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Living in a world of make-believe: the mythmakers of the globalising age

Despite the failings of the neo-liberal model, the media still uses its advocates in City institutions, financial bodies and agencies associated with them to explain and analyse the crisis
Gerry Hassan
7 January 2010

Thirty years ago in another economic and political age the Glasgow University Media Group analysed the biases of current TV news in a series of seminal reports beginning with Bad News (Routledge and Kegan Paul 1976). They made the case that across a range of issues: economic, industrial and political, news which professed itself to be ‘impartial’ was instead imbued with a deeply selective and partial view of the world.

Since then a much more powerful, partisan and explicitly ideological account of the world has come to the fore in politics and in our mainstream analysis of the world. It focuses on the merits of globalisation, competition, deregulation and free market economics. Despite the global crash and crisis of this paradigm, most of the mainstream media with honourable exceptions (Larry Elliott in The Guardian, Will Hutton and Paul Mason on a good day, more of which later), have become even more narrow and dogmatic in their commitment to a world economic and political order which is in profound crisis.

A telling example of the power of this dominant view of the world was provided on Newsnight on Tuesday night by Paul Mason with an item on his forecasts for 2010. This six minute film cited four experts, all of whom were from the City, two from HSBC, one from CitiGroup and one from GLC Hedge Fund. All offered partisan, deeply controversial views as if they were uncontested wisdom with no scrutiny, criticism or context offered.

The item opened with Paul Mason talking of the dangers of a ‘double dip recession in the UK’ as the economy officially comes out of recession as predicted on January 26th and then reacts to the withdrawal of £30 billion worth of temporary stimulus. Steven Bell, Chief Economist of GLC Hedge Fund talked of Britain coming out of recession, but things looking much more gloomy before they get better. Mason then commented:

Can Britain make a move from growth boosted by state spending and printing money to recovery led by the private sector?

Thus the opening assumptions of Mason’s piece set the problems of the UK in the political and media shift which has gone on in the last year, moving the crisis of the economy from one of free market capitalism and the financial sector to being one of the state, public spending and public debt.

Stephen King, Chief Economist of HSBC then said:

… past recoveries in the US, but also Europe are often led by consumers – low interest rates leading to more consumer borrowing and higher house prices …

This is a conventional economic analysis of recent decades, but hardly the way such economies have dealt historically with economic regeneration in periods such as the 1930s and immediate post-war era. King acknowledges that such an approach as he is recommending will be ‘more difficult now’.

In the most revealing extract of the whole film King warming to his theme of how it is time for government to have a reality check and voters to experience pain said:

This is a political rather than an economic issue. We know from an economic point of view how to deal with excessive debts and deficits. You just take the bitter pill of austerity. That means public spending cuts and possibly some tax increases. The political question is can governments deliver that kind of pain?

Time for some ‘shock therapy’ perhaps along the lines the West doled out to Russia and the former Eastern European countries post-1989. Karen Ward, Chief Economist of HSBC then invoked the need to tackle the ‘structural deficit’, before Willem Buiter, Chief Economist of CitiGroup promoted the need for ‘an emergency, a crisis to get these kind of cuts’ and that ‘people don’t do them [cuts] unless they have a gun to their heads’. This would happen he suggested due to the power of the markets:

We may need a first downgrade or putting on negative watch before a UK Chancellor thinks of taking 6% of GDP cumulatively out of public spending …

Mason then concluded the item be offering a series of predictions for the UK in 2010: namely, the UK would face a crisis between its credit rating and the plans of the UK Government. As a sign-off he suggested this would lead to the following growing realisation, ‘Earth to Whitehall we have a problem’.

After this came a studio discussion with Irvin Stelzer of the Hudson Institute, Gillian Tett of the ‘Financial Times’ and Will Hutton of the Work Foundation. Stelzer was his usual indefatigable self, Tett made many insightful comments, while Hutton – usually thoughtful, reflective and challenging of the groupthink of the last few decades – seemed to have gone significantly AWOL. He talked of the recession as basically over in the UK in themes similar to his piece in the weekend Observer.

Hutton took what Jeremy Paxman called a ‘Panglossian analysis’ that the UK could easily if it so choose halve the national debt in less than a decade, that its position was comparatively advantageous compared to other economies, and that what was all the fuss, given we had done it all before in the mid-1990s. In The Observer, Hutton argued that the UK would see a speedy recovery during 2010 and 2011, which was the product of ‘hyper-active government policy’ and ‘government economic activism’ which would see Labour at some point (possibly in hindsight) vindicated.

Being Will Hutton his piece contained many lucid, penetrating points, acknowledging that Labour was still in hock to the banks despite everything, from the National Investment Bank to the bankers’ bonus windfall which would soon be rescinded. Yet there was something strangely ahistoric about Hutton’s piece, oddly disturbing from the author of The State We’re In. He talked of Labour’s beholden attitude to the City and finance during the New Labour era and lack of support to real industry without once mentioning the anti-industrial culture which is so deeply rooted in society and has been from the early formation of British ‘gentlemanly capitalism’.

Tett commented in the Newsnight discussion that the seismic crises of 2008-9 had been one of mortgage debt and corporate debt, whereas the issue was now one of managing sovereign debt. The UK faced a position and set of challenges similar to the one Japan faced from the 1990s onward, although both Tett and Hutton acknowledged that Japan was a much more cohesive, equal society where the burden of restraint had been borne across all of society, including the well-off.

What Paul Mason’s item illustrates is the stranglehold of the market fundamentalist view of the world and how even people who can be as thoughtful and questioning of it as he can be and Will Hutton can fall victim to its assumptions.

Despite the global crisis, the collapse of the financial sector and severe strain which has challenged every single neo-liberal tenet, it is telling that the way the media reports our economics and politics has become more ideological, dogmatic and unquestioning. This is in part because the dominant economic orthodoxies of recent times have succeeded in presenting themselves as truisms which are uncontested and basically unideological. They have become part of what I have called ‘the official future’: an account of the world and a version of globalisation which in its simplicity and mechanical determinism can be understood by anyone (cf. Gerry Hassan, Eddie Gibb and Lydia Howland (eds), Scotland 2020: Hopeful Stories for a Northern Nation, Demos/Scottish Book Trust 2005 and Richard Eckersley, Well and Good: How We Feel and Why It Matters, Text Publishing 2004).

Despite the failings of the free market model and its associated ‘knowledge economy’ and ‘new economy’ paradigms, the dominant spokespeople used in the media to explain and analyse the crisis are from City institutions, financial bodies and agencies associated with them: banks, hedge funds and independent analysts who work in the City. Alternative voices, whether they be from academia, trade unions, NGOs or other independent bases are time and again marginalised, ignored and excluded.

This cannot be allowed to go on unchecked and unchallenged, and as a start should be monitored and analysed. This points to the need for a contemporary Glasgow University Media Group of our age to map the biases, judgements and values which are at play in how the modern media cover our politics and economics. Surely this is a project worthy of trade union or university research?

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