will become a basic commodity equivalent to energy in the world economy" and that "it will function as a fonn of currency in world trade, convertible into goods and services everywhere." 6 Information moving between Qations on the basis of "economic opportunities" and "competition", unimpeded by other national or cultural considerations, affords American communications media the same advantages American commerce now receives from "free" world trade patterns that are also minimally controlled by national states. Accordingly, the material interests of American commerce and American mass communications find their expression in the early postwar presidential declarations of freedom of speech and freedom of enterprise. Their joint interests are further promoted when, over time, it became apparent that the championing of freedom of communications (or speech) most often had as an indirect benefit, the global extension of American commerce and its value system. But more of this later. Truman's conception of a well-arranged international economic order, though newly-announced as American doctrine in 1947, had an earlier counterpart in another world-embracing system. Writing about English national policy in the latter part of the nineteenth century, two English economic historians used the felicitous phr-ase "free trade imperialism." 7 The concept of empire, they noted, can~~

7

Harry S. Truman, Address, March I947, Bayior University. Address by Robert Sarnoff, president, R.C.A., May I, I967, to the International Communications Association. 7 J. Gallagher and R. Robinson, "The Imperialism of Free Trade", The Economic History Review, Second Series, Vol. VI, No. I, August I953. 6

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not be judged by formal empire alone. "Refusal s to annex are no proof of reluctan ce to control." The mechanics of informal empire, in the British experience, these writers found, "was the treaty of free trade and friendsh ip made with or imposed upon a weaker stai:e."s The policy as they describe it was "trade with informal control if possible, trade with rule when necessary." A brilliant opportun ity for the practice of free trade imperial ism was offered to the English in Latin America after that area's breakaw ay from Spain in the early 1800's. Canning , the British minister in 1824, put the issue in terms that are stunning ly contemp orary. "Spanish America is free", he said, "and if we do not mismana ge our affairs sadly, she is English."D A century and a half later, America n leaders view the dissoluti on of the British, French, Dutch and Portugue se empires with equal enthusia sm if less candor. Moreover, the opportun ities for informal control affording paramou nt interest in the newly-in depende nt nations are irresistible to the youthful America n power complex. One may accept Landes' bland explanat ion of America n practices " ... as a multifar ious response to a common opportu nity that consists simply in disparity of power", and that "whenev er and whereve r such disparity has existed, people and groups have been ready to take advantage of it." 10 More illumina ting perhaps is the Baran and Sweezy analysis that "capitali sm has always been an internati onal system. And it has always been a hierarch ical system with one or more leading metropolises at the top, completely depende nt colonies at the bottom and many degrees of superord ination and subordin ation in between." 11 In either case, the United States is at the top of the power pyramid that exists today and scores of recently indepen dent states are at the bottom. To believe that the commercial and informat ional connecti on points that join these economically feeble nations to the technologically powerful America n economy are beneficial to both sides of the union is to outdo Voltaire 's good doctor Pangloss. If free trade is the mechanism by which a powerfu l economy penetrat es and dominat es 8Jbid, p. I I. 9Jbid, p. 8. 1° David S. Landes, "Some Thoughts on the Nature of Economic Imperialis m", The Journal of Economic History, December 1961, Vol. XXI, No. 4, p. 510. 11 P.A. Baran and P. M. Sweezy, "Monopol y Capitalism ", Monthly Review Press, 1966, New York, p. 178.

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a weaker one, the "free flow of informat ion", the designat ed objective incident ally of UNESCO , is the channel through which life styles and value systems can be imposed on poor and vulnerab le societies. If the perils that unrestric ted trade pose to developi ng nations are now fairly widely recognized, the significance of commun ications flows as elements in internati onal control are only barely beginnin g to be apprecia ted, even in the United States itself. Perhaps a special sophistic ation is required to compreh end the material benefits that accrue to the transmit ter nation from the intangib le messages and informa tion it processes for weaker, receiver societies. To those long accustomed to mercanti list beliefs in which hard exports at least must be matched with hard imports, the returns to informat ion export are uncertai n and inconclusive. But belated as recognit ion has been, commun ications are now a major factor in decision-making througho ut the interlock ed America n power complex. Business has been aware of and has utilized mass commun ications with great vigor since the advent of radio forty years ago. Now the executive and military bureaucr acies have seized enthusia stically the possibilities offered by informa tion control. The television editor of the New York Times, Jack Gould, writes that "Preside nt Johnson believes that the governm ental prioritie s of the days ahead may well be defense, foreign affairs and communications."12 A congressional committ ee in 1967 considered the issues of "Modern Commun ications and Foreign Policy" in its hearings, significantly titled, "Winnin g the Cold War: The U.S. Ideological Offensive." 18 Testimo ny before the committee, asserted flatly that "To a significant degree what America does will shape the emerging internati onal commun ications system. . . To a very large degree other countrie s will imitate our experien ce and will attach themselves to the institutio ns and systems we create... Given our information technology and informa tion resources, the United States clearly could be the hub of the world commun ication system." 14 Another witness before the Committ ee, John Richards on, Jr., Presiden t of Free Europe, Inc. [Radio Free Europe] claimed that The New York Times, July 3, 1966. Modern Communi cations and Foreign Policy, Report No. 5, Subcomm ittee on Internatio nal Organizati ons and Movements of the Committe e on Foreign Affairs, 90th Congress, 1st Session, Washingto n, 1967, House of Representatives. H I bid, P· 53. 12 13

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"the subject matter [modern communications and foreign policy] is the most important question now before the U;S. Government. It is one of the most important matters that could possibly attract the attention of leadership in America both private and public."ts More efficient control of communications is also a major concern of th'e military establishment for very practical purposes. Behind the verbal inducement and material enticement that American expansionism first displays to the out-lands lies the traditional regulator of international domination-military force. One hundred and fifty military bases outside the continental United States attest to the vigilance which is maintained for the security of the spreading American involvement over the planet. Strong American garrisons are strung out across the Pacific, onto the Asian mainland, in Western Europe, Latin America and the Middle East. In a world split as much by a North-South poverty line as by an East-West ideological divide, the expectations of regional and local violence against an intolerable status quo are high. Former Secretary of Defense McNamara, perhaps as part of his occupational interest, found a startling association between poverty and social violence. "There is a direct and constant relationship", he stated, "between the incidence of violence and the economic status of the countries afflicted. " 16 What conclusions do the purveyors of and defenders against violence draw from this relationship? Not surprisingly, the U.S. military establishment implements the civilian decision to control the rate and character of the change in the poor world, and modern communications techniques find their most admiring practitioners among the war games specialists. Instantaneous connections to men in the most inaccessible field locations are benefits already available to combat strategists. For some time, communications and space satellites have been providing intelligence that is of great tactical value in what is now euphemistically called "counter-insurgency." The Director of Telecommunications Management in the President's Executive Offices, former General O'Connell appeared before a Congressional committee in 1966. He compared current United States' requirements for international communications with its "non-empire"

with Britain's needs of an earlier time which in some instances still carry over to the present. O'Connell put the nation's international communications demands in a sympathetic and unaggressive setting. "The United States does not have a farflung empire or commonwealth of nations", he stated, "but at this point in our history we have a great community of interest with the many free and independent nations of the world whose rights of self-determination, progress toward higher living standards, governmental strength, stability and ability to resist the forces of externally sponsored subversion are of great interest to us as a nation." For this reason, then, "the rapid growth of our International Telecommunications System is a matter of the greatest importance in strengthening our mutual interest and understanding ... In this connection it is interesting to note that the British Commonwealth still has a somewhat larger international complex of communications than does the United States."17 As a spokesman for a society so concerned with denying its imperial position, the general's comments are notable both for their appreciation of the British world role and his difficult task of reconciling United States' communications requirements for professed unselfish purposes with England's colonial utilization of the same or similar resources. Ironically, as a result of their powerful communications capabilities, American policymakers have come to accept the legitimacy of a position that once was highly regarded by the Soviet leadership of an earlier time. Appealing directly to the people over the heads of a nation's governmental bureaucracy was once the revolutionary stockin-trade of Russian Communists. From the very beginning of the 1917 Revolution, Lenin had emphasized the value of getting the ear of the "masses"•in other nations and circumventing the tiresome and generally unsympathetic channels of the bourgeois state. A halfcentury later, the combination of prolonged economic prosperity and communications sophistication have produced comparable sentiments in the American command community. A report of the congressional committee concerned with "Winning the Cold War" and "Ideological Operations and Foreign Policy", elaborates the new approach:

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1s !bid, p. 53. 16

The New York Times, May 19th, 1963.

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11 Government Use of Satellite Communications, Hearings before a subcommittee of the Committee on Government Operations, House of Representatives, 89th Congress, 2nd Session, August and September, 1966, p. 284.

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"For many years military and economic power, used separately, or in conjunction, have served as the pillars of diplomacy. They still serve that function today but the recent increase in influence of the masses of the people over governments, together with greater awareness on the part of leaders of the aspiratibns of people, brought about by the concurrent revolutions of the 20th century, has created a new dimension for foreign policy operation. Certain foreign policy objectives can be pursued by dealing directly with the people of foreign countries, rather than with their governments. Through the use of modern instruments and techniques of communications it is possible today to reach large or influential segments of national populations-to inform them, to-influence their attitudes, and at times perhaps even to motivate them to a particular course of action. These groups, in turn, are capable of exerting noticeable, even decisive, pressures, on their governinents."1a

support to our international activities to being also an instrument of foreign policy.'' 20 (Italics added) The more active role accorded to communications activities in behalf of the governmental and private interest has prompted some attempts at creating a philosophical underpinning, to distinguish contemporary American practices from efforts by other societies to achieve imperial hegemony at other times through broadly defined cultural operations. To this task, Charles Frankel, professor ofPhilosophy at Columbia University and formerly Assistant Secretary of State for Education and Cultural Affairs, recently addressed himself. Frankel believes that "we are entering an era of educational and cultural relations" which "offer instruments for diplomacy and foreign policy whose potential ability is enormous and has as yet only begun to be felt." He distinguishes three separate stages in the history of cultural exchange between states and peoples. At the beginning, in the first and longest stage, " ... cultural exchange was simply an accidental by-product of the contact between different groups. It was not usually sought, and it was frequently resisted." Stage number two, according to Frankel, which had its climax in the 19th century, consisted of the "triumph of one's own culture over the culture of others. (It) was not accidental, but was deliberately sought and promoted. It was a motive as well as a consequence of war, of commerce, of imperial organization and imperial rivalry ... This is the period of the great explorations and of colonization." For Frankel, this period is dead and done with. We are now, still a~cording to Frankel, in the third stage, one that in his calculation, began only twenty years ago, almost coincidentally with the date of Mr. Luce's recognition of an American Century. What characterizes the "new era" (not to be confused with a similarly termed period that enthusiasts applied to the 1920's, prior to the Great Collapse)? Frankel lists several features that identify the current cultural scene and make it, in his estimation, qualitatively different from preceding periods. There is the volume and intensity of the cultural traffic. It is heavier and it penetrates more deeply than the earlier flows. There are more organized social institutionschurches, universities, foundations, voluntary associations and gov-

The opportunity to address a national, if not a world audience grows continuously. Leonard Marks, the director of the United States Information Agency, reminded his listeners at the national press club in early 1967 that the number of nations with television already had reached 104, and the number of sets around the world totalled 182 million and was climbing spectacularly. Radio receivers numbered well over half a billion, and international broadcasting, increasing steadily, has now reached 24 thousand hours weekly.1o Small wonder then that since the end ofthe second World War the American technological supremacy, and its leadership in communications in particular, has been receiving wider and wider appreciation inside the domestic business, military and governmental power structures. Understandable, too, has been an assumption of additional responsibility by the communications apparatus for these interest groups. An intra-governmental committee on international communications, including representatives of the Federal Communications Commission, the Office of Telecommunications Management, and the State, Justice and Defense departments, reported in (April) 1966 that "telecommunications has progressed from being an essential 18 Committee on Foreign Affairs, Report No. 2 on "Winning the Cold War. The U.S. Ideological Offensive," 88th Congress, House Report No. 1352, April 27, 1964, pp.6-7. 19 Leonard H. Marks, "Intermitional Communications a National Imperative", National Press Club, Washington, D. C., February 23, 1967.

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2 0 Report and Recommendations to Senate and House Commerce Committees, Submitted by the Intra-Governmental Committee on International Telecommunications, April 29, 1966, Executive Offices of the President, April 1966, p. I.

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ernments-that participate in the informational flow. And, finally, Frankel suggests that for the first time, there is a two-way flow between the rich and the poor, the more powerful and the less powerful nations and peoples. Furthermore, spectacular scientific and communications revolutions are continuously accelerating the already high level of social intercourse. 21 The facts are much as Frankel describes them. Their interpretation is another matter. For him "the height of the period of cultural imperialism, in which the richer nations moved out toward the poorer ones" terminated in the 19th century. To less officiallyoriented observers there can be a different reading which sees an agressive and powerful industrial-electroni cs complex working to extend the American socio-economic system spatially and ideologically. The intense volume of messages that Frankel calls attention to only highlights the expanded capability of modern communications over which the United States is in command. The numerous social institutions participating in the traffic do not in any way dilute the system's major message. Churches,. universities, foundations and governments have with few exceptions, uncomplainedly carried the official, industrial-governmental outlook. The ease, for instance, with which the CIA enlisted voluntary conduits, which still affirm their "independence", suggests the near total triumph of the i~perial idea in the American "pluralistic" society. In most instances, conviction, not force, persuaded these various institutional groupings to follow the official course. The two-way flow of "information, attention and trouble" between the powerful and the less powerful nations that Frankel considers to set the age apart from preceding epochs is still more apparent than real and certainly not evenly balanced. Who for example, would daiin that the "information, attention and trouble" contributed by the United States to Latin America is reciprocated? It is appropriate, too, that "trouble" is mentioned by Frankel as one of the ingredients of this new era. What is "trouble" to American power-wielders may be anything but trouble to less developed states and their populations. Generally, the efforts of the inarticulate to express themselves constitute "trouble" to already-established and privileged groups.

Satisfaction with and support of the American international cultural offensive is of a piece with current attitudes to the country's economic expansion and global penetration. Yet self-delusion has never been a national monopoly. Our English friends not so long ago colored the world's maps with their own particular hue, indicating their far-reaching paramountcy-all the while exclaiming that their steadily expanding empire was indeed even a surprise to themselves. As one English chronicler of the late 19th century put it, "We seem, as it were, to have conquered and peopled half the world in a fit of absence of mind. "22 Since that time of innocence, we have overtaken and surpassed the British in many fields, not least of which is apologetics. American explanations of what has been unfolding on the international scene in recent decades substitute concern and cultural exchange for absent mindedness as the motivating elements in the nation's overseas behavior. Beginning a long line of self-justifications, President Truman in his 1949 inaugural address, for example, antiCipated by two decades Frankel's evaluation, when he affirmed that "The old imperialism-exploi tation for foreign profit has no place in our plans. What we envisage is a program of development based on the concepts of democratic fair-dealing." 28 Academics likewise have assured us of our benevolence as well as how much we differ from this century's earlier predators. One writes, "It is certainly misleading to describe by the same word 'imperialism' both the European statesmen who plan ruthlessly to overrun a country in Asia or Africa and the American company building an automobile assembly plant in Israel." 24 Another asserts thiit "what was regarded as exploitative imperialism about a half-century ago is now regarded on almost all sides virtually as benevolences extended to economically backward nations starved for development capital ...

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21 Charles Frankel, "The Era of Educational and Cultural Relations", Department of State Bulletin, June 6, 1966.

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22 J. A. Seeley, "The Expansion of England, 1883", quoted in A. P. Thornton, "The Doctrines of Imperialism", John Wiley &: Sons, Inc., New York, 1965, p. 23. 2a Harry S. Truman, President, in Department of State, General Foreign Policy Series, No. 18, p. 8. 24 Daniel H. Kruger, "Hobson, Lenin and Schumpeter on Imperialism", Journal of the History of Ideas, Vol. XVI, No. 2. April 1955, p. 252.

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Hobson's imperialism is dead, which is not the same, of course, as to say, as some scholars do, that it never existed." 25 . Yet academic and official agreement over the death of imperialism, both economic and cultural, seems somewhat premature when considered alongside the behavior and the openly expressed views of the power complex itself. Read, for example, the words of former Deputy Secretary of State for Economic Affairs (and now U.S. Representative to the United Nations) George W. Ball, delivered to the New York Chamber of Commerce in May 1967. He noted that "it has been only in the last twenty years that the multinational company has come fully into its own. Today the lines between domestic and overseas business are no longer very distinct in many corporations." Ball sees "few things more hopeful for the future than the growing determination of American business to regard national boundaries as no longer fixing the horizons of their corporate activity." With realism and candor, Ball carefully divides up the non-socialist portion of the world between the United States and the industrialized and capitalis· tic Common Market countries. "In practice this would mean an American recognition of the primacy of the European interest in Africa - and consequently the primacy of European responsibility for the economic assistance, education, health and defense of the African people. We would, in other words, recognize that Africa was a special European responsibility just as today the European nations recognize our particular responsibility in Latin America." 26 This is hardly the model of a two-way flow of "information, attention and trouble" that Charles Frankel sees as the indication of the new era in cultural exchange. The multinational corporations that Mr. Ball extolls, are the engines that give the thrust to American expansionism. The communications apparatus which these industrial giants have at their disposal provides the methodology without which the new imperial surge would be ineffective, coming as it does on the heels of political liberation in so many former colonial territories. The character of the United States communications complex is significant then, not only for its tremendous importance domestically

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in influencing the lives and organizing the daily behavior of Americans. Less apparent at home but increasingly felt abroad is its contact with the international community. The structure, character and direction of the domestic communications apparatus are no longer, if they ever were, entirely national concerns. This powerful mechanism now directly impinges on peoples' lives everywhere. It is essential therefore, that there should be at least some familiarity with what the American communications system is like, how it has evolved, what motivates it and where it is pointing. These are the subjects for our further consideration.

2s B. Semmel, "On the Economics of Imperialism", in Economics and the Idea of Mankind, Bert F. Hoselitz, editor, Columbia University Press, New York, 1965, p.193. 2s Address by George W. Ball, before the New York Chamber of Commerce, New York, May 5, 1967.

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[26] Media imperialism?* THE TELEVISION IMPERIALISM THESIS

Many people over the last hundred years have pointed out the importance of American (and British) media in the world. 1 The most carefully researched work on this topic is still·Thomas Guback's The International Film Industry (1969) which analyses Hollywood dominance in the western European film industries since 1945. However, Herbert Schiller's Mass Communications and American Empire, also by an American and also published in 1969, is a rare exception to the general lack of Marxist empirical accounts. 2 Schiller's thesis- that American television exports are part of an attempt by the American military industrial complex to subjugate the world- has been followed by other related work. Alan Wells's Picture Tube Imperialism? (1972) pursues the television imperialism thesis in Latin America. Schiller's first contention is that despite the apparently commercial character of United States telecommunications, the American radio spectrum has increasingly come under the control of the federal government in general and the us Secretary of Defense in particular. Domestic American radio and television is concerned with selling receiving sets and advertising goods. The educational stations of early American radio were lost as a consequence of commercialism and greed, and Schiller would like to see a return to a more educational and less commercial emphasis. Since 1950 and increasingly since the Cuban Bay of Pigs fiasco of 1961, Schiller sees American television as having come under the control of Washington; for example RCA (which controls the NBC television and radio networks) is also a major defence contractor - and consequently beholden to, and uncritical of, the federal government. The great expansion of American television into the world around 1960- equipment, programming and advertising- is seen by Schiller as part of a general effort of the American military industrial complex to subject the world to military control, electronic surveillance and homogenized American commercial culture. American television *You may prefer to read about 'Media Imperialism' at a later stage, for instance, before reading Part Four. If so, please skip.

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programme exports, through their close connection with the manufacture of television receiving sets and American advertising agencies, are also seen as the spearhead for an American consumer goods invasion of the world. This export boom has, and is intended to have, the effect of muting political protest in much of the world; local and authentic culture in many countries is driven on to the defensive by homogenized American culture. Traditional national drama and folk music retreat before Peyton Place and Bonanza. So powerful is the thrust of American commer<;:ial television that few nations can resist. Even nations which deliberately choose not to have commercial broadcasting find their poiicies being reversed by American advertising agencies within their borders and by pirate radio stations from without. Commercial radio and television received from neighbouring countries tend to a 'domino effect', by which commercial radio spreads remorselessly into India, while commercial television spreads from one west European country to the next. With the exception of the communist countries, and perhaps Japan; few nations can resist. During the 1960s, Schiller argued, American policy. came to focus even more strongly on subjugating and pacifying the poor nations; and in this strategy space satellites were to play a key part. The United States government handed its telecommunications satellite policy into the hands of the giant electronics companies (ATT, ITT, RCA) and then negotiated with the western nations INTELSAT arrangements which gave the United States dominance of world communications; ultimately the policy was to beam American networ-k television complete with commercials straight into domestic television sets around the world. The homogenization of world culture would then be complete. False consciousness would be plugged via satellite into every human home. Alan Wells elaborates how American television imperialism works in Latin America. Latin American television, since its birth, has been dominated by United States finance, companies, technology, programming- and, above all, dominated by New York advertising agencies and practices. There is a very substantial us direct ownership interest in Latin American television stations. 'Worldvision', an ominously titled subsidiary of the us national ABC network, plays a dominant role in Latin America; American advertising agencies not only produce most of the very numerous commercial breaks but also sponsor, shape and determine the whole pattern of programming and importing from the USA. Indeed, 'approximately 80 per cent of the hemisphere's current programs - including The Flintstones, I Love Lucy, Bonanza and Route 66- were produced in the United States' .3 This near monopoly of North American television programming

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within South America distorts entire economies away from 'producerism' and towards 'consumerism'. Madison Avenue picture tube imperialism has triumphed in every Latin American country except Cuba. THE TELEVISION IMPERIALISM THESIS: TOO STRONG AND TOO WEAK

The Schiller-Wells account exaggerates the strength of American television, partly because some of their quoted figures are unreliable; they concentrate on the high point of American television exports in the mid-1960s. They also tend to accept too easily the promotional optimism of a company like ABC, whose Worldvision remained a paper 'network' only. Sometimes, too, their logic is faulty. They complain that in the poor countries only the very rich can buy television anyhow, and then they see television as subverting the whole nation. But the American influence on world television- even if not so great as these authors argue - has been very considerable. These authors' argument is also too weak. They scarcely notice the tendency of television merely to repeat a previous pattern of radio and feature films. This television imperialism thesis ignores the much earlier pattern of the press and news agencies which quite unambiguously did have an imperial character- although the empires were European ones, mainly British, but also French, Dutch, Belgian, Portuguese. Tapio Varis has produced (Table 1) the first reasonably comprehensive mapping of worldwide television import patterns. Varis found for 1971 (the year before Wells's book was published) that the television channels in the larger Latin American countries (such as Argentina, Colombia and Mexico) imported between 10 per cent and 39 per cent of programming. The only one of seven Latin American countries in the Varis study to import 80 per cent of programming was Guatemala.4 Varis also found that a substantial proportion of television imports came from countries other than USA, including imports from such Latin American countries as Mexico. Nevertheless, the Varis 1971 study did document American television exports around the world on an enormous scale: Many of the developing countries use much imported material, but - with the exception of a number of Latin American countries and a few Middle East countries - television is still of minor importance in most parts of the developing world; when it is available, it is for the most part merely a privilege of the urban rich.

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The United States and the People's Republic of China are examples of countries which currently use little foreign material - at least compared with the total amount of their own programming. Japan and the Soviet Union also produce most of their own programs. Most other nations, however, are heavy purchasers of foreign material. Even in an area as rich as western Europe, imported programs account for about one-third of total transmission time. Most nonsocialist countries purchase programs mainly from the United States and the United Kingdom. In western Europe for example, American produced programs account for about half of all imported programs, and from 15 to 20 per cent of total transmission time. The socialist countries also use American and British material, but only TV Belgrade uses as large a share of American programs as the Western European countries.. The real social and political impact of imported programs may be greater than might be inferred from the volume of imported material, because of audience viewing patterns and the placing of foreign programming. Available studies about prime-time programming in various countries tend to show that the proportion of foreign material during these hours is considerably greater than at other times. For each country surveyed, we looked at the categories into which imported programs fell. Program imports are heavily concentrated on serials and series, long feature films, and entertainment programs. 5 A more recent study by Elihu Katz, George Wedell and their colleagues 6 traces the history of both radio and television in ten Latin American, Asian and African countries plus Cyprus. This study attributes a considerably larger place to British influence. The KatzWedell study suggests that the television imperialism thesis takes too little account of radio and of differences both within and between nations. It also strongly confirms that there was a high point of American influence on world television at some point in the 1960s. Central to the Katz-Wedell study is the notion of 'phases of institutionalization'. First there was a direct transfer or adoption of a metropolitan - usually American, British or French - model of broadcasting, with radio setting the pattern for television. Secondly, there was a phase of adapting this system to the local society. Thirdly, and ultimately, a new 'sense of direction' was introduced by the government - this typically involved removing any remaining vestiges of direct foreign ownership and increasing the direct control of government. This third phase typically occurred around 1970 and thus

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invalidated some of the Schiller and Wells arguments around the time they were being published. Katz and Wedell focus heavily on the receiving countries and are excellent at detailing the endless muddles, confusion, indecisions, self-deception, conflicting goals, conflicting ministries - the general chaos which seems to characterize the appearance of television. Katz and Wedell reject any strong television imperialism thesis, and they tend to see the American and British exporters of television models and styles as no less muddled and self-deceiving than the importers. Nevertheless despite their implicit rejection of much of the television imperialism thesis, Katz and Wedell do provide much descriptive material which fits the thesis quite well. The importance of production (transmission and studio) technology is confirmed. Like the other students of television exports, they look with horror on the weight of commercial advertising, the predominance of American entertainment series and the relative absence in most countries of high quality educational or cultural television programming.

but the possibility of greatly raising prices has been defeated by the national television organizations which are typically strong buyers looking for bargains among competing sellers. Thus it may be true that American companies like RCA saw enormous sales of television sets and programming as a lucrative possibility; but there is also some evidence that RCA were rather hesitant, and only ABC of the us networks was really optimistic. Moreover, what happened was as bad in commercial terms as the most pessimistic predictions; starting with 'initially' very low prices, American television exporters saw their prices rise only a little and later stay steady against inflation. Exports of American television sets also did not succeed as well as many expected. The often ferocious and often self-contradictory arguments put forward on this topic stem partly from an absence of reliable information about the actual prices paid for various services. Since an extra 'copy' of a news agency service, or the use of a feature film or a television series, has no obvious or 'rational' price there is more than the usual scope for price cutting and variation. Nevertheless, my guess is that the absence of price information results partly from embarrassment on both sides; often, I suspect, the salesmen of American companies are embarrassed by the low prices they are getting. Equally, I suspect, purchasers are embarrassed by the quantity and sometimes the quality of material they are receiving for such a low price. Reasonably reliable estimates of the total overseas revenue of United States media art> available in some cases, even though the nature of revenue varies greatly between media- as does the ratio of 'revenue' to profit. Probably first would come feature films; Hollywood 'theatrical' revenues abroad were $592 million in 1975 (Table 16). Approximately second equal would be records (including tapes, etc.) and the overseas revenues (commission, not billings) of American advertising agencies. Next would come the roughly $100 million revenue ofus television exports; then the overseas revenue of AP and UPI. These five categories together probably earned revenues of between $1,500 and $2,000 million in 1975. By 1975 British television exports were probably earning about as much as those of the United States, if feature films on television are excluded. This British success depended heavily on the market of the United States itself. But lacking Hollywood's large theatrical film earnings, Britain must have earned a sizeable fraction of her export media revenue through books and EMI records. In video news exports- Britain's strongest single media export field- revenues were extremely small; Visnews in 1975-6 earned revenues of only £3·8 million and no profit at all. The tendency of the most obviously politically influential media

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The economies of scale operate in many manufacturing fields, and especially in fields where the research and development costs are high -such as new drugs, aircraft production or computers. In these three fields the United States has achieved supremacy. But the economies of scale work in an even more extreme way in some media fields. In order to achieve extra overseas sales you have physically to manufacture and sell additional aircraft, or computers or pills - and a similar situation obtains with books or records. But in other media fields the additional cost of extra 'copies' is negligible. Only one copy is needed to show on a national television network. Only a smallish number of copies of feature films are required for one country. Andwhat few television imperialism writers have noticed- news agencies and syndication services are also subject to extreme economies of scale; once you have a news service available in a foreign capital, hooking up additional clients costs a fairly negligible amount. Such economies of scale operate equally for all large producers, one might think. But this is not quite the case. The standard American practice in all media fields is initially to undercut the opposition through price competition; this follows from the enormous numbers of publications and broadcasts outlets in the USA. The policy is wide sales at low prices. American news agencies adopted this policy when they broke into the world market and they still operate it now. Hollywood did this so successfully with feature films that it could later raise its prices. The same tactics were pursued in television-

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exports to earn the least revenue is consistent with the non-profit goals which often obtain in news, plus the market strength of such major purchasers of news as national news agencies and broadcasting organizations. Over half American export media revenues are earned from the young people who buy pop q:cords or visit cinemas, and from advertisers, around the world. Or to express the same point in media imperialism terms: Media exporters earn monopoly profits by selling entertainment to young consumers of entertainment and young housewife users of advertised products, while the media exporters dump their products at low prices on national broadcasting organizations and news agencies.

countries have increased confidence in the English-language agencies. At the time of the Hollywood world-wide export dominance of 1920, most of the world's governments were more or less willing to accept the western international news agencies. And this situation has continued ever since. The western agencies have largely maintained their international acceptability despite the emergence of the communist bloc and the independence of ex-colonial nations. Governments in these countries can still control the in-flow of news, and to some extent the out-flow, through the mechanism of their national agency. The world's governments, with almost no exceptions, allow the international agencies to gather news about them for world dissemination. Governments know that it is possible to cover a country from outside - via radio and newspapers, by interviewing plane passengers arriving in neighbouring countries and so on; most governments prefer to have the foreign agency men based in the country, where correspondents often have little alternative to heavy dependence on the local national news agency. International news agencies are partly mere go-betweens for national new~ agencies. But the two American agencies and the British agency have acquired special international legitimacy. Most governments, politicians and journalists acknowledge that this news - while neither neutral nor always accurate- is at least more neutral and more accurate than any likely alternative. Even though the Anglo-Americans only behave as if neutrality were possible or accuracy meaningful, nevertheless the energy which goes into the 'as if' performance is apparently widely thought to be impressive. These agencies have largely shaped the presentation ofinternational news in all countries around the world; these agencies do not merely play a major part in establishing the international political agenda, but they have done so now for a hundred years. And for a hundred years they have been the main definers of world 'news values', of what sort of things become news. This news legitimacy has, of course, been very strongly connected with the agencies' considerable success in being, if not all things to all governments and all newspaper readers, then at least acceptable to most governments and most newspaper readers. This has been done partly by parcelling the world up into regions with regional services;* just as the two American agencies distribute regional services to the main regions of the USA, so also in the world. The 'two sides' style of domestic reporting- 'the Republican said and then the Democrat said' - has led to a two-sided style of international reporting. Even

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In retrospect it may seem inexplicable that the governments of certain countries ever allowed media importing to take place on the scale of Hollywood film importing around 1920 or American television series importing after 1960. But governments are more interested in news than any other media form; and international arrangements for controlling the trade in news had been established long before 1920. The main instrument of news trading was the international news agency; the main exporters of international news around 1870 were Reuters and Havas - and all the other countries were the customers of the British and the French agency. More precisely, the importers were often national news agencies in particular countries; any government could indirectly control the incoming flow of British or French news by controlling or guiding the national agency through which the news was sieved before it reached any domestic newspapers. It was not surprising that the great diplomatic and financial nations, France and Britain, should dominate the world wholesaling of news. Moreover a powerful and rising European nation like Germany was able to get itself included as the third member of the cartel with its own special area in Scandinavia and Russia. The international dissemination of news thus acquired a strong flavour of free trade- free trade as a doctrine interpreted by Britain and France. One of the contributions of the United States on the world scene was to give this free trade a fresh flavour; the American agencies in the early twentieth century brought an increase in direct competition both amongst themselves and between themselves and the Europeans; the news cartel slowly lost its imperial overtones and incorporated more competition. The American agencies in the interwar period seemed to be giving a new meaning to the notion of a free trade in news; moreover, the main enemies of this notion in the 1930s- Hitler for instance- by their very opposition must in many

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* In general Reuters' services are more regionalized and Associated Press the least regionalized in most world regions. A common economy measure adopted by the American agency is to reduce the regional news element in regional services.

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though an American news agency is in many ways totally American, it is easy to edit the service into a 'one-sided' shape merely by leaving out what the Republicans or the Democrats said, or internationally by leaving out what the capitalists or the communists said. Any newspaper or news agency journalist in the world who wants a ready supply of pointed and critical comments on the American. President or the British Prime Minister need go no further than the agency ticker tape already installed across the hall. The quality of being easy to bend and shape, easy to edit selectively, is also found in Anglo-American feature news material of various kinds. The New York Times service in 1972 was taken by 119 foreign newspapers in 46 countries.* The Los Angeles TimesfWaslzington Post news service was available in English, French, Spanish or German and was taken by I 00 newspapers also in 46 countries. One of these leading prestige papers in a sizeable country is unlikely to buy a foreign news service lightly; buying such a service implies at least respect, probably admiration. Buying these services from American prestige newspapers (and their British junior partners) amounts to a re-affirmation that the paper buying the service is continuing to follow Anglo-American news values. In all but a few countries in the world (such as Britain) these prestige newspapers are not only the most politically influential but also have the largest or among the largest sales; many are also looked up to as leaders in technological innovation and the practice of journalism. Time and Newsweek are available in most countries in the world; even at the height of the Cold War such American magazines were relatively seldom censored, 1 and in many countries there are now domestic imitations - which often copy the American formats in considerable detail. In western Europe export sales of dailies, weeklies and monthlies are dominated by American and British publications (French and German foreign sales are confined largely to Switzerland, Belgium and Austria). 8 A large number of American technical magazines have significant foreign sales. 9 'Off-shore' media production, which is especially familiar in the feature film industry, was pioneered in Europe by American tycoon publishers. From 1887 James Gordon Bennett jnr produced a daily edition of the Herald in Paris, and since then- apart from 1940-4-

there has always been at least one American daily newspaper P?bIished in Paris. These efforts not only directed European attention towards American newspaper tycoons but also brought to Europe many young American journalists, who often later worked on ot~er publications. Bennett's journalists were the first of ma?y succeedmg waves of American communica tors- others appeared m. films (~r?m about 1910 on), in commercial radio (about 1930 on~, m te~evlSlon (especially 1955 on). There were also waves of agency JOurnalists and of advertising men. The o~-shore sty!e of produ;tio~ led ~o overseas editions of various magazmes of wh1ch Readers Dzgest 1s the most famous; women's magazines were another major field later follo~ed by men's magazines. Recently we have seen off-shore Amencan business magazines.* Even those relatively few of the world's newspapers and other .news media which have their own staff correspondents tend to statiOn a high proportion of them in New York, W~shington and London. Staff correspondents reporting from the Umted States tend to rely heavily on the dominant us. domestic me~ia. Foreign correspondent~ subscribe to a special Amencan agency w1re for such correspondents, every day they read the New York Times and Washington Post and perhaps the Wall Street Journal; every week they flough t~rough piles of magazines- and they follow the networks. 1 The Ed1~or or foreign editor back home in London or Tokyo h.as often himself previously been stationed in the USA and he ~on~mues to take an active interest in American news -he does this via the Lon~on or Tokyo service of the self-same agencies available in the USA, VIa local editions of the self-same news magazines and so on. C~nsequently foreign correspondents stationed in the USA ~end to rece1v.e enthusiastic requests for reports on the latest Wh1te House bnefing, the

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• McGraw-Hill is involved in an international network of business magazines, which has three main elements: 1. Business Week- McGraw-Hill's main us business magazine also has an international edition. . . . 2. International Management - was est~blished b~ .McGraw-Hlll m London m 1946· it is a monthly aimed at Britam, the Bnush Commonwe~lth and the Engllsh language world market. This magazine also has a Spamsh language edition for Latin America. . . . . .. 3. McGraw-Hill has established vanous kmds of ed1t~nal, s~les, advert1~mg and in some cases, joint ownership, arrangements With, busme~s magazmes in major countries; these include Espausione (Italy), L 'Expaus1on (Franc~), Manager (West Germany), and Nikkei Business (Jap~nl)d- ~h e ~~;er ~r .m~ stance, involves a partnership with the Japanese financ1a a1 y, 1 1011 e1za1 Shimbun. These arrangements allow economies not o?IY ~n editc;rial- b~t the world ch?in of McGraw-Hill offices provides econom1es m selhng cop1es and attractmg advertising between countries.

• The leaders in this field are the New York Times news service and the Washington Post/Los Angeles Times news service. The New York Times news service was taken in 1972 by A I Alzram (Cairo), Politika (Belgrade), The Times and Sunday Times (London), Le Figaro and L'Express (Paris), Der Spiegel (Germany), Corriera del/a Sera (Milan), Asahi Slzimbun (Tokyo), Times of India (Bombay); it was also taken by a number of leading 'prestige' papers of Latin America0 Estado de Si1o Pau/o and Jorna/ do Brasil, El Mercurio (Santiago, Chile), Exce/sior (Mexico City). La Nacion (Buenos Aires) and El Nacional (Caracas).

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latest dark-horse for the Republican nomination, and requests for the correspondent's own version of Newsweek's fascinating feature on the worse-than-ever difficulties of New York's Mayor. Thus the correspondent finds himself rewriting at source bits and pieces of the very same American national media which in regional versions are on sale around the world. Something similar happens for foreign correspondents based in Britain. With Visnews and UPITN the international news agency tradition is married to the BBC tradition and the result is world-wide acceptance. The video news stories which Visnews and UPITN supply to their customers around the world each day contain (in contrast to CBS) only natural sound - the thud of rifle butts on heads, perhaps thuds alone without spoken commentary. There is a written commentary describing such details as names, time and place, but different television networks can shape the film to their own ideological and stylistic requirements by adding commentary and by editing. Richer customers use fewer stories and typically edit down those they do use to shorter running times. Many stories are supplied to customers only in a single world region; normally a story has to be of interest to several countries to get covered. An item of interest to only one country- such as an African President visiting Latin America- can be specially covered. In addition many news background and documentary television stories are compiled by TV network customers around the world from the archive film libraries of the video agencies - Visnews has 35 million feet of archive newsreel and TV news-film. The Anglo-American video news agencies also provide the core of the material for the Eurovision daily news exchange. Visnews alone provided 25·5 per cent of all news material on Eurovision in 1973. Eurovision has the most significant and long established daily television news exchange in the world and it is now linked to other regional exchanges; it has a daily exchange with the Soviet and east European Intervision. Its news goes daily from Madrid via Atlantic satellite to Latin America. Its exchange links are also spreading across the Mediterranean into North Africa and the Middle East. In all cases the flow of news is either entirely, or mainly, 'one-way flow' out of Eurovision, and in all cases the Anglo-American video news agencies provide the core of material transmitted. It is thus difficult to exaggerate either the direct presence or the indirect influence of Anglo-American materials and styles on television news throughout the world. Having shaped the world's print news values, the Anglo-Americans have largely written the international grammar of television news; the main television news bulletin in most countries in the world will

normally carry some Visnews material. Why? Audiences in all countries have been taught to expect television news to include an expensive commodity- foreign news film. If you don't buy it cheaply from the Anglo-Americans there is no practical alternative. Moreover, as with newspapers, this foreign coverage is of more visually dramatic material; it is typically of higher technical quality than local material (in most countries) and among television 'professionals' it carries more prestige than does domestic material. Being dependent upon foreign countries for their information about international politics may have been a difficult pill to swallow. But foreign ministries- faced with the alternative of not having the information, or having to rely entirely on their own diplomatsswallowed the pill. After this, accepting entertainment from abroad was easy; foreign advertising, easier still.

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SOME APPEALS OF HOLLYWOOD ENTERTAINMENT*

Many countries failed around 1920 to grasp the near impossibility of shutting out Hollywood films. Later, especially in the 1930s, some countries began to develop coherent policies for such resistance. But having made non-commercial arrangements for broadcasting, most of these same countries then failed to recognize that a state controlled broadcasting system also would face an importing dilemma. State broadcasting systems were in the late 1940s taken somewhat unawares by music imports. The same broadcasting systems were later taken unawares by television imports. The most successful resistance to Hollywood imports in the 1930s occurred in the Soviet Union, Japan and Germany. These governments all saw Hollywood imports in political as well as cultural terms; all these countries had substantial economic resources- and their governments were willing to pay the price of maintaining major domestic film industries. Television was invariably established as an off-shoot of radio, a decision which confused and weakened initial resistance to American television imports. Most countries outside Latin America had a public service (or BBC) style of radio. European and other state broadcasting organizations overestimated their ability to resist importing Hollywood materials and styles; and in countries where a domestic mini-Hollywood has been painfully established, broadcasting organizations typically failed to grasp the relevance of this hard-won domestic experience. The importing of entertainment materials has primarily been of pop music records, feature films, recorded television drama series • The next chapter will deal with Hollywood and other us entertainment.

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News, entertainment, advertising .•. and imperialism? and recorded ~ntertainment s~ows. Much of this material adopts the form of a fictiOnal story- children's programming in comic strips in women's magazine fiction and paperback books. 'In these fictionai stories the American media present their characteristic themes of status, success, personal qualities, sex roles, youth and ethnicity. The resp~~se of foreign consumers will depend partly upon their own ethmcity, age, and sex. In Europe imported material reaches the ~ntire populat~on, but ~utside Europe those most heavily exposed to Imported. medta are mamly urban, employed in the modern economy, are .relattvel~ yout~ful and have higher than average incomes. In Latm Amenca, Asta and Africa the typical consumer of imported media will be a young white-collar worker or a factory worker- not an elderly peasant in a remote rural area. Many of these urban consumer.s will th~~selves have a personal history of social and geographtcal mobility, and may respond to these themes in American media. Many will be women- often escaping from traditional views of appropriate women's roles- and the portrayal of women in American media output may be appealing. . People .in authority may not like emphasis on upward social mobility, relative freedom for women and support of the young against the ~Id. Hollywood's favourable portrayal of people with white skins and Its n;tuch less favourable portrayal until recently of people with black ~ki~s mu~t have .led to very mixed responses. Within many countne~ m Latm Amenca, the Arab world and Asia, there are people of both lighter and darker skin colour- so the possibilities for racial identification and antagonism even within a single country are quite complex. The appeal of stylized violence to the frustrated urban youth of many lands cannot be better illustrated than by the many imitations of the American western. Some of the most obvious are the Italian and Spanish, Spaghetti and Paella, westerns. There have also been many Asian imitations of the western including Chinese films made in Shanghai in the interwar period, Japanese historical films, and more recently the Kung-Fu (or Chop Suey) westerns of Hong-Kong. The various mini-Hollywoods of the world have copied the phenomenon of the star and in many countries the most popular single star performer is a local nationaL But Hollywood had established the first star system around 1920 and has managed to convince the world that it stiJI has a uniquely large supply of uniquely dazzling stars. Part of the glamour of the Hollywood star lies in his or her stardom itselffame and fortune not only in the United States, but also around the world. This factor of stardom in many countries as an integral part of star appeal was already evident in 1920 when Douglas Fairbanks and Mary Pickford visited Europe ostensibly on their honeymoon:

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The crowds were so thick outside their suite at the Ritz-Carlton in New York before they sailed that they couldn't leave the hotel. Word was called ahead to England, France,- Holland, Switzerland and Italy that Doug and Mary were coming.... They first stopped at the Ritz in London and crowds tho~sands deep waited all night to catch sigh~ of their id?ls. Doug delighted in carrying Mary through the pressmg throngs m London and later in Paris. . .. Doug and Mary escaped to the cottage of Lord Northcliffe on the Isle of Wight only to be discovered surrounded by hundreds of fans at dawn one morning. . These scenes were repeated on the Continent and not really discouraged by Mary and Doug.•.• In ~ug~no, ~witzerland, and Venice Florence and Rome the fans hailed Mana e Lampo (for 'lightnlng', which is what Douglas was calle~ in I.talian). In Paris one afternoon they were afraid to leave their suite at th~ !fotel Crillon the crowds were so thick, but they announced their mtention of' visiting Les Halles one morning and took satisfaction in stopping all traffic. . . . . Only in Germany, the so recent enemy, were they Ignored, and neither Doug nor Mary could stand it.... Word of the triumphal tour came back to New Y~rk thro~gh the newspapers, and America wasn't to be outdone m hononng the pair of cinema artists.11 Charlie Chaplin was greeted by equally enormous European crowds. Mary Pickford and Douglas Fairbanks also visited the Soviet Union, where in 1925 their films still dominat!:!d local screens, and they were again greeted by huge crowds. All of this was powerfully encouraged by the Holly~ood public~ty mills the result of operating publicity across a contment of dmly news~apers; Hollywood also drew on the techniques .of 'advancing' Presidential campaigns and theatrical tours. The arnval of ~amous faces from 6,000 miles away must have seemed m~re dramatic than any arrival of a star in one European country commg from another. These Hollywood stars also had an excuse for perpetual moveme~t a continuous succession of photogenic arrivals and departures -JUSt like their film selves. The Hollywood star arriving on a publicity trip in Europe wa~ t~e inheritor of an established tradition of exotic American pubhc1ty trips to Europe. Increasingly during the latter half of the nineteenth century American minstrels, celebrities, circus .freaks, found~rs of new religions and wild west entertainers had ~rnved to enter~am the staid Europeans with the latest American exotica. Douglas Farrbanks established a pattern by which the indication of success in such a trip

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was the number of Kings and Queens met in Europe and subsequently invited back for visits to Los Angeles. The same thing continues still as waves of American singers, dancers, actors, actresses and celebrities come remorselessly fluttering out of the western sky - here today in Europe and gone tomorrow around the world. The same preceding and succeeding waves of publicity operate; now, for the old tradition of shipboard interviews, arrivals and departures for the benefit of the local press, have been substituted the rituals of the airport and the television chat show. The status themes, the stars' personalities, the intimate career details are put on display. The star modestly admits to the two hundredth interviewer how she was just so lucky to get her latest and best yet part. The media audience is invited to identify with the star who is so dazzlingly successful and yet not much different from you or me -sincerely worried indeed about her next show, film or disc. Success in the media has long been one of the American media's staple topics. And as the American media have moved out on to the world scene, media success-on-the-world-scene has become a staple media topic: 'Yes, darling, already doing good business in Japan and Sweden, not released here until tomorrow.'

country's response to a particular media import. Canadian responses are probably more clearly articulated than would be the responses in many other countries. Yet Litvak and Moule's Cultural Sovereignty: The Time and Reader's Digest Case in Canada, reveals a situation of great complexity and with quite a chequered history. United States magazines in Canada first became a national Canadian issue around 1920. The issue, as raised by Horatio C. Hocken, a former Mayor of Toronto and an ex-journalist, included these points:

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IMPACT ON DOMESTIC MEDIA: A CANADIAN EXAMPLE

'Media industries' in many importing nations are internally divided. In many countries the press is very partisan and competitive while broadcasting is a state monopoly. There is often a small film industry, quite separate from press and broadcasting, and itself internally torn between importing foreign products and domestically producing rivals to them. In contrast, the Anglo-American exporters - whata ever their domestic battles- as exporters tend to operate somewhat more as an integrated media industry. A single news agency sells written, spoken and film news. The spread of Hollywood interests across all of the electronic media results in a single company selling feature films and television series and records. American media tycoons whose interests diffuse through the media also add to this industrial definition. One great advantage of the Americans, then, was that they knew in their own minds what the media were mainly about. Or their uncertainties at least were less than those of the Europeans and other importing nations- who were less able to agree as to what the media were about or for, or even whether the media constituted a single meaningful field of activity. A study of Canadian responses to the importing of United States magazines is one rare example of a detailed case study of one

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The great bulk of United States magazines consisted of salacious literature that dissipated the morals of Canadian youth. That American publications were mainly responsible for Canada's 'brain drain' by depicting the United States as a land of unlimited promise, higher wages, better living conditions, and 'good times' ... That United States publications, especially those of the Hearst syndicate, often expressed opinions repugnant to British sentiment in Canada. That United States magazines posed an economic threat because of the substantial volume of advertising they conveyed, which attracted customers that would otherwise buy from Canadian manufacturers. That the Canadian magazine industry was fighting a losing battle for its very survival and desperately needed protection or assistance .... That magazines are crucial vehicles in the generation and dissemination of national sentiment and therefore deserve special consideration apart from strictly commercial calculations.12 These arguments have a familiar ring- all have been used in many other countries. Most of the arguments against American imports are negative ones; they cover a wide range of concerns- moral, cultural, political and commercial- and some seem to be rather contradictory. The main arguments in favour of media imports into Canada- as elsewhere- were projected on a rather general plane; the entry of United States magazines should be allowed to continue -proponents of this case argued - in the interests of freedom of the press, and freedom of citizen choice. In Canada the most effective and unified lobbyists were the advertisers. Differences within Canada occurred along the lines of

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the national and central versus the provincial- American magazine publishers found allies in maritime (east coast) and western Canadian publishers against the central Canadian publishers. These differences also overlapped with Quebec v. the rest, and Liberals v. Conservatives - a Canadian government of one party tended deliberately to undo the policy of its predecessor. Finally there was the argument of Canadian cultural identity and autonomy against the argument of employment for Canadians- if the favourable tax position of us subsidiary local Canadian editions was removed, it was argued, the Canadians who produced these editions would become unemployed. · The complexities of this Canadian example are simple compared with the internal conflicts which exist in some other countries, and across the entire range of media. Expensi~e products at low prices inevitably induce- among media entrepreneurs, relevant government officials, producers and journalists- conflicting responses. Admiration, greed, envy, contempt and fear put together in various combinations, and in various sectors of the media industry, do not always make for well considered and realistic policies.

which were smaller advertising spenders, the largest single advertising agency was American - including Indonesia, Pakistan, Thailand, Malaysia, Nigeria, Ghana, Kenya, Colombia and Peru.* 13 By the 1970s the only serious rivals to the American multinational advertising agencies were a few international associations of national European agencies - and some, even of these, included an American partner. A similar pattern exists in European public relations and market research firms. And what the American advertising agencies have done in western Europe they had also done in most of Latin America and much of Asia (minus Japan) and Africa. The familiar strategy of an entry via London into Europe and the British Empire was one factor in the internationalization of Madison Avenue. The post-1945 period saw an enormous overseas expansion of American consumer goods companies. American prominence in such classic fields for advertising as toiletries and packaged foods had a special 'multiplier effect'; in such fields the proportion of total cost which advertising expenditure makes up is much higher than in industry overall. Thus if incursions of American, mainly consumer goods, companies· account for 10 per cent of a Latin American country's national product, the advertising which accompanies those products may account for, say, 30 per cent of total advertising. Moreover, this will mainly be national, not local, advertising; American companies might thus account for 50 per cent of all advertising in national media. American manufacturers and advertising agencies tend to work together. Several American advertising agencies 'went international' specifically to service the multi-national operations of one or two major consumer advertising clients. Some agencies maintain offices in specific foreign cities as a loss-making service to a major domestic client. American agencies were able to benefit especially from their widely presumed superior expertise in commercial television and in the broader area of 'marketing' -which also was becoming fashionable in many nations in the 1950s. There was a long tradition in Europe and elsewhere of believing that advertising was peculiarly an area of American expertise. The acceptance of imported infusions of market orientation- of which foreign advertising agencies are a spearhead- tends to become part of a gradual change not only of entire national media systems, but also of those aspects of political, cultural and social life upon

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SKEWING DOMESTIC MEDIA: MADISON AVENUE

The press in many countries - including .capitalist and communist ones - is often regarded as an extension of political party and government. On the other hand films, radio and television are frequently seen -while having some political significance- as being mainly a matter of entertainment and leisure. Advertising is often officially regarded - again in capitalist and in some communist countries- as being primarily an area of commerce and trade, only incidentally connected with the media. This latter view is so common that many governments, which prohibit or severely limit foreign ownership of newspapers or radio/television stations, have no objection to their advertising agencies being heavily foreign owned. This evolved historically, perhaps, because originally the influence of American advertising in other lands was mainly indirect, depending upon imitation. It was not until the 1960s that American ownership of advertising agencies developed in many foreign countries. By 1973, and with the exception of Japan, in each of the other leading advertising countries- West Germany, France, Canada, Australia and Britain- at least half of the twenty largest advertising agencies had an American name. Countries where at least three of the five largest advertising agencies had American names were: Argentina, Belgium, India, Italy, Mexico, Netherlands, New Zealand, Norway, Spain and Venezuela. In at least another twenty countries

• The criterion of •American name' has been used because the precise details of advertising agency ownerships change rapidly and are often not publicly known. Some agencies with American names- for example Hindustani, Thompson of India- in 1973 involved only a large minority American holding.

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which the media most directly impinge. The early impact of foreign advertising agencies is to increase competition between, and sometimes within, media at all levels; advertising agencies have acquired within the American system certain tribal rules (such as 'no competing accounts', independence of media and advertisers) which make competition more vigorous between advertising agencies than is competition between, for example, American newspapers. American public relations and market research agencies are similarly competitive. This American competitive commercial presence usually brings other consequences- such as a downgrading of particularistic 'who knows who' criteria and an upgrading of 'rational' objective criteria such as audited circulations, survey research and cost-per-thousand. Emphasis upon 'neutral' criteria is not really value-free. Advertising agencies always have their own prejudices, which may have some rational basis internal to the operation of advertising agencies. Large American advertising agencies prefer electronic media to print. 'Rational' grounds include these agencies' experience with the very largest us marketing companies (such as Procter & Gamble) which often favour television, and the fact that television requires fewer insertions and may thus be more profitable for agencies. Radio and television typically are more 'measured' than the press, are less politically partisan, require more 'creative' advertising expertise and may be more responsive to rational bargaining over bulk discounts, and favourable scheduling. This preference for the electronic media tends to produce more revenue for these media which in turn allows them to spend more on providing programming and hence to competing still more with the press. Few governments are likely to be worried by such a tendency since governments typically find their electronic media more amenable, in the areas which most interest governments, · than their domestic press. Foreign advertising agencies proclaim a particularly strong line against 'bribes' and 'kickbacks' and by projecting an 'honest' commercial image may encourage both local and 'international' companies to increase their advertising expenditure. Even if much of this increase goes to a limited range of electronic media, the effect nevertheless is to expand the total revenue, and total share of national income, which goes to the media. The appearance on a substantial scale of American advertising agencies has, then, three major consequences. First, the total size of the media industry (in terms of revenue and of audience time) is increased. Secondly, the advertising agencies play a major part in switching revenue towards- and hence expanding the output of- commercial broadcasting. Thirdly these agencies play a decisive part in swinging entire national media systems towards commercial, and away from traditional political,

patterns. This has occurred in most countries of western Europe, Latin America and Asia.

56

CULTURAL IMPERIALISM V. AUTHENTIC LOCAL CULTURE

The cultural imperialism thesis claims that authentic, traditional and local culture in many parts of the world is being battered out of existence by the indiscriminate dumping of large quantities of slick commercial and media products, mainly from the United States. Those who make this argument most forcibly tend to favour restrictions upon media imports, plus the deliberate preservation of authentic and traditional culture. This problem of cultural identity is part of a larger problem of national identity. The United States, Britain and France belong to a minority of the world's nations in having a fairly strong national identity. Almost all their citizens speak roughly the same language; but even in these countries there are major internal frictions regional, ethnic and language, as well as social class, differences. And even this degree of national identity has only been achieved after several centuries of national existence, including civil war often followed by the brutal subjugation of regional and ethnic minorities. Countries which have an unusually strong national identity- such as USA, Britain and France- also happen to be the very same countries which have the longest traditions of the press and other media, conducted primarily in a single national language. The strength of national identity is less marked in Latin Amenca either despite, or possibly because of, the use of Spanish as the language of all but one of the main countries. In much of eastern, central, and parts of northern, Europe there are two, three or more separate languages, religions and cultural traditions within a single state. The Soviet Union has this pattern on an even larger scale, as does India and some other Asian countries. There are similarly sharp cleavages within many Arab countries; and Africa is the continent where national identity is least strong of all. The variety of languages within many nation states is at once a major factor in 'cultural imperialism' and in lack of national identity. There are also very big differences between urban and rural areas, a very uneven pattern of development between some backward areas and other areas with exportable resources. Not only peasants' rebellions, guerrilla uprisings and palace revolutions but large-scale civil wars are a recent experience or an immediate realistic prospect in many lands. In the many countries where the prime object of policy is to reduce the threat of armed conflict, the need to strengthen 'authentic culture' may not be seen as primary.

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The most authentic and traditional culture often seems and not only to the ruling elite, to be also the most inappropriate. This is not merely because traditional culture sanctions what would now be called civil war. Traditional culture is also typically archaic, does not fit ~~th cont~mpora~ notions of justice or equality, and depends upon rehgwus beliefs which have long been in decline. Many traditional cultures were primarily carried by a small elite of scholars and priests who often used languages which few other people understood. Not only Arab and Hindu cultures but many others ascribed a fixed subservient posit.ion to. women, the young and the occupationally less favoured. It IS precisely these unpopular characteristics of much authentic culture which make the imported media culture so popular by contrast. The variety in traditional cultures is clearly enormous but two frequently found types of music can be used as illustration. One is the type of traditional opera found in a number of Asian countries· such ~raditio~al oper~ musically coiJ.?plex, often having its own s~ecial lzed actmg traditiOns as well as Its own musical instruments. Both its total repertoire and its total audience were often quite small. Such musi~ belon.gs to a trad.iti.onal ?ierarchical society which has long been 111 declme. Clearly It IS unhkely to become a hit parade or television staple; it has to compete, moreover, with Beethoven and Mozart as well as with the Beatles and the movies. A second. common type of traditional music is found in many parts of Afnca and some parts of Asia. This music is less complex ~nd depends on simple~ instruments; the music both appeals to and 1s produced by the ordmary people. The music indeed is an integral part oF the major individual (birth, marriage, death) and collective (especmlly harvest) events and symbolism of ordinary life. It was often played for a few days or few weeks on end. It has influenced jazz and all subsequent western popular music; but in its authentic and traditional form it is difficult to adapt to media usage- although many African radio services do broadcast such music, and it is often popular especially in the immediate area from which it originates. Another difficulty of 'authentic culture' is that one might expect there to be some level of regional culture beyond the tribal or national, but smaller than the international. There is indeed quite a lot of radio listening across national boundaries, but many governments and broadcasting organizations wish to discourage it. Many nations in the world, both 'old' and 'new', have uneasy relations with their neighbours. Subjecting the neighbour's citizens to your media, while protecting your own citizens from his media, is a common purpose of radio policy. The debate about cultural imperialism and authentic culture is

reminiscent of, and related to, another debate about 'mass society', mass culture and indeed the 'mass media'. The term 'mass' has a long intellectual genealogy of its own- and has long been used by both left and right with various shades of meaning and implication.14 When this debate dealt with Europe and the United States it was confused enough. But the same debate, transposed to Asia and Africa, gets confused even further. It is precisely the highly educated elite in Asian and African countries who are the most active consumers of imported- and presumably 'low, brutal and commercial' -media. It is the rural dwellers- short of land, food, literacy, income, life expectation, birth control devices and so on- who are the main consumers of traditional and 'authentic' culture. T. W. Adorno at one time claimed that even a symphony concert when broadcast on radio was drained of significance; many mass culture critics also had very harsh things to say about the large audiences which went to western and crime films in the 1930s- films which yet other cultural experts have subsequently decided were masterpieces after all. Even more bizarre, however, is the western intellectual who switches off the baseball game, turns down the hi-fi or pushes aside the Sunday magazine and pens a terse instruction to the developing world to get back to its tribal harvest ceremonials or funeral music. Such a caricature illustrates that the real choice probably lies with hybrid forms. In many countries there are older cultural forms which continue in vigorous existence, although modified by western influences. Pop music often takes this form; 'eastern westerns' or the Latin American te/enovelas are other examples. The debate should, then, be about whether such hybrid forms are primarily traditional and 'authentic' or whether they are merely translations or imitations of Anglo-American forms.

58

?s

POLITICS AND INEQUALITY

How do the Anglo-American media affect politics or inequality within an importing country? Do they, as the Media Imperialism thesis implies, buttress reactionary politicians and solidify inequalities? Or do they have democratic and egalitarian implications? Among nineteenth-century elites in Europe one of the main anxieties about the American press was its lack of respect for established practices and people. Charles Dickens, returning from the United States in 1842, expressed these anxieties with vigour and clarity: Among the herd of journals which are published in the States there are some, the reader scarcely need be told, of character and credit.

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From personal intercourse with accomplished gentlemen connected with publications of this class, I have derived both pleasure and profit. But the name of these is Few, and of the other Legion; and the influence of the good; is powerless to counteract the mortal poison of the bad. Among the gentry of America; among the well-informed and moderate; in the learned professions; at the bar and on the bench: there is, and there can be, but one opinion, in reference to the vicious character of these infamous journals. It is sometimes contended- I will not say strangely, for it is natural to seek excuses for such a disgrace- that their influence is not so great as a visitor would suppose. I must be pardoned for saying that there is no warrant for this plea, and that every fact and circumstance tends directly to the opposite conclusion. When any man, of any grade of desert in intellect or character, can climb to any public distinction, no matter what, in America, without first grovelling down upon the earth, and bending the knee before this monster of depravity; when any private excellence is safe from its attacks; when any social confidence is left unbroken by it, or any tie of social decency and honour is held in the least regard ... then, I will believe that its influence is lessening, and men are returning to their manly senses. But while that Press has its evil eye in every house, and its black hand in every appointment in the state, from a president to a postman; while, with ribald slander for its only stock in trade, it is the standard literature of an enormous class, who must finc;l their reading in a newspaper, or they will not read at all; so long must its odium be upon the country's head, and so long must the evil it works, be plainly visible in the Republic. To those who are accustomed to the leading English journals, or to the respectable journals of the Continent of Europe, to those who are accustomed to anything else in print and paper; it would be impossible, without an amount of extract for which I have neither space nor inclination, to convey an adequate idea of this frightful engine in America. Responses to imported American media continue to be related to attitudes towards currently prevalent inequalities. But it would be quite misleading to think in terms of media imports always favouring the poor at the expense of the rich. Even within the United States the media are primarily aimed at the middle of the population, not at its very poorest mem hers. In terms of England in 1842, or western Europe today, imports of American media may quite realistically be seen as potentially hostile to established elites. But the emphasis of these

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media upon success and status favours the new rich more than the old poor. These media also present a heavily urban view of life. In multi-party nations of western Europe, and perhaps to some extent in eastern Europe, imports of American media materials may tend towards democratizing and egalitarian effects. Such commercial infusions will tend to influence, if not the basic substance of political power within importing countries, then at least the styles politicians use in presenting themselves to local and national publics. Increased amounts of market oriented media fare- more entertaining entertainment, and more 'neutral' news- will tend to make the more obviously political party fare seem less entertaining and more obviously dull and unattractive. Thus politicians try to dress up their political messages in more entertaining and neutral-looking packages. This in turn implies the use of PR and market research skills- in presenting the chief executive and his supporters, but also in presenting and shaping policies in even the most complex and delicate areas. In multi-party countries, the rise of commercial or mainly advertising-financed media and the decline of party or governmentfinanced media may become cumulative. Politically or governmentcontrolled media tend to become less attractive to audiences, hence less important to politicians, and so on. More and more politicians use the techniques and the advice of advertising, market research and public relations, while the argument is heard (and heeded) that media which are obviously controlled by government or party constitute bad political strategy. There is a gradual change by which politicians and governments in multi-party countries seek accommodations within an increasingly commercial pattern of media. But in poorer African and Asian nations infusions of Western media may indeed buttress and extend existing inequalities. Since these imported media are consumed mainly by the urban and relatively affluent, and since importing becomes a substitute for providing cheap domestic media to most areas, inequality may be increased. In many poor countries, also, the media are controlled by the government; the national media may become a key instrument through which a small affluent elite maintains itself in power. This view of the media as prime defenders of the status quo is often shared by politicians in power and illustrated by the heavy military guard found outside many capital city radio stations. Thus foreign media may in some affluent countries favour more equality, but in other less affluent countries favour more inequality. In yet other countries, such as those of Latin America both sorts of effects may occur at the same time. For example Wells may be right in believing that the imported media tip the scales away from the country and in favour of the city; but within the heavily populated

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Latin American cities those same media might have an egalitarian effect.

more remarkable because Hollywood has here retained its export leadership for 60 years. The television imperialism thesis cannot be considered merely for television alone. A more historical approach, covering all media, is required. We must also note, for example, both exporters and importers' intentions - as well as recognizing that many social consequences are unintended. Nevertheless the Schiller thesis has a number of strengths. It takes the whole world for its unit of analysis- and Schiller's domino theory of American media influence is one illustration of the benefits of so doing. In my view the Anglo-American media are connected with imperialism, British imperialism. But these media exports both predate and still run ahead of the general American economic presence overseas or the multi-national company phenomenon. Schiller attributes too many of this world's ills to television. He also has an unrealistic view of returning to cultures many of which although authentic are also dead. In my view a non-American way out of the media box is difficult to discover because it is an American, or AngloAmerican, built box, The only way out is to construct a new box, and this, with the possible exception of the Chinese, no nation seems keen to do.

62

ONE MEDIA IMPERIALIST, OR A DOZEN 1

The media imperialism thesis does not confront the presence of strong regional exporters in various parts of the world. Mexico and Argentina have a tradition of exporting media to their neighbours; Egypt exports to the Arab world, while Indian films and records go to many countries in Africa and Asia. Not only the United States, Britain and France, but also West Germany, Italy, Spain and Japan all export some media. Even Sweden has its own little media empire in Scandinavia. And the Soviet Union has strong media markets in eastern Europe. This phenomenon can be seen as running counter to the media imperialist thesis- showing that American and British media exports have many substantial rivals. But there are also grounds for seeing Mexican or Egyptian or even Indian exports as an indirect extension of Anglo-American influence. The countries which are strong regional exporters of media tend themselves to be unusually heavy importers of American media. Italy in 1972 was after the USA the second largest exporter of feature films, with considerable strength in every world region. Yet Italy itself took over half of its imports from the USA (Tables 2 and 3); Britain, Mexico and India all took an unusually high proportion of their imports from the USA. Other strong film exporters -Japan, Egypt and West Germany- were strong importers of American films. Only the USSR, among major film exporters, imports virtually nothing from Hollywood (Table 3). By 1972 the majority of films made in Britain were Hollywood financed and distributed; and a substantial proportion of Italian and French films (including Italian-French eo-productions subsidized by both governments) were also American-:financed and distributed. And all of the major film exporters in the world (except USSR) take around three-quarters of their film imports from the USA, UK, Italy and France combined. Thus almost all significant film exporters in the world are themselves open to heavy current Hollywood influence. The strength of Soviet film exports in eastern Europe is noticeably weaker than Hollywood's unassisted export strength in all world regions apart from eastern Europe (Table 2). These data, incidentally, illustrate that television is not necessarily the best example for the media imperialist thesis. The continuing extent of Hollywood feature film exports around the world is all the

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References

Bibliography

2.

MEDIA IMPERIALISM?

1. The present author first came across this phenomenon in the case of British advertising agencies. See Jereniy Tunstall (1964) pp. 33-5 140-1, 156-7, 224-6. ' ' 2. The shortage of Marxist empirically based accounts of this topic is illustrated in Marxism and the Mass Media: Towards a Basic Bibliography 3 (1974) which contains 453 references. 3. Alan Wells (1972), p. 121. 4. Kaarle Nordenstreng and Tapio Varis (1974), p. 14. 5. Tapio Varis (1974), p. 107. 6. E. Katz, E. G. Wedell et al. (1977). 7. Michae1 A. Barkoey (1963). 8. 'Profiles of the European Executive Market'. Survey conducted in 11 west European countries for Newsweek International by Conrad Jameson Associates (London, 1973). 'Foreign Circulation of Representative us Publications 1964-65' (New York: Magazine Publishers' Association). 10. This passage on foreign correspondents in the USA is based on John Hohenberg's (1967) account of how Asian foreign correspondents operate in the USA, upon the author's experience of interviewing foreign correspondents of British media in New York and Washington in 1965 and upon questionnaires completed by 37 such British correspondents in 1968 and reported in Journalists at Work (1971). 11. Robert Windeler (1975), pp. 119-20. 12. Isaiah Litvak and Christopher Maule (1974), pp. 19-20. 13. Ad~·ertising Age, 25th March 1974. 14. Leon Brarnson (1961).

Barkocy,.Michael A. (1963) 'Censorship Against Time andLife International Editions', Journalism Quarterly 40 pp. 517-24 Brarnson, Leon (1961) The Political Context ofSociology, Princeton University Press Guback, Thomas H. (1969) The International Film Industry, Bloomington: Indiana University Press Hohenberg, John (1967) Between Two Worlds: Policy, Press, and Public Opinion in Asian-American Relations, New York: Praeger Katz, E.; Wedell, E. G.; Pilsworth, M. J. and Shinar, D. (1976) Broadcasting and National Development, Manuscript Litvak, Isaiah and Maule, Christopher (1974) Cultural SovereigntY: The Time and Reader's Digest Case in Canada, New York: Praeger Nordenstreng, Kaarle and Varis, Tapio ( 1974) Television Traffic- A One-Way Street?, Paris: Unesco Schiller, Herbert I. ( 1969) Mass Communications and American Empire, New York: Augustus M. Kelley Tunstall, Jeremy (1964) The Advertising Man in London Advertising Agencies, London: Chapman & Hall Varis, Tapio ( 1973) International Inventory of Television Programme Structure and the Flow of TV Programmes Between Nations, University of Tampere: Institute of Journalism and Mass Communication Varis, Tapio (1974) 'Global Traffic in Television' ,Journal of Communication 24 pp. 102-9 Wells, Alan (1972) Picture-Tube Imperialism? The Impact ofU.S. Television on LatinAmerica, Maryknoll, N.Y.: Orbis Books Wmde1er, Robert (1975) Mary Pickford: Sweetheart of the World, London: W. H. Alien

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The Political Economy of the Media I THE INTERNATIONAL DIMENSION

[27] The International Dimension

Most of the many questions raised in, or arising out of, the preceding chapters have an international dimension, and have increasingly tended to become the focus of a world-wide debate among policy-makers, researchers and professionals alike.

l. The Issue Probably the major phenomenon of the second half of the twentieth century has been the accession to independence of almost eighty nations, thanks to which over two billion people have been liberated from colonial domination. Despite this, present-day world conditions - political, economic, scientific, technological and military as well as social and cultural - tend to foster the position and influence of certain countries, and to perpetuate the dependence of a large number of other countries. Political independence is thus restricted, and even undermined, by economic dependence, and especially by the nature of relationships and the international division of labour between developed and developing countries. Moreover, it has become increasingly clear that the effects of intellectual and cultural dependence are as serious as those of political subjection or economic dependence. There can be no genuine, effective independence without the communication resources needed to safeguard it. The argument has been made that a nation whose mass media are under foreign domination cannot claim to be a nation. Unfortunately, in today's world, communication has all too frequently become an exchange between unequal partners, allowing the predominance of the more powerful, the richer and the better equipped. Discrepancy in power and wealth, by its own weight or by deliberate action, has an impact and influence on communication structures and communication flows. Herein lie many of the underlying causes of the inequalities, disparities and imbalances so characteristic of international communications, in particular between industrialized and developing countries. Thanks to technological advances, nations can become more interlinked than ever before in history. The global web of electronic networks can, potentially, perform a function analogous to that of the nervous system, linking millions of individual brains into an enormous collective intelligence. Political, economic and cultural factors are working toward this inter-dependence; but unless major structural changes are achieved it is difficult to expect the free exchange, the equality, and the balance beneficial to all. The crucial question is whether there exists the political will to overcome the factors which can be recognised as obstacles. Communication's role in international relations is also important, and indeed vital, because it governs the ability of international opinion to come fully to grips with the 34

35

problems which threaten mankind's survival- problems which cannot be solved without consultations and cooperation between countries: the arms race, famine, poverty, illiteracy, racialism, unemployment, economic injustice, population growth, destruction of the environment, discrimination against women. These are but the principal problems, and it is essential to highlight how very serious, deep-rooted and far-reaching they are, and even more, how the same challenges and the same dangers affect all nations. The mass media have a vital role to play in alerting international public opinion to these- and other -problems, in making them better understood, in generating the will to solve them, and equipping ordinary people, if necessary, to put pressure on authorities to implement appropriate solutions. Only if the media put more stress on what joins people together rather than on what divides them will the peoples of the world be able to aid one another through peaceful exch&nge and mutual understanding. The importance of communication in pursuing these objectives is increasingly recognised, and professional communicators are, on the whole, taking their responsibilities more and more seriously. There are, nevertheless, divergent views concerning the extent of these responsibilities and the ways of discharging them. The problem is that of reconciling two imperatives. The first is the positive contribution expected of the organs of information -which some would wish to make an actual obligation -in mobilising or alerting public opinion in connexion with the major questions which condition man's development and upon which the survival of mankind depends. The second is the freedom of the press - which has also to be regarded as an obligation - to make facts known simply because they are facts. Difficult choices must constantly be made, as professional communicators well know. However, the Commission takes the view that in principle there is no insuperable dilemma, and no insoluble conflict between these two concepts.

2. Imbalances and Inequalities The international dimension of communication issues has its origins in the realities of the new world situation. More particularly, the concerns, claims and conflicts which g~.;nerate the current international debate stem from certain negative repercussions of principles adopted long ago, which have taken the form of imbalances and inequalities. At the period of the foundation of the UN and of Unesco, the international community set itself a certain objective: to guarantee and to foster freedom and free flow of information. This principle is solemnly proclaimed in various international instruments dealing with human rights and fundamental freedoms.
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THE INTERNATIONAL DIMENSION

However, the obvious imbalances in communication supported the view that "free flow" was nothing more than "one-way flow", and that the principle on which it was based should be restated so as to guarantee "free and balanced flow". The somewhat hazy origins of these concepts date back to the 1950s; they became more clearly defined between the late 1960s and the early 1970s. By that time, the imbalance in the flow of news and information between industriiilised and developing countries was a major topic in international meetings, as an issue in the debate on fundamental political and economic issues in the contemporary world. Today, virtually no one disputes the reality of this imbalance. There is no general agreement, however, about concrete applications of the concept, still less about remedies to the problem and desirable policies. It is for this reason that the concepts of free flow and one-way flow, balance and imbalance, have become issues of the debate and indeed of international contention. The imbalance in news circulation is a complex and varied phenomenon. Alike quantitative and qualitative, it may occur at different levels and in different forms: (a) between developed and developing countries, insofar as the information flow is governed by the existence or non-existence of appropriate infrastructures; (b) between countries having different political and socio-economic systems; (c) between developed countries belonging to the same political system, particularly between smaller and bigger ones; (d) between the Third World countries themselves; (e) between political news and news concerning the social, economic and cultural life ~f countries battling with the ills of underdevelopment; (f) between what ts conventionally called 'good' news and 'bad' news, i.e. news of catastrophes, failures, conflicts, set-backs, follies and excesses; and finally (g) between topical news of current events and information dealing in greater depth with issues important in the daily lives of peoples and nations. Doubtless there is no single, universal criterion by which to measure these imbalances and disparities, since news values differ from one country to another and from culture to culture, and even sometimes within a single country. Hence any generalization on news values is bound to remain rather loose, even if professional communicators do frequently agree on a number of factors considered to make for news. Such imbalances are today not only limited to news flows in the usual sense. They also affect, to an increasingly serious extent, the collection and diffusion of data necessary for scientific purposes, technological innovations, commercial needs, trade development, exploitation of natural resources, meteorological forecastings, military purposes, etc. In short, there is an imbalance regarding strategic information for political and economic decision-making. The gap between the fully-informed and the under-informed continues to widen as the imbalance between those imparting and those receiving information becomes accentuated. Although it is only fair to recognise that the international flows have enormously increased and that communication sources have enormously increased their output, it is necessary also to stress that communicators have strengthened their

power to control the impact of the messages transmitted, as well as the selection of information available. Also, the attendant distortions and imbalances reflect in some . . way the dominant interests of the societies from which they emanate. This situation cannot continue witltout detriment both to mternational understanding and to cooperation between nations, without affecting the sociopolitical and socio-cultural conditions prevailing in different countries and without prejudicing the efforts to satisfy the basic needs, to solve the essential problems of the world's populations and to safeguard world peace.

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Cultural Cooperation adopted by the General Conference ofUnesco {1966) states that "broad dissemination of ideas and knowledge, based on the freest exchange and discussion, is essential to creative activity, the pursuit of truth and the development of the personality." In the most recent

Declaration on Fundamental Principles concerning the Contribution of the Mass Media to Strengthening Peace and International Understanding, to the Promotion ofHuman Rights and to Countering Raciaiism, Apartheid and Incitement to War (Unesco) (Adopted on 28 November

1978) it is sUited that "The exercise of freedom of opinion, expression and infonnation recognized as an integral part of human rights and fundamental freedoms, is a vital factor in the strengthening of peace and international understanding." (Article Il).

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3. The International Debate Thus, it was around 1970 that the concepts upon which today's international debate is focused first began to be formulated in clear-cut terms. Without retracing every stage in the history of this debate, it may nevertheless be useful to recall the major themes on which a wide range of protagonists are now joining issue: governments, and non-governmental organizations, specialised agencies, regional organizatio~s, research centres, political movements, professional associations, mass medta, journalists and politicians, etc. First of all the criticisms formulated in many developing countries reiterated by certain sociallst countries and supported by many researchers and journalists in western countries, start from the observation that certain powerful and technologically advanced States exploit their advantages to exercise a form of cultural and ideological domination which jeopardizes the national identity of other countries. The problems raised by the one-way information flow and by the existence of monopolistic and oligopolistic trends in international flows< 1l have been widely discussed in many international instances, gatherings and seminars. It has been frequently stated, in particular, that due to the fact that the content of information is largely produced by the main developed countries, the image of the developing countries is frequently false and distorted. More serious still, according to _som.e vigorous critics, it is this false image, harmful to their inner balance, whtch IS presented to the developing countries themselves. The dangers and fears created by the potentialities of direct satellite broadcasting stimulated the demand for a balanced flow of information. It was when these questions first came to be discussed that increasing anxiety arose about the content and quality of the information transmitted, together with a dawning awareness of the lag in developing countries in news production and transmission. On the other hand, many media professionals consider that, while the existence of these imbalances and the dangers which they entail cannot be denied, stressing the one-way news flow can lead to further restrictions on freedom of information and to strengthening the hand of those in favour of reducing the inflow of information; the (!)A major international study made at that period stated: "It must also be recognized that international infonnation dissemination has long formed the subject of discriminatory practices ••• Public opinion in the industrialized countries will not have real access to full information on the Third World, its demands, aspirations and needs, until such time as information and communication patterns are liberated from the market-oriented sensationalism and news presentation which characterize them at present and until they are consciously stripped of ethnocentric prejudices. The widening of the capacity to infonn must be viewed as an essential component of attempts to create a new international order and, as such, the monopolistic and discriminatory practices inherent in current international information dissemination must be deemed as one of the worst, though subtle, characteristics of the present system." (RIO, Reshaping the International Order, A Report to the Club of Rome, Jan Tinbergen, Coordinator, 1977).

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consequence would be a radical break with the concept of free flow. Assuming that the diversity of opinions, news, messages and sources is a precondition for truly democratic communication, this school of thought also considers that the "decolonization of information" must not serve as a pretext for bringing information under the exclusive control of government authorities, and thereby allowing them to impose their own image of reality on their peoples. In the debate on international communication, the role played by the transnationals has become crucial.(!) Not only do these conglomerates mobilise capital and technologies and transfer them to the communication market; they also market countless socio-cultural consumer goods which serve as a vehicle for an amalgam of ideas, tastes, values and beliefs. The transnationals exert a direct influence on the economic production apparatus of the countries in which they operate, as well as playing a part in commercializing their culture, and can thus modify the socio-cultural focus of an entire society. Transformations in the structures of international communications, as a factor inherent in the conceptual foundations of international relations and of development, are frequently called for. It is argued that a world built on mutual understanding, acceptance of diversity, promotion of detente and coexistence, encouragement of trends towards real independence, not only needs but makes room for new, different patterns in international communication. If the conception of development as a linear, quantitative and exponential process, based on transfers of imported and frequently alienating technology, is beginning to be replaced by that of an endogenous qualitative process focused on man and his vital. needs, aimed at eradicating inequalities and based on appropriate technologies which respect the cultural context and generate and foster the active participation of the populations concerned, then there can be no doubt that communication between .people and nations will become different. The non-aligned countries have played a major role in the evolution of ideas concerning the dependence of the media, the imbalance in news flows and global communication patterns and the negative effects of this imbalance. They have advanced the view that the vast majority of countries are reduced to the state of passive receivers of information put out by a few centres. (ll This is how the call for a "new order"( 3l as distinct from the "old order" in the field (I) A study submitted to the Seventh Special Session of the United Nations General Assembly, points out that "the essential factor of the present hierarchical pattern of the centers' ideological and cultural dominance is the virtual monopoly on international communication- even communication between the various Third World countries- exercised by the multinationals, their dominance over a large number of the mass media of Third World countries and their influence over almost all the mass media". (This study was prepared by a research team of the Dag Hammarskjold Foundation in cooperation with the United Nations Environmental Programme, published under the title "what Now? Another Development".) (2) The !Vth Conference of Heads of State and Government of the Non-Aligned Countries which met in Algiers in 1973 was the first meeting at which these countries raised the problem in clear-cut terms and gave forceful expression to their common interest- 'born of the immense vacuum left by the UN'- in information. Three years later, a Symposium on communication, held in Tunisia, paved the way for the first Conference of Ministers of Information of the Non-Aligned Countries which adopted a draft declaration ratified in Colombo some weeks later by the Summit Conference of Non-Aligned Countries, stressing that a "new world communication order" was no less important than a new economic order. (3) It should be noted here that the new order in the field of communication has been variously termed: "new world information order","new international information order", "new international

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of communication and information came into being. The feeling that such a new order is today a necessity stems from the conviction that information and communication are an essential factor of international relations in all fields and particularly in the establishment of a new system founded on the principle of equality of rights and the independence and unfettered development of countries and peo~les. Thus, transformations in communications are related to the conceptual foundations of the new international economic order. In certain respects, development and communication do follow or are based on the same principles. It is vital that the pre5ent state of dependence of the developing world, in its economy and its communications alike - a dependence which both generates ever greater inequalities and is wasteful of natural (and in particular non-renewable) material and human resources - be replaced by relations of interdependence and cooperation between national systems as they become progressively autonomous and capable of endogenous development. The new communication order must be considered as an element of the new economic order, and the same methods of analysis may be applied to both. In particular, both call for a global, universal- albeit necessarily pluralist - approach, since the major problems besetting mankind can be solved only at the world level. There is a coherent correlation between these two orders stemming from the fact that information is now a specific kind of basic economic resource (and not just a commodity) which performs an essential social function but which is today unequally distributed and badly used. In some other respects, the new communication order is a pre-condition of the new economic order, just as communication is the sine qua non of all economic activities between groups, peoples and nations. At the present stage of the debate, a new world information and communication order is an open-ended conceptual framework which may direct the attention of those concerned towards (a) cataloguing and defining the problems affecting the building of a freer, more just, more effective and better balanced international communications system, based on democratic principles designed to establish egalitarian relations between sovereign entities; (b) facilitating coherent discussion at the international level by focusing it initially on the more urgent and practicable tasks; (c) clarifying the political options involved. In reality, it is a matter of initiating a long-term process at the national, regional and international levels, one involving not only those primarily concerned but all societies and geared less to academic discussion and more to effective, practical action. Howev.er, we must not ignore the fact that the establishment of a new order will bring major transformations in national as well as international structures of communication. Designed to meet the basic needs of the poorer sections of the world's population, it pre-supposes a new distribution of available resources in accordance with their vital rights and needs. These concerns, and many other related claims, fuel the international debate. The contentions and opinions discussed above are, naturally, fiercely defended by some and no less fiercely disputed by others. However, it should be stressed that such claims and counter-claims directly or indirectly underlie a number of decisions and resolutions adopted by Unesco, in particular the decision which led to the creation of the International Commission. information and communication order", etc. At the 1978 General Conference of Unesco and General Assembly of the United Nations two Resolutions have been adopted and consensus was reached on the term "new more just and more efficient world information and communication order" which indicates not only the aim but also its major parameters. For conciseness and completeness, the term "new world communication order" will be used in this Report.

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[28] Whose New International Economic and Information Order?

The U.S.leads the world as producer, consumer, processor, and exporter of communication goods and services. Americans preside over the bulk of the channels and the content of the worldwide information flow. American professionals, business men and women, civil servants, educators, and leaders in virtually every field operate increasingly in international frameworks; the same is true of the nation's information and cultural gatekeepers. Chronicle of International Communication, January 1980, 1 (1 ).

Production sites in the world economy are shifting. They are bei11g relocated globally by transnational corporations that seek maximum profits by taking advantage of international differentials in wages, taxes, raw material availabilities, and political complasance. Simultaneously, a spectacular growth of a new communication technologies facilitate the operations of those companies that can·y on their business in dozens of countries. While this is the reality, a different set of expectations prevailed in much of the world community for at least the last twenty years. These were expressed in the demands for a new world economic and, later, information order. These demands were predicated on 1

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the determination of people in the former colonial countries and other dominated areas to shake off the shackles of poverty forged, largely, by economic and cultural dependency. Yet deep structural changes in the social and productive spheres inside both the dominating and dominated states have always been a precondition for the realization of equal relationships between poor and rich nations and peoples. The full dimensions of a new world economic order, from this perspective, have never been fully articulated. Still, it was clear that most of the prevailing economic assumptions and relations governing production, distribution a!ld, indeed, what constituted "development" itself, were open to review and revision. The demand for a new world information order-a demand which emerged more slowly-reflected similar impulses. The definition and presentation of everyday reality, nationally and internationally, have been the prerogatives of a score of media conglomerat~s. The concentrated control of information by Western monopolies has created enormous difficulties for those seeking economic selfdetermination and political autonomy. By their information selection and control, the Western media, wherever they operate or penetrate, assist in providing the transnational corporate business system with diverted and disoriented domestic publics. Inform.ation management for years permitted the dominating centers to i~ nore or misrepresent the Third World demands for new economic and cultural-informational arrangements. Now new tendencies can be observed. The far reaching industrial and technological shifts occurring under the inititatives and guidance of transnational business provide an opportunity for-if not necessitate-the centers of domination to adopt the language, if not the substance, of socially desirable change. The new electronic industries, the changing sites of industrial production, and the sophisticated instrumentation that permits high volume, and instantaneous international communication are imposing a new form of hierarchical organization on much of the world. At the same time, these developments are being described as facilitating a new global economic and informational order. But this is an "order" quite unlike the one perceived originally by the Third World and Non-Aligned Nations. It does not arise out of dependency and the desire to overcome it-the inspiration of the poor

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world-but derives from the beneficiaries of domination and their intention of perpetuating that domination. The economic and social transformations now taking place around the world, and the effort to present these changes as the answer to longstanding demands at home and abroad for a substantively new economic and informational order, are the subjects of this chapter. TRANSFORMATION IN THE WESTERN INDUSTRIALIZED ECONOMIES

What is happening, it is important to state at the outset, is not a linear, preconceived and predetermined transformation of the international political economy. The energizing stimuli heavily influencing what is now occuning are the relatively recent substantive changes in the American economy and in a few other inrlustrially advanced economies. Briefly put, change on a global scale is being activated by a complex set of pressures, initiatives, and requirements arising out of domestic developments in a few core industrial areas, foremost of which is the United States. A summary review of some of the significant changes in the American economy since the end of the Second World War is suggestive (though it should be noted that the following account accepts unquestioningly descriptions of the American economy as "pluralistic" and controlled by "middle management administration"): Consider the shrinking percentage of blue-collar workers in the labor force, wilh the near-doubling (inflation discounted) of lhe gross national product since W.W.II; the expansion of research and development·in governmental and business budgets and the flowering of major new industries built on the technologies of solid-state electronics and information processing; the transformation of family-owned big business into multinational conglomerates under multilayered middle-management administration; the substantial growth of the not-for-profit private governmental sectors of the pluralistic U .S. economy; the proliferation of the control functions of the Federal Government into many aspects of the economy. 1

Within the overall pattern, the most striking development is the phenomenal growth of the so-called information sector, a not too clearly defined category that includes the production of information

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technology and goods and the information services utilized by the rest of American industry (and society). This sector is estimated to have accounted for almost half of the gross national product in 1967, and still more since that time. 2 Though there is increasing skepticism about such calculations, there can be little disagreement about the very rapid growth of information activities in the United States. New industries have appeared in the last 30 years, producing a spectacular range of electronic instrumentation which, in turn, has been installed rapidly, though unevenly, in manufacturing and services across the country. The productivity of the domestic economy is more and more reliant on information processes and electroirlc systems. According to one estimate, 30 percent of the labor force is "cunently in contact with computers on a daily basis." It is claimed that in the early 1980s the figure will increase to 50 percent and reach 70 percent by 1985. 3 Rarely encountered twenty years ago, computers and·microprocessors today are literally household items. While the domestic importance of computerization grows almost daily, the well-being of the information industries which provide the hardware and services is increasingly dependent on the worl.d market for growth and sales. In a magazine forum organized by Datamation reviewing the status of the semiconductor industry, two key figures in the field emphasized the i~portance of the international market for U.S. producing companies. H. Gunther Rudenberg, senior staff member of Arthur D. Little, Inc. observed: "It's an international production scene and an international marketing scene". Roger Bender, president of NEC Microcomputers, added: "Fortunately-or unfortunately, depending on your point of view -the U.S. semiconductor industry is world-oriented; it invests heavily in R & D, and it is not going to roll over and be absorbed by foreign manufacturers." 4 Information machinery, information services, information products and information "know how" have become increasingly significant' components of American foreign trade, as well as supplying dynamism to the domestic economy. An Arthur D. Little study estimated that the world market for telecommunications equipment would more than double between 1977 and 1987, going from $30 to $65 billion, and with the greatest market potential for the developing nations. 5

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Trade figures for 1979 showed that, in contrast with other sectors of American manufacturing, where exports have been lagging and the nation's overall trade balance is in deficit of more than $30 billion, "U. S. manufactures of computers and business-related equipment scored a trade surplus of more than $4 billion. "6 The surplus was still more substantial in 1980. Assessing the~e trends, the Administrator of the National Telecommunication and Information Administration (NTIA), told a congressional subcommittee in March, 1980, that "telecommunications and information merchandise exports [excluding services] represented 10% of the overall U.S. merchandise exports in 1977. Overall, the telecommunications and information sector, together with ag:ticulture and aviation, are currently the leading portions of the export market of the United States." 7 More significant in the long run is that in services too (the processing and transmission of date), U.S. firms are increasingly active internationally. "U.S. computer firms," one observer notes, "are major world suppliers, deriving about half of their revenues from overseas sales; overseas revenues of U.S. -computer firms from sales of services was one billion dollars in 1976 for both on-line and software services and may increase to more than two billion dollars by 1981."8 Yet as these information goods and services flow out of the country, streams of data flow in, are processed, and are returned to the international information current as U.S. products. This interactive flow of information, involving the American and the international economy, is a vital feature of contemporary world market relationships. The United States is "the world's leading importer of data, "9 at the same time that it dominates the export field. Another dimension adds additional importance to the information sector. It has been recognized for some time that familiar cultural products and services-film, TV programs, books, news, records, etc.-besides offering entertainment, are ideological items embodying social values and messages and consequently influencing the organization of the entire social enterprise. Yet computerization and data processing, as well, exert a marked, if still unobserved, impact on the social terrain. Such vital matters as the locus of decision making-the issue of centralization or local control-are affected, if not determined, by the structure and operation of the (imported) electronictelecommu-

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FIGURE 1.1 THE NATURE OF TRANSBORDER DATA F_LOWS PREDOMINANT FLOW OF RAW DATA TO BE PROCESSED

UNITED STATES

OTHER FIRST WORLD COUNTRIES

PREDOMINANT DIRECTION OF INFORMATION

THIRD WORLD

Source: Trammalional Data Report, March 1980, 2 (8). Originally in AFIPS Report Transborde1· Data Flows.

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nications facilities. So too, questions of the organization of the workplace and labor's role in production are bound up 'vith the information systems now being introduced. Dominique Wolton of the University of Paris spent several months in the United States, interviewing journalists and publishers about the new communication technologies. He was startled to find that practically no attention was given to the question of the impact of the new systems and instrumentation on the character of the work and the work process itself. He wrote: The fact that the transition from paper to computers is bound to modify the process of intellectual creation was never mentioned. Yet the new technology necessarily makes this creative process more abstl·act, involving an essentially visual, rather than a material or tactile, relationship to writing, which now occurs within the fixed space of the display screen. Who can deny that here we have the seeds of a change in the journalist's relation to his work?

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and Again, little was said about changes in the organization of this workjournalists instead made the point that electronic editing allow~ them greater control over their copy. Yet this advance raises the question of what will happen to the line dividing the activities of the journalist from those of typesetters and other production workers. The question gains urgency as the technical capabilities of the former encroach on those of the latter. 10

Wolton also expressed surprise that no consideration seems to have been given to what the consequences may be of the substitution of selective, computerized information on demand for the more general, overall information customarily supplied by newspapers and other large circulation organs of information. For both economic and ideological reasons, therefore, the information industries and their ancillary activities have become vital determinants of existing and future power relations 'Within and between nations. In the few industrially advanced market economies t?at h~ve moved furthest along the informational path, this relatiOnship does not go unremarked. An official British paper, for example, notes that "It is the view of the United Kingdom that ~nformation processing and handling in all its aspects is now the critIcal technology for advanced industrial countries. "11 A recent French study likewise states that "data processing has become a strategic sector in most countries." 12 Concern in Canada is manifest in the conclusions of a Special Government Consultative Committee: We conclude our work, therefore, not with another recommendation but with an exhortation: with all the force at our command, we urge the government of Canada to take immediate action to alert the people of Canada to the perilous position of their collective sovereignty that has resulted from the new technologies of telecommunications and informatics; and we urge the Government of Canada and the governments of the provinces to take immediate action to establish a rational structure for telecommunications in Canada as a defence against the further loss of sovereignty in all its economic, social, cultural, and political aspects. 13

In the United States, consideration of the information industries' priority and well-being takes place within a still larger context. It involves nothing less than the maintenance, some would say restoration, of corporate America's global economic power.

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Indicative of the tone and urgency of the debate, Business Week, in mid-1980, announced the necessity for a "reindustrialization of America. "1-1 The New York Tin,es carried five long articles on essentially the same subject in August and September, and former President Carter, at the end of August 1980, created an Economic Revitalization Board.* Actually, this is the public side of a conflict of views and interests inside the corporate community on how to arrest the decline of U. S. economic strength worldwide. Powerful economic groups are affected by the decisions that will be made on capital investment, research and development expenditures, protection of domestic industries, and encouragement for the expansion of high technology industries. In any case, the strategic objective is the same: holding or recapturing markets, and restraining and disciplining the domestic lab or force. Whatever the public relations messages to the contrary, profitability and the authority of capital over labor remain the fundamental desiderata. Gyrus Vance, former Secretary of State, informed a Harvard University Commencement audience in June 1980: "There must be reduced consumption and a higher rate of capital investment; a willingness to shift from obsolete industries instead of propping them up with protectionist trade barriers. "15 Academics recommend 'speedier disinvestment' in 'sunset' industries so that people, money and technology can flow to 'sunrise' industries." 16 Extending the metaphor, the financial editor of The New York Tinws writes: "There are, to paraphrase Benjamin Disraeli, two economies today: one falling, the other rising; one technologically stagnant or decadent, the other young and brilliant. The task of industrial policy is to help the new to emerge, and fertilize or replace the old. " 17 Uncharacteristically, Congress is not lagging here. In an unpublished report to the U.S. Senate Democratic task force on the economy, "a group of nine Democratic Senators has recommended that Congress create an industrial financing bank to provide capital to high-risk ventures in advanced-technology 'sunrise' industries with promising potential for growth and support. "18 *In January 1981, all seven magazines in the Time, Inc. conglomerate for the first time took up a single editorial theme and carried articles on the 'revitalization' of America.

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As could have been expected, the leaders and representatives of the information industries anticipated the general debate. As early as 1978, one senior analyst related information to global economic developments, and saw bright prospects for U. S. information producers and transmitters: A small but increasingly powerful group of decision-makers-in government as well as in industry-are now coming to believe that an ideal way to relate to the world economy is as an idea and knowledge exporter, based on sophisticated information tools. For example, publications, software, and data can be sold abroad for export revenue, and the knowledge and our natural resources still remain at home-you can sell information over and over again and still have it. 19

Another voice in the information industry community, speaking perhaps for the "powerful group of decision-makers," is that of John Eger, formerly director of the Nixon Administration's now defunct White House Office of Telecommunications Policy. Eger's view of the American role in the information age takes full-account of the sea-change shifts in production underway in the United States and around the world. Eger, along witih Vance and other 'internationalists', accepts and, in fact, urges an acceleration in the transformation of the domestic economy, eliminating as quickly as possible older, less profitable manufacturing industries. This he realizes, will require an altogether new set of relationships of the American with the international economy. In truth, Eger's vision comprehends a massively reorganized division oflabor worldwide. In this reorganization, the United States would provide the vital information function. "Since the export of information products and the import of raw information is essential to our growing information economy," he writes, "we must treat these efforts as we would any other important sector of our economy." To be sure, such an approach necessitates difficult decisions-which Eger, and the interests he represents, are fully prepared to recommend: If we do proceed to bargain on information flow, we will have to be prepared to make trade concessions in other areas, where our technological advantage is smaller and our lahor coRts g-reater. The results could well be a loss of jobs in older domestic industries in exchange for guarantees that our growing information industry will continue to expand. 20

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What these ambitious views appear to reflect are the hopes of some influential Americans to maintain, if not restore, an already badly eroded position of global power. The basis of the newer power role, in this perspective, is the electronic industries and their outputs, the technology of which is derived largely from past and present astronomical expenditures on military and space projects. The design for a worldwide redistribution of industrial production is, of course, not a unilateral American decision. It takes into account historical factors that have been pushing things in this direction for some time. Manufacturing capacity, especially in basic industrial fields, has developed in many countries outside theN orth American and Western European centers. Two world wars and innumerable regional conflicts have contributed greatly to this movement; opportunities for the emergence of this enterprise in many less developed locales occurred when the outputs of the major industrialized powers were mobilized and channeled into military production. More· important still, the rapid expansion of transnational corporate activity in the last three decades has created a substantial number of manufacturing facilities in the less industrially developed nations. These innumerable manufacturing enclaves, tributes to the profit seeking quest of the transnationals, have been exporting their outputs in mounting volume into the world market. The outcry of some U.S. industries for 'protection' against these goods is indicative of the heavy weather ahead. Efforts such as those of John Eger to encourage the redeployment of the manufacturing base have to be understood in this overall context. Actually, significant redeployment already is observable in the core of American industry. In its 25th anniversary compilation of the 500 largest United States manufacturing corporations, Fortune magazine compares the original of 1955 with the 1980 listing. The changes noted suggest that the new international division of labor is well underway: Back in 1955, for example, the list was heavily weighted toward such 'basic' industries as metal manufacturing, rubber, food, textiles, autos, and oil. Leaving aside oil, which has to be treated as a special case, companies in these basic industries filled 185 slots on the 500 and accounted for 43 percent of the 500's total sales. Over the years, however, the basic-industry contingent has been losing position. It is

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represented now by only 148 companies which account for only 30 percent of the 500's total sales. In this same 25-year interval, there is another distinctive trend. The high-technology companies have made some of the most conspicuous gains in sales ... e.g., Xerox (No. 150), and Polaroid (No. 228) .... Five of the computer companies in this year's listing-Control Data (which ranks 159), Digital Equipment (No. 187), Memorex (No. 346), Data General (No. 441), and Storage Technology (No. 457)-are among the thirty companies on this year's list that didn't even exist when the fi1·st 500 was put together. 21 THE RATIONALE OF COMPARATIVE ADVANTAGE

The public rat\onale for the suggested redistribution of industrial manufacturing worldwide rests heavily on a doctrine developed in the 19th century: the theory of comparative advantage. It argues that optimum benefits occur when each nation exchanges what it produces most advantageously, i.e., at lowest cost. The doctrine contains more than a little but something less than the whole truth. Most disturbingly, it accepts as fixed, conditions of differential capacity or advantage, ignoring the historical factors that may have contributed to the present relationship. The doctrine in this way presents itself as timeless, universal truth, permitting of no change in the underlying conditions and relationships of those caught up in its operation. 22 Comparative advantage is an ideal doctrine, therefore, with which to justify the economic shifts that are occurring today. These are made to appear 'natural', 'inevitable', beneficial, and progressive. Arguments on their behalf circulate widely. The transnational media see to that. Applying the comparative advantage principle to international data communication-a subject of the greatest interest and concern to the transnational corporations-two enthusiasts describe how benefits are supposed to derive from the doctrine's application: In societies in which information activities generate up to half of the GNP, substantial gains in productivity will arise from efficiency gains in that sector. Thus there is good economic reason to use the cheapest, fastest, most accurate, and most complete information facilities available, wherever they may be located. Just as international trade in physical commodities has raised living standards in the world community by allowing use of commodities produced in the

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most advantageous places, so societies half of whose economic activities consist of information operations will gain mutual advantage from shared use of information resources, with each nation working especially at activities in which it has a comparative advantage. Energy and other scarce resources can be saved by linking distributed activities electronically, rather than duplicating expensive facilities in many phy:;;ical locations. "z1

Actually, this near eulogistic tribute to comparative advantage is addressed to the developed market economies in Western Em·ope-the OECD countries. Since it is these industrialized economies which at this time are challenging the "advantage" of United States-based information industries aand threatening to limit their operation in Europe, the study from which this passage has been taken was written to demonstrate the utility of comparative advantage in the field of information to advanced industrial nations. It is supposed to convince these countries that their interests are well served if their processing requirements continue to be handled by American data processing firms. However, the lesson is there for the less industrialized states as well. This is the thrust of a comment on the same subject by an executive of an American computer services company: Many countries have and are expending efforts to develop competence in producing computer and telecommunications hards ware and general purpose software with varying degree of success. No matter how this works out over time for each country, it is clear that a wide variety of very good general purpose equipment and software is readily available within all countries at relatively competitive prices today. This is likely to be even more true in the future. So the question must be raised as to how much stmtegic value there Teally is for a country to p1·oduce such general purpose ha.rdware and software. ATe there perhaps other things which have greater strategic valu.e to any connt1y? 21

The modern proponents of comparative advantage are uniformly silent about the appalling inequities and dependencies that historically have acompanied the doctrine's implementation. Indeed, the early post-World War 11 efforts by Third World countries to overcome economic backwardness and dependency were directed largely at the effects of comparative advantage as they had accumulated in Asia, Mrica, and Latin America. It is a bitter irony that the exploited countries, some of which are now embarked on at least

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limited industrialization, are again being pushed into unequal economic and informational relationships under the guise of comparative advantage. It should be understood that the shifts, proposed and actual, in the world division of labor, based on an ever-increasing utilization of information in the productive process as well as in the continuously expanding service industries, do not imply a fully developed plan with each participant neatly and consciously assigned a particular slot in the global economy of the future. It is rather, a projection of some developments that have taken place already and other tendencies that are now observable. It is not, therefore, predestined, but it may be predictable. Daniel Bell writes about this:

Consequently, it is also the chief beneficiary of the changes now occurring, though here too, there are no long term guarantees. The worldwide media system, for the most part also under transnational control, ignores or misrepresents what is transpiring. When the shift is discussed at all, it is described as historically progressive, a step toward 'modernization', and in the interest of people everywhere, especially those in the poor lands.* The costs and the burdens-most of which are still to be experienced-are overlooked and unmentioned. An elemental lesson in capitalistic enterprise is being played out on a world stage. Benefits are going to the holders of capital. Burdens are being borne by the vast majority without property stakes. And so, hard as it may be to accept, for the time being the transnational corporate system has captured, or at least diverted, the movements toward a new international economic and informational order. Both of these movements, the economic and the informational, originated with the impoverished peoples of the world. More than a hundred industrially weak and exploited nations sought, since the Second World War,·to create a new international

Because of a combination of market and political forces, a new international division oflabor is taking phtce in the world economy. . . . It is likely that in the next decades traditional, routinized manufacturing, such as textile, shipbuilding, steel, shoe, and small consumer appliances industries, will be centered in this new tier (e.g., Brazil, Mexico, South Korea, Taiwan, Singapore, Algeria, Nigeria) that is beginning to industrialize rapidly.

Bell believes that this global realignment in production will not be achieved easily or smoothly: The response of the advanced industrial countries will be either protectionism and the disruption of the world economy or the development of a 'comparative advantage' in, essentially, the electronic and advanced technological and science-based industries that are the feature of post-industrial society. How this development takes place will be a major issue of economic and social policy for the nations of the world in the next decade. 25

Bell does not discuss why this largescale shift in worldwide productive activity may be expected to be troublesome. But the nub of the problem is who will shoulder the burden of this vast realignment of productive effort. The answer is, of course, working people. The changing division oflabor internationally is being initiated, guided, and implemented largely by the transnational corporate system. It is not, at this time, influenced in the slightest by social need or any larger public interest. It is the transnational corporation and its unending search for new markets, raw materials, and maximum profitability that is the engine powering the international transformation now proceeding.

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*Peter I>ruckel·, an m;tute observer of corporate behavior, uses the comfortable expression "p1·oduction sharing" to describe this process. "Manufacturing work," he writes, "that is highly Jabor-intensive will increasingly have to be moved where the Jabor supply is-that is to the developing countries." Peter F. Drucker, The Age l!( DiRcml.f.innity, Preface to the paper edition. New York: Harper, 1978, p.xix. In the real world of the transnationals, "production sharing" looks somewhat different from Drucker's description. The New York Tirnes gives this account of world components produced for U.S. cars: "It's all part of a trend in world industry, with the large indus trial companies concentrating more and more on high technology, research, design and management, and less developed countries beginning to acquire skills in manufacturing goods, including automobile parts, that they can make cheaper and perhaps even better. South Korea and Taiwan, for example provide everything from ignition wires to intake valves, while Brazil manufactures entire auto and truck engines." Edwin McDowell, "Made in U.S.A.-with foreign parts," The New York Times, November 9, 1980. Then there is the "production sharing" that Barbara Ehrenreich and Annette Fuentes describe. In Mexico, Taiwan, South Korea, the Phillippines, Malaysia, and many other Third World countries, millions of young women are being hired by the transnational companies to perform demanding, Iabor intensive tasks. The human costs of "life on the global assembly line" do not appear on the glossy balance sheets of the new international division of labor. Barbara Ehrenreich and Annette Fuentes, "Life on the global assembly line," Ms, January 1981, 9 (7), pp. 53-59, 71.

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WHOSE NEW INTERNATIONAL ECONOMIC AND INFORMATION ORDER? 15

16

enviroment in which the economic, political, and cultural fetters that prevented their autonomous development would be broken. Now both movements are seemingly being incorporated into vehicles for facilitating the global relocation and private corporate control of economic activity. · Under transnational corporate direction, production in conventional industrial goods and services is being transferred world wide to sites with impoverished workers, tax exemptions, and complaisant governments.* Information industries are, at the same time, taking over as the central foci of economic activity in the earlier industrialized core areas. As this international relocational process unfolds, the new international economic order is itself recast but hardly into a progressive arrangement. The new, industrial producer nations are being brought into the existing world structure, carrying on their newly developed industrial activities under market rules and with market criteria that date back at least a century and a half. A United Nations resolution, adopted in 1975, explains and validates the overall process:

enterprises] is not likely to be a framework for a. new and more equitable world economic order but rather designed to stabilize the present order and thus contain a further deterioration of the developing countries. "27 The new international information. o;rder falls neatly into this general context. As information is crucial for the operation of the transnational corporate system, there is every reason to expand international communications. Increased linkages, broadened flows of information and data, and above all, installation of new communication technology, are expected to serve nicely the world business system's requirements. That they can be considered as constituting a new international information order is so much additional icing on the cake of the transnationals.

Developed countries should facilitate the development of new policies and strengthen existing policies, including labour market policies, which would encourage the redeployment of their industries which are less competitive internationally to developing countries, thus leading to structural adjustments in the former and a higher degree of utilization of natural resources in the later. 26

One writer sees the international division oflabor resulting from what he terms this "integrative approach" as leading to a familiar condition: The main directionality of the linkages in this division of labor-and the international system of which it is a part-is thus such that the developed countries provide the consumption patterns, technology, skills, capital, etc. to the developing countries which then establish production facilities to service the markets of the North.

All of this leads to the bleak conclusion that the new, new international economic order "with its reliance on TNEs [trammational *A counter movement could develop with the widespread introduction of microprocessors to all aspects of mass production. Then it may be possible for high technology centers to re-engage in industrial production without any significant labor costs. Few workers will be employed.

OPERATIONAUZING THE NEW COMMUNICATIONS TECHNOLOGY IN THE NEW ORDER

Technology plays a vital role in the emerging new scheme of things. It serves dually: first, to integrate the transnational corporate system, and second, to deepen the dependence of the peripheral world on hardware, 'software, training, and administration supplied by that system. The less developed nations are not to be denied the new technology. On the contrary, technology is being pressed on the poorer countries in an atmosphere of urgency. ''We must offer to expand communication systems abroad," urges one promoter of U. S. information policy. "Imaginative use of our satellites and earth stations, shared time on our broadcasting channels, crash projects to produce cheap newsprint-all and more are readily possible. "2!1 Technology's role in the less-developed economies will be extended, but under the auspices of the transnational corporate system. This, it is reasonable to be believe, is intended to assure the implantation ofWestern developmental models--of production, administration, consumption, and education. Though it is not likely that the most sophisticated instrumentation and processes of advanced capitalism will be made available to the peripheral world, even in those cases. where it is offered the effects will be the same--dependency, and development patterned on the market model. Writing about the possible transfer of information technology, one observer notes:

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Even if the U.S. Government did subsidize access to U.S. data banks and 'information resources' [the U .S. proposal at the UNESCO 1978 Paris meeting and elsewhere], it is questionable how useful this information would be .... In order for information to have real utility it has to be tailored to the needs and circumstances of the user and this simply is not achieved through the installation of an int~rna tional data network. However, once the technical, financial, and management skills and infrastructures have been developed, as in the case of Taiwan, Hong Kong, Malaysia and others, then the export of information is related to the export of capability and 'comparative advantage. '29

The important consideration at this time, from the perspective of the transnational corporate policymakers, is to get advanced communications technology installed in as many places as quickly as possible. The effort to put the technical infrastructure in place--termed. "operationalism" 30-is as agreeable to the American information industry complex as it is to the transnalional system overall. Suggestive of the efforts undertaken to create an international atmosphere of encouragement, if not urgency, for the rapid adoption of new communications technology, the International Telecommunications Union (ITU) organized a forum in Geneva in September 1979, the introductory section of which was called Telecommunication Perspectives and Economic Implications. The subjects under discussion were: "strategies for dealing with evolving international telecommunications; industrial products and transfer of technology for effective operation; telecommunication services and networks; [and] financing of telecommunications." Offering views on these important questions was a panel of speakers recruited almo:::)t exclusively from the most powerful companies producing equipment in the transnational corporate system. Among them were: the president of RCA, the Vice-President aild Chief Scientist of IBM, the President of Siemens AG the VicePresident of th.e. Executive Board at Philips; the Execdtive VicePresident of A.T.&T; the Vice President and Group Executive of Hughes Aircraft, and similar ranking officers from Thomson-CSF NASA'. Comsat, and Ericsson (Sweden). Supplying the new instru~ mentati~n ~nd proc~sses means consolidating Western long term control m mternatwnal markets over equipment, replacement parts, servicing, and finance.

611 WHO KNOWS?

18

"Operationalism," consequently, makes little attempt to ascertain the appropriateness of the items sold or to develop norms for such an evaluation. Useful or not, needed or not, Western suppliers push their wares come what may. Mild attempts to establish international specifications and protective standards are rebuffed and labelled "premature. ":n INFORMATION INEQUALITY IN THE CENTER OF THE SYSTEM

Though this is small consolation to the rest of the world, in the global shift of economic and informational activity now proceeding the center of the system, no less than the periphery, expe1'iences deepening inequalities. To the developing nations, the new corp.munications technology is promoted as a means oflessening social gaps in education and literacy and as a means of leapfrogging into· the modern age, with classrooms and businesses informed from satellite broadcasts. For the already industrialized countries, the promise is of electronically induced democracy, plebiscites, and polls, carried out at home by the touch of a button on the living room TV console. These are claims the transnational corporate system circulates through its transnational media circuits. Actual developments, in the United States and elsewhere, present another reality. Consistent with market practice, the advantages and capability of using the new instrumentation vary directly with technical and financial ability (to pay). It requires little imagination to guess who benefits from the new information technology in corporation-dominated America, where a few hundred businesses control more that threefifths of the national economy. In the very heart of the most advanced 'information society' it is predicted that, contrary to widely publicized claims, the introduction of electronic information systems will deepen information inequality in the social order. 32 And if this is the prospect for a nation with an abundance of informational circuits, what may be expected to occur in those numerous countries were scarcity, weakness, and dependency are still the prevailing characteristics? THE FREE FLOW OF INFORMATION

In the period from1940 to 1970, 'the free flow of information' was a major element in United States information and foreign policy. 33 In this earlier time, the objectives generally were limited to the

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6I3

The Political Economy of the Media I

The Political Economy of the Media I

WHO KNOWS?

WHOSE NEW INTERNATIONAL ECONOMIC AND INFORMATION ORDER? 19

20

market needs of the American media industries-the news agencies, film and TV-program export sectors, advertising, publishing, and record industries. The doctrine also was directed against the socialist nations, intended to put pressure on them to open up and be susceptible to consumerist ideology. Though these aims remain important objectives, the information issue, and the free flow of information doctrine in particular, now transcend the somewhat parochial question of expanded markets for American media interests. Information gathering, processing and transmission, have become essential and determining elements in affecting corporate America's position in a new international economic order. William Colby, former director of the Central Intelligence Agency, puts it this way:

communication functions vital to the survival of the worldwide American business system:

Today the world is facing a choice between free trade and protectionism in international information exchange. As we learned in the field of commmodities, it will be important to choose the path toward freedom rather than protectionism .... In the information industry, whether hardware, software, or the rapidly growing field of substantive analysis, a similar strategy for free international exchange must be developed. The benefits of free exchange and the cost of attempts to obstruct it must be articulated. 34

Just how important the free flow of information doctrine has become to the transnational corporate system's maintenance and survival is noted by another communications analyst. It is, Clippenger writes, "the pillar not only of U .S. civil liberties and individual freedom, but the market economy as well .... And many U.S. commentators and officials have avowed that the concept of free flow is a wholly non-negotiable item. "35 If supremacy in the information sector cannot be maintained, American power could shrink to continental confines. The capability to monitor and police the world, for the protection of the corporate system, is also at stake. Former President Carter alluded to this capacity in discussing the SALT II Treaty with Congress: As I have said many times, SALT II is not based on trust. Compliance will be assured by our own nation's means of verification including extremely sophisticated satellities, powerful eleclroni~ systems, and a vast intelligence network. '10

Similarly, the Director of Security Programs for I RM-the corporate empire of computing capability-mentions circumspectly the

I believe the paramount objective should be the preservation of the free flow of information across and within national borders balanced by considerations for privacy and national security. This must be the single most important objective simply because of the immense economic and political impact of free information flow in today's society. So much of this information flow takes place beneath the surface of our conscious activities that we literally take it for granted. Perhaps we would only realize its true value and impact if it were restricted. 37

But historically and currently, the free flow of information is a myth. Selectors and controllers continue, as they always have, to sift and shape the messages that circulate in society. It is always a matter of who the selectors are and whom they represent. And this is an area of which social class is in control. The free flow of information, as a phrase, does describe well, however, what now occurs in the global information infrastructures that link the transnational business system. In these privately organized circuits, the flow does move freely between corporate affiliates in the international sphere. Public scrutiny is avoided and strong efforts are made to keep matters as they are.* But the Fortune 500 companies are not necessarily limited to transmitting data wthin their corporate structures. As new tech*Some indication of the intra-transnational corporate information flow internationally is provided by Hewlett-Packard, a major U.S. manufacturing company: "Hewlett-Packard manufactures more than 4000 products for wide-ranging markets which are primarily in manufacturing-related industries. We have 38 manufacturing facilities and 172 sales and service offices around the world, and together these employ about 45,000 people. We have experienced a very rapid growth of about 20% per year, culminating in sales of $1.7 billion in 1978.... To support this btlsiness, we currently have some 1,400 computers (not including desktop units or handheld calculators). Of these, 85% are used to support engiJ'leering and production applications, are usually dedicated to specific tasks, and often are arranged in networks. A number of them are also used in computer-aided design applications as front-end processors for large mainframes. The remaining 200 computers are used to support business applications. . The network tying all this together consists of 110 data communications facilities located at sales and service offices, at manufacturing plants, and at corporate offices in Northern California and Switzerland." (Cort Van Rensselaer, "Centralize? Decentralize? Distribute?," Datmnation, April 1979, 25 (4), p. 90).

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The Poliiical Economy of the Media 1

615

WHOSE NEW INTERNATIONAL ECONOMIC AND INFORMATION ORDER? 21

22

nology makes all communications processes increasingly interchangeable-i.e., messages, whatever the form, be it record, voice or visual-are reducible to electric impulses. Transnational businesses have the opportunity to reach large audiences and ·publics on their own terms, possibly through their own informational circuits. (See Chap. 4) A recent study notes: "The ability to communicate with masses of. people is spreading beyond the 'institutional media'."And a United States Supreme Court decision in 1978 approved the principle that "a telephone company, or any other corporation, has First Amendment rights. " 38 In recent years, United States policy makers defended American broadcasters' rights to use direct satellite broadcasting-when it became available-without complying with national oversight from any country. The argument advanced claimed that the world itself was covered by the U. S. Constitution. Now, apparently expanding on that modest interpretation, the international community may be informed that not only American media but all U.S. transnational corporations have unlimited global communication rights because they are shielded by the U.S. Bill of Rights.au

Given this strength, can the new international division of labor-with informational activity at its apex-be effected according to the design of the transnational corporate system? To begin to amw.ier this question, which concerns a good part of the world economy, the changing structure and character of the Ame~·ican economy-still the center of the world system-must be exammed. Following this, the impact of these changes on the international system must be considered. It is to a review of these subjects that the subsequent chapters are devoted.

RECAPITULATION AND FUTURE FOCUS

Industrial competitive pressures, technological developments, social movements, and national policies are changing the contours of the international economy and the global informational system. The change itself is not an issue. It is an ever-present historical phenomenon. What is of concern are the forces that are pushing and directing the current global shifts. To date, the main activators and controllers of these changes have been the transnational corporations. In responding to their own profit imperatives, economic activity, political behavior, and the cultural environment in much of the world have been affected dramatically. Though the TNCs are not the exclusive agents in determining the mix of production, the character of consumption, the social values attendant on both, and the informational messages circulating worldwide, they are the most influential. This is so because they are the richest and most powerful actors on the international stage at this time.

WHO KNOWS?

Notes to Chapter One 1.

2. 3.

4. 5. 6. 7. 8.

9. 10.

11. 12. 13. H.

15. 16.

Eli Ginzberg, "The professionalization of the U.S. labor force,"Scientif"ic American, March 1979, 240 (3), p 48. M. U. Porat, "Global implications of the information society,"Journal of Communication, Winter 1978, 28 (1), pp. 70-80. E. Drake Lmidell, "Greater penetration viewed as Critical DP issue,"Computmworld, February 19, 1979. "The chip revolution ... a candid conversation," Datamation, June 1979, 25 (7), pp.98-100. Computerwodd, April 1, 1979, p. 80. Com.pute1world, March 31, 1980. Transnational Data Report, May 1980, 3 (1) p. 7. W. Fishman, "International data flow:Personal privacy and other matters, "paper presented to the Fourth International Conference on Computer Communication, Kyoto, Japan, February 3, 1978. Angeline Pantages & G. Russell Pipe, "A new headache for international DP," Datamation, June 1977, p.115. Domini que Wolton, "Do you love your VDT?," Columbia Journalism Review, July/August 1979, 18 (2), pp. 36-39. "Taking a stand on a critical technology,"editorial, Computing, September 7, 1978, London, emphasis iri the original. Simon Nora & Alain Mine, L'lnformatisation de la Societe, La Documentation Francaise, Paris, 1978. Teleccnmnunicat·ions and Canada,report of the Consultative Committee of the Implications of Telecommunications for Canadian Sovereignty (The Clyne Report), Ottawa, March 1979, p. 76. Bu..c;iness Week, June 30, 1980, cover page. The New York Times, June 6, 1980, A 12. Edward Cowan, Books of the Times, review of the Zero-sum society,by Lester C. Thurow, The New York Times, July 1, 1980.

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17. 18.

19. 20. 21.

22.

23.

24.

25. 26.

The New York Times, June 27, 1980, D2. Edward Cowan, "Aid urged to 'Sunrise' industries,"TheNew York Times, September 1, 1980, Dl. Vincent E. Guiliano, "Electronic office information systems and the information manager,"Bulletin of the American Society for Information Science,February 1978, 4 (3), p.13. John M. eger, "Protest of global 'information war' poses biggest threat to U.S.," The Washington Post, January 15, 1978. Linda Snyder Hayes, "Twenty-five years of change in the Fortune 500,"Fortune, May 5, 1980, pp.90-92, emphasis added. Wallerstein points out that the advocacy and implementation of the principle of comparative advantage and its complementary doctrine of free trade historically are linked to hegemonic power. If hegemony is defined as a situation in which a single core power has demonstrable advantages of efficiency sinmltaneously in production, commerce and finance, it follows that a maximally free market would be likely to ensure maximal profit to the enterprises located in such a hegemonic power. "It is no accident therefore that, at the moment of Dutch accession to hegemony in the seventeenth century, Hugo Grotius published that 'classic' of international law, Ma1·e Libentm, in which he argued that 'every nation is free to travel to every other nation, and to trade with it', because 'the act of exchange is a completion of independence which Nature requires', (Grotius, 1916). This ideology was revived under British auspices in the midnineteenth century and American auspices in the mid-twentieth. In each case, the ideology was practical only to the extent-and as long as-the core power who promulgated it was truly hegemomic." Immanuel Wallerstein, "World networks and the politics of the world economy," in Am os H. Hawley, Ed. ,Societal growth process and implications, New York: The Free Press, 1979, p.273, emphasis in original. Ithiel de Sola Pool & Richard J. Solomon, "Transborder data flows: Requirements for international co-operation," Organization for Economic Co-operation and Development (QECD), Working Party on Information, Computer and Communications Policy DSTI/ICCP/78.21, Paris, July 26, 1978, pp.l7-18. ' Ald~n Heintz, Vice-President, International and Corporation OperatiOns, ~share, Inc., "The computer services industry," in Data regulatt.ons: Eu1·opean and thi1·d world realities. Uxbridge, England: Onhne, 1978, p. 165, emphasis added. Daniel Bell, "Communications technology-for better or worse,"!Ia?-ua?·d Busiuess Review, May-June 1979,57(3) p.2G. "Development and international economic cooperation", Resolu-

The Political Economy of the Media I 24

27.

28. 29. 30. 31. 32.

33.

34. 35. 36. 37.

38.

39.

617 WHO KNOWS?

tion 3362, S-VIII, UN General Assembly, Seventh Special Session, September 16, 1975. Karl P. Sauvant, "The role of transnational enterprise in the establishment of the new international economic order: A critical review, "Ervin Laszlo & J orge Alberta Lozoya, Ed., Strategies for the NIEO, Oxford: Pergamon, March 12, 1979, p.24. Leonard R. Sussman, "A new world information order?" F1·eedom at Issue, November/December 1978 (48) p.9. John H. Clippenger, "The hidden agenda,"Journal ofC01nm1mication, Winter 1979, 29 (1), pp. 189-190. Benno Signitzer, Regttlation of direct broadcasting from satellites: The UN involvement. New York; Praeger, 1976. The U .S. delegate to the Strategies and Policies for Informatics (SPIN) meeting in Torremolinos, Spain, August 1978, stated this explicitly. Herbert S. Dordick, Helen G. Bradley, Burt Nanus & Thomas H. Martin, "The emerging network marketplace," F35, Decei_Uber 1978. Center for Futures Research, Graduate School of Busmess Administration, University of Southern California, Los Angeles, CA 90007. Herbert I. Schiller, Communication and cultural domination, M.E. Sharpe, White Plains, N.Y.: 1976, Chap. 2. William E. Colby, "International information-free trade or protectionism," International Conference on Transnational Data Flows, Washington, D.C., December 3, 1979. John H. Clippenger, op. cit., p. 199. The New York Times, June 19, 1979, p. A-13. Harry B. DeMaio, "Transnational information flow: A perspective,"Data Regulation: European and Third World Realities.Uxbridge, England: Online, 1978, p.170. William H. Read, "The first amendment meets the second revolution,"Working Papers, W-79-3. Harvard University Program on Information Resources Policy, · Cambridge, Massachusetts, March 1979, pp.25-26. A Canadian Government study sees this as an imminent reality. "Few people in Canada are aware of the implication.s of wha~ is happening. These are some of the dangers foreseen If protective measures are not urgently devised and implemented. Greater use of foreign, mainly U.S., computing' services and growing dependence on them will ... facilitate the attempts of the government of the United States to make laws applicable outside U.S. territory." Telecmmnu.nications and Canada (The Clyne Report), op. cit., p.64.

[29] Excerpt from Transnational Communication and Cultural Industries.

1. Introduction

Recent discussions of communication policies, the free and balanced flow of information, and a new international information order have included the transnational production and distribution of information and flow of mass media material. It is repeatedly claimed that present information flows are marked by serious inadequacy and imbalance, and that most countries are reduced to being rather passive recipients of information disseminated by a few other countries. The problem has now become a matter of national as well as international concern and discussion. World market economies are characterized by transnational systems of enterprises, and information production and dissemination are mostly in the hands of a few transnational corporations with their headquarters mainly in North America and Western Europe. More and more countries are paying increasing attention to cultural and information dependency as a reflection of self-awareness and their own identity. The movement of non-aligned countries in particular has supported action ·designed to achieve a more balaneed flow of information. Some. voices have even asserted that 'free flow' has little meaning for those lacking the necessary infrastructure and the means for communication. Taking this view into account, Unesco has supported the development of national communication policies throughout the world and has stimulated research to deepen the understanding of international communications in order to identify common ground for greater international co-opera~on in achieving a more balaneed flow of information. Although it is usually assumed that transnational corporations are among the chief agents responsable for the transnational flow of communication, there is little research on the nature and extent of their influence. The sources of power for TNCs in the developing countries in particular are said to lie in the control of technology, finance capital and marketing, as well as in the dissemination of ideas, opinions and values. The giant TNCs are not directly active in the communication industry; however, they can influence the mass media, for example, through advertising, through control of banking facilities and therefore local and national financing arrangements, and through transfer pricing, etc. The TNCs active in communications are usually classified as middle-sized or even small companies. Nevertheless, the direct and indirect impact, especially on the consciousness and minds of people and

on culture, is important and may be even greater than some other industries of higher economic significance. Transnational corporations in communications are an essential part of the present national and international information order. In the market economies, the TNCs in communication are part of the system. The fundamental characteristic of tltis transnational world system, is the trend towards the internationalization and concentration of capital and production, which has been observable since the end of the last century and has been most obvious in such branches of industry as oil production, machinery, rubber, food, tobacco, etc. Before the 1950s, most transnational investments were in such industries, but during the 1950s there was a shift towards manufacturing and related areas such as banking, advertising, and the mass media industries. This was facilitated by technological innovations in industrial production and international communication. Air travel, telephones, telex and satellites have made it possible to have production units in many countries and still control the whole network with a global strategy directed from a central headquarters. It may be. noted that economic expansion is associated with political and socio-psychological influence and that foreign investment of capital can imply social and cultural consequences. During recent decades, this process of transnationalization has been radically increasing, coinciding with the global spread of new communication technology, particularly television, computers and communication satellites. As far as the mass media are concerned, after news agencies, the ftlm companies were the frrst transnational corporations. Cinema production began in the years before the First World War, and some European countries became exporter nations. But fmancial and other difficulties stemming from the war changed the principal direction of flow, and the United States emerged as a world power in the field of cinema. Throughout the 1920s, various European nations sought to protect themselves from the exportation of American ftlms and erected a multitude of trade barriers to prevent their importation, distribution or exhibition. None the less, film production in some countries was on the way to extinction, and in many others hardly developed or advaneed at aiL Thus for more than half a century the American film industry has been international, dominating the world ftlm market in degree of distribution and in box-office

The Political Economy of the Media I receipts, even though in fact it has produced only a relatively small share of the world's motion pictures. Beginning in the l 920s, radio became an ideal vehicle for reaching foreign audiences, especially in countries with a high illiteracy rate. Transnational conglomerates were already financing radio programmes exported to foreign countries. The large scale production and export of broadcast programmes started, however, in the era of television - in the 1950s. The history of broadcasting has been very closely connected with the development of the record industry, which started to flourish before the First World War in many countries. Most of the world's records were produced by a few American, British and German companies, or their affiliates and representatives abroad. The massive production of records is still in the hands of a few major conglomerates, although there is a great number of smaller companies. The transnational character of hardware industries, making equipment for carrying mass media messages (i.e. radio and television production equipment, film equipment, recording equipment, satellite earth stations), as well as for the home (radio and TV receiving sets, phonographs, etc.), has a long tradition. As early as 1883, the Edison Corporation was founded in Germany for the manufacture of electrical equipment using American patents. The development of telecommunications and communication infrastructures has been essential for the creation of modem transnational corporations. Certain transnational corporations are principally concerned with the international flow of information and personnel rather than goods. Such service industries include advertising, management consultancy, data processing, film production, and hotel management. A study of the transnational corporations active in communications should also take into account the wider implications of the present situation. For example, some researchers have pointed out that the process of economic and political self-reliance requires sociocultural independence. According to these views, acceptance of the values, behavioural patterns, and especially consumption patterns, of a fex developed countries constitutes a major problem. 1 It is only recently that the communications-advertising-culture dimension has begun to make itself evident as an integral part of the transnational instrumentality. Furthermore, it is important to recognize that the transnational communication system has developed both with the support and at the service of the transnational economic structure2.

6

l.KariP. Sauvant, 'HisMaster'sVoice',Ceres, Vo1.9,No.S, September-October 1976, p. 32. 2. Juan Somavia, 'The Transnationa!PowerStructureand In· ternationallnformation' Development Dialogue, 1976:2, p.l7.

619

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The Political Economy of the Media I

2. An overall quantitative survey of the transnational flow of mass media materials

suggest 'that the basic global flow of television programming is among eight rich countries because those eight have most of the receivers and the largest audiences.2 Read also argues that the principal direction of the flow is from the United States to the other seven. TABLE I. American Television sales to foreign television companies, in millions of dollars

Transnational television flow A Unesco survey I of world television programme flow in 1974 showed that the global markets are widely dominated by British companies. The results of this study are not repeated here. Although the study provided only very crude estimates of the television flow, its overall findings have not been contested. There are different approaches to the study of the international television programme flow. One is purely economic, whereas the other stresses the dominating and cultural role of foreign programmes, in addition to their business value. From the purely business point of view, the dominating role of American television exports is summarized in Table I, according to which the foreign sales and rentals of American television programmes totalled approximately $100 million a year in the 1970s. There was very rapid growth throughout the 1960s (from $25 million to $100 million in 1970), with stabilization in the 1970s. If inflation is considered, the foreign sales of the American television programmes in 1973 would be almost equal to those of 1963. However, there are also other orms oftransnational operations, such as the export of capital for production, eo-production, or eo-financing abroad. It is worth observing that as much as two-thirds of the foreign sales of the American P.rogrammes go to the rich market areas: Canada, Australia, Japan and the United Kingdom. This finding of the previous Unesco study is further confirmed by the study of W. Read, who observes that the figures for television receivers

Year

Value:

Year

Value

1958 1960 1961 1963 1964 1965 1966 1967

I~

25 45 66 70 76 60 78

1968 1969 1970 1971 1972 1973 1974 1975

95 99 97 85 93 130 85 175

Compiled from the following sources:

Erik Bamouw, The Image Empirt. New York. Oxford University Press. 1970. Ross Drake. "From Daniel Boonc to Mod Squad. Some Headaches of Selling U.S. Television Shows Abroad'. TY Guide, 29 April 1972. AI Preiss. 'The Impact of American Commercial Television in Westcm Europe. Japan &. South America', Tdtfilm lnJmtat{ona/, October 1964. William H. Read. America'S Mass Mtdia Maclumts, The John Hopkins University Press., 1976, John. Tebbet, "U.S. Television Abroad. Big New Business',Saturday Review, 14 July 1962. Tapio Varis.lnlurtalional/nvenJory ofTeln~ision Programme Srruc/urt and rhe Flow ofTV Programmes beMeen Nations, Research Institute, University ofTampen:. No.20/1973. The Network Projecl, Global Salesmen. Columbia University, Notebook No. 10, Winter 1975. Broadcasting, 22 October 1973. Variety, 9 January 1974.

From the business point of view, one could argue that the developing countries are of little economic importance to the industrial world's television business

I. Kaarle Nordenstreng and Tapio Varis, Television

Traffic- a One-Way Street? (Reports and Papers on Mass Communication N". 70, Paris, Unesco, 1974.) 2. William H. Read, 'Global TV Flow: Another Look', Journal of Communication, summer 1976, pp. 69-73.

9

because the bulk of foreign revenue comes from the developed areas. The argument is parallel to the one often used by the transnational corporations, that since some 80 per cent of their business is done between countries of the developed areas, the main concern should be there. However, this is an incomplete picture of the phenomenon. In the global television business, the cultural approach to a study of the worldwide distribution of television programmes would stress that the amount of programme time imported and shown in the developing countries, whether free of charge or at a low price, is equally important because of the social, cultural and political impact of the imported material. In quantitative terms, many of the developing countries have been importing most of their television programmes from a few foreign sources, and the main rival to the American companies has been the British television industry. In recent years, the foreign sales of British corporations have increased notably. In 1973, they exported almost a third as much as the American companies when measured in financial terms. In 1974, the British exports, reaching most countries of the world, amounted to a total value of about $36 million (18 million pounds), and the year 1975 was even more successful. According to later estimates, British television exports in 1976, excluding motion pictures sold for television, exceeded those of the American companies. I In the 1970s the world market economies faced a serious economic crisis that also affected the television industry and world television markets. One general consequence of this crisis has been that the smaller companies have had difficulties in maintaining and increasing their national programme production, while the large companies have been better able to survive and strengthen their transnational activities. Recent television imports in small countries have shown an increase in foreign programming. In Ireland, for example, there was a slight increase of imported material during the 1970s from some 55 per cent (1971) to almost 60 per cent (1975). In Denmark, 50 per cent was imported in 1971 and 55 per cent in 1976.

The flow of newsfilm Newsfilm for television can be exchanged either electronically through a telecommunication network, or by air freight. From an international point of view, the exchange networks are most developed in Europe, where the geographic, economic and political factors have made it possible to develop international exchange systems. The Arab region is also making rapid progress in television news exchange systems. Among the Asian broadcasting services, the Asian Broadcasting Union (ABU) has promoted exchanges. In 1958, five European countries started using the Eurovision TV link net for daily exchanges of newsfilm. At the beginning the exchange was modest and unsystematic, but it became more regular in 1961. The exchanges have expanded rapidly and now some twenty-five countries are taking part in them. Eurovision has members in Western Europe, North Africa and the Middle East. Newsfllms are exchanged three times a day and the number of 10

621

films has multiplied many times. In 1974, over 5000 items were exchanged in Eurovision, compared with only 1,245 in 1965. In Eastern Europe the exchange of newsfilm was started at a later date. The International Radio and television Organization (OIRT) founded the lntervision News Link Net in 1960 for the exchange of news between members. During the 1950s there had been some special programmes transmitted with a microwave radio- net. After the founding of Intervision experimental transmissions were started, and in 1964 the Intervision systematic exchange was established. At that time some of the Eastern European countries were left outside of the net because of technical difficulties, and the exchange took place only once a week, on Fridays. The link net was later developed, and in 1970 daily transmissions were started between all Eastern European countries. A weekly exchange between Eurovision and Intervision was started in 1965, and since 1970 the exchange between the two unions has been carried out daily. Satellite experiments of Intervision exchanges have included exchanges with Cuba. The amount of newsfilm material exchanged has increased both in Eurovision and Intervision, and between the two organizations.2 The amount of news exchanged in Eurovision has been 4,500-5,000 items annually, excluding the opening of EVN-0 midday exchanges in 1975. The international newsfilm agencies originate about half of the Eurovision material. Of this newsfilm agency material, the British Visnews originates about one half of all agency material, the British-American United Press International and Independent Television News Ltd. (UPITN) one third, and the American CBSNews about 10 per cent. When the otTers of newsfilm agencies are left aside, the Eurovision items then come from a few originating countries, of which the most important have been the United Kingdom, France,. the Federal Republic of Germany, Italy and Switzerland. Their share of the exchanged material has together been some 60 per cent. In Intervision, the role of the member country as a producer of newsfilms is greater than it is in Eurovision, since the number of members in Intervision is only a third of that in Eurovision. The USSR, however, is clearly the largest producer and originator of newsfilms in Intervision, and its share of the exchange has increased annually. Poland and Czecholovakia have been the other large news originators. The shares of various countries in Intervision otTers have varied considerably every year.

I. Some data on t.'Je British overseas transactions in respect

of film and television material 1968-74 are presented in HMSO, Deparunent of Industry, Business Monitor, Overseas Transactions, 1974.

2. Data based on original research by the author for the European Broadcast Union (EBU), and OIRT Working Party for Television News 1973-1975. See Tapio Varis and Renny Jokelin, Television News in Europe, Institute of Journalism and Mass Communication, N". 32/1976, Fin· land, University of Tampere.

The Political Economy of the Media I

The Political Economy of the Media I

622

The exchange of newsfilm material between the two network organizations jn Europe has been very uneven. Intervision takes two-thirds of the Eurovision material but Eurovision received only approximately 6 per cent of the Intervision material (200 items annually), despite the fact that offers from lntervision to Eurovision have increased regularly. Very little newsfilm material produced directly by the developing countries is shown in European television news. The material that comes into the exchanges is originated by the transnational newsfilm agencies. Out of all news items in Eurovision exchange about the developing countries, the transnational newsfilm agencies provide some 94 per cent of reports from Asia, 44 per cent from Africa, and 71 per cent from Latin America. Even though some regions of the developing countries are now in the process of organizing their own newsfilm exchanges, and even preparing for reciprocal co-operation with Western European news exchanges within Eurovision, the transnational newsfilm agencies remain the main source of newsfilm for Africa (excluding North Africa), Asia, Latin America and the Middle EasL Events in the developing countries are reported mainly when they affect Europe or European interests in those countries. Table 2 summarizes the share in coverage of some developing regions presented by different newsfilm agencies to the European news exchange, Eurovision. According to this table, the newsfilm agency performances in the different developing areas seem to vary little from the overall market shares in Western European exchanges. In summary, the newsfilm flow follows very largely the trend in the flow of television programme material as a whole. In fact, the production and transnational distribution of newsfilm material is even more concentrated than that of other television programmes. In most parts of the world, the imbalance in the flow of news continues. However, many Arab and Asian countries are developing various kinds of systems to improve their own newsfilm production and distribution. TABLE 2. Transnational newsfilm agencies' share in coverage of the developing areas on Eurovision, 1975 Visnews

All areas Africa (excl. North) Asia/Pacific Latin America

46.2% 63 65 47

UPITN

36.1% 31 25 32

CBS

15.5%

ABC

2.3%

6

10 21

Source: EBU. Working Parti Television News·. O.A/5422-com. Pro. 1456, by YrjO Unsipuro, London. September 1976.

Although satellite communication creates technical possibilities for the two-way flow of information, the experience so far would suggest that there is a one-way flow: from North America and Europe to many other areas of the world, at least as regards electronically exchanged news material. More research is needed on the non-electronic exchanges (air-freight, correspondents, etc.). The problems of the imbalance are partly

technical and partly depend on whether the economic situation of a country permits it to produce and distribute news.

American, French, Italian, British and (Federal Republic of German) feature film imports in the same countries.

The flow of motion pictures and sound records

TABLE 3. The share of American feature films of all feature films imported by fifteen countries in 1970, in percentages

An analysis of world film production faces certain problems. There is no way of determining the exact number of feature films produced in one year in all countries of the world. Statistics, when available, have often been compiled according to varying criteria. The figures shown cannot give the precise quantity of global film production, but at most only a comparative idea of the capacity for film production. According to available data, 1 the leading film producers can be grouped into four categories according to their production capacity. First, there are the Asian countries: India and Japan, one crossing the mark of 400 films a year and the other staying slightly below that. In both countries, the production seems to have stabilized at this level in the early 1970s. A second group is that of Italy, the United States and the USSR, with Italy producing close to 300 films, the United States a little less, and the USSR approaching 250 films a year. The third group, countries producing up to 200 films, includes France, the Republic of Korea, Greece, Hong Kong and Spain. Finally, there are four countries that come close to producing 100 films a year: Mexico, the Federal Republic of Germany, the United Kingdom and Pakistan. eo-production is evidently important only in Europe, mainly among the countries of the European Economic Community (EEC), although Spain is often a partner producer. In France more than half of the films produced in 1972 were eo-productions, in Spain almost a half, in Italy over 40 per cent, and in the Federal Republic of Germany almost 30 per cenL In other countries, eo-productions of films had a minor or nonexistent role. All in all, it may be estimated that the global production of long films varies between 3,400 to 3,500 films per year. However, this estimation gives little idea of the number of new films that actually find their way into international distribution circuits. Most probably this figure is not very high, while many films have very limited or no marketing value at all. It may be estimated that only some 10 to 15 per cent of the global film production reaches any significant international distribution annually. Most of the film-producing countries have very little distribution in the international film market. For example, India and Japan, the leading producers of long films, can rarely sell their products outside their own national markets. A closer look at the importation of films shows the countries whose film production is meaningful for most other countries of the world. Table 3 shows the share of American feature films of all imported feature films in fifteen countries, and Table 4 the total share of

1. Data based on Unesco Statistical Yearbook, pp. 819-821.

1974,

50-60

Italy, Argentina

40-50

Norway, New Zealand

30-40

Netherlands, Israel, Switzerland, Federal Republic of Germany, Canada, Finland

20-30

Yugoslavia, Australia

10-20 1-10

Poland, Hungary German Democratic Republic

Source: Statistical yearbooks of the countries mentioned. as present in Mikko Jokela, Book, Film. Television, Institute of Journalism and Mass Communication, No. 27/1975, University of Tampere.

TABLE 4. The total share of American, French, Italian, British and German (Federal Republic) feature films of all imported feature films in fifteen countries in 1970 More than Netherlands, Argentina, Switzerland 90 80-90

Norway, Canada, Federal Republic of Germany

70-S_Q

Israel, Yugoslavia, Finland, Italy, New Zealand

60-70

Australia

40-50

Poland

30-40

Hungary

20-30

German Democratic Republic

Source: The: same as in Table 3.

According to these two tables the American films alone have a very dominating role outside the socialist countries, and together with French, Italian, British and German (Federal Republic) films form 80 to 90 per cent of all imported films in the non-socialist countries studied. Japan can be taken as an example of an industrialized country with high national ftlm production.. In 1970, Japan imported 236 feature films. Slightly more than half of the imports came from the United States, and another bulk (35 per cent), from Italy, France and the United Kingdom. Consequently, as much as 86 per cent of the Japanese film imports in 1970 came from those four countries. The same trend continued throughout the 1970s.. In 1975-76, Japan imported 233 foreign films; of these, 55 per cent came from the United States and 33 per cent from France, Italy, the Federal Republic of Germany, and the United Kingdom.' Although there are slight changes in the figures for Japan for 1970 and 1975-76, the structure of imports has remained the same. Switzerland is also a wealthy industrialized country In the production of films the Swiss resources, how-

11 12

ever, are quite different from those of Japan. A relatively small national population cannot support a large domestic film industry and consequently the country has a large importation. In 1970, the Swiss national film production amounted to only five films while 443 films were imported. Of the Swiss imports, about 35 per cent came from the United States, and 57 per cent from the Federal Republic of Germany, Italy, France and the United Kingdom. Consequently, the United States and the four EEC countries accounted for 92 per cent of the total number of films imported into Switzerland. In Argentina, the total number of imported films in 1970 was 391 while the national production was 28 films. Thus, in the total number of new films on the market in Argentina, domestic film production yielded 6.7 per cent whereas importation yielded 93.3 per cenL Of the imported films, 57 per cent came from the United States and 33 per cent from Italy, France, the United Kingdom, and the Federal Republic of Germany. The five countries together provided about 90 per cent of the Argentine film importation. Poland imported 180 films and produced nationally 28 films in 1970. The largest source of film imports into Poland was the USSR (20 per cent) but as much as 14 per cent came from the United States. The other imports came from various sources: Eastern Europe, France, the United Kingdom, Italy and other countries. Almost half of the Polish imports came from the socialist countries. Imported films from the United States, France, the United Kingdom, and Italy made up some 40 per cent of the total To summarize, American films have a dominating role in all parts of the world except in the socialist countries. The other major suppliers of films for international markets are France, the United Kingdom, the Federal Republic of Germany and Italy. In the socialist countries the USSR is a major supplier of feaure films. There seems to be very little flow of feature films between the East and the West. However, the small socialist countries of Europe show many Western films. Occasional films from the socialist countries are imported into the Western countries.

The flow of sound records Because of the nature of sound records and the process of production there are no official statistics on this field. The production of sound records almost exceeds the transnationality of motion-picture production. Because the production costs are not very high, it is possible for the transnational record companies to produce in several countries.. In order to obtain an idea of the transnational flow of sound records it is best to approach the market from the point_ of consumption rather than production, because the music industry as well as the trade journals produce ample information on the consumption of records and cassettes.

I. Variety, 9 June, p. 45.

623

The Political Economy of the Media I

624

For books and motion pictures it is relatively easy to compile statistics based on a single unit, one book or one film. In mechanized music the single unit, an LP or a single, is useful only for best-seller charts of records, hit parades, which have a continously changing character. A better idea can be obtained by studying, for instance, the market shares of various record companies in hit parades in different countries over long periods. The study of hit parades over longer periods gives an idea where the best-selling records come from. The sales of popular music represent at least nine-tenths of the total sales of records. Hence the sales of classical music cannot change the general market pattern, especially since they tend to follow the pattern set by pop music. One could compare the markets of motion pictures and sound records, although the two fonns of mass communication have very different characteristics. It can be estimated I that the volume of world motion picture markets is approximately $5 billion and the volume of world record markets approximately $6 billion (1974). Consequently, the volumes of the two global markets are very similar. Approximately 30 per cent of the market for films and records is in Europe, and some 20 per cent in Asia and Australia. More than a third of the film markets and some 40 per cent of the record markets are in North America. Latin America accounts for some 10 per cent of film and 5 per cent of record markets, and Africa only 0.5 per cent in both. TABLE 5. Leading world sound record and motion picture markets Country

Sales or r..:ordi 1974 ($million)

United States Japan USSR Fed. Rep. of Germany United Kingdom France Canada Australia Netherlands Brazil Mexico Italy Sweden Spain Belgium Yugoslavia South Africa India Venezuela TOTAL

Motion pictures: total box office gross receipts 1973 or 1974 (S million)

2200 720 512 460 450 260 210 140 120 90 85 80 65 60 60 58 45

I 650 • (1974) 390 (1974) (1974) 170 (1973) 140 (1973) 210 (1973) ISO • 100. 30 (1973)

5 615

3 950

so.

40. 360 40 115 30

(1973) (1973) (1973) (1973) (1974)

50. 390 (1974) 35.

"Estimated Sourrt!: Sound record: Billboard,lntemational Buyer's Guidt!, 191Si16, Sec· tion 2. 20 September 1976. Motion Picture: Variety, 29 January 1975, p. 24 (U.S.A.), Variety, S February 1975, p. 35 (Japan). Variety, 14 May 1975, p. 69 (India). Variety, 18 September 1974, p. 31 {for year 1973).

The Political Economy of the Media I

A country-by-country look at the markets for records and motion pictures is presented in Table 5. According to this table in Western Europe motion pictures have larger market than records only in Italy and Spain. In most other countries records have clearly bigger markets than motion pictures. The figures of record sales' in India are not available, but the film market there is equal to that of Japan. As to the socialist countries, there are no data comparable to the dollar-based market volumes of motion pictures. However, the official Soviet statistics and business magazines estimate that in the USSR, for example, there are four to five times more filmgoers than in the United States. The Soviet market for records is estimated to be comparable to that in the Federal Republic of Gennany or the United Kingdom. The Yugoslav record market is comparable to that in Belgium or Argentina. In other socialist countries the figures for record sales are lower (Czechoslovakia $37 million, Poland $7 million, Hungary $3 million). The five big transnational corporations in the record industry are as follows: Electrical and Musical Industries Ltd (EMI), of British origin; Columbia Broadcasting System Inc. (CBS); Wamer/WamerElektra-Asylum (WEA) and Radio Corporation, of American origin, and the Netherlands/Gennan (Federal Republic) Polygram. ·A study of the sixteen main markets of these corporations shows that they cover at least half or more of the record markets of those major areas. In most countries the majority of records are of foreign origin. Only in the United States are some 80 per cent of the records sold domestically produced. The estimated figure for the USSR is approximately 95 per cent.

625

TABLE 6. Main sources of imported books in selected countries

a

The flow of books In 1971, the world total production of books was 548,000 titles, almost double the 1955 figure of284,000 titles.2 However, the structure of high and low production areas has remained almost unchanged. Mrica continues to stay at the lowest level while North America, Europe, Oceania, and the USSR are areas of high book production. About 43,000 translations were made throughout the world in 1971, of which 40 per cent were made from English, 13 per cent from French, and 10 per cent each from Gennan and Russian. Consequently, some three·quarters of all translations in the world are made from these four languages. Some regional patterns in the structure of languages translated exist. English, for example, has a dominant position in the origin of translations in Western Europe, while the Eastern European countries translate a great deal from other than these four dominating languages. I. Original research by Martti Soramiiki. University of

Tampere. Data based on figures from Variety and Bilboard magazines. 2. Data based on Unesco Stalislica/ Yearbook, 1974, pp. 663-68. 13

lmporling

Year

country

Austria Belgium Denmark France Federal Republic of Germany Greece Netherlands Norway Poland Ponugal Spain Sweden United Kingdom Argentina Brazil Chile Colombia Mexico Nicaragua Paraguay Venezuela United States Australia New Zealand

Percentage of

Main sources

main sources ofthetotaJ imponation

1969 1969 1968 1974 1974 1968 1966 1969 1968 1968 1970 1968 1969 1970 1968 1971 1970 1971 1970 1970 1970 1970 1971 1969-70

93 92 72

85 73 95

82 79 84 87 76 84 76 79 85 15 88 79 89 96 86 71 79 87

FRG, NL, SW, USA, YU FR, NL, FRG, USA, SW UK, USA, FRG, CZ, SWED SW, IT, BE, SP, FRG AU, SW, UK, NL, USA UK,USA BE, USA, FRG, UK, FR DENM, UK, SWED, USA, IT USSR, GDR, FRG, UK, CZ UK, FR, USA, SP, FRG IT, FR, ME, UK, ARG DENM, NL, UK, USA, FRG USA, IT, NL, SW, FRG Sp, USA, ME, UK USA, PO, SP, FR, ARG SP, ARG, ME, USA, FRG SP, USA, ME, ARG SP,USA USA, SP, PAN, ARG, COST ARG, USA, FRG, JAP, ME USA, ARG, PAN, ME, SP UK, NL, JAP, FRG, IT UK, USA, HONG K, COST, NL UK, USA, AUSTRALIA

Source: S. Taubcn. The Book Trade of lhe World, I and 11, Hamburg, 1972 and 1976. Ab~eviati?ns: FRG. Federal Republic ofGennany; NL, Netherlands; SW, Switzerland; USA, United States of America; YU. Yugoslavia; FR, France; UK. Unned Kmgdom; CZ. Cz.~hoslo\·a~ia: SWEO, Sweden; IT, Italy; BE. Belgium; SP, Spain; OENM, Denmark; USSR, Union of Soviet Socialist Republics; GDR, German Democraltc Repubhc; PO, Ponugal; PAN, Panama; HONG K, Hong Kong; ARG, Argentina; ME. Mexico; COST, Cosla·rica.

In general, translations are most important to small countries. But because books are tied to the language of their origin, their direct international circulation is limited. In most countries of the world translation·s account for less than 25 per cent of all books published. In book exports and imports, the same concentration in sources can be found as in the languages translated. Table 6 summarizes the main sources of imports in selecte countries. According to this table, the five main sources of imports account for more than 70 per cent of books imported. Book exports are not necessarily a very large sector of the publishing industry. The United Kingdom, where exports of books account for almost 50 per cent of the income of the publishing industry, is an exception. I In the United States, for example, book exports account for just over 6 per cent of the national book industry's total annual output, although foreign earnings are important to many publishers, particularly in the field of technical, scientific and professional publishing. The importance of some African countries, for instance, to the French publishing industry can be understood by looking at some statistics from Le Commerce Exterieur du Livre en France pour I"Annee 1975. In 1975, the Ivory Coast imported books from France that were 14

worth about I 9 million francs, and Moroccan imports of books were worth more than 21.5 million francs. In the same year; the American book imports from France were valued· at about 20.5 million francs. The developing countries may be more profitable markets for books, especially textbooks, than for television and film.

Conclusions on the flow of mass media materials From the business point of view, the modem mass media offer a global market approach for producers and distributors. The industrialized Northern Hemisphere as a whole is the main consumer of the products of the communication industries. The available data confirm that the countries of the Organization for Economic Cooperation and Development (OECD) are the most important market area for the transnational, largely Anglo-American, communication industry. It is in these countries that profits are made. In other countries, the I. The total receipts of British publishers from book exports were in 1975 wonh £ 133 million, 39.7 per cent of total

sales. (HMSO, Depanment of Industry. Business Monitor, PQ 489 Publishing and Printing).

626

The Political Economy of the Media I

The Political Economy of the Media I immediate financial gains are not the most decisive motives for operations; rather the issue there is more of opening the markets and creating patterns for future consumption. As shown in the brief survey of the transnational flow of telvision programmes, newslilsm, motion pictures, sound records, and books, the transnational structure of the flow is rather similar in each of these areas. World television programme sales are dominated by the American and British companies, and newslilm distribution is in the hands of British and American companies. The world motion picture sales take place through the American companies, followed by those in France, the United Kingdom, the Federal Republic of Germany, and Italy, although companies in these countries are often American subsidiaries. Within the socialist countries of Eastern Europe, the USSR is a major supplier of motion pictures. The world markets of sound records are dominated by live transnational corporations in the United Kingdom, the United States, and the Federal Republic of Germany/the Netherlands. These companies produce under different labels in many countries. "In book

translations, English is the dominant language of original texts. English, French, and German together represent two-thirds of the sources of translations in world statistics. In this section, the concept of 'flow' has been used in a limited and measurable way to illustrate the different aspects and dimensions of specific media processes. This approach shows how information, ideas, entertainment, capital and hardware material flow between societies. However, the internationaliz ation of publishing, for example, can be seen as a part of the overall grouwth of transnational media) Consequently, there is a need for complementing the approach described above by perceiving properly the new dimension of the internationalization of the media industry as a whole.

627

5. Conclusions

Although the studies presented have concentrated mainly on film and television, they have shown that the problems of mass media TNCs is multidimensional. Little research exists concerning the transnational mass media industry and even less on the impact of mass media TNCs on the social, economic and cultural life of nations relationships between countries, or international understanding. One of the immediate conclusions is that there should be a continuing collection of data and information on the activities of mass media TNCs. This would be of worldwide interest in order to avoid misunderstanding and misconception of the role of the TNCs, which now stems in particular from the lack of publicly available data. It would also be of interest to policymakers who' intend to formulate measures for national communication systems. The general trend of the TNCs in communication is towards conglomeration: film, television, discs and other mass media producs have become or are becoming increasingly important in the growing entertainment and leisure-time industries. Another characteristic is the transnationaliz ation (some-times called internationalization) of the mass media and the increasingly global marketing organizations, which could be called transnational cultural industries. In order to place the TNCs in communication properly the perspective of the transnational power structure it is necessary to realize not only that the world market economy is organized into a transnational system of entreprises but also that world information production and dissemination are largely in the hands of a few transnational corporations. In the international process of economic integration and improved worldwide communication s there is a tendency towards a new type of concentration in transnational activity. Whereas previously the major TNCs gave their local subsidiaries a fairly high degree of autonomy, production strategy now stresses greater centralization of decision-making according to product lines. This applies to the hardware industry but is not altogether clear in the case of software. However, the present studies show, for example, that to a great extent foreign subsidiaries of the major film companies are not independent but are ·operated to serve the interests of their parent companies. Decisions that affect the culture of the host country are made abroad by TNCs whose primary interests are private and commercial. It can be assumed that in other areas, such as book publishing, there is also a tendency to place manufacturing in

I. Peter Gelding, 'The International Media and the Political

Economy of Publishing', University of Leicester, 1977 (mimeo); Annand Mattelart, 'The New Multinational Educators', IAMCR (International Association for Mass Communication Resarch), World Conference, Leicester ' 1976 (mimeo).

countries that offer the best cost levels and facilities for marketing these products internationally. The effects of this kind of transnational production on local production have not been well documented. The two case studies undertaken in Argentina and Thailand illustrate in particular the feeling that, because of foreign influence on an area as sensitive as cam· munications, it is necessary to ensure the country's own cultural integrity and national independence. While various international bodies are engaged in formulating guidelines for the TNCs in general, much less attention is paid to the RNCs in communication . It is sometimes suggested that the present imbalance in world information flows should become the subject of negotiation . in international forums in the same manner as trade and fmance. Some countries have introduced concrete measures to control foreign mass media influence. This is done by a quota system complemented by national laws and taxes for imported films. However, as demonstrated in the two case studies, once foreign influence has become dominant it has been very difficult to introduce and enforce laws designed to stimulate national film and television industries and decrease foreign dependency. TNCs in film and television have often used the methods of eo-production and co-fmancing. As indicated by the present study, the dominant companys' attitudes towards these forms of co-operation vary. As far as the receiving countries are concerned, these arrangements might offer one of the few possibilities of having some say in the production of international film and television programmes. There exist examples of this kind of co-operation between countries with different social systems. One area for critical research might be the study of past experiences in eo-production and eofinancing, particularly how such arrangements can support the goals of national development and cultural policy. The Cultural implications of the TNCs are multidimensional. The strong foreign influence on national film and television has led many researchers and political figures to ask what the cultural identity of a people or cultural sovereignty actually is in the aera of universalized leisure culture. Communicatio n is seen as an area of economic and cultural life that should be particularly protected against foreign penetration because it is essential to national and cultural identity and to the improvement of the quality of life. However, the problem exists, not only between nations but also

49

15

J

The Political Economy of the Media I

628

between the local elite created in part by the transnational business culture and the other segments of the population. Some of the economic implications of the TNCs, such as heir impact on domestic media, consumption and employment, deserve further study. One can also ask to what extent the TNCs' interests in profit-making, conquering markets, etc., conflict with national development programmes and the communication policies of developing countries. Foreign-made films and television programmes also affect the flow of capital away from the national media industry. The present studies have shown that importation of television programmes into small countries tends to increase rather than decrease as a result of the economic difficulties of many local broadcasting companies. Foreign m:;ss-produced programmes are cheaper to use than locally produced programmes. The Thai case study raises the question of what should be the optimum duration of broadcasting time in small and developing countries in order to avoid becoming too dependent on foreign sources. The TNCs are actively entering the field of mass education, particularly by introducing new technology. The big electronic companies have educational divisions and are increasingly interested in the traditional mass media. A detailed study has not yet been made of the extent to which the new educational techniques, such as the utilization of satellites for educational purposes, the use of audiovisual teaching materials or electric data processing affect dependency on foreignbased TNCs. Usually the introduction of a new medium, as shown by the introduction of television into Thailand, takes place without much public discussion and critical evaluation of its social and cultural impact. It is not quite clear, for example, how the use of space communication or computers will help to achieve a more balanced flow of information or improve international understanding. The tentative general conclusion of the present collec

tion of studies suggests that the international production and dissemination of information, at least in the case of film and television, is highly dependent on some internationally dominant companies. The TNCs' impact is different in various countries. According to the present studies transnationalization in the mass media is especially apparent in the hardware industry, and modern communication technology makes the relationships between hardware and software more problematic. One of the reasons for the transnationalization of the electronics industry has been the demand for economies of scale in production and a high profit margin. Economies of scales logically lead to export and such production requires cheap labour. The transnational electronics industry tends to establish itself in areas where labour is cheaper and where there are markets for export. Highly skilled labour, however, as well as research and innovation activity are kept in the home countries. Obviously, the TNCs in the electronics industry vary in their behaviour, and it may be erroneous to group them !all in the same category. The studies presented here suggest that government action to control foreign influence in the mass media may have very opposite effects in different socioeconomic conditions. In principle, transnational mass media are allowed to operate, produce or maintain services in other countries because their presence is thought to be of value to the country and to the information flow and therefore to better international understanding and peace. At present, the world production and dissemination of films, television programmes and other audio-visual material are characterized by a certain imbalance. This imbalance can be corrected only by the adoption of national and international communication policies that strengthen the creation of alternative ways and means of mass communication, especially the creation and promotion of'national cultural industries'.

[30] Cultural Autonomy Threatened

very type of human society is characterized by the necessity to adapt

E its environment. For this adaptation human beings develop a series of direct and indirect relations with their environment. The into

direct relations constitute the cultural system of a society. This system comprises three types of adaptive relations: • • •

Instrumental: the instruments (techniques) human beings develop and apply Symbolic: the symbols with which human beings communicate Social: the patterns of social interaction which people create to carry out the varied tasks of life

The development of these adaptive relations is an inherent aspect of every society's struggle to survive. Crucial for survival will be the adequacy of a cultural system vis-a-vis the environment in which a society finds itself. Different climatic conditions, for example, demand different ways of adapting to them (i.e., different types of food, shelter, and clothing). The adequacy of the cultural system can best be decided on by the members of the society who face directly the problems of survival and adaptation. They are in the best position to strike the balance between a society's environment and its material and immaterial resources. Critical for a society's chances of survival are the internal capacity and external freedom to develop its cultural system autonomously. Cultural 50

1

The Political Economy of the Media I ·

630

2

The Political Economy of the Media I

CULTURAL AUTONOMY IN GLOBAL COMMUNICATIONS

CULTURAL AUTONOMY THREATENED

autonomy is fundamental to the independent: and full development of every society. Since environments in which societies have developed have always been diverse, we are confronted in human history with a great variety of cultural systems. Today, however, we see the rapid disappeara~ce of the rich variety of techniques, symbols, and social patterns developed under conditions of relative autonomy. A quick review of my own experiences of the international scene amply illustrates this point. o

o

•

•

o

o

o

•

• •

631

3

•

U.S. television entertainment fills in large portions of air time in many countries. Moreover, local prograt;n~ are produc~d according to U.S. formats. Even small televtston networks m poor countries unquestioningly follow the Western example of broadcasting as many hours as possible. Some try to fill. 6 to 10 hours daily. Such a practice then pushes these networks tnto the open arms of Theo Kojak and Starsky and Hutch. Where the production of an authentic local program may cost $1000, the local station owner may import North American culture for less than $500. • In Central America, school children read in their U.S.produced textbooks that the Indians living in lands with large gold deposits did not realize its value until the Spaniards told them. In gratitude, the Spaniards taught them reading, writing, and belief in God. The Indians began to work for the Spaniards voluntarily. • Many broadcasts from All India Radio are loyal copies of BBC models. The most important Indian newspapers could have been edited in England. The Indian film industry followed the Hollywood path by becoming caught up in the Western preference for sex and violence. . • In its gigantic advertising campaign, IBM assures NavaJO I~ dians that their cultural identity can be effectively protected tf they use IBM typewriters equipped with the Navajo alphabet. • In Algeria, the influence of the French language continues to be so strong that the daily El Moudjahid sells ten times more copies of the French than the Algerian edition. o The millions of copies of Latin American women's magazines disseminate the North American ideal of the efficient, welldressed, nonpolitical housewife and homemanager. • In many Third World countries, babies die because imported milk powder replaces efficient and cheap breast-feeding.

In a Mexican village the traditional ritual dance precedes a soccer match, but the performance features a gigantic Coca-Cola bottle. In Singapore, a band dressed in traditional Malay costume offers a heart-breaking imitation of Fats Domino. In Saudi Arabia, the television station performs only one local cultural function- the call for the Moslem prayer. Five times a day, N.orth American cops and robbers yield to the traditional muezztn. The incredibly rich local musical tradition of many Third World countries is rapidly disappearing under the onslaught of dawnto-dusk North American pop music. For starving children in the Brazilian city of Recife, to have a Barbie doll seems more important than having food. In Senegal, a mobile video unit intended to produce popular programs in the village stands idle; the producers of local programs prefer the expensive studio modeled after Western standards. In South Africa, skin cream is available that lightens a black complexion. Advertising suggests that black cannot be the ideal of beauty. For the poorest people of Latin America, advertising is an important source of information. North American agencies tell them that the good life is the life of the average consumer in the U .S. Venezuelan housewives are encouraged to identify their happiness with possessing a refrigerator or dishwasher. Advertisemems advise the worker in Bogota to escape from the daily routine by means of a U.S.-made Ford or a U.S. airline. Nigeria announces a Western calor television system when the cost of a black and white set would absorb the annual income of an average farmer. On the Indonesian isle of Bali, performers of traditional Ramayana ballet increasingly adapt their presentations to the taste and comprehension of Western tourists.

This summary is only a selection of the images that thoughtful people in the Third World are increasingly confronting. These observations reflect a trend of cultural awareness that has been well documented in a series of studies.l Admittedly, we need more research on precisely how the process of cultural "imports" affects the receivers in the long term, especially with respect to cultural norms and behavior. One conclusion still seems unanimously shared: the impressive variety of the world's cultural systems is waning due to a process of "cultural synchronization" that is without historic precedent. It appears that public recognition of cultural diversity is kept alive only on the

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folkloric level when traditional ceremonies·, flags, and dress adorn international gatherings. Throughout history, cultures have always influenced one another. The richest cultural traditions emerged at the actual meeting point of markedly different cultural patterns, such as the Sudan, Athens, the Indus Valley, and Mexico. The result of such confrontations, as in the case of African and Arab traditions, was an enriched-not destroyedculture. With few exceptions, the cultural history of humankind is not characterized by one-way traffic in cultural confrontation. To be sure, there have been notable and decisive exceptions, as is clear from the destruction of the Aztec and Inca cultures or the Brahmin kingdom of Champa. But the more general characteristic is that cultural systems either maintain their integrity or develop a more pluralistic and richer pattern. For example, in the process of a two-way exchange, dominant nations with more primitive cultural systems may adopt the more refined systems of the nations they conquer. One illustration is that of Germanic kings who tried to convey classical Roman culture to their people after seizing power in the western Roman empire. Moreover, in the interaction between "high" and "low" cultures, the latter is often far from passive. In many instances, the bearers of the low culture will actively and selectively adopt only certain cultural traits from the other culture. Some Indian tribes incorporated the Spaniards' use of horses; others, like the sedentary Pueblo Indians, did not. In many cases, even the great empires of history have allowed dominated peoples their own cultural systems. Often this was a conscious strategy for the maintenance of their position of power. Such a procedure is evident in European colonial history, where the distance between the exclusively Western culture and the indigenous culture is kept as wide as possible. In the second half of the twentieth century, a destructive process that differs significantly from the historical examples given above threatens the diversity of cultural systems. Never before has the synchronization with one particular cultural pattern been of such global dimensions and so comprehensive. Never before has the process of cultural influence proceeded so subtly, without any blood being shed and with the receiving culture thinking it had sought such cultural influence. It is remarkable that this process should happen exactly when technological development seems to facilitate optima] possibilities for mutual cultural exchange. Modern communications technology is offered to the world with the suggestion that the expression of cultural diversity is now definitely guaranteed. In reality, however, all the evidence indicates that centrally controlled technology has become the

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instrument through which diversity is being destroyed and replaced by a single global culture. In international relations the preservation of cultural identity is increasingly a decisive issue. Cultural influence is now a central aspect of the military, political, and economic expansion of the Western industrial states; analysis of cultural penetration provides an essential key to understanding the mechanisms of the international metropolissatellite structure. "The fundamental metropolis-satellite structure has remained the same throughout, but the basis of metropolitan monopoly has changed over the centuries." 1 This observation by Andre Frank · accurately reflects the experience of many developing countries in the past half century. In the period of colonialism, the dependent satellites were kept under metropolitan control by political and military measures. After the formal recognition of their political independence, political-military coercion became the exception rather than the rule, with some notorious exceptions, such as Guatemala ( 1954), the Dominican Republic ( 196 5), and Vietnam. For many nations of Africa, Asia, and Latin America, the postcolonial period cannot be labeled independent, because of the effective maintenance of the dependency structure by such economic roots as loans, aid, investments, and trade conditions. In addition to this economic element, in the second half of this century there is a growing importance of yet another-and in the long run strongerbasis of the metropolis-satellite structure: the mechanism of cultural synchronization. In the international literature, this phenomenon is usually described as cultural imperialism. I give preference to the concept of cultural synchronization, which is more precise for my purposes. In my view, cultural imperialism is the most frequent, but not exclusive, form in which cultural synchronization occurs. Cultural synchronization can take place without imperialistic relations constituting the prime causal factor or even without any overt imperialistic relations. The latter is illustrated by the adoption in the Soviet mass media of so many Western symbols and production formats. Exogenous influence may ·be imposed on the receiving cultural systems or it may be actively invited by them. It is important to stress that even in the latter case, the synchronization with a foreign cultural system will very profoundly affect a society's long-term independent development. The process of cultural synchronization implies that a particular type of cultural development in the metropolitan country is persuasively communicated to the receiving countries. Cultural synchronization implies that the traffic of cultural products goes massively in one direction and has basically a synchronic mode. The metropolis offers the model

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wit~ v.:hich t~e receiving parties synchronize. The whole process of local social. mvenuveness and cultural creativity is thrown into confusion or is defimtely ?estroyed. Unique dimensions in the spectrum of human values, wh1ch have evolved over centuries, rapidly disappear. If cultt~ral aut?nomy is defined as a society's capacity to decide on t~e allocation of Its own resources for adequate adaptation to its envuonment, then cultural synchronization is a massive threat to that autonomy .. Global cultural synchronization locates decisions regarding the a!locauon of resources extraterritorially. Exogenously developed tec~mques, _symbols, and social patterns are introduced more on the basi_s of the Interests and needs of the metropolis than on the needs and envt.ronment of the host country. The indiscriminate adoption of foretgn technology can obviously produce profound cultural effects. For examp!e, agricultural mechanizat!on has influenced decisively the allocation of labor resources and, m turn, the pattern of life of large parts of the labor force. M~st striking- and central to th~ concern of this study- is the scale on whtch the cultural systems of Thud World "satellite" countries have over the past three ~ecade.s adop~e~ techniques, symbols, and social patterns from the htghly mdustnahzed metropolitan countries. The transfer of culture f~om metropolis. to satellite is historically not a new phenomenon; but smce the 1950s, 1t takes place in an unprecedentedly large_ manner. !h~ 1950s we~e the years of significant transnational expansiOn of capitalist economies and decisive transnationalization of indust~ial production. 3 !he agents of the metropolitan economy, spectfically the trans.natt?nal corpor~tions, are introducing throughout the world a revolu~10n ~n commercial thinking: the world should be seen as one economtc umt.4 The transnational firm no longer recognizes the validity of the autonomou~ national state or. national culture. Consequently, as Jacque~ Matso?rouge, IBM prestdent of the European division, states: t?e _bas~c confltct of this new per~od is "between the search for global opttm.tzauon of resour~es and ~he mdependence of nation-states."5 Transnauonal firms constder natiOnal boundaries politically, economically, and culturally obsolete and unable to define business requirements or ~onsumc;r trends. The world is one marketplace and the world customer ts esset?ual for that CI?ark.et. World market and world customer demand an optimal synchrontzauon of cultural values so that authentic national characteristics ?o not jeoJ?ardize the unity of the transnational system. _The satelltte countries therefore are incorporated in the transnat_t~na_l system by . the persuasive marketing of cultural values that legmmi~e metropol~ta? interes~s. T~e concept of development, for example, 1s marketed m Its equation wtth the concept of modernization.6

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The developed nation is the modern nation that achieves the per capita income and the rate of mechanization and urbanization of the advanced industrial state. In this move toward strengthening the cultural basis for the international dependency structure, the communication industrial complex is a. vital element. The international flow of communications has, in fact, become the main carrier of transnational cultural synchronization. Cultural synchronization and its function in the maintenance of the metropolis-satellite structure cannot be understood without knowledge of the role of the ruling class in the satellite countries. The class of internal colonialists is the crucial link between foreign interests and the exploited masses. A notorious example is the traditional elite of Latin American society-wealth y families who own the national newspaper chains and benefit greatly from alliance with the transnational corporanons. A classic example of the relation between a local elite controlling the media and transnational communication interests is the situation faced by Allende in Chile when he was elected in 1971. A major part of Chilean magazine publishing was dominated by the Edwards family, who also owned the influential and widely circulated newspaper El Mercun"o and had exclusive rights for the AP, Reurers, and Agence France Presse news agencies. Edwards was president of the Inter American Press Association; the president of the Edwards group was at the same time president of IBEC (International Basic Economy Corporation). "Through this stock company, numerous national firms were controlled by North American investors, the majority of whom belonged to the Rockefeller group."' The national elite provides the nationalist legitimization of the dependency system, the local marketing knowledge, and the "native" capital, which represents in many dependent countries an increasing share of industrial investment. Nationally dominant classes are the convenient intermediaries for the global spreading of a profit-oriented mercantilistic and consumer culture. One must be aware that cultural influence through the communications industry does not always occur in a direct way. Many people in Third World countries are scarcely touched by the modern electronic and print media. Television, newspaper, films, and books are still inaccessible to millions of people in Africa, Asia, and Latin America. It is the urban elite and middle class who are most exposed to the North American influence on the local communication industry. If the ruling elite accept the imported social models, however, their action will certainly be decisive for the economic and cultural environment of the rest of the population.

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Historically, industrialization has transcended the national borders and become global. In this transnationalization, the configuration of cultural values is inevitably mediated on a global scale, becoming the cultural basis in dependent countries for reproducing the modes of production, distribution, exchange, and consumption of the metropolis. As part of this global marketing system, the cultural commodities manufactured in the metropolis-films, television series, pop musicare massively exported to be reproduced, distributed, exchanged, and consumed in the satellite countries, thus competing with indigenous cultural values and cultural forms of expression. 8 In the process of transnationalization, the public media are the major cultural institutions mediating the values inherent in industrialization. Their mode of mediation is generally synchronic. This means that in most social systems the public transmission of information and entertainment is guided by a concern to create a consensus regarding societal goals and their underlying values. This synchronization is made operative on a global scale by the transnational communications industry, which concomitantly with the transnational industrial expansion of past decades has extended the production and distribution of its goods and services from national to international markets. Two factors are of vital importance in this process. On the one hand, in a number of branches of the communication industry, production for the home market remains the principal objective. Consider the examples of the international news agencies UPI and AP. Their most important market (between 60 percent and 70 percent of total revenues) is the public media in the United States; the production and ~istribution of their international product is thus guided primarily by the logic of the local national market. On the other hand, some products of the communications industry, such as many of the television series, cannot hope to cover production costs with revenues from the home market alone. Costs for an average one-hour television drama, such as MCA's McCioud, Baretta, or Kojak, amount roughly to $400,000. Sales to television stations in the United States of America cover 75 percent of these costs, so that export becomes an evident necessity. Thus, a mass product has to be manufactured that has a sufficiently universal appearance to be salable anywhere in the world. With the global expansion of the communication industry, television and film production companies, news agencies, advertising firms, and publishing houses have become transnational corporations of impressive scope. In their strategy of diversification, many industrial corporations have adopted communication as a profitable investment. BetWeen 10 and 15 percent of the largest corporations in the world have considerable interests in the international communication trade.

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Increasing concentration of economic power has developed: just as in other branches of industrial activity; 75 percent of today's International communication market is controlled by some 80 uansnational corporations. These co~porations. introduce value patterns which ~re native to the metropohs but whtch have no relauon to the genutne social needs of the receiving countries. One analyst notes that in Latin America, the foreign-dominated radio and · television systems carry values that are alien to the real needs of those societies. Creation of social myths and false heroes a~d ov~remphasis on en_terr~inm~nt and violence are all instruments of ahenatwn and cultural dtsonentauon. 9 Studies by the Finnish researchers Kaarle Nordenstreng and Tapio Varis indicate that entertainment is heavily represented in the one-way traffic of television programs in the world, which leads to. a glo~al spreading of cultural values. that pe~ade the soap opera_ and en me s_enes produced in t~e metropohtan n~uons. 10 ~~e mdusmal corporauons, however, provtde more than JUSt televtswn programs; they also graciously entertain the world with films, records, cassettes, women's magazines, and children's comics. Illustrative examples of the last come from the Wale Disney Corporation. Although it is claimed that the characters in the comic strips are non political, a closer analysis shows that the fantasy world of Disney has a strong poHtical orientation . 11 • Although the international communications flow tends to constst mainly of entertainment products, the role of international news in transferring values should not be underestimated. The selection of news by the few large international news agencies undoubtedly reflects the values of metropolitan countries. Most developing countries are dependent on this choice for their information on events outside their country. They receive international news as well as news··about themselves via the news centers in New York, Paris, or London. "In the absence of a national news agency in Thailand, India receives only the A~erican or British version of events in that country. How that keeps That land and India from understanding each other more deeply and readily is for those who know how to judge." 12 The transnational communication-industrial complex is apparently characterized by an impressive variety of structures and contents; in fact, however, there is great uniformity. Both organizational structure and product are North American. Evidently the United Kingdom and France are also important exporters of media institutional patterns and products. The United King~om and France are St_Ibcente~s o~ the North American communications tndustry, because thetr organtzattonal structure and their media contents follow North American models (although there are French and British peculiarities that played an important ~ole in the synchronization process occurring between these ~etropoln_an subcenters and their own satellite countries). Moreover, m the Thtrd

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CULTURAL AUTONOMY IN GLOBAL COMMUNICATIONS

World there are media exporters of some scope, such as Egypt and Mexico, although their own programming content is basically an adaptation of North American examples. Even the socialist countries are following the North American lead in many respects, despite the relatively infrequent flow of communications between East and West. Of the various reasons for North American domination, the most important is economic. The enormous size of the media market in the United States of America has made it possible to develop very large communications corporations. Ready access to finance capital, technology, and marketing channels have also been important factors in the rapid creation of operations on a large scale. Such a strong national base has facilitated the expansion into the international market. The active collaboration between the communications industry and North American political, financial, and military circles has further strengthened such international expansion. This combination of economic and political factors has made it possible for corporations based in the United States not only to exploit technological possibilities but also to determine the popular media formats. Thus, the communications industry in the United States was always one step ahead of the rest of the world, especially in the critical period after World War Il. Other countries could be offered a ready-made model with prices so low that competition was excluded.u In analyzing the process of cultural synchronization and the role of the communications industry in this process, one· must take into account the wide range of content and format employed. These include not only news and entertainment but also educational materials, children's comics, women's magazines, recorded music, computerbased data systems, optical fibers, and satellite communication systems. For a clear illustration of how the process of cultural synchronization functions, it is helpful to analyze in greater detail two of its vital channels: transnational advertising and the transfer of communications technology.

639

TABLE 1 Top Ten Advertising Agencies in United States and World Income TOP TEN AGENCIES INU.S. INCOME (U.S. Agencies: Gross Income in millions)

Rank 1 2 3 4 5 6 7 8 9 10

Agency

Younf. & Rubicam ]. Wa terThompson Co. Ogilvy & Mather Im'l. Ted Bares & Co. FoO£e, Cone & Belding Leo Burnert Co. BBDOim'l. Grey Advertising Doyle Dane Bernbach McCann-Erickson

l,

J,,

1978

$149.7 118.2 106.8 93.4 95.9 94.5 91.3 74.7 72.1 69.4

$118.1 107.2 89.8 54.9 75.7 89.0 80.1 65.2 64.5 59.6

TOP TEN AGENCIES IN INCOME OUTSIDE U.S.

ll

I

1979

(U.S. Agencies: Gross Income in millions)

Rank 1 2 3 4 5 6 7 8 9 10

Agency

McCann-Erickson ]. Waiter Thompson Co. SSC&B Ogilvy & Marher Im'l. Young & Rubicam Ted Bates & Co. D'Arcy-MacManus & Masius BBDO Im'l Leo Burnett Co. Campbell-Ewald

1979

1978

$181.0 135.7 119.9 99.4 97.9 82.6 70.6 53.5 48.6 44.6

$151.1 114.9 100.9 82.5 85.8 76.0 54.7 52.3 39.2 38.9

TOP TEN AGENCIES IN WORLD INCOME (U.S. Agencies: Gross Income in millions)

Rank 1 2 3 4 5 6 7 8 9 10

TRANSNATIONAL ADVERTISING \Np are expanding our activities in tlw .U<"a oi

total t ommunications.

J. Walterlhompson"

The most striking example of a vehicle for cultural synchronization comes from the uansnational advertising industry. In 1979, worldwide advertising revenues for the 50 largest agencies was $3.9 billion. Of these, the 10 largest agencies in the United States garnered some 46 percent of this amount in both domestic and foreign revenues (see Table 1).

Agency

]. Waiter Thompson Co. McCann-Erickson Young & Rubicam Ogilvy & Mather Im'l. Ted Bates & Co. SSC&B BBDO Int'l. Leo Burnett Co. Foote, Cone & Belding D'Arcy-MacManus & Masius

1979

1978

$253.9 250.4 247.6 208.2 181.0 153.2 144.8 141.1 137.6 128.0

$221.5 211.0 203.8 168.4 133.1 133.1 120.4 128.3 110.0 104.7

Source: Advertising Age, 19 March 1980, p. l. Reprinted wirh permission of Crain Communications, Inc.

11

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CULTURAL AUTONOM Y THREATENED

The top 10 North American agencies control 40 percent of their domestic market. Their leading internatio nal position is owing to the fact that the largest global advertisers are the best clients. The 10 largest clients are Procter & Gamble, General Foods, Bristol-Myers, American Home Products, General Motors, Unilever, Ford, Sears Roebuck, R.). Reynolds Industries, and Colgate-Palmolive. These corporations spend on average 30 percent of their advertising budgets on the international market. Transnatio nal advertisin g is thus mainly propagan da for the products of the l~rgest North American transnatio nal corporatio ns, propaganda designed and packaged by the largest North American advertising agencies. These major agencies are dominant not only in developed countries, such as Australia, where the top 10 U.S. agencies control 38 percent of the advertising market, or the Netherlands, where their control is 43 percent, but even more so in Third World countries, where over 70 percent of national advertising markets are controlled by agencies based in the United States. The transnational advertising industry is characterized by strong growth- between 1970 and 1978, advertising budgets of the largest advertisers in the United States have doubled; strong concentra tion-of the 50 largest advertising agencies in the world in 1977, 36 have owners in the United States and account for 81.5 percent of the revenues of the 50; and strong transnationalization (see Table 2). The most important channels for the advertising agencies in developing local markets are the public media. The international marketing strategy for the expansion of corporations based in the United States is therefore intimately linked with the export from the United States of the commercial radio and television model. An increasing number of countries have surrendered to the attraction of advertising revenues and allowed advertising to be part of regular radio and TABLE 2

Participation of Foreign Advertising Agencies in National Advertising Sales (1975)

Countn'es Industrializ ed countries (minus United States) Industrializ ed countries (including United States) Third World countries

Percent Foreign

joint Percent Venture

Percent National

42.1

7.1

50.8

18.6 62.2

3.1 6.7

78.3 1.1

Source: "The Role of Trade Marks in Developing Countries," Geneva, UNCTAD, TD/B/C.6/ AC.3/3/Re v.l, 1979, p.34.

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13

television programming. In Th~rd World co~ntries particular!~. advertising messages take up a considerable poru~n of br~a?cast ume_ (~ee Table 3). In some Latin American countnes, television advemstng accounts for more than 25 percent of the total air t~me, princip~lly because advertising films are a cheap way to fill expensive broadcasting ttme. The messages produced and distribute d by the transnat~onal advertising agencies can be divided _into two ca~egori~s: informauve and J?ersuasive. Transnational indusmal corporauons wtll spend money mamly on advertising for consumer goods ~uch as deterge':ltS, prepared foo~s. etc. Compared with total sales, a h1gh percentage IS spent on advertising. The largest United States producers of con~~mer goo?s spend an average 6 percent of their sales budget on advemsmg; considerably l~ss money is spent on advertising for capital goods su_ch as heavy machmery, office equipmen t, lorries, etc. The largest Umte~ States producers of capital goods spend an average 0.8 percent of thetr sales budget on advertising .n .. . It is important to observe that the advemsmg for consumer goo_d~ IS generally of a persuasive nature. This means that for go_ods requmng the greatest amount of informatio n, the actual in~ormanve content of the advertising about them is the smallest. For capital goods, hov:'ever, where the target audience is usually rather well-informed, the mformative content of the advertising is very significant. Take, for example, the detailed descriptions of machinery in advertising in tr~de magazines. Transnational advertising aimed at Third World _cou_nmes, however, floods them with messages for consumer goods whtch mform very little but persuade very strongly. . . The number of trademarks registered in Third World couotnes mdicates the rate of their introducti on and the source of foreign consumer goods. In 1974, 49.9 ~ercent of the newly_registered trademarks w~re foreign, compared wtth 27.4 percent ~n 196_4.~ 6 These ~oretgn trademarks come mainly from the highly mdustnalt zed counmes (95 percent), especially the United States (34.4 percent), Japan (15.l_percent), United Kingdom (12.2 percent), and the Federal Republic of Germany (9.2 percent). TABLE 3

Percentage of Airtime for Advertising

Countries Western Socialist (Eastern Europe) Third World

Radio

Television

5.8 0.9 19.8

4.9

Source: "The Role ofTrade Marks in Developing Countries," Geneva, UNCTAD, TD/B/C.6/ AC.3/3/Re v.l, 1979, p.30.

2.2 11.8

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More than three-quarters of these new registrations concern consumer goods: chemical products ( 16.2 percent), food ( 11.2 percent), tobacco (3.2 percent), textiles (12.8 percent), and, especially, pharmaceutical products ( 16.7 percent). In the case of this last category, it is striking that the same product is often sold under many different trademarks. The advertising budgets in the pharmaceutical industry are exceptionally high, almost 30 percent of their sales budgets. Supported by extensive advertising campaigns, products are sold that falsely claim to have a quality superior to products lacking trademarks. As a consequence of these campaigns, the primary target audience, the medical doctors, get very little objective, reliable information. Many doctors are inclined to prescribe these pharmaceutical products on the basis of the advertising; they thereby risk prescribing ineffective products.'7 Western pharmaceutical products are often grossly overpriced. In Sri Lanka, for example, a certain antibiotic was sold for US $17 per 1000 capsules; the state pharmaceutical institute discovered after testing that the same product could be purchased in its original form for US $6 per 1000 capsules. 18 Advertising for the products from the largest United States producers of consumer goods contributes to the definition of basic needs in Third World countries. Products are not adapted to suit local needs; local needs, through advertising, are adapted to the products. Thus, consumption patterns are being created that lead to a wasteful spending of what little is available. The poorest in Third World countries spend a considerable part of their income for products which make them even poorer. In many Latin American countries, peasant women are receiving training as "promotores de salud," a type of paramedic similar to the Chinese "barefoot doctors." After their course of instruction, the Red Cross gives them a basketful of products from Bayer, Ciba-Geigy, Merck Sharp and Dohme. These products will then be sold in remote villages. Often, however, the villages have very effective traditional herbal medicines at their disposal. In Bolivia, for example, advertising for Alka Seltzer has increased sales, even though there are more effective and cheaper alternatives, such as mint tea. In many areas of Peru, the population is thoroughly convinced that anything bought in the pharmacy has to be better than natural products. Every self-respecting family has Aspro, which they use with less knowledge and more unpleasant side effects than they do the naturally occurring medicines. Aspro is also far more expensive.I9 Another example of abuses in advertising concerns the sale of tobacco. Cigarette sales in Third World countries have doubled over the past 10 years. The large transnational tobacco firms have discovered a rapidly growing market in these countries and strongly encourage the

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smoking of cigarettes through their aggressive advertising campaigns. A particularly striking fact is that the largest tobacco .firm in the world, British-American Tobacco, sells cigarettes in Third World countries containing more nicotine than similar ones in domestic markets. 20 A cultural system which would be adequate for the poorest persons system would mean a set of instrumental, symbolic, and social that in relations that helps them to survive in meeting such fundamental needs as food, clothing, housing, medical treatment, and education. Such needs are not met if they are identified with the consumption of Kentucky Fried Chicken, Coca-Cola, Aspro, or Peter Stuyvesant cigarettes. Survival has to be stressed, because the introduction of inadequate adaptive methods is indeed a matter of life or death. This is most dramatically demonstrated in the case of baby food in Third World countries. Major producers of food products, such as Nestle, Cow & Gate, American Home Products, and Bristol-Myers, have made great efforts to advertise bottle feeding as the ideal type of baby food. Radio programs in native dialects and "milk nurses" have assisted in the successful advertising campaigns, which have instilled an almost magical belief in the white milk powder of the white man. Replacing breast-feeding by bottle feeding has had disastrous effects in many Third World countries. 21 An effective, adequate, and cheap method has been exchanged for an expensive, inadequate, and dangerous product. The expense for the milk powder taxes an already strained family budget, sometimes up to 35 percent. Many illiterate mothers, unable to prepare the milk powder correctly, have not only used it improperly but have also inadvertently transformed the baby food into a lethal product by using it in unhygenic conditions. The baby food drama painfully illustrates how serious the contribution of advertising to cultural synchronization can be. 22 Richard Barnet and Ronald Muller have described the impact of uansnational advertising on Third World countries: The world managers argue that they are cultivating tastes and educating for progress. Marketing the pleasures of becoming a man of distinction who knows and drinks good whiskey, of exercising power on the highway at the wheel of a new Fury, or escaping to the South Seas via Pan Am offers the people of poor countries the prospect of the "good life" to which they can aspire. 23

This marketing strategy attempts to take advantage of the dreams of the poor of being identified with the rich. Barnet and Muller point to this in quoting studies by advertising consultant Professor Evangelina Garcia at the Central University of Venezuela. " 'They think that there are rich and poor,' she explained, 'but that all have access to the same consumer goods they hear about on the transistor or see on the TV. It is

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a matter of luck whether they have the money to buy them and luck can change.' "24 Advertising also brings about an identification with the culture of the more affiuent social classes of the developed world. " 'An important impact of imported advertising campaigns,' Professor Garcia points out, 'is that values in the U.S. are reproduced in Venezuela, in relation to sex, love, prestige, race, etc .... Advertising,' she concludes, 'creates a psychological dependence.' " 2 5 The acceptance by Third World countries of the patterns of consumption present in highly developed countries can also contribute to serious disturbances in the national economy, because these patterns demand a much higher level of individual and national wealth. As a result of this bombardment by advertising, the elite sectors, with higher incomes, tend to be integrated increasingly into the international economy, while the poor, spending scarce resources on unneeded things, lag farther behind in essentials such as health and education. This creates a widening gap between rich and poor and contributes to an explosive social disintegration. The important point is that transnational advertising does much more than sell products and shape patterns of consumption; it informs, edu.cates, changes attitudes, and builds images. 26 In doing all this, transnational advertising contributes significantly to the cultural synchronization of the world.

TRANSFER OF COMMUNICATION TECHNOLOGY Another major carrier of transnational cultural synchronization is the current form of transfer of technology. The control of technology is an essential element in global economic, political, and cultural relations. This control is monopolized by the largest industrial corporations, which have access to the funds for research and development and which are the proprietors of the majority of patents and licenses for technology. In many of the Third World countries, 60 to 90 percent of all patents are owned by foreign corporations. In the area of communications, research and development for all the new technologies, such as satellites, optical fibers, microcomputers, and laser beams, are controlled by a small group of the largest transnational aerospace and electronics corporations. The more conventional techniques, such as printing, are manufactured in only a few industrialized countries and have to be imported by most Third World countries. In many of the Asian, African, and Latin American countries, radio and television stations have been built by British, French, or United States corporations, which manufacture communications equipment. These same firms also instruct personnel in the use of the equipment, thus creating and maintaining Western standards of professionalism and organizational structure.

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Contrary to many expectations, the volume and structure of technolqgy transfer from metropolitan to satellite countries in recent decades has not contributed to the independence of the latter, but instead has often increased the dependence. In the case of Algeria, for example, the desire to speed up the development process through more effective telecommunications has meant that the whole national communications-infrastructure was in effect handed over to liT, GTE, Ericsson, and Nippon. With the transfer of technology, the following questions must always be posed: Which social group receives the economic, political, and cultural benefits? In the case of communication technology, it is especially important to ask, "Who benefits economically; that is, who gets more income from the application of new communications techniques?" Moreover, who benefits culturally? Who is going to use the new technology? Who can exploit their prestige value? Which groups can communicate more effectively by adopting this technology? In most Third World countries, past experience indicates that" these benefits will accrue principally to three groups: the transnational corporations which deliver the products; the transnational banks which finance the purchase of the products; and a "new class" of officials- managers and military personnel connected with the ruling government who will be among the few able to use tlie products. One of the effects of the process of technology transfer, as it is presently occurring in many Third World countries, is to create among ruling elites an identification with the cultural system of the exporting country. Such an identification with a foreign culture has a number of important consequences: 1. A technology implies an institutional· structure to support the

administration, continued maintenance, and marketing of that technology. When a technology is imported, it is inevitable that at least some of the supporting social structure will also be introduced. The importation of the communication media is a classic example of how the whole institutional complex and administrative organization were brought in along with the supposedly "value-free" technology. Many countries, in choosing to adopt United States radio and television technology, have also introduced the United States model of commercial media. This structure was originally designed to suit specific United States commercial interests. The professional staff, which must maintain the hardware and produce the programming, receives a Western-oriented training and usually embraces Western professional norms. Along with

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this technical training, !hey internalize a foreign professional ideology and learn to define their social status in accordance with this ideology. 2. The communication technology introduced, such as aroundthe-clock television, is often very inappropriate for lessdeveloped, largely rural countries. Television, for example, is useful only for a small urban elite; it places a priority on social services for this small elite instead of on the masses of rural peasants, who should receive the higher priority in national development. As was noted above, technology introduced from a developed country is more often oriented toward a sophisticated level of consumption rather than toward a solution to the pressing basic social problems. This aggravates the gap between rich and poor and enhances national disintegration. Moreover, the direct importation of technology impedes any effort toward using local resources and stimulating creative talents in the development of a technology appropriate for the specific conditions of that country. 3. At present, the transfer usually involves the end product of technology and not the knowledge which permits independent research and development and which is at the heart of technological control. The basic scientific and engineering knowledge is a commodity jealously guarded by corporate interests and treated as a proprietary right. What is at stake is a cultural value: the rejection of scientific and technological knowledge as a public good. Worthy of attention is the present tendency in industrialized nations, especially in the United States, to make easy access to scientific information, stored in public libraries, the private property of a few large data-processing firms. Only these firms have the financial and technical means to process, store, and retrieve the rapidly expanding volume of information available in the world today. The institution of public exchange of basic scientific knowledge is being replaced as this knowledge is reduced to a marketable commodity. 4. Finally, in the case of some kinds of technology, such as space satellites, the cost of research and development is so great that only the wealthier nations can afford it. Many Third World countries have no access to this more sophisticated technology or, if they do, it is under conditions of economic and political dependence. Often argued is that technology, such as satellite communication, is becoming less expensive over the years, so that

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Third World countries are able to participate in its use. This is deceptive, because the facility of access to satellite communication via leased technology is not the same as having control over the communications system. There have been cost reductions in certain aspects of satellite communication, as evidenced by the figures in Table 4. At the same time, however, the costs of launch and space vehicles have increased considerably during the period, so that control remains in the hands of the wealthier nations. In 1976, the seven space vehicles for the INTELSAT V series of satellites cost US$235 million to b1:1ild and another US$273 million to launch. Since the vehicles themselves are not at their ready disposal, many Third World nations have decided ro build earth stations and to lease transponders. Most commonly, the reasons given for this practice are the need for national int~gration and the improvement of educational and health-care systems. At present, Third World nations leasing transponder capacity from INTELSAT include Algeria, Brazil, Malaysia, Sudan, and Uganda. In the very near future, Colombia, Zaire, and Chile will be added to the list. Regional systems are being planned among the Arab nations and in Latin America. Indonesia has its own satellite system with the Palapa I and II, manufactured by Hughes Aircraft, and now leases to other nations. Yet as a representative of Hughes Aircraft admitted, the Palapa system can be switched off when so requested by Hughes or the U .S. Department ofDefense. 2 7 The issue of transfer of technology has become particularly central, since recent international development strategies tend to seize upon this as the key mechanism for solving inequalities in international communications. In such forums as UNESCO, there seems almost unanimity regarding the necessity to transfer the technological resources from highly developed countries to the Third World in an effort to assist their TABLE 4

Cost Reductions in Satellite Communication

Item

1965 Costs

1975 Costs

Earth stations

Several million$

$5,000 (for the ATS-6)

$22,350

$5,100

$32,500

$1, lOO

Network charge for one hour of prime-time transmission Investment cost per circuit year in orbit

Source: Cees J. Hamelink, "Imperialism in Satellite Technology," WA CC journal, vol. 26, no. 1, 1979, p. 14.

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integration into the global communications system. One may well ask, however, who exactly will benefit from this? There is a good chance, as will be argued later, that expanded global communications technology will be primarily to the advantage of transnational industrial and financial systems. The offer of direct technology transfer is attractive to many Third World countries, but seldom does the cost-benefit analysis take into consideration the potential threat to their cultural autonomy. If the foreign technology is adopted, however, it necessarily influences the allocation of the receiver's resources. For example, the adoption of labor-saving automation technology greatly affects the allocation of human resources in the host country and tends to maintain the existing dependency relations. In general, the key characteristic of the present volume and structure of technology transfer is the strengthening of existing dependency. Highly illustrative is the case of microelectronic technology and its impact on the international division oflabor. According to the doctrine of comparative advantage, it has been projected that whereas the developed countries with their advanced scientific knowledge would specialize in areas of high technology such as nuclear energy, space, and data-processing technologies, the Third World countries, using their low-wage advantage, would specialize in labor-intensive industrial production. A 25 percent share for the Third World in global industrial production by the year 2000 has even been foreseen on this basis. There are, however, a number of problems with this projection.

nology develops rapidly, products soon become obsolete, and in order to move items into the market quickly, it is important to keep costs low. Low wages for assembly are thus a vital factor. In the production of microprocessors (the "chips"), for example, the stage of assembly demands very little training and can easily be carried out in off-shore plants in the Third World. In contrast, design, production, and testing of the integrated circuits demands skilled labor and sophisticated equipment, all of which is handled in the home countries. _ 4. Another reason for maintaining or establishing production facilities in Third World countries are the "free trading zones" (FTZs). Many electronics manufacturers use these for their production processes. Presently, there are some 80 FTZs in the Third World and 40 more are about to be established. Half are located in India, Indonesia, Thailand, Malaysia, the Philippines, South Korea, and Taiwan. They offer many advantages to the transnational corporations, such as tax holidays, government subsidies, no free trade unions, no customs expenses, no restrictions on tmports and exports, no currency controls, and so forth. 5. Many countries where the FTZs are located are expected to become important markets for c:;lectronic products in the 1980s and beyond. Many corporations will want to have production facilities near to these new markets.

1. The low-wage advantage of Third World countries is increas-

The presence of transnational manufacturers of microelectronic products is often of very dubious benefit to the host countries.

ingly undermined by the higher level of productivity in the industrialized countries through the application of microelectronics. Automation makes labor costs a less important factor vis-a-vis investments in advanced equipment and top-level management. 2. There are already indications that industries which might have been expected to move to the Third World are likely to remain in the developed countries. The electronics industry, heavily involved in off-shore operations, seems to be planning new generations of plants in the industrialized countries as a result of automation techniques. 3. At present the Third World still offers an attractive reservoir of unskilled and semiskilled labor for the transnational corporations involved in the development and application of microelectronics technology. The mass production of consumer electronic goods frequently involves a large volume of standardized parts that can be assembled by semiskilled labor. Since the tech-

1. In the electronics industry, the investments per la borer are

relatively low, which makes it easy for the manufacturer to move the whole production process quite suddenly. 2. Approximately 80 percent of the labor force in the FTZs consists of women under 30 years of age, often recruited from peasant households. They are particularly desirable because of their delicate fingers, their working tempo, their readiness to carry out monotonous jobs, and their low salaries (half of what men would earn). In most FTZs, women live in miserable conditions in crowded barracks. When their usefulness ends, they are easily dumped. 3. Electronics technology usually becomes obsolete within about 3 years, which means that in case local plants take over, th~ir products come late on the market and cannot compete wtth the transnational corporations that have meanwhile advanced considerably.

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4. Again, as we saw before, there is ~o transfer of vital technological knowledge. The core of the microelectronics know· how remains firmly under the control of the large transnational corporations, which increasingly strengthen their positions by mutually restrictive agreements on technical information. Third World countries are left with a fragmented production process reduced to extremely simple routines. In this most advanced and very influential technology, the wealthier industrialized countries are carving out the niche that will serve their interests best.

TIIE CENTRAL THREAT TO CULTURAL AUTONOMY: CULTURAL SYNCHRONIZATION In the debate regarding the emergence of a new international informa· tion order, a wide array of issues has been discussed: the representation of Third World countries in news reports in the First World; the domination of radio and television programmin g in poorer countries by foreign imports; the domination of the public media by commercial interests to the detriment of the real cultural and developmental needs of the country; and so forth. However, from the viewpoint of many Third World countries, the central issue is increasingly the threat to their cultural autonomy. This chapter has analyzed in depth why the threat to cultural autonomy is so serious and what are the major operative mechanisms of this threat. The cultural system of a society is here seen as the totality of instrumental, symbolic, and social adaptive relations which have evolved so that the society can create a truly human existence within the variety of the world's environments. The autonomy of people in their cultural development, that is, the ability of people to respond according to their own best intuitions, is crucial in establishing an adequate cultural system. Few, if any, cultures have developed as completely isolated phenomena; part of adaptive cultural growth is selective borrowing and exchange. In recent decades, however, there has arisen a process best described as cultural synchronization which threatens, as never before, the delicate balance of adaptive cultural relations in many parts of the world. Cultural synchronization implies that the decisions regarding the cultural development in a given country are made in accordance with the interests and needs of a powerful central nation and imposed with subtle but devastating effectiveness without regard for the adaptive necessities of the dependent nation. The principal agents of cultural synchronization today are the transnational corporations, largely based in the United States, which are

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developing a global_ invest_ment and m.arketin~ strategy: Tlie 1ransnational corporauons whtch are m~st dtrecdy !nvolve~ wtth the cultural component of this global expanston. are the tnternauon~l communications firms. This chapter has summanzed some of th~ maJor conclusions of the extensive research on the cultural I?enetranon by ~hose uansnationals involved in global communicanons. Transnauonal advertising, however, and the current strategies of technology transfer constitute the greatest threat to cultural autonomy and are the .two ax~s around which much of the global expansion of transnattonals ts cc:mered. Many countries are becoming incr~asingly aware. of thes~ threats to their cultural autonomy. The followmg chapter wtll examme the at· tempts of these nations to counter the mechanisms of cultural synchronization.

REFERENCES 1. See studies mentioned in the Bibliography under Culture and Im-

perialism. . . . . 2. A. G. Frank, Capitalism and Underdevelopmen_t m Latm -:menca, rev. ed., Baltimore, Penguin, 1971, p. 177. A perttnent selecuon from the large body of literature on the issue of imperialism and dependence would include the following: Samir Amin, Unequal Developf!1ent, New .Y?rk, Monthly Review Press, 1976; M. B. Brown, The Economzcs oflmpenalm n, Baltimore, Penguin, 1974; F. E. Cardoso and E. Faletto, Dependen_ce a'!d Development in Latin America, Cambridge, Mass., ~arvard Umverstty Press, 1979; D. Chirot, Social Change in the Twentteth Century, Ne~ York, Harcoun Brace Jovanovich, 1977; C. Elliott, Patterns of Poverty m the Third World. New York, Praeger, 1975; A. Emmanuel, Unequal Exchange, New Yo;k, Monthly Review Press, 1972;). Galtung, "A Structural Theory oflmperialism ,"}ournal ofPeace Research, vol. 8, ~o. 2, 1971. PP· 81-117; T. Heyter, Aid as Imperialism, Baltimore, Pengum, 1971; E. de Kadt and G. Williams (eds.), Sociology and Development, London, Tavistock, 1976; V. G. Kiernan, Amen'ca: The New Impen~li!m, London, Zed, 1978; D. Nabudere, The Politt'cal Economy oflmpenaltsm , Lo_n~on, Zed, 1977; H. Radice (ed.), International Firms and Mode.rn Impen~lts~, Baltimore, Penguin, 1975;JoseJ. Villamil (ed.), Transnattonal CaP_ttaltsm and National Development, Sussex, Harvester, 1979; I. W~ller~tetn, The Capitalist World-Economy, Cambridge, Cambridge Umverstty Press, 1979. . 3. Robin Murray, "The Internationalization of Capital and the Nauon s.ta~e, .. in H. Radice (ed.), International Firms and Modern lmpenaltsm, Baltimore, Penguin, 1975, p. 128. . 4. Richard Barnet and Ronald Muller, Global Reach, New York, Stmon and Schuster, 1974, p. 18.

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5. In an address to the American Foreign Service Association, Washington, D.C., 29 May 1969. 6. In the Western ethnocentric definition of development, social research (e.g., the work done in the 1950s by Wilbur Schramm, David Lerner, and Everett Rogers) has functioned as a sophisticated carrier of cultural synchronization. 7. Armand Mattelart, "Mass Media and the Socialist Revolution: The Experience of Chile," in George Gerbner et al. (eds.), Communication Technology and SociaiPoli'cy, New York, Wiley, 1973, pp. 425-440. 8. For a more elaborate analysis, see Cees J. Hamelink, The Corporate Village: The Role of Transnational Corporations in International Communication, Rome, IDOC International, 1977, chap. 4. 9. Marco Ordonez, Los problemas estructurales de la comunicacion colectiva, Quito, CIESPAL, 1974, p. 6. 10. Televisiontraffic: a One-Way Street?, Paris, UNESCO, 1974. 11. Arid Dorfman and Armand Mattelart, How to Read Donald Duck, New York, International General, 1975. 12. A. Mitra, "Information Imbalance," paper presented at ILET Conference, Mexico, 1976. 13. Jeremy Tunstall, The Media are American, New York, Columbia University Press. 1977. 14. ]. Waiter Thompson Advertising Agency, Annual Report 1973, p. 3. 15. Percentages calculated from data in Advertising Age, vol. 29, no. 9. 1977, p. 1. 16. ''The Impact of Trade Marks on the Development Process of Developing Countries," Geneva, UNCTAD,June 1977. 17. M. Silverman, The Drugging of the Amencas, Berkeley, University of California Press. 1976. 18. M. Silverman and P. Lee, Pills, Profits and Politics, Berkeley, University of California Press, 1974, chap. 6. 19. Information from field work by Jose Hulshof, Peru. Private correspondence, 1978. 20. Michael Muller, Tomorrow's Epidemt"c? Tobacco and the Third World, London, War on Want, 1978. 21. "Undoubtedly, the multinational companies, the manufacturers of formulas of milk products for infant feeding, have been aggressive in their advertising and their promotion of these products, and undoubtedly this has led to a great spread in bottle feeding of babies. I can without doubt say that the bottle feeding of babies has led to a great deal of ill health and many deaths." M. Latham, Medical Research Centre, Nairobi, Kenya, in· an interview for the BBC television program Panorama, London, 1 December 1975. 22. Jane Cottingham, Bottle Babies, Geneva, ISIS, 1976. 23. Global Recch, p. 173. 24. Ibid., p. 175. 25. Ibid., p. 176.

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26. Karl P. Sauvant, "The Potential of Multinational Enterprises as Vehicles for the Transmission of Business Culture," in Karl P. Sauvant and Farid G. Lavipour (eds.), Controlling Multinational Enterprises, New York, Campus Verlag, 1976. 27. See Robert E. Jacobson, "Satellite Business Systems and the Concept of the Dispersed Enterprise; an End to Nation;U Sovereignty?" paper presented at an East-West Communication Institute Seminar, Honolulu, Hawaii, EastWest Center, 1978, p. 30.

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[31] The new world information and communications order An unrecognisable picture According to the professionals themselves, the audiovisual media are responsible for breaking down barriers between countries and peoples. Under the spell of instantaneous communication , a global culture shuffles together the everyday lives of different continents, weaving around the planet a network of electronic information that offers a continuous world-wide show hooked up to life itself. One only has to surf the technological wave, to miniaturize. the instruments and multiply the channels - and the occasional disparities which affect the flow of images will soon be absorbed into the statistical tables of the Grand Designers of electronic democracy. And yet this bubble of post-modern imagery quickly bursts at the slightest breeze, the slightest contact with reality. For in its description of an imminent future, it jettisons all links with an uncomfortable present. Where do they come from then, these images bearing the stamp of universal diversity? Listen to these statistics. In France, during the first three months of 1983, nationally made films accounted for 48.9% of cinema admissions; American films for 33.8%; British films 4.2%; Italian films 2%; German and Soviet films less than.0.6% each. Films from other parts of the world totalled about 10% of admissions, an exceptional figure since the average for these films (classified under 'various') has oscillated around just 5% for the last 20 years.• In 1982, about two-thirds of the 475 films shown on television were French films. Of the 196 foreign films, 132 were American: only 25 belonged to generally little known currents of the cinema. 2 During 1979, Brazil, which produces about 100 films a year, sold 64 to Latin American countries, 33 in Africa and 23 in Europe. Of these 23 films, Spain bought 5, Yugoslavia 5, Italy 4, Romania 4, Switzerland 3, the Soviet Union 2 and West Germany 1. France did not buy one. Yet in the same year, Brazil bought a quarter of all French films produced. 3 Spain, through its cultural links, would seem to hold out an obvious welcome to the national film traditions of Latin America.

International image markets

But as a Latin American film distributor, resident in Madrid, recently remarked: 'Latin American films were never shown on Spanish television until recently. Now it's a real revolution, they show one a month'. 4 In 1982, of the 390 feature films programmed on Spanish television, 61% were American, 16% Spanish, 16% British and the remaining 7% mainly Italian and French. 5 Italy, one of the pioneers in the introduction of the new Latin American cinema to Europe during the 1970s, now seems to have deserted this cinema in its television programming. Of the 1827 films it imported in 1982,1418 were American, 133 British, 108 French and 60 from the Soviet Union. 6 'Latin' cultural affinities show themselves even less strongly when you find that it is in the North of Europe West Germany, Scandinavia - that the greatest opportunities are given to Latin American films. To explain this situation, there is no lack of common sense justification: Third World films 'do not interest the public', 'do not correspond to its habits and its tastes' and so on. Yet the success of the French TV programme Cinema sans visa calls for a moderation of such arguments. As one of the organisers of this series, devoted to 'different' film traditions, declared in March 1983: 'The programme has been a great success and proves that an audience exists for quality films. Admittedly, one must make concessions, that is, avoid overly difficult films, but it is possible to show an alternative cinema. The problem is to innovate and increase the awareness of the public'. 7 The average audience for Cinema sans visa is 10% of viewers (4 million people), a figure which can, in the case of films like Viva el Presidente by the Chilean cineast, Miguel Littin, rise as high as 30%. The success of new television magazine programmes like Resistances (on human rights) and Lettres d'ailleurs also testifies to a demand for information on the countries of the South. These programmes, however, represent only an extreme minority in the global policy of French television, exemplified by their inclusion within specialised slots of the 'film club' type. On the first channel (TF l) the absence of such a slot is even justified by the 'nonexistence' of Third World films. And although these minority initiatives reflect concerns that can be found at a formative stage in Spain (though totally absent in Italy), the means adopted cannot go unquestioned: 'The opportunity for alternative film traditions suffers, in the long run, if they are confined to the style of Dossiers de /' ecran*. They take on a documentary role, as if the Third World had no right to an imagination, to fiction'. 8 *Dossiers de /'ecran is a long-running television series in which an entertainment film is shown as a prelude to a discussion between experts and scientists on a theme (vaguely) related to the film. (Translator's note)

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What space for what culture? 9 Against the declared willingness of some programme planners to open up television to Third World cinema, there are, of course, 'technical' obstacles: the rigidity of the home market, giving rise to. little variety in productions; ignorance of well-known authors and actors from the Third World; a tendency to consume the latest novelty, thus favouring those countries able to produce on a large scale; long delays from distributors, who demand firm commitments from television channels before buying up the rights to a film; the rules governing how long films are allowed to run at commercial cinemas (for example, the number of admissions on the first day) disastrous for alternative films, which need time to establish themselves; the exponential increase in promotion costs (prints, posters, advertising etc); the almost total incapacity of Third World countries to launch films internationally because of their weak production capacity and limited local outlets; and the extraordinary barriers built up by sluggish, disinterested bureaucracies. These technical obstacles are very real. But technical answers to technical questions can only give rise to more technical problems. As a result, the cultural relationship between the North and the South is reduced to the vocabulary ofwell-intentioned regulations and culture itself to an instantaneous statistic, emptied of all historical and social dimension, cut off from the great political issues debated internationally over the last ten years. Can we seriously discuss the audiovisual output of the Third World without explaining how each country constructs its own image of the other? And can we seriously analyse these images without looking at the issues of domination and resistance that lie behind them?

Democracy or totalitarianism? Information, communications and culture are increasingly to be found at the centre of international debates, and have formed the basis of multiple confrontations. Since 1973, through organisations like UNESCO or the Non-Aligned Movement, Third World countries have repeatedly denounced the unequal international flow of news - produced and distributed as it is by a limited number of press agencies belonging to the developed nations. The demand for a 'new world information and communications order' subsequently gave rise to a series of meetings and conferences. These meetings led up to the C?eneral Conference of UNESCO in Belgrade in 1980, where the McBnde Report on the problems of communications was approved. 9 Since this time, meetings of the non-aligned countries ~ave continued to draw up a balance sheet of progress, noting for mstance that new forms of alliance between the countries of the South

10

International image markets

have emerged, principally through the creation of national news agencies and regional networks of these agencies. Initially centred on combating the imbalance of news flows this debate on communications has progressively widened its scope u'nder the pressure of non-aligned countries. The declaration on computers and development adopted during the meeting in New Delhi (1983) testifies to this. International organisations of an essentially technical nature have also begun to feel the political effects of an increasingly global questioning of the geopolitical distribution of power in the field of information. One example is the debate within the International Union of Telecommunications on the allocation of frequencies, an allocation which the ten biggest broadcasting countries (controlling 90% of the available wavebands) thought had been resolved once and for all. Around the issues thrown up in each phase of these debates alliances are made and unmade. But an analysis of these splits show~ that they cannot simply be reduced to the sinister East-West conflict hawked by the news agencies and media of the industrialised countries. For the· Third World, this interpretation both denies its autonomy and expropriates problems it had itself formulated. And by brushing aside the imposition of an East-West mould on these debates, we are also. silently acknowledging one of their principal lessons: the political emergence on the international scene of a new force with its own interests. As a Peruvian researcher pointed out in 1982: 'It is only very recently, and partially, that the Soviet Union and the other socialist countries have come around to supporting efforts for the construction of a new international communications order. Furthermore, the observations of Sergei Losev, a member of the McBride Commission, made clear more than once the coolness and reservations of the Soviet Union in the face of Third World demands.' 10 This collision between national interests and so-called 'natural' political alliances emerged very early in various areas of the communications field. As early as 1974, the debate over the necessity of regulating satellite teledetection activities showed that the higher interests of military alliances were insufficient in themselves to ensure cohesion among the Western 'bloc' states. These satellites, monopolized by the United States, had accumulated from the beginning of the 1970s gigantic stocks of information on the soil and subsoil of all the continents. At the height of the energy crisis, some countries feared that multinational firms could thus discover deposits or diagnose agricultural problems, and use this information against them by causing, for example, price fluctuations. The United States refused all controls in the name of'freedom in space', a thesis she had

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What space for what culture? 11 already proposed during the 1972 discussions over direct broadcasting satellites -and found herself alone against the votes of 102 countries. Argentina and Brazil, whose political regimes were very different at the time, put forward the suggested rule of 'prior consent to teledetection by satellite'. The Soviet Union and France, directly threatened in their own projects to develop this technology, joined forces to propose a middle way: that the information obtained by teledetection cannot be made public without the express consent of the state concerned. These fluctuations of alliance, disconcerting for those wishing to reduce debates on communications to a simple episode of superpower confrontation, clearly show that by overthrowing the ground rules the Third World has confirmed its eruption onto the political scene.

A false consensus Recognition of this new phase in the political and cultural emancipation of the Third World should not, however, allow us to pass over the tensions within this movement. For are we really talking about a new information order or simply a new sharing out of the established order? The 'Third World' consensus explodes as soon as we come to the central problems of a genuinely alternative form of communication. Who will produce this information? What subject matter will emerge from this transformation? What are the means of communication best adapted to these producers and to this content? Roberto Savio, founder of Inter-American Press Service, an agency created in the wake of the international discussions on communications, recently drew the lessons from ten years' experience: 'The real problem', he wrote in June 1982, 'should not be posed in terms of quantitative transfers of informational capacities from North to South. Rather it should be in terms of creating new flows of information with contents, personnel, priorities and needs which are absent from current flows. Following this logic) it is not specifically in the North/South context that the various groups making up the social fabric - unions, academic institutions, cooperatives, associations and communities - must be situated in order to produce information that existing channels do not supply. The problem is therefore qualitative and not quantitative.' 11 This emphasis on quantity, which allowed certain Third World governments to pass over embarrassing questions of power within society, has so far limited the construction of a 'new order' to the provision of financial aid, technical assistance and professional training. And it is precisely this flaw which has enabled authorities in

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12 International image markets the West to reduce the idealism and generosity of the debate's initiators to a simple manipulation of institutions, remote-controlled by the Soviet Union. Disconcerted by the growth of Third World demands which have expanded from the distribution of news to the control of communications technologies, they finally rallied in 1981 by decreeing an embargo on further negotiations. The 'Declaration of Talloires', published 18 May 1981 at the close of a meeting organised by the World Press Freedom Committee, remains the most striking document of this counter attack by 'newspapers, magazines, free radio and television stations of the West and elsewhere', uniting for the first time against the 'campaign by the Soviet Union and some Third World countries seeking to give UNESCO the power to model the future development of the media'. 12 Analysing the meaning of this realignment of forces, the Peruvian researcher Rafael Roncagliolo wrote in June 1982: 'The time when communications bosses acted in relatively dispersed fashion through organisations like the Iilter-American Press Association and the International Press Institute has now disappeared. Today, we are seeing the formation of a big transnational blocwith a strategy whose principal objective - paraphrasing the terms of the Talloires Declaration - is to 'no longer authorize discussions and activities which relate to propositions unacceptable to the West'. Their complementary objective is to take over certain suggestions for a new world information and communications order whilst abandoning democratisation in favour of 'cooperation with the Third World, aiming to help it renew its production and training resources'. The qualitative problem of the role of communications in the construction of democracy is thus transformed into a quantitative problem which boils down to an increased dependance through technology and professional and ideological training. 13 The most telling illustration of this, almost a caricature of the technology transfer approach, is the creation of a Liberian press agency, financed by West Germany: four million marks for the erection of a high technology cathedral in an informational desert.

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Economics and culture: the same struggle National masochism? One cannot resist on behalf of somebody else. The very idea of resistance implies an aggression felt in the very heart. Yet persuaded of the durability- even the superiority- of their culture, many in the industrialised countries have criticised the Third World for excessively politicising the debate on the new world information and communications order, for having been caught up in the game of sorcerer's apprentice ideologues. But to challenge the choice of battlefield and the use of words, without relating them to the conditions of their selection, is surely to prevent oneself from identifying the historical origin of resistance, to understand the language it speaks and therefore to communicate. Each form of resistance has its own language. In an age of crisis in politics, the France of the 1970s placed its confidence in the language of the economy. And it was precisely through the economy that she received the first signal of alarm: 'In post-industrial economies', wrote the President of the Inter-Ministerial Commission on transborder data flows in July 1980, 'where the processing of information today represents between 40 and 50% of its added value, it is natural that international information exchange plays a central role ... The current development of transborder flows establishes and amplifies the dominance that multinational systems are achieving over individual countries. Certainly the nation state remains vigorous. But it runs the risk of being steadily drained of its strength. 1 To make the shift from this alarm call to the development of a national debate, however, required a change in the political majority in France. 'Power over communications is being concentrated in every country', declared President Mitterrand during the Versailles summit of June 1982. 'A handful of firms are expropriating all the networks necessary for electronic transmission. By controlling them, they influence in turn the traditional media: the cinema, the press and television. Most of the new activities in which the majority of firms are engaged (production, storage, information processing) presuppose extremely heavy investment, which again leads to high concentration ... More generally, the distribution of information developed and controlled by a few dominant countries could mean for others the loss of their history or even their sovereignty, thus

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14 International image markets calling into question their freedom to think and decide. ' 2 At the same time, the world conference in Mexico City on cultural policies (Mondiacult '82) confirmed that the countries of the North more sensitive to the imbalance of world trade because of their ow~ recently-acquired vulnerability, had finally discovered the links between the economy and culture that the South had perceived as early as 1973. This 'discovery' established the failure of the so-called 'cultural democratization' policies and marked the limits of a conception of development based on the introduction of planning tools in the cultural sector: 'The past fifteen years have seen the emergence of three parallel phenomena: (a) a two, five or ten-fold increase according to the country, of public spending on culture; (b) despit~ increased spending, stagnation in the use made by the public of cultural institutions; and (c) a twenty, hundred or thousand-fold increase in public contact with artistic works as a result of industrial cultural products ... The conclusion that inevitably springs from this observation is that far more is being done to democratize and decentralize culture· with the industrial products available on the market than with the "products" subsidised by public authorities.'3 'Culture and economy: the same struggle. It is useless to avert one's gaze and pretend nothing has changed: the facts are there and cannot be denied', declared French Minister of Culture Jack Lang in Mexico City. 'Cultural and artistic creation- several delegates have argued so from the beginning - is today victim of a system of multinational financial domination against which we must organize ourselves ... Is it our destiny to become the vassals of an immense empire of profit? We hope that this conference will be an occasion for peoples, through their governments, to call for genuine cultural resistance, a real crusade against this domination, against -let us call a spade a spade - this financial and intellectual imperialism.' 4 For those familiar with international issues, such a declaration was a 'non-event'. However, hearing these words from an official representative of a large industrial country was an event, amply shown by the international and national divisions created by his intervention. Apart from the 'total exasperation' registered by the United States, the speech from Jack Lang, 'well received by the Eastern bloc and certain Third World countries,' 5 caused a split within the Western camp. 'Thus if Finland, Denmark and Norway, at least in private, and Italy in public appreciated the speech, others were more circumspect, notably Holland, Spain and West Germany, whose delegate was reportedly "shocked by this chauvinist discourse". ' 6 'It was not only an "incident" that broke out at the Mexico conference, but a new episode in the North-South dispute.' 7

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Ignoring Lang's conjunction between economics and culture, comment in the French media focused instead on 'American cultural imperialism' (although the United States had not been named once in the speech) and turned it into a battle of value judgements and assumptions. Lang was accused of having launched 'a war of berets, bourrees and Breton bagpipes' 8 against Dashell Hammett, Chester Himes, William Irish, Orson Welles, Meredith Monk, Richard Forman, Jackson Pollock, Andy Warhol, Merce Cunningham, etc ... 'The worst Broadway revue will always outclass the pathetic spectacle of folkloric dances in clogs', wrote one of the most violent critics. 9 This outburst of 'national masochism' 10 seemed to mark the emergence in France of an intelligensia which, in order to denigrate its culture of origin, used the same contemptuous tone and derisory examples as many ruling class elites in the Third World had done as they waited for previously despised popular cultural forms like reggae and salsa to return home on the wings of transnational corporations before celebrating their 'birth'. And yet this emergence is itself very much a French phenomenon. In its inability to consider culture either in its material or historical context, it anchors itself in the French tradition of antagonism between the 'cultural' and the 'technical'. As the report 'Technology, Culture and Communication' noted: 'Why is there such fierce resistance to the linking of culture and technology? Why is there a tendency to dissociate the two, that is to perceive the former through the exclusive outlets of literature and aesthetics - therefore as essentially prestigious - and the latter as a product of utilitarianism? Why is there this difficulty in reconciling culture with its own materiality and historical conditions of production? Why have intellectuals so long been reticent not only in analyzing the apparatuses of cultural massification but above all in critically posing, other than in terms of sheer indifference or elitism, the problem of their own relations with the media?' 11 Of course one does not have only the culture of one's personal taste and aesthetic leanings but also that of one's social class and professional interests. And admitting this enables us to see that there exists a dynamic link between knowledge and ignorance, between what one chooses to learn and what one cannot ignore. Paradoxically, the loudest demands for 'cosmopolitanism' are accompanied in France by a localism that borders on illiteracy.

Resisting the obvious The shallow level of debate forces us to make our own assessment of the extent of the French cultural crisis. For whereas the laid-off

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electronics worker is beginning to see the threads linking his or her fate to that of the Malaysian in an economic free zone, and to discover the law of comparative advantages in an age marked by the international flow of capital, the French intellectual class remains blind to the expropriation it has already undergone. In the international debates which are redefining the place of culture and radically changing the conditions of its production, the participants no longer heed such intellectuals. Already, perhaps, they no longer even hear them. This ignorance is all the more disturbing in that it reveals a real isolation. Since 1975, analyses ofthe inherent dangers of the growing internationalisation of cultural commodities have no longer been the prerogative of Third World countries. Even in Europe, the importance of the issue brings together academic researchers, trades unions, professional groups, industrialists and liberal or socialist governments. All in their own way are questioning the relation between industrial culture and political democracy. Thus in 1978, European Ministers of Culture, gathered in Athens, adopted a resolution stressing. that 'a large part of the cultural industries are multinational and the means of influencing them therefore complex'. They invited the Council of Europe to carry out 'a study of the extent to which the activities of the international or multinational cultural industries and national cultural policies mutually influence one another.' 12 Former West German Chancellor Helmut Schmidt was the first politician to be roused publicly, in 1977, by the threat of satellite television, particularly by the plan for a Luxembourg commercial satellite. This could influence the 'cultural identity' of European nations and the development of their own audiovisual systems, he warned. At the time, an official report later recognized, 'the French government displayed a total contempt for everything concerning the cultural aspects of the question', 13 thus consecrating the traditional division between a technocracy interested only in industrial performance and an intelligensia imprisoned within its territorial disputes. The audiovisual media, the industrial and financial driving force behind the production and distribution of cultural commodities, are now at the heart of internationalisation strategies. And here again, the most dependent countries have been the first to feel the need to regroup in the face of the multinational conglomerates. Thus the African film market is largely dominated- in the Ivory Coast, Mali, Togo, Niger, Renin, Chad, the Cameroons, Senegal, Mauritania, the Congo and the Central African Republic - by two big distribution companies (one French, the other American) which decide what films

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will be distributed. To loosen these chains of cultural subjugation, the Conference of Heads of State and of Government of the member countries of the Organisation Commune Africafne et Mauricienne (OCAM) created in 1974 the Inter-African Centre for Cinematic Distribution (CIDC), quickly followed by the Inter-African Centre for Film Production (CIPROFILM). Many other examples could be given of cooperation between states or radio-television institutions. But these alliances do not only work at a government level: they extend to new partnerships like the association of Super 8 producers, the world association of community radios, the Federation of Audiovisual Directors (FERA) and the Inter-Arab Film Distribution Cooperative, all founded in the last few years. FERA also brings together unionised film-makers from 11 European countries and participates in the negotiations over the 'European Audiovisual Space'.

Cultural identity: an area of -conflict The debate over 'American cultural imperialism' has come just at the right time to remind us that within the 'Latin' countries, everyone doesn't speak the same language: 'While waiting for further episodes of Dallas, Moroccan television is showing another series, The Conquest of the West. In French! This is a double insult to the Arab viewer who cares nothing about America and does not understand French. Thus American imperialism is transmitted to the Third World via Paris.' 14 As the Moroccan writer Tahar Ben Jelloun recalled, the paths of cultural subjugation follow the twists and turns of the colonial heritage. But this is not all, as the vice-president of the American delegation at Mondiacult '82 underlined: 'When Mr. Lang affirms "culture and economy: the same struggle", he ought to remember that multinationals flourish in France as well as the United States, that France exports its culture like the United States and like many other countries.' 15 A minefield? Much more so than these declarations would lead us to believe. For the denunciation of an evil 'other~ is never exempt from a certain 'holier than thou' attitude to be found at the heart of the notion of 'cultural identity' . 16 In the area of the audiovisual media, there are at least four ways in which cultural identity serves as a screen to reality, a way of not thinking in terms of an alternative. Example One: Exclusive recourse to simple protectionist measures like the quota system on imported films. Although somewhat justified by the 'defence of national territory', this policy has many adverse effects, not least that it establishes a geographical division between the here and the elsewhere. While it limits foreign influence,

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it proposes no other alternative than the limit itself. For the quota solution to be effective, it must at least be accompanied by the necessary complement of a production policy. A government that adopts the quota solution seems to be doing a lot when it has done essentially nothing. Example Two: The defence of cultural identity as a mask for greater profits to sectional interests - public servants, technicians, executives, artistic personnel, etc, all solidly installed in their ivory towers. When the defence of cultural identity becomes confused with the defence of a fixed past, it runs the risk of filling a strictly conservative role. It finds itself reduced to a role of complacency, reduced, in fact, to an asphyxiating localism. Example Three: Cultural identity reduced to a national label stuck on what is essentially a transnational copy. A large number of television series, for example, have fallen into this trap. Admittedly the stories may be based on the national past, or real historical situations, but the general narrative style is still that of the big television empires. In the process, cultural identity becomes picturesque folklore. Example Four: Cultural identity as the standard bearer for an alternative cultural imperialism. This happens, for example, when a country presents itself as a champion of a linguistic community and simply treats the latter as a market unified by common language, rather than taking account of its underlying diversity. The history of 'Latinity' is a prime example of this tendency. As Guy Martiniere explains: 'The concept of Latin America, created in France under Napoleon Ill, was born on the eve of the military - and scientificexpedition to Mexico. The Latin definition of the political, cultural and economic influence of the France of Napoleon Ill in relation to the America formerly colonized by Spain and Portugal corresponded admirably to the grand dessein of the Emperor ... France, heir to the European Catholic dynasty, carried in America and in the world the torch of the Latin races- that is the French, the Italians, the Spanish and the Portuguese - in order to check the "rise of the Protestant nations and the Anglo-Saxon race" while avoiding a European decline. Already at the time, in the face of this French "cultural" initiative, reaction was not slow in coming: the notion of "Hispanity" quickly appeared in Spain in response to this Latinity.' 17

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From tradin~ patterns to communications systems One-way traffic? Ten years ago, the existence of'unequal exchange', the domination of one culture over others, was considered too obvious to warrant discussion. Did not the bombing of Hanoi suffice to prove the existence of a military imperialism there and to nourish elsewhere the denunciation of cultural imperialism? Confronted with such clarity, few observers demanded proof. With the decline of the utopias fermented by economic growth, and the rise of a disillusionment which combines anxiety at the global crisis with a political disenchantment with 'really existing socialism', the clear evidence of a 'relation of force' is tending to disappear from the French intelligensia's view of the world. On the compost of'Third Worldist' guilty consciences, strange flowers are already beginning to bloom in France: 'A big arrival in the supermarket of ideas: products guaranteed as Western and proud of it, pure of all Marxo-Christian weakness towards that second-hand and worn out idea, the Third World. Long live us, to the devil with shame, let the poor fend for themselves! Such is the latest ideological fashion in smart circles. And if you want my opinion, the product will please and therefore breed offspring. The liquidation of scruples, widespread during the last colonial wars, dates back some time ... What threatens the West is its "physical and moral ageing". Under-development is not our fault, but that of the socialist countries because of their arms build-up and their catastrophic economic and social models. It is Third World governments, not ours, that pillage the inhabitants and massacre their cultures.' 1 It is the very legitimacy of the question of unequal exchange which is challenged here. Imperialism doesn't exist. It has never existed. In the course of the last ten years, the tone of ideological enthusiasms has shifted. A Third World of preconceived ideas, satisfied with its ignorance, has given way to a Westernism of convictions steeped in rhetoric. And yet studies documenting the reality of unequal exchange continue to accumulate. According to a classic study by UNESCO, it was estimated that French and British television exports during 1972 were in the order of 20,000 programme hours each. American exports varied between 100,000 and 200,000 hours. 2 Apart from exceptional cases like

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Mexico, very few Third World countries can claim similar levels. Latin America, with only 3% of the world's television sets, received at the time over a third of American programme exports. As a result, 40% of Latin American television broadcasts on average come from the United States: in some countrie!i, like Guatemala, this 'index of dependance' can reach nearly 80%. Further statistics published by UNESCO in 1977 confirmed these tendencies in the cinema sector. In 48 countries during 1975, over 90% of film consumption depended on imports. Only the United States, the USSR, Japan and India watch more nationally made films than foreign films. 3 Although the Americans account for only 32% of the total of imported films throughout the world, and are responsible for only 5-6% of world feature film production, they nevertheless take home half of the world cash receipts. 4 In the national struggles for cultural liberation that were just beginning during the 1970s, these studies also took on a militant role, giving statistical muscle to the notion of 'American cultural imperialism'. In 1983, almost ten years after that first UNESCO study, the American magazine Variety asked an accounting and management advisory firm to draw up a list of 'All-Time Film Rental Champs'taking inflation into account. Gone with the Wind, released in 19~9, was first, with nearly 322 million dollars. Of the first ten films With over 130 million dollars each, four were produced between 1977 and 1982: Star Wars, E. T., The Empire Strikes Back and Grease. Four others were produced between 1972 and 1976: Jaws, The Godfather, The Exorcist and The Sting. 5 These figures illustrate not only that the United States industry of super-productions is still in good shape, but also the extent of its success on the world market. For in foreign countries, it is these same films that earn the most. During the 1982-3 season, E. T. earned double the receipts, in Italy, of the runner-up- another American film, First Blood. 6 In Argentina, in 14 weeks, E.T. accounted for a quarter of all cinema admissions in Buenos Aires. 7 In Japan, in less than 10 weeks, E. T. earned 55 million dollars and attracted lO million people, 4 million more than Jaws, the previous record-holder. 8 Global statistics confirm the predominance of American cinema in market-orientated countries. In 1982, America_n films earned 111 million dollars in Spain, representing 45% of total receipts. Spanish films earned half this sum, 56 million dollars, Italian films 24 million and French films 9 million. 9 Between 1970and 1981, only France and Japan among industrialised countries succeeded in keeping a majority share (between 50 and 55%) of their domestic market. In Italy, national production, which earned 60% of receipts in 1970,

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What space for what culture? 21

slumped to 44% in 1981. In the same period, West German national production fell from 39% to 19%. Between 1975 and 1980, Great Britain lost half of its internal market, national production falling from 41% to 20%. 10 Less is known about international television trade, but the United States still occupies 60% of the market for programme exports. A few figures enable us to evaluate the weight of the American presence on the world's television screens. The case of Italy is exemplary: out of 21,000 programmes imported in 1982, 80% were of American origin ... In Spain, in celebration of their autonomous audiovisual networks, Catalonia and the Basque province started a ratings war by dubbing Dallas into the local language ... Anxious to counterbalance the cultural ravages of Dallas and company, some Persian Gulf states invested 8 million dollars in adapting - for 15 Arab-speaking countries- 130 episodes of Sesame Street 11 ••• In France, in 1981, out of a total of 4,000 programme hours, TF1 broadcast 535 hours of foreign programmes, of which 334 hours were supplied by American programmes. Out of 81 hours of foreign feature films, 72 came from the United States. The certificate of good health delivered to American television exports by Variety during the 1983 MIP TV fair confirms this diagnosis: 'First, and there's nothing new here, the U.S. is still clearly where the action is. From series to te1epics to films, where else could you get an incredible 1,000 hours of programming - right now.' 12 But the persistent pre-eminence of America in information, communications and culture is not limited to films and television. The United States also flaunts a clear domination in the new networks of electronic information. In 1982, for example, the United States controlled 56% of data banks and the EEC countries 26%, those left over being divided between international organisations and the 'rest of the world'. 13 At the centre ·of this hegemony, however, is undoubtedly the advertising industry, the go-between for the worlds of production and mass consumption. At the end of the 1960s, advertising agencies of American origin controlled 10% of the French advertising market. Ten years later, they had captured 36%. Despite this progression, France remains one of the only countries in the world where American agencies are still in the minority. Once again, she shares this privilege with Japan. Elsewhere, American dominance is overwhelming: in Italy, Belgium and Spain, the subsidiaries of McCann Erickson, J. Waiter Thompson, Young and Rubicam, etc., invariably jostle for first place. In 1982, American advertising firms held 30 of the first 50 places in the world advertising industry, followed by Japan (12), France (3), Brazil (3), and West Germany

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and Switzerland one each. The foreign business of the top ten American agencies represents over half their total revenues. 14

The new exporters One could easily continue to accumulate evidence of the dominant position of American firms. But in so doing we run the risk of enclosing ourselves within a condemnation without perspective. The wide avenues which only a few years ago echoed to cries of 'U .S. Go Home!' have today become cui-de-sacs. For just a few illustrations will also show that there are nuances to the map of global 'one-way traffic'. In 1975, Japanese television exported practically nothing. Yet in 1980 she exported 4,585 programme hours, of which 56% were films and cartoon series. The four principal clients of these cartoon films were Italy (740 hours), Hong Kong (308 hours), South Korea (250 hours) and Taiwan (183 hours). France was in tenth position with 35 hours. 15 By 1982, the Japanese cartoon film industry was putting 1,800 26minute episodes on to the international market. The firm Toei-Doga, the biggest of the Japanese cartoon companies - employing 600 people and sub-contracting to 60 firms -now produces each year 230 26-minute episodes, without counting a large number of cartoon feature-length films. Among its creations are Goldorak and Candy. By comparison, the American production of cartoon films is in the order of 22 annual series of 52 to 65 episodes (in other words, about 1,300 episodes) and certain stages of this production are subcontracted to Japan, South Korea, Taiwan and sometimes Australia.16 This eruption onto the international market, enabling Japan to compete with the United States, has also led her to inherit problems until now reserved for her rival: 'We found that Japanese television exports have made significant inroads into a territory formerly monopolized by Hollywood', Japanese researchers noted in 1982. 'At the same time, however, we realized that Japanese TV programmes are now becoming criticized for the same type of 17 cultural invasion attributed to American programmes.' In 1972, Televisa, the Mexican audiovisual conglomerate, exported 1,300 hours of television programmes. By 1980, sales to foreign countries had reached 24,000 hours. In the same year, French television exports were no more than 6,000 hours. Through its own network, Spanish International, made up of 11 affiliated TV stations, I0 community stations and 178 cable systems, Televisa reaches 25 million households in the United States. 90% of films circulating on the Spanish-speaking cinema circuit in the United States come from

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What space for what culture? 23 Mexico. The vast majority of them come from the studios of Televicine, a subsidiary ofTelevisa, and this company realises 30% of its turnover in the United States. 18 To extend its operations to Puerto Rico and the Dominican Republic, the Mexican conglomerate has linked up with the American firm Wometco, a pioneer of American film distribution in the West lndies. In 1972, Brazil similarly exported practically nothing in the way of television programmes. But by 1982, Rede Globo, a Brazilian audiovisual conglomerate, was exporting to the value of 7 million dollars, mainly to Latin American countries, but also to Italy, Federal Germany, Great Britain, the United States and Africa. 19 This sum is equivalent to the 1980 export turnover (an exceptional year) of all the French television channels and production companies. Rede Globo, which was already distributing programmes dubbed into Spanish in the United States, launched itself onto the American cable market in 1982 with programmes dubbed into English. Its debut was a series of 50 one-hour episodes, produced on video-cassette and dubbed in Rio de Janeiro. 'We are in negotiations with the Chinese who are very interested in two of our telenove!as', declared one of the commercial directors of Rede Globo in December 1982. The same month, Rede Globo signed an agreement on 'exchanges of technology and experiments, eo-production and preferential trade arrangements' with Rette 4, the second-biggest Italian network. 20

Unequal growth? There are limitations, however, to an approach based on trading patterns. Although it enables us to map out imbalances and changes, it does not, in return, offer any principle of understanding. For we must also take into account the varied potential in different countries for audiovisual transmission and reception. The 'global village' exists only in the minds of the disciples of McLuhan and the prophets of the electronic age. To extinguish this mirage let us simply recall that, at the end of the 1970s, 45% of developing countries were practically without television. Whereas in Europe, the number of television sets is about 275 per 1,000 inhabitants, this figure drops to 90 per I ,000 in Latin America and ll per I ,000 in Africa. But even these figures mask extreme variations within Africa and Latin America. Argentina, for example, has 204 sets per I ,000 inhabitants whereas Haiti has only 11. In Africa, the French colony Reunion comes first with 130 sets; at the other extreme, we find the Central African Republic with 0.2 sets per 1,000 inhabitants- a grand total of 400 sets in the whole countryY· Similar disparities exist with radio receivers (Europe 381 radios

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per 1,000 inhabitants; Latin America 252/1,000; Africa 73/1,000), 22 cinemas (France 5,000; West Africa 300 for 55 million people), telecommunications (in 1981 Africa had 0.4 telephone lines per 100 inhabitants compared to 5 in Latin America'and 40 in Europe) and finally, computers (where the Third World share does not exceed 5-7% of total world investment). There is a great temptation to judge all these disparities by the same yardstick- the 'level of development'- and against the same dynamic - that of 'growth'. But this approach simply envisages eventual integration into the dominant cultural system, and also invites each country to evaluate itself through the distorting mirror held up by the economic citadels. To break with this tunnel vision, we must establish different communications systems within the diversity of their individual histories. To confront these histories is to rediscover their differences, not only in social relations within civil society, links between the state and the private sector, and international alliances, but also in the blending of so-called traditional modes of communication with new technologies. In Latin America, for example, 15% of radio-television networks are controlled by the public service. In Africa, this figure jumps to 85%.23 How can we explain these differences? To start with, we cannot understand the creation of audiovisual systems in most Latin American countries without analysing the role of the American television networks. Following the example of ABC, these companies set up during the 1960s systems of technical assistance and programme exchanges by using the regional common market structure. Nor can we understand the audiovisual development in African countries without referring to the organic links woven between these new systems and those of the BBC and the former French ORTF. Furthermore, nor can we understand the complexity of each national system without making a detour through their politics -from liberal democracies and relatively benign one-party states to the worst forms of dictatorship. Within the cinema industry alone, an analysis of evolution which simply applied indices of economic development would be unable to account for the fact that Argentina and Mexico developed cinema industries at the same time as France, Italy and Spain. Since 1980, however, the Argentine and Mexican cinemas have plunged into a profound under-production crisis, whereas Brazil is on the way to becoming the biggest cinema producer of the continent. The most convincing counter-proof to the development approach, however, can be found in countries with French-speaking minorities, like Belgium, Quebec and Switzerland. There is no cinema industry, strictly speaking, in Belgium. But an explanation for this. in terms of

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What space for what culture? 25 the conflict between the international costs of production and the national investment potential does not enable us to understand the rapid growth of the Quebec and the French-speaking Swiss cinemas during the 1960s and 70s. Does Belgium lag behind? In response to this question, the Belgian film-maker Andre Delvaux argued: 'Firstly, this lag does not exist in television, which for us is a more important medium than the cinema. Next, we have a "blank on the soundtrack" (the lack of a whole generation of film-makers aged between 25 and 50) ... Finally there is the division, irreversible but still positive and justified, between Flemish and Walloon culture. The former appears to be in better health, in my opinion, for it has the advantage of not being connected to a powerful foreign culture (even if it is true that we are open to German, English, and Dutch influences). We Flemish possess an individual and autonomous language. This is not the case for the Walloons, who have more or less the same relationship with the French that English-speaking Canadians have with Americans. Between the 17th and 19th centuries, the Flemish almost disappeared as an entity because of French interference. Renewal was made possible between 1830 and 1845 by Romanticism, which regenerated a sense of national and cultural identity by reminding us, for example, of our brilliant past in the Middle Ages. I think that now the new re-balancing will allow some of the finicky aspects of the Flemish "cultural quest" to be bypassed and will favour the flourishing in Belgium of two cultures on an equal basis. Obviously, the Walloons will have to find, like the French-speaking Swiss, a way of escaping the attraction of Paris .. .' 24 One must also ask why, unlike the Quebeckers and the Frenchspeaking Swiss, the various elements of the Belgian ruling class have not felt the need to support a national film industry, being content with French films. To respond to this proliferation of questions, the notion of cultural imperialism, and its corollary, 'cultural dependence', is clearly no longer adequate. Historically, these two notions were an essential step in creating an awareness of cultural domination. Thanks to this consciousness, a political and scientific groundswell was progressively built up, intimately linking subjective impressions acquired in day-to-day struggle with attempts to formalise a theoretical base. Without this lived experience, it is impossible to understand the hesitations, uncertainties and also the conceptual certainties of div~rse geographical and social areas. One day, we shall have to examine more closely not only the genesis of communication systems but also the history of the manufacture of the concepts which made them into a privileged area of research. Only this recording of history enables us to seize at once the continuities and the ruptures

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which have given rise to new approaches, new tools, linking up with real" social movements. After all, is not saving the memory of peoples also saving the memory of the confrontations in which the tools of theoretical reflection were forged? In succumbing to the market law of obsolescence, in viewing the past in terms of a razed-earth policy or the rhetoric of nostalgia, are we not reducing ourselves to a philosophy of the ephemeral which combines a denial of history with a resignation in the face of the future?

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Notes

Notes 11.

Part 1: Chapter 1: The new world infonnation and communications order 1. Le Film Fran~ais, 3 June 1983, p. 4. 2 Informations C.N.C.l97, March-April 1983, p. 16. · 3. Paulo A. Paranagtia, 'L'experience des relations cineniatographiques entre la France et le Bresil: mariage de raison ou passion devorante?', contribution to the commission 'For a Latin Audiovisual Space' (L.A.S.) presided by A. Mattelart, 1983. 4. Speech by Waiter Achugar at the symposium 'Cinema film trade between the North and the South', Cannes Film Festival, May 1983. 5. Enrique Bustamante, 'Las industrias culturales de lo audiovisual en Espaila', contribution to the L.A.S. commission, Madrid, April 1983. 6. Source: Cinema d'Oggi, Jan. 121983, cited in Gu/liver4, May 1983, Rome, p. 28. 7. Speech by Jean-Ciaude Guillebaud at the round table discussion 'The promotion and distribution of Third World films in France', organised by the L.A.S. commission, Paris, 2 March 1983. 8. P. A. Paranagua, contribution cited. 9. UNESCO, Many Voices, One world, final reportofthe International Commission for the Study of Communication Problems (McBride Commission}. Kogan Page, London/Unipub, New York/UNESCO, Paris, 1980. 10. Rafael Roncagliolo, 'El "Nomic": Communicaci6n y poder', first international forum on 'Communications and power', Iima, June 1982, p. 8 (duplicated typescript). 11. Roberto Savio, 'Communicati6n y desarrollo en la decada de Ios 80', Rome, /PS Newsletter 10, December 1982, p. 40. 12. See Fernando Reyes Malta, 'lnformaci6n y desarrollo bajo la contraofensiva Reagan', Communicaci6n y Cultura 7, Mexico, 1981, p. 60. 13. R. Roncagliolo, as above, p. 16. In October 1983, the same organisations met for a second time at Talloires. There, the anti-UNESCO offensive retreated somewhat in the face of the resistance of news agency representatives and moderate Third World journalists. See Jacques Decornoy, 'Qu'est ce que la Iiberte de communiquer?' Le Monde, 8 October 1983. Chapter 2: Economics and culture: the same struggle 1. Alain Madec, Les Flux transfrontieres de donnees, Paris, La documentation franr;aise, 1982, pp. 12-13, 15 (author's italics}. 2. Franr;ois Mitterand, Technologie, emploi et croissance, rapport au sommet de Versailles, 5 June 1982. 3. Augustin Girard, 'Cultural industries: a handicap or a new opportunity for cultural development' in Cultural Industries: A Challenge for the Future of Culture, Paris, UNESCO, 1982, p. 25. 4. Speech by Jack Lang, French Minister of Culture, Mexico, 27 July 1982 ' (typescript). 5. 'Polemiques a Mexico', Le Matin de Paris, 30 July 1982. 6. As above. 7. 'La conference de !'UNESCO a Mexico, Le Monde, 30 July 1982. 8. Bernard-Henri Levy, 'Anti-americanisme primair', Le Matin de Paris, 3 August 1982. 9. Guy Konopnicki, 'A des annees-lumieres', Le Monde, 7 August 1982. 10. Guy Hennebelle, 'Revons-nous de devenir portoricains', Le Monde, 26 August 1982.

675

12. 13. 14. 15. 16. 17.

113

Armand Mattelart, 'Technology, culture, and communication: research and policy priorities in France', Journal of Communication, Summer 1983, P· 6~. S~e also A. Mattelart, Y. Stourdze, Technology, Culture and Commumcatwn m France. A report to the Minister ofResearch and Industry, New York-Amsterdam, . North-Holland (forthcoming). 2eme Conference des ministres europeens responsables des Affatres culturelles, resolution Ill Athens, October 1978. Jacques Thib~u, Rapport sur les satellites de telt!vision directe, Paris 1982 (typescript). See 'Faut-il bruler les Ami:ricains?', Le Nouvel Observateur, 7 August 1982. . . 'Polemiques a Mexico', Le Ma~in de Paris, ~0 J~ly 1982.. This argument is developed m Jean-Mane Ptemme, Id_en~ne culturelle ~~ domination secondaire', contribution to the L.A.S. commtsston, 1983 (duph. . , .. • . · cated typescript). Guy Martinil:re, Aspects de la cooperallonfranco-bres!ltenne, Presses umversttaires de Grenoble, 1982, p. 27-9.

Chapter 3: From trading patterns to co':'munications systems I. From a literary column by B. P01rot-Delpech, Le Monde, 27 May 1983. 2. Kaarle Nordenstreng, Tapio Varis, Television Traffic -A one-way s~reet? A survey and analysis of the international flow of television programme materwl, UNESCO, . Paris, 1974. 3. 'Statistics on Film and Cinema 1955-77', Statistical Reports and Studtes 25, . . UNESCO, Paris, 1981. 4. Thomas H. Guback, 'Film as International Business',Journal ofCommumcal/on, Winter 1974, Vol. 24:1. 5. Variety, 4 May 1983, p. 15. These figures are for the United States and Canada only. 6. As above, p. 292. 7. As above, p. 465. 8. As above, p. 335. 9: As above, p. 406. 10. Cinema d'Oggi, 4 May 1983, p. 16. 11. Variety, 14 April 1982, p. 68. 12. Variety, 4 May 1983, p. 509. 13. Diane News, EEC, Brussels, July-August 1982. On the issues of the newcompu~er networks see A. M. Helert and H. Schmucler, Communication and Information Technologies: freedom ofchoice for Latin America?, Ablex, Norwood, New Jersey. (forthcoming; original French edition 1983). .. . 14. Advertising Age, 18 April 1983, pp. 9-10. 15. Japanese Television Programme Imports and Exports - International Televwon . . ,, Flow Project, report no. 3, Japan, Aug~st 198~, p. 28.. 16. Jacques Mousseau, 'Plaidoyer pour une mdustne franr;atse du dessm at me , Communication et langages 52, 1982, p. 52. 17. Japanese Television Programme Imports as above, p. 25. 18. Variety, 17 March 1982, p. 49. 19. Variety, 30 March 1983, p. 64. 20. Prima, January 1983. 21. World census of television sets, Television Radio Age Imernational, October 1981. 22. Annuaire statistique de /'UNESCO, 1981-2, Paris. 23. Antonio Pasquali, Comprender la Communicaci6n, Monte Avila, Caracas, . 1978, pp. 256-7. 24. Quoted in A. Mattelart, J.-M. Piemme, TtHevision, enjeux sansfronueres, Presses universitaires de Grenoble, 1980, p. 180.

The Political Economy of the Media I

[32] Excerpt from New lnternational/nfomwtion and Communication Order Sourcebook.

Document No. 42

(EXCERPTS)

UNESCO RESOLUTION 4/19 ON THE INTERNATIONAL COMMISSION FOR THE STUDY OF COMMUNICATIONS PROBLEMS 21 October 1980, Belgrade The General Conference, Reaffirming its attachment to the principles proclaimed in the Charter of the United Nations, the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the Constitution of UNESCO and the Declaration on Fundamental Principles concerning the Contribution of the Mass Media to Strengthening Peace and International Understanding, to the Promotion of Human Rights and to Countaring Racialism, Apartheid and Incitement to War, Recalling more particularly Article 1 9 of the Universal Declaration of Human Rights which provides that "Everyone has the right to freedom of opinion and expression; this right includes freedom to hold oponions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers" and Article 29, which stipulates that, like all others, "These rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations",

677

tion of the Havana Summit (1 979), noting progress in the development of national information media, stressed that " co-operation in the field of information is an integral part of the struggle for the creation of new international relations in general and a new international information order in particular", Recalling that the Director-General, in pursuance of resolution 1 00 adopted by the General Conference at its nineteenth session {Nairobi, 1976), set up the International Commission for the Study of Communication Problems, composed of sixteen eminent persons acting in an individual capacity, that the Commission was able to carry out its work in total independence and that it prepared a final report published under the title Many Voices, One World, Considering that the publication by UNESCO of the Report of the International Commission for the Study of Communication Problems is not only stimulating a discussion of considerable breadth and intensity, but is, at the same time, encouraging professional circles and the general public to join in the debate, Noting with satisfaction that the report of the Director-General on the findings of the International Commission for the Study of Communication problems {21 C/85) has greatly facilitated the discussions devoted to communication problems and to the different aspects of the Organization's programme related to them, Conscious that communication among individuals, nations and peoples, as well as among national minorities .and different social, ethnic and cultural groups can and must. provided that its means are increased and its practices improved, make a greater contribution to individual and collective development, the strengthening of national and cultural identity, the consolidation of democracy and the..advancement of education, science and culture, as well as to the positive transformation of international relations and the expansion of international co-operation,

Recalling also Articles 1 9 and 20 of the International Covenant on Civil and Political Rights, Recalling also the declaration in the Constitution of UNESCO that .,the States Parties to this Constitution, believing in ... the unrestricted pursuit of objective truth, and in the free exchange of ideas and knowledge, are agreed and determined to develop and to increase the means of communication between their peoples and to employ these means for the purpose of mutual understanding and a truer and more perfect knowledge of each other's lives", Racalling moreover that the purpose of UNESCO is "to contribute to peace and security by promoting collaboration among the nations through education, science and culture in order to further universal respect for justice, for the rule of law and for the human rights and fundamental freedoms which are 3ffirmed for the peoples of the world, without distinction of race, sex, language or religiun, by the Ch:~rter of the United Nations" {Article 1 of the Constitution), Reaffirming the responsibilities of UNESCO. arid its role In the field of communication and recalling previous General Conference debates on this subject, including resolutions 4/9, 1/2 and 4/9, 1/3 adopted at its twentieth session (1978), Noting the increasing attention devoted to commuPication problems and needs by other intergovernmental organizations, both regional and international, notably the Movement of Non-Aligned Countries which, in the Declara!ion of the Colombo Summit {1976). stated that "a new international ord'}r in the fields of information and ·mass communications is as vital as a new international economic order" and, in the Declara-

248

VI 14. Considers that: a) this new world information and communication order could be based, among other considerations, on: i) elimination of the imbalances and inequalities which characterize the present situation; ii) elimination of the negative effects of certain monopolies, public or private, and excessive concentrations; iii) removal of the internal and external obstacles to a free flow and wider and better balanced dissemination of information and ideas; iv) plurality of sources and channels of information; v) freedom of the press and information; vi) the freedom of journalists and all professionals in the communication media, a freedom inseparable from responsibility; vii) the capacity of developing countries to achieve improvement of their own situations, notably by providing their own equipment, by training their personnel, by improving their infrastructures and by making their information and communication media suitable to their needs and aspirations; viii) the sincere will of developed countries to help them attain these objectives;

249

678

The Political Economy of the Media I

[33]

ix) respect for each people's cultural identity and for the right of each nation to inform the world public about.its interests, its aspirations and its social and cultural values; x) respect for the right of all peoples to participate in international exchanges of information on the basis of equality, justice and mutual benefit; xi) respect for the right of the public, of ethnic and social groups and of individuals to have access to information sources and to participate actively in the communication process; b) this new world information and communication order should be based on the fundamental principles of international law, as laid down in the Charter of the United Nations; c) diverse solutions to information and communication problems are required because social, political, cultural and economic problems differ from one country to another, and, within a given country, from one group to another.

Excerpt from New International Information and Communication Order Sourcebook.

Document No. 71 THE DECLARATION OF TALLOIRES OF THE "VOICES OF FREEDOM" CONFERENCE 17 May 1981, Talloires We journalists from many parts of the world, reporters, editors. photographers, publishers and broadcasters, linked by our mutual dedication to a free press, Meeting in Talloires, France, from May 1 5 to 17, 1 981, to consider means of improving the free flow of information worldwide, and to demonstrate our resolve to resist any encroachment on this free flow,

15. Expresses the wish that UNESCO demostrate its willingness in its short-term and medium-term activities to contribute to the clarification, elaboration and application of the concept of a new world information and communication order.

Determined to uphold the objectives of the Universal Declaration of Human Rights, which in Article 1 9 states, "Everyone has the right to freedom of opinion and expression; -this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media regardless of frontiers," Mindful of the commitment of the constitution of the United Nations Educational, Scientific and Cultural Organization to " promote the free flow of ideas by word and , image," Conscious also that we share a common faith, as stated in the charter of the United Nations, "in the dignity and worth of the human person, in the equal rights of men and women, and of nations large and small," Recalling moreover that the signatories of the Final Act of the Conference on Security and Cooperation in Europe concluded in 1975 in Helsinki, Finland, pledged themselves to foster "freer flow and wider dissemination of information of all kinds, to encourage cooperation in the field of information and the exchange of information with other countries. and to improve conditions under which journalists from one participating state exercise their profession in another participating state" and expressed their intention in particular to support "the improvement of the circulation, of access to, and exchange of information," "1

250

Declare that: 1 . We affirm our commitment to these principles and call upon all international bodies and nations to adhere faithfully to them. 2. We believe that the free flow of information and ideas is essential for mutual understanding and world peace. We consider restraints on the movement of news and information to be contrary to the interests of international understanding, in violation of the Universal Declaration of Human Rights, the Constitution of UNESCO, and the Final Act of the Conference on Security and Cooperation in Europe; and inconsistent with the Charter of the United Nations. 3. We support the universal human right to be fully informed, which right requires the free circulation of news and opinion. We vigorously oppose any interference with this fundamental right. 4. We insist that free access, by the people and the press, to all sources of information, both official and unofficial, must be assured and reinforced. Denying freedom of the press denies all freedom of the individual.

368

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The Political Economy of the Media I

The Political Economy of the Media I

5. We are aware that governments, in developed and developing countries alike, frequently constrain or otherwise discourage the reporting of information they consider detrimental or embarrassing, and that governments usually invoke the national interest to justify these constraints. We believe, however, that the people's interest. and therefore the interests of the nation, are better served by free and open reporting. From robust public debate grows better understanding of the issues facing a nation and its peoples; and out of understanding greater chances for solutions. 6. We believe in any society that public interest is best served by a variety of independent news media. lt is often suggested that some countries cannot support a multiplicity of print journals, radio and television stations because there is said to be a lack 'of an economic base. Where a variety of independent media is not available for any reason, existing information channels should reflect different points of view. 7. We acknowledge the importance of advertising as a consumer service in providing financial support for a strong and self-sustaining press. Without financial independence, the press cannot be independent. We adhere to the principle that editorial decisions must be free of advertising influence. We also recognize advertising as an important source of information and opinion. 8. We recognize that new technologies have greatly facilitated the international flow of information and that the news media in many countries have not sufficiently benefited from this progress. We support all efforts by international organizations and other public and private bodies to correct this imbalance and to make this technology available to promote the worldwide advancement of the press and broadcast media and the journalistic profession. 9. We believe that the debate on news and information in modern society that has taken place in UNESCO and other international bodies should now be put to constructive purposes. We reaffirm our views on several specific questions that have arisen in the course of this debate, being convinced that: Censorship and other forms of arbitrary control of information and opinion should be eliminated; the people's right to news and information should not be abridged. Access by journalists to diverse sources of news and opinion, official or unofficial, should be without restriction. Such access is inseparable from access of the people to information. There can be no international code of journalistic ethics; the plurality of views makes this impossible. Codes of journalistic ethics, if adopted within a country, should be formulated by the press itself and should be voluntary in their application. They cannot be formulated, imposed or monitored by governments without becoming an instrument of official control of the press and therefore a denial of press freedom. Members of the press should enjoy the full protection of national and international law. We seek no special protection or any special status and oppose any proposals that would control journalists in the name of protecting them. There should be no restriction on any persons's freedom to practice journalism. Journalists should be free to form organizations to protect their professional interests. Licensing of journalists by national or international bodies should not be sanctioned, nor should special requirements be demanded of journalists in lieu of licensing them. Such measures submit journalists to controls and pressures inconsistent with a free press. The press's professional responsibility is the pursuit of truth. To legislate or otherwise mandate responsibilities for the press is to destroy its independence. The ultimate guarantor of journalistic responsibility is to the free exchange of ideas. All journalistic freedoms should apply equally to the print and broadcast media. Since the broadcast media are the primary purveyors of news and information in many countries, there is particular need for nations to keep their broadcast channels open to the free transmission of news and opinion.

369

\'

681

1 0. We pledge cooperation in all genuine efforts to expand the free flow of information worldwide. We believe the time has come within UNESCO and other intergovernmental bodies to abandon attempts to regulate news content and formulate rules for the press. Efforts should be directed instead to finding practical solutions to the problems before us, such as improving technological progress, increasing professional intercharges and equipment transfers, reducing communication tariffs, producing cheaper newsprint and eliminating other barriers to the development of news media capabilities. Our interests as members of the press, whether from the developed or developing countries, are essentially the same: ours is a joint dedication to the freest, most accurate and impartial information that is within our profesional capability to produce and distribute. We reject the view of press theoreticians and those national or international officials who claim that while people in some countries are ready for a free press, those in other countries are insufficiently developed to enjoy that freedom. We are deeply concerned by a growing tendency in many countries and in international bodies to put government interests above those of the individual, particularly to information. We believe that the state exists for the individual and has a duty to uphold individual rights. We believe that the ultimate definition of a free press lies not in the actions of governments or international bodies, but rather in the professionalism, vigor and courage of individual journalists. Press freedom is a basic human right. We pledge ourselves to concerted action to uphold this right.

370

Name Index Abrams, B. 36 Adomo, T. 59, 64-5, 439, 465, 469, 471-2, 522-3, 529, 581 Ainsworth, H. 184 Aitken, Sir M. 19, 220 Alexander, G.W. 112 Allende, S. 635 Althusser, L. 5, 52, 56, 58, 61, 465, 471, 473-4, 482-3, 485, 516, 524 Alvarado, M. 489 Amin, S. 122, 458 Anderson, J. 432 Annenberg, W.H. 36, 303 Archer, M.S. 310 Amheirn, R. 434 Amold, M. 6 Aronson, J. 94 Arriaga, P. 98 Astor, David 217 Astor, Major J.J. 140-41, 152, 174, 212, 220 Attewell, P. 89 Babe, R. 93 Bachrach, P. 513, 516 Badaracco, J. 94-5 Bagdikian, B.H. 33, 48-9, 99, 108, 117, 119-20, 314 Baker, B.H. 108 Ball, G.W. 558 Bancroft family 313 Baraka, I.A. 422 Baran, P.A. 439, 441-2, 447, 451, 453, 455, 550 Baratz, M.S. 513, 516 Barber, B. 523 Barbour, F. 91 Barlow, G. 393 Bames, P.W. 36 Bames, T. 141-2, 215 Bamet, R. 643 Bamouw, E. 381, 385-9 Barron, J.A. 109, 116-17 Barry, J. 18 Barthes, R. 473, 512 Bartholornew, H.G. 191, 218-19 Bartlett, R. 90 Bartlett, V. 187

Bates, B. 93 Bator, F. 380 Baurnol, W .J. 70 Beaverbrook, Lord 13, 66, 72, 144-5, 151, 182, 189, 196, 203-4, 216, 218-21 Becker, G. 90 Becker, S. 96 Beethoven, L. van 580 Bekkers, W. 387, 391 Belfield, R. 275 Belfrage, C. 163 BeH, D. 417, 478, 606 Bellows, H.A. 112 Bender, R. 597 Benjarnin, G. 388 Be~arnin, W. 70, 530, 536 Benn, T. 114 Bennett, J.G. 568-9 Bennett, W.L. 108 Bent, S. 109 Bergrnan, I. 258 Berkowitz, N. 412 Berle, A. 100 Berlusconi, S. 312, 315, 318, 378 Berry brothers 6 Berry family 220 Berry, J.M. 146 Berry, Sir W. see Lord Carnrose Bessrnan, J. 43 Bevin, E. 185-6, 188, 190, 194, 198 Biffen, J. 272 Bingham family 292 Blakenham, Lord 273 Blank, D. 448 Blatchford, R. 193, 200 Blaug, M. 100 Blurnler, J. 387, 478 Boadicea 272 Bolingbroke, Viscount H.J. 129 Bonaparte, L. 411 Bond, A. 320 Borges, J .L. 258 Bottornley, H. 183-4 Bottornore, T. 468, 470 Bourdieu, P. 64, 67, 82, 310, 472 Bowen, W.G. 70 Bozell Ill, L. 108

684

The Political Economy of the Media I

The Political Economy of the Media I

Brailsford, H.N. 187 Brandeis, L. 305 Brecht, B. 471, 530, 534 Briggs, A. 75 Bright, J. 411 Brown, A. 320 Brown, I. 187 Brown, J. 422 Brown, L. 421-2 Brunton, G. 279 Buhle, P. 114 Bunce, R. 385 Burnham, Lord 6, 146 Buscombe, E. 489 Bush, G. 529 Bustamente, E. 378 Busterna, J.C. 93, 99 Callaghan, J. 271 Campbell, A.J. 47 Camrose, Lord 136-7, 146, 148, 182, 217, 219 Canning, G. 550 Cappo, J. 368-9 Cardona, G.R. 498 Carey, J.W. 118 Carlat, L. 364 Carnoy, M. 507, 518 Carol, King of Rumania 184 Carter, J. 601, 612 Carter, S.L. 117 Catto, Sir T. 185 Caves, R. 41 Celler, E. 226-7 Chamberlain, J. 192 Chamberlin, E.H. 441 Chambers, L. 480, 485 Chaplin, C. 266, 573 Chapman, I. 277-8 Charren, P. 390 Chase-Dunn, C. 90 Checkland, M. 276 Cher 364 Chirac, J. 317 Chomsky, N. 95, 108, 118, 122, 313, 527-8 Christiansen, A. 218 Christie, A. 24 Churchill, W. 186 Cieply, M. 36 Clemenceau, G. 187 Clippenger, J.H. 612 Cobden, R. 411 Colby, W. 612 Coltrane, E.J. 112

Columbus, C. 368 Commager, H.S. 109 Commons, J.R. 87 Compaine, B.M. 34-5, 99 Condliffe, J.B. 547 Connell, I. 476, 488 Cooley, C.H. 511 Corradi, I. 501 Cowdray, Viscount 7, 14 Cowhey, P. 94 Cox family 313 Cox, J .M. 232, 290 Crane, A.G. 111 Crowther, G. 217 Cudlipp, Sir H. 19 Cunningham, M. 662 Curran, J. 61, 80 Curtis, T. 18, 23 Cutler, A. 487 Dagnino, E. 501 Danzig, F. 368 Davies, W.H. 187 Davis, M. 35-6 Davis, Sir J. 24 Dawson, G. 216, 221 de Benedetti, C. 311 de Bord, G. 458 de la Mare, W. 187 Dekom, P. 42 Delane, J.T. 138, 141 Delfont, B. 19 Delvaux, A. 672 DeMott, J. 117 Denton, C. 319 Dewey, J. 511 Dickens, C. 196, 581 Diller, B. 36-8, 275 Dillinger, J. 435 Dinh, T. Van 96 Disraeli, B. 601 Dobb, M. 28 Dorninick, J. 384 Donahue, J. 385 Donaton, S. 360, 368 Dornhoff, W.G. 99 Douglas-Rome, C. 28Q-81 Dreier, P. 100, 305 Driberg, T.E.N. 164 Du Boff, R.B. 109 Dunbar, J. 185-6, 188 Duner, B. 501 Dunnett, P.J.S. 47 Dyson, W. 187

Eagleton, T. 432, 483 Earl, P. 90 Easton, S. 364 Edwards family 635 Eger, J. 602-3 Eisenhower, D.D. 251-2, 290 Elias, J.S. 182-4, 186, 188-98, 203 Elliman Jr, D. 357 Elliott, P. 496, 512 Ellis, H. 187-8 Engels, F. 55-6, 63-4, 482 Enzensberger, H.M. 439, 465, 530 Epstein, E.J. 33 Ernst, M.L. 111, 120 Eron, L. 392-3 Escarpit, R. 325 Etzioni, A. 95-6 Etzioni-Halevy, E. 374 Evans, H. 276 Ewer, W.N. 187 Fairbanks, D. 572-3 Faraone, R. 501 Farjeon, H. 187 Fellini, F. 258 Fiddick, P. 319 Field family 275 Fisher, F.M. 92 Fleming, I. 24 Foot, M. 160, 164-5 Forman, R. 662 Forster, E.M. 187 Foucault, M. 516, 526 Frank, A.D. 38, 633 Frankel, C. 555-8 Franklin, J. 121 Fraser, R. 193 Freire, P. 419, 422, 428 Freud, S. 469 Friedman, A. 312, 315 Friendly, F. 435 Frost Jr, S.E. 110 Fyfe, H. 188 Galbraith, J .K. 87, 439, 441, 451 Gandy, 0. 97-9 Gans, H.J. 33, 118 Garcia, E. 643-4 Garnett, E. 187 Garnham, N. 97, 99, 479 Garvin, J.L. 217 Gerbner, G. 392-4, 425 Giddens, A. 310 Giffard, C.A. 121

685

Gitlin, T. 108, 518 Gogol, N.V. 515 Gold, D.A. 458 Gold, R. 365 Golding 164 Golding, P. 59, 97, 439, 477, 488-9, 496-7, 500 Goldmann, L. 471, 743 Goldsmith, 0. 5 Goldsmith 72 Gomery, D. 38, 43 Goodman, Lord 277 Gordon, J. 218 Gould, G. 186 Gould J. 551 Grade family 19 Gramsci, A. 100, 465, 469-72, 474, 482, 485, 517-19, 525-7 Grant, J. 409 Grass, G. 258 Graves, R. 187 Green, H. 293 Grigg, J. 279 Guback, T. 33, 49, 96-7, 560 Guedalla, P. 187 Gunn, H. 218 Gurevitch, M. 478 Haley, W. 213-15 Hall, S. 59, 115, 476, 478-9, 482-8, 491-2, 517-19, 528 Halloran, J.D. 489 Hamelink, C. 439, 498 Hamilton, A. 281 Hamilton, D. 279, 281 Hammett, D. 662 Han, K.-T. 99 Handley, N. 315 Harbord, J. 251 Harding, W.G. 290 Harmsworth, A. see Lord Northcliffe Harmsworth, H. see Lord Rothermore Harris, R. 277 Hawke, B. 320 Hearst, W.R. 290, 456 Heffer, E. 114 Heilbroner, R.L. 115 Herman, E.S. 95, 108, 118, 12Q-21, 313, 527-8 Heyer, G. 24 Hilferding, R. 471 Hill, A. 393 Himes, C. 662 Hindess, B. 486-7

686

The Political Economy of the Media I

Hird, C. 275 Hirschleifer, J. 92 Hirst, P. 488 Hitler, A. 566 Hobson, J. 558 Hocken, H.C. 575 Hoge, J. 275 Hollings, E. 274 Horkheimer, M. 59, 64-5, 465, 472, 522-3, 529, 533, 540 Howe, G. 90 Huesmann, L. 392-3 Hulton, Sir E. 144 Hussey, M. 276 Huxley, A. 187 Hyde, Sir C. 212 lliffe family 14, 148 Irish, W. 662 Isgur, L. 284 lsaacs, N. 95, 118 Jackson, M. 365 Jacoby, R. 114 Jakubowski, F. 471 Jansky Jr, C.M. 110 Jelloun,.,.T.B. 664 Jenkins, S. 280 Jensen, J. 228 Jessop, B. 468 Jhally, s. 98 Johnson 94 Johnson, L. 386, 551 Jones, K. 133 Jonscher, C. 98 Kahn, F. 46 Kahneman, D. 92 Kaplan, S. 291 Katz, E. 563-4 Keliner, D. 88-9, 100 Kelly, S. 275 Kemsley, Lord 148, 160, 182, 200, 219 Kennedy, E. 274-5, 321 Kielbowicz, R.B. 109 King, C.H. 219 Kirtland, C.M. 231 Kitchener, H.H. 221 Kittross, J.353-4 Knight, M.M. 454 Knutsford, Lord 216 Kojak, T. 631 Kolko, G. 114 Krasnow, E. 394

Kwerel, E. 94 Lacan, J. 52, 469 Laclau, E. 519, 526 Lancaster, K. 91 Landes, D.S. 550 Landro L. 36 Lang,J. 661-2,664 Lansbury, G. 186-7, 193 Lasch, C. 114 Layder, D. 310 Layton, Sir W. 196 Lazarsfeld, P. 113 Leach, E.E. 110 Lee, M. 95 Lenin, V.I. 438-9, 482, 518, 553 Leong, W.-T. 96 Levant. P. 60 Levitt, T.N. 449 Levy, M. 132 Lichter, S.R. 108 Linder, S.B. 449, 451 Linklater, M. 279 Lipman, J. 386 Lippmann, W. 489-90 Lipstadt, D. 295 Littin, M. 655 Little, A.D. 597 Litvak, I. 575 Livant, W. 98, 440, 444 Lloyd 410 Lloyd George, D. 187 Lo, C.Y.-H. 458 Locke, J. 129 Lomax, A. 412 Longley, L. 394 Lonsdale, Lord 184 Losev, S. 657 Losey, J. 24 Loveli, T. 65 Lowe, B. 408 Luce, H. 543, 555 Luckman, B. 15 Luft, S. 281 Lukacs, G. 470, 473 Lukes, S. 510, 513-14, 516-17, 519 Lupescu, Madame 184 Lyndhurst, Lord 215 Lyon, C. 41 Macaulay, R. 187 MacDonald, R. 191 Macherey, P. 483 Machlup, F. 93

The Political Economy of the Media I Magiera, M. 366 Maisonrouge, J. 634 Maitland 279 Mallalieu, J.P.W. 165 Mandel, E. 54 Mankiewicz, F. 389, 391-3 Marcuse, H. 70, 439, 523 Marks, L. 554 Marlowe. T. 217 Martin, K. 217 Martiniere, G. 665 Marx, K. 52, 54-7, 61-70, 72, 76-,.79, 88, 90, 99, 122, 438-9, 444-6, 452, 454-5, 466-7, 473, 478, 482, 517-18 Mason, T. 480 Mattelart, A. 96, 469, 498 Maule, C. 575 Maxwell, R. 72, 276, 285, 312, 316, 319 Mazrui, A. 498 McChesney, R.W. 110-12, 116, 119-20, 394 McClellan, S. 37 McConnaughey, G. 226 McGovern, G. 389 McGowan, J. 381 McLuhan, M. 324, 440, 670 McManus, J. 361 McMurtry, L. 510 McNamara 552 Means, G. 100 Meehan, E.R. 95 Meese Ill, E. 48 Melior, W. 193 Mercer, C. 483 Meszaros, I. 114 Meyers, J. 361 Meyers, M. 37 Miliband, R.R. 58, 65, 67, 479, 499 Miller, K. 97 Milton, J. 281 Minney, R.J. 185 Mintz, B. 310 Mishan, E. 380 Mishima, Y. 258 Mitterand, F. 660 Mond, A. 215 Monk, M. 662 . Montavalli, J. 43 Montesquieu 129-30 Moore, R. 18, 23 Morcambe 23 Morgan, A. 112, 120 Morgan, J.E. 11Q-12 Morris, H. 184 Morris, R.C. 38

687

Morris, W. 64 Morrow, E.R. 435 Mosco, V. 96-7 Mouffe, C. 519, 526 Mozart, W .A. 580 Muller, R. 643 Muller, S. 391 Murdoch, R. 20, 35-9, 66, 271-81, 284, 286, 301, 303, 309, 312, 316, 32Q-21, 387 Murdock, G. 59-60, 97, 99-100, 314, 439, 477, 488-9, 497 Murray, R. 499 Murrow, E.R. 386 Musel, R. 427 Napoleon Ill 665 Neil, A. 280 Neumann, F. 472 Nevinson, H.W. 186 Newfield, J. 37 Newton, M. 184 Nichols, J. 507 Nielsen, A.C. 442 Nixon, R. 119, 288, 386, 389, 415-16, 602 Noble, J .K. 286 Nockels, E.N. 110, 119 Noli, R. 96, 381 Nordenstreng, K. 439, 637 Northcliffe, Lord 6, 66, 131-43, 169, 182, 187-9,194,202,207,215-17,219 ,221,573 Novak, R.D. 108 Novek, E. 99 O'Conneli 553 Ochs, A. 292 Offe, C. 458, 467 Oilman, B. 96 Orweli, G. 283 Owen, B. 47 Owen, F. 164 Palamountain, J. 456 Paley, W.S. 116 Palmer 410 Palmer, E. 389-91 Palmerston, Lord 171, 408-11 Pangloss 550 Parenti, M. 524, 528 Park, R. 511 Passeron, J.L. 64 Patterson, T. 388 Pearce, M. 384 Pearson, C.A. 138 Pearson, S. 13, 14

688

The Political Economy of the Media I

Peck, M. 3Sl Perry, A. llO, 219 Peterson, P.G. 431 Philips, L. 43 Phillips Price, M. IS7 Picard, R.G. 47 Picasso, P. 25S Pickford, M. 572-3 Pinter, H. 24 Plato 53S Pollock, J. 662 Popper, K.R. lOO Porter, N.D. 23 Poulantzas, N. 61, 45S, 467, 499, 516 Powe Jr, L.A. ll7 Pragnell, A. 3S7 Prokop, D. 469 Proxmire, W. 24S Radford, J. 4S3 Ray, S. 25S Read, W.H. 620 Reagan, R. 44, 49, ll9, 274, 2SS, 316, 321, 376, 390, 394, 525, 529 Reed, A. 164 Rees-Mogg, W. 279 Reich, W. 469 Reith, Sir, J.W.C. 7, 184 Renwick, Lord 17, 19 Resnick, S. SS, 9S, 100-101 Rhondda, Lord 146 Richardson Jr, J. 551 Riley, J.G. 92 Rivers, J. 37-S Robertson, C.P. ISS-6 Robins, K. 99 Rockefeller, N. 252, 635 Rogers, E. 513 Rogers, J.L. 36 Roncagliolo, R. 659 Roosevelt, F.D. ll9-20 Rosen, P. ll2, liS Rosenthal, E. 43 Ross, E. 314 Rothennere, Lord 6, 132-3, 135-7, 139-44, 146-7, lS2, 196, 199, 217-21, 279 Royko, M. 275 Rudenberg, H.G. 597 Russell, Lord J. 4ll Sarafin, R. 369 Sarkkinen, R. 3S7 Samoff, D. ll6, 251-2 Samoff, R. 549

Sartre, J.-P. 473 Sassoon, S. lS6 Savio, R. 65S Schacter, M. 391 Scherer, F.M. 34, 39, 41, 47 Schiller, H. 96, 9S, 122, 352, 439, 45S, 49S, 560-62, 564, 5S5 Schlesinger, P. 492 Schmidt, H. 663 Schudson, M. liS Schwartz, M. 310 Scott, C.P. IS9, 199, 201, 215,.222, 493 Scott, G.C. 3S Scott, J. 313 Seignobos, C. 129-30 Seldes, G. 109 Sepstrup, P. 3S7, 392 Severin, W.J. llO Schackle, G.L.S. 95 Shaftesbury, Earl of 409 Shah, E. 271-2 Shakespeare, F. 427 Shakespeare, W. 392 Shankar, R. 25S Shapiro, M. 513 Shaw, C. 2S5, 2S7, 291 Shaw, G.B. IS7 Shawcross, Lord 19, 276-7, 2SQ-Sl Sica, A. 90 Siegelaub, S. 96 Signorielli, N. 392-3 Sinha, N. 99 Sitwell. 0. IS6 Skase, C. 320 Sklar, M.J. ll4 Sloan, A. 274 Smith, A. 94, 95 Smith, D. 336 Smothers brothers 435 Smythe, D. 60, 96, 9S, 465-72, 474, 4S6-S Sohn-Rethel, A. 471-2 Solomon, N. 95 Soloski, J. liS Southwood, Lord IS2, 219 Spender, J.A. 215 Sraffa, P. 471, 473 Stallone, S. 44 Stanton, F. 396, 413-14 Sterling, C. 353-4 Stem, L. 37 Stevenson, W. 365 Stinchcombe, A.L. 94 Stothard, P. 2SO Swaffer, H. 163

The Political Economy of the Media I

Sweezy, P.M. 439, 441-2, 447, 451, 453, 455, 550 Swerdlow, J, 3S9, 391-3 Swift, J. 129 Taishoff, S. 113 Teinowitz, I. 361, 363 Terry, H. 394 Thatcher, M. 271-3, 316 Thayer, L. SS-9 Thomas, Sir M. 164 Thomas, N. Ill Thompson, Lord E.P. 9, 13, 15, 20, 54, 66, 4SO, 4S7 Thompson, J. W. 226, 63S Thomson, R. 226 Tisch, L. 2S7 Tomlinson, H.M. 1S6 Tracey, M. 492 Trotsky, L. 471-2 Troughton, Sir C. 277 Truman, H. 94, 54S-9, 557 Tse-Tung, Mao 440 Tuchman, G. lOS Tunstall, J. 352, 49S Turner, T. 357, 361, 365 Turner, W.J. IS7 Tu row, J. 372 Tversky, A. 92 Unwin, Sir S. 15 Vance, C. 601-2 Varis, T. 49S, 562, 637 Vaughan, R. 23 Veblen, T. S7, 439, 447 Vemoff, E. 96 Victoria, Queen 171 Villard, O.G. 109 Voltaire 550 Von Hayek, F. S7 Von Mises, L. S7 Waddington, D. 273

689

Wallace, E. 191 Wallerstein, I. 90 Walley, W. 354 Walter, A.F. 13S, 140 Waiter, J. 137-S, 140-41, 174, 212, 220 Waiter II, J. 215 Waiter ID, J. 13S Walter IV, J. l3S, 140 Waiters, B. 3S6 Warburg, Sir F. 25 Warhol, A. 662 · Wasko, J. 97 Webster, F. 99 Wedell, G. 563-4 Weinberg, S. 305 Weinstein, J. ll4 Welles, 0. 662 Wells, A. 560-2, 564, 5S3 Wells, H.G. 191 Westergaard, J. 512 Whale, J. 47S Whymes, D. S7 Wilcox, D. 30S-9 Williams, F. 155 Williams, R. 51, 55-7, 62-3, 65, 465-6, 471, 473-4, 479-S4, 4S6-SS Wilson, C. 2SO Wilson, W. 1S7 Winters, P. 36S Wise 23 Witcher, S.K. 3S Wolff, R. SS, 9S, lOQ-101 Wolton, D. 599-600 Woodfull, H.S. 222 Wrench, J.E. 216 Wright, E.O. 45S Wright, P. 91 Young, Lord 272 Yule, Sir D. 1S5 Zangwill, I. lS7 Zenger, J.P. 121 Ziegler, P. 43

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