An important but overlooked factor in the last two UK general elections was the influence and role of financial and business journalism. In his new book Complacency and Collusion, Keith Butterick explores the history and development of financial and business journalism and how it influences not just political journalism but also sets the political agenda.
‘There is a new report focusing on media coverage throughout the May election written by the Centre for Study of Media, Communication and Power at King’s College London. It concludes that the, ‘Conservatives ‘won’ the battle to set the campaign agenda focussed on the economy rather than health, education or immigration.’ They noted that reports and commentary about the economy focussed first on spending cuts (1,351 articles), then economic growth (921 articles) followed by cutting the deficit (675 articles).
Interestingly, the study also demonstrated how the traditional print media set the political agenda rather than new media such as Twitter.
It follows then, that since 2005 the Coalition government and the current Conservative government have used the issue of economic management as a stick to successfully beat the Labour Party. Only last week Chancellor George Osborne was at it again, in the debate over the so-called fiscal charter he accused the Labour Party of wanting to run a permanent deficit. Once again Labour stood accused as being deficit deniers, or in other words, the party that couldn’t be trusted with the economy.
This link between financial journalism and politics is not new. For over 200 years, the financial and business pages have been important arenas where economic philosophies are promulgated and discussed. Adam Smith and John Maynard Keynes, for example, both used the print media of their day to establish their ideas. Continuing the trend in the late twentieth century, the financial and business sections have also played a crucial role in establishing the intellectual credibility of both neoliberalism and austerity.
Neoliberalism, the dominant politics of the last thirty years, did not just happen. In the United States during the 50s and the 60s it was a marginalised economic theory because it offered no solution to the economic problems of the day, and that it was only after it appeared to offer an answer to the problem of inflation that it began to be taken seriously. However, in the UK it was the support of two influential economic commentators, Samuel Brittan of the Financial Times and Peter Jay, the economics editor of The Times who helped establish the credibility of neoliberal economic philosophy of Friedman and Hayek. Their role was crucial in influencing the Conservative politicians of the day who went on to form the first Thatcher government.
The way the financial and business pages helped to establish intellectual credibility of austerity in the early years of the coalition can be illustrated by two examples. First came the argument that if we did not introduce a policy of economic austerity then our economy would suffer the same fate as Greece; the clinching arguments were laced with undefined threats of what the bond market would do if we did pursue these policies. This argument was supported by a succession of business leaders and individual businesses and stock market analysts keen to support the continuation of neoliberalism from which they had benefitted. The argument that markets could not be defeated is rarely challenged by business and financial correspondents either because they did not have the skills or knowledge to challenge the arguments or because they agree with the policy. The second argument was that our economy would lose its triple AAA status if we did not introduce a deficit programme. This would in turn make the cost of borrowing more expensive and impact on everyone.
In Complacency and Collusion, I argue that the financial and business pages set the national and international political agenda. There are many examples of where policies first raised in the financial and business pages go on to become political issues – the successful abolition of the 50p tax rate is one. The ‘business lobby’ uses the financial and business pages to campaign for issues that supposedly affect its interests, and they rely on an uncritical type of reporting by journalists who believe it is their role to support business.
It was exactly this type of uncritical type of business reporting that helped to create the climate that led to the crisis 2008. The uncritical reporting that passes for much of financial and business journalism actually helped contribute to the financial crisis. There is an implicit assumption in the press that the only type of business structure that can exist is that of shareholder value, that the sole function of any company is to enhance the value of their shareholders. The current domination of this form of business is presented as the natural state of an economy, without possible alternatives. This is a dangerous view to propagate.
The effect this had on the political landscape was clearly demonstrated during the recent Labour leadership election where too many of the leadership contenders came out with the fatuous phrase that the Labour Party had to be more ‘pro-business’. In practice, this meant accepting the status quo and remaining uncritical of business practice. That way has already led to economic catastrophe and will do so again unless there is a radical change of policy. The landscape can be changed, but it is not enough to be anti-austerity, there has to be a clear alternative to the neoliberal thinking at the heart of it.
Critical financial and business journalism is now needed more than ever, neoliberalism has weakened or destroyed local and national government and the trade unions that once protected society from the negative impact of business. At the same time, the influence of business on our lives has been growing through outsourced services and the growth of globalisation. Critical financial business journalism has the responsibility of defending our society.
While there are many excellent examples of critical financial journalism, criticising for example high and unwarranted chief executive pay and tax abuses, too much still accepts the fundamental ideological basis outlined above. We need financial and business journalism to explore new economic paradigms and challenge the status quo as their forerunners did in the 30s and 70s.’
Keith J. Butterick is director of the Centre for Communication and Consultation Research at the University of Huddersfield and the author of Introducing Public Relations Theory and Practice (Sage, 2011). He is an award-winning business journalist, magazine editor and former director of a financial public relations consultancy.
Complacency and Collusion: A Critical Introduction to Business and Financial Journalism is available to buy from Pluto Press here.