Page 105 - Critical Political Economy of the Media

84 Critical investigations in political economy

(TNC) ‘is one that maintains facilities in more than one country and plans its
operations and investments in a multi-country perspective’ (Herman and
McChesney 1997: 13). Such firms tend to internationalise both products and
production processes which in turn contribute to the dissemination and adoption
of professional practices and media forms and formats.
Capital’s inexhaustible search for new markets is eloquently described by Marx
and Engels (2013 [1848]). The search for the investment of capital in media
technologies and services, combined with the imperatives on firms to compete in
increasingly liberalised international markets, has encouraged the expansion of
multinational media corporations. The industrial and manufacturing base of
post-war prosperity in Western nations suffered shocks in the 1970s precipitated by
the OPEC oil crisis, stagnation combined with rampant inflation (stagflation) and
collapsing profits, especially in heavy manufacturing industries. Firms attempted
to restore profits through foreign investments and expansion into new markets.
The shift from manufacturing to IT industries and services lies at the heart of
what has been dubbed a ‘knowledge economy’ and analysed more critically
as digital capitalism (Schiller 2007) or informational capitalism (Fuchs 2011)
(chapter five). Informatisation, data processing and international communications
became core requirements for capital growth. The various drives for capacity in
information and communication systems also contributed to reshaping media
and cultural industries. Finally, merger and acquisition activity in media has also
partly resulted from the expansion of the financial sector and assets relative to
other sectors of the economy, especially from the mid 1990s. Financialisation is
intimately connected with the slowing rates of growth of the so-called triad
economies of the United States, Europe and Japan since the 1970s (Foster and
McChesney 2012). The financialisation of capital accumulation was analysed by
the Marxist economist Sweezy, who regarded the growth of the financial sector as a
response to the stagnation tendencies of monopoly capitalist economics. Deepening
stagnation of production led to a shift from ‘production to speculative finance as
the main stimulus to growth; high levels of unused productive capacity in manu-
facturing encouraged industrial corporations to ‘pursue the immediate, sure-fire gains
available through merger, acquisition, and enhanced monopoly power than to
commit their capital to the uncertain exigencies associated with the expansion of
productive activity’ (Foster and McChesney 2012: 13, 17). Corporations have them-
selves become financialised entities, operating like banks in managing capital
flows and engaging in speculation on futures and other ‘fictitious capital’, as well as
currencies and commodities. Media, telecoms and the Internet sector have been
in the forefront of the financialisation of capitalist economies (Winseck 2012).
The expansion of multinational corporations, developing global production
and distribution networks, has been uneven but ongoing, with strong foreign
direct investment (FDI) from the mid 1980s. Growth has been driven by efforts
to open and expand markets or to make production more cost-efficient by
accessing lower labour costs, resources, infrastructure, production facilities or
advantageous tax regimes. Overseas expansion is also connected to domestic