Download WEEK 9 Political Economy

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The Historical/Theoretical Foundations of Political Economy
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Adam Smith defined political economy as the allocation of resources and was
concerned with “how mankind arranges to allocate scarce resources with a view
towards satisfying certain needs and not others” (Smith, 1776/1937: 14)
PE focused on the production, distribution and consumption of wealth and their
consequences
Early political economists studies capitalism as a system of social production and how
the resources were allocated in this arrangement
In time, PE evolved as capitalism evolved
PE added to its concerns the class analysis and Marx’s and Engel’s historical
materialism thesis
PE emphasized a radical critique of the evolving capitalist system through moral
stance in opposition to the unjust characteristics of the system
In the second half of the 19th century a fundamental shift occurred in the study of
economic issues.
• The focus changed from macro-analysis to micro-analysis
• Emphasis was placed on individuals rather than societal concerns
• Methods were drawn from the social sciences rather than from moral
philosophy
These fundamental changes also reflected on to the name of the discipline – from
political economy to economics
Today, although classical form of economics prevails, PE has also survived and
evolved in different forms
In terms of the political economy of communication, we are referring in general to a
radical, critical and/or Marxian political economy
In summary, a primary concern of political economists is with the allocation of
resources within capitalist societies
Through studies of ownership and control, PEs document and analyze relations of
power, a class system and other structural inequalities
These explanations set the stage for applying political economy to the study of
communication
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Political Economy of Communications
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During 1940s and 1950s, US communication scholars focused primarily on individual
effects and psychologically oriented research
There was very little concern for the economic context in which media were produced,
distributed and consumed
In the 1950s and 1960s Dallas Smythe urged scholars to consider communication as
an important component of the economy and to understand it as an economic entity
Smythe presented one of the first explications of PEC in 1960
According to Smythe, the central purpose of applying political economy to
communication was to study the structure and policies of communication institutions
in their social settings
Although Smythe’s discussion at this point did not include radical or Marxist
terminology, it was a major departure from the kind of research that dominated the
study of communication at that time
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It was not until the 1970s that the political economy of media and communications
(PE/C) was explicitly redefined but this time within a more explicitly Marxist
framework
AT this time, Graham Murdock and Peter Golding offered their formulation of the PE
of Communication, stating that “the mass media are first and foremost industrial and
commercial organizations which produce and distribute commodities (1973: 205-206)
Therefore, PE/C is fundamentally interested in studying communication and media as
commodities produced by capitalist industries (Murdock & Golding, 1973)
Moving from here, Nicholas Garnham further outlined the approach in 1979, also
drawing connections to Frankfurt School and noting that the PE of C invovles
analyzing “The modes of cultural production and consumption developed within
capitalist societies (Garnham, 1978: 123)
A good deal of PE/C research has focused on the evolution of mass communications
as commodities that are produced and distributed by profit-seeking organizations in
capitalist societies
A market model now dominates much of the media landscape
This commercialization process has been accompanied by an ever-expending
consumer culture, thus prompting the term cultural capitalism as a descriptor for the
current period
One concern for Political Economists has been the
commodification/commercialization of media resources
Increasingly, media and communication resources have become commodities –
products and services that are sold by profit-seeking companies to buyers or
consumers
An obvious example is the development of various forms of “pay” TV, such as
Digiturk, LIG TV etc…
In addition, more and more of the media/communication landscape is filled with
commercial messages. Ex. Product placement in Hollywood films
Diversification has been another concern for the PE/C
As media companies have expanded, new lines of business have been added in a
process of diversification
Today many huge media/entertainment conglomerates that are involved in a wide
range of diversified activities dominate media/culture industries
One such example among may others is Time Warner for instance
Time Warner includes the following
• Publishing
• Film
• TV production and distribution
• Home video
• Music
• Cable networks
• Cable systems
• Computer services
• Professional sports
As media corporations have grown larger and more profitable they have also
integrated horizontally
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Horizontal integration refers to adding companies that are in the same line of business
Time Warner for example has added many magazines to its already sizable list of
magazines that were owned by Time, Inc.
Currently, Time Inc. publishes more than 140 magazines
Not only have these media/communication conglomerates have expanded horizontally,
but they have also integrated vertically
Vertical integration means adding companies in the same supply chain or at different
stages of production
This has been possible with new distribution technologies and deregulation of markets
For example, Time Warner, Warner Bross and New Line Cinema produce and
distribute motion pictures that are shown on the company’s cable networks (HBO,
Cinemax), and television network (Warner TV network)
Another major concern for political economists of communications has been market
concentration
Although a competitive marketplace is the avowed goal of capitalism, there is an
inevitable tendency for markets to become concentrated
By documenting the actual level of competition (or lack of it), PE/C challenges the
myth of the competitive marketplace under late capitalism
Essentially, most of the media industries or sectors in the United States and around the
world are dominated by oligopolies
An oligopoly is a market form in which a market or industry is dominated by a
small number of sellers (oligopolists)
For example, an oligopoly that includes Warner, Disney, Universal, Paramount and
Fox (all owned by giant media conglomerates) regularly receives 80% and 90% of the
total theatrical film box office, in both the USA and many countries around the world
These various trends have been investigated by political economists at various levels
of analysis.
These have included
– National media systems
– Specific media industries
– Specific corporations and
– International level of analysis
Political economists in their analysis, are especially interested in the consequences of
such media concentration
For example
– Availability and quality of news
– Tabloidization of news
– Homogenization of content in cultural industries
More generally, political economists have analyzed these trends in relation to
capitalism and power
Closer, more in-depth analysis of media and communication organizations is
necessary to
– asses the precise mechanisms of corporate ownership and control and
– examine trends of commodification, integration and diversification
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This analysis considers these developments in light of issues such as cultural
creativity, diversity, equity, access, and democratic ideals
The Walt Disney Company provides a good example for such analysis
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The company has been known for producing children’s or family-oriented
entertainment
– It gained a somewhat sacred or pure image
– Based in LA California
– Produced short animated films that were distributed by other film companies
and appeared and appeared before feature-length films in movie theatres
around the world
– They were not one of the major studios
– The company grew with financial difficulties
– Their reputation was for quality animation – using cutting-edge technological
developments
– Disney brothers were the first to set the foundations of diversification
– They expanded to include television production and live-action feature films
– In 1953 the company opened Disneyland – the first of many theme parks
– At the same period they also started distributing their own films
– At the end of the 20th century, Walt Disney Company was the second largest
media conglomerate in the world
– Now they had a wide array of domestic and international investments
– The companies revenues for 2000 were more than $25 billion
– Disney owns the American Broadcasting Company (ABC)
– Broadcast TV stations
– Radio stations and networks
– Maintains partial ownership of several cable networks including 80% of ESPN
and 38% of A&E and Lifetime
– Walt Disney Studios produces films under the Touchstone, Hollywood Picture
and Miramax labels
– The company is involved in home video, recorded music, theatrical
productions, and consumer products
– It has more than 600 Disney Stores around the world where these products are
sold
– Disney currently has six major theme parks in USA and three others around the
world
– The company also owns extensive hotel and resort properties
– Variety of regional entertainment centers
– A cruise line
– Sports investments
– And a planned community in Florida called Celebration
– The Walt Disney Internet Group includes sites such as ABC.com, Disney
Online and ESPN.com
A political economic analysis of the Disney Company would investigate the
beneficiaries of their policies and motivations (shareholders and managers)
It would require looking at mechanisms of control within the corporation that
influence the production and distribution of its products and services
A complete study would look carefully at large stockholders, their relation to
managers, and the composition of the board of directors.
Ties to other companies and institutions would need to be explored as well