There is a growing symbiotic relationship between business, communication networks and the mass media. Business depends on communication networks and the mass media in numerous ways; in the actual conduct of business, in the need for market information, for advertising and market creation, and as ideological apparatii which act to naturalise market economies and defend class interests. In fact it is argued that the contemporary mass media rather than simply reporting on economic issues have become an integral part of economic processes (Chakravartty, Schiller 2010). Moreover mass media companies are increasingly multi-national businesses with vested interests within the various markets and societies they report on. This research explores the role of the mass media and communication networks in the crisis of overproduction and specifically the Irish economic crisis. The Irish crisis has deep roots in the country’s semi-peripheral dependent nature and its weak domestic economy, however, the current crisis is fundamentally a crisis of overproduction in property driven by speculation and encouraged by an approving media and pro cyclical government policy.
The crisis of overproduction (Marx, Engels 1848/1998) describes how in the capitalist mode of production every producer seeks to increase surplus value (or profit) by developing the forces of production (innovation), which in turn leads to an increase in the scale of the production and a corresponding (sometimes sudden) fall in price (Clarke 2001, Clarke 1990). Moreover as the distribution of the overall surplus wealth is skewed in favour of the minority class of capitalists, the working classes (in the broader sense) lack the money to buy back what they produce. This contradiction between social production and private appropriation is, for Marx, one of the basic contradictions in the capitalist system (Fichtenbaum, Shahidi 1987 p. 468). The capitalist class at the same time constantly needs to find new areas of investment. This feeds into the production of credit and speculative activity which can act to amplify and elongate the process of overproduction. Finally it is only with the destruction of wealth does value return to the commodity and market. The mass media and communication networks play an important role in the crisis of overproduction, firstly in the dissemination of information to market actors, the reflexive and dialectical nature of how actors respond to market information and finally as an ideological apparatus which acts to naturalise the market through what the research describes as a market orientated framing mechanism.
The contradiction of overproduction coupled with price inflation (driven by speculation and credit) is the key to the Irish crisis. For example in 1995 the average second hand house was 4.1 times the average industrial wage; by 2007 the cost had risen to 11.9 times (Norris, Coates 2010 p. 10). Speculators pushed production, and kept prices rising in what could only be described as a ‘fictitious’ housing market. By 2007 28% of mortgages were speculative loans. The property market began to dip in 2007 and the crisis accelerated alongside the international credit crisis.
The 2007 government response to the crisis was twofold. On the one hand it embarked on a policy of austerity with cutbacks to all aspects of government spending, including the wages of state workers. At the same time it gave a ‘blank cheque’ to the financial and banking sector both in recapitalisation and in the nationalisation of bad debts and bankrupt banks. Government policy has sent Ireland into a deflationary cycle. The new government elected in February 2011 (despite the pre-election rhetoric) has adopted effectively the same policy.
The Irish mass media played a crucial role in the Irish property market: firstly, as a means of information and advertising, many Irish daily and Sunday papers include lucrative and non-critical property supplements (moreover, Irish media companies made substantial investments in property listing websites); secondly, in an ideological manner where issues of housing were seen predominantly through what the research describes as market orientated frame, rather than, for example, seeing housing as a societal issue. The research, as part of a doctoral thesis, has (thus far) explored the coverage of the Irish Times on issues of housing and property in the run up to the 2007 general election. Amongst others the following key trends were found: a predominately market-orientated frame including the privileging of exchange value over use value; a source bias by actors from the banking, mortgage, and real estate and building industries whose statements were reported uncritically. In the news sections politicians were also sourced including some oppositional and critical, though these were in the vast minority. There was no sourcing from house buyers or renters of private residential housing (use value sources). Structural issues such as overproduction, excess zoning, the spiralling cost of land and housing were completely ignored. The research will go on to explore the ideological role of the press in the political sphere post-crash.
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