Page 191 - Critical Political Economy of the Media

170 Critical investigations in political economy

expanded their size and operations. Increasingly able to relocate production,
operations and finance they gained leverage over governments forced to compete
for their patronage under terms that favoured transnational capital at the
expense of labour and frequently of national capital too.
In the 1980s and 1990s the financialisation of capitalism increased with the growth
in private banking, currency and derivative trading (including by multinational cor-
porations). International transactions were facilitated by new technology, notably
satellite and fibre optic cable communications and computing. Market pressures
and government liberalisation produced an increasingly unregulated flow of
capital between countries on an unprecedented scale. The main features have
been a weakening of state-centred economic sovereignty, and the emergence and
consolidation of a neoliberal global order formed from the second half of the
1980s. The transformation to a neoliberal governance system was precipitated
by the collapse of bureaucratic party-states in the communist East. The welfare
states in the capitalist West were weakened. Post-war settlements based on institu-
tionalised compromise between capital and labour shifted to neoliberal economic
policies based on liberalisation, deregulation, privatisation, market proxies in the
residual public sector, internationalisation and reduced direct taxation – a set of
policies intended to alter the balance of forces in favour of capital. The inter-
national financial and trading system was reshaped. The implications for media
and cultural policy are examined further in the next chapter.
Since the ascendency of neoliberalism in the 1990s and 2000s there have been a
series of crises in global capitalism, with a major global recession in 2007–8. As the
rise of the so-called BRIC countries (Brazil, Russia, India and China) illustrates,
some economies have been relatively insulated from or aided by crises affecting
the older advanced economies. China was insulated from the crises afflicting
Western capital in the 1970s and grew its economy in the 1990s with China’s
telecommunications market, the world’s largest, developed by national capital
and the party-state (D. Schiller 2007: 180, 177–97). US hegemony, including
cultural hegemony, has been weakened, although the US remains the world’s
geopolitical superpower (Tunstall 2008).
The consequence of the global reorganisation of capital has been a significant net
loss for democratic governance. The consequence of an adverse reaction from
financial markets has disciplined governments into maintaining a raft of policies
favoured by private capital interests from privatisation and deregulation, cuts to
welfare programmes and tax cuts for corporations and wealthy individuals.
Multinational corporations have used diverse means to extract market-friendly
policies from huge investment in lobbying to regulatory and industrial arbitrage.
The second main consequence has been to strengthen capital and weaken labour.

Globalisation, states and culture

Informing the clash between cultural globalisation enthusiasts and radical political
economy’s critique of neoliberal ascendancy are differences in conceiving the state.