Engineering and Freedom, Part 10

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The marketing/advertising economy is generally conceived in terms far removed from the welfare/social economy.  

In fact, both offer goods and services at very low cost to the ultimate consumer, subsidies that must be borne elsewhere in the economy. Governments pay for their social programmes through borrowing or tax revenue. Industry pays for its entertainment programmes by incorporating the cost into the price of the products it creates. In both cases, the expense of the goods on offer is socialized. 

For both the social economy of government expenditure, and the promotional economy of advertising subsidy, then, the normal rules of the cash or price economy do not apply. 

The irrelevance of price, the primary source of data for productive decisions, is the reason both government and marketing agencies must collect so much “intelligence” on the everyday habits of their clientele. 

Post-Keynesian economics has outlined in great detail how the expropriation of wealth from private hands to finance the social economy has proven deleterious to the cash economy as a whole, in large measure because the irrelevance of price in the social distorts demand and supply decision-making. 

Yet little systemic analysis has undertaken as to how what one recent book called the “entertainment economy” may, too, distort the overall cash economy, even though the mechanism for the subsidy of the latter is the same as the former. 

The main argument against the social appropriation of capital investment, advanced by neo-classical economists, is that non-private interests are much less efficient in marshalling resources than are private concerns. But couldn’t this be said equally of the appropriation of actual investment in capital, for the purposes of advertising promotion through mass media? 

Marketing funds must be borrowed from the total of that available to produce a good in the first place. It is an expense without any necessary return. If advertising improves sales, that is well and good, but if an ad campaign does not do so, its expense cannot be recouped by selling it to someone else (as is the case with say, unneeded capital goods). 

Advertising, by its very nature, represents a potential wasteful expense of resources by private capital, in the same way as does wasteful government social spending. The money spent on marketing (as is the case with government programme-spending) does indeed create jobs, often well-paying ones in both cases. 

The question is whether the jobs created are worth their value to the economy overall. For the bureaucracy that must be established in order to administer state spending, the answer that has been returned by the neo-classicists has been a resounding, “No.” But for the industry-dependent marketing sector, few have even wondered to inquire if it is worth its value at all to the economy. 

Textbooks talk about “economies-of-scale,” or the savings achieved with mass production. But contemporary manufacturing concerns have grown into continent- and globe-sized monsters less to achieve economies of scale, than to afford the vast cost of mass-media advertising. 

Oligopoly or monopoly might be a matter of course in certain industries, notably resource-extraction, where there are inherently high fixed costs of exploration, etc. The only inherently high-cost factor of production that consumer-goods manufacturers must deal with is advertising and marketing. 

Where the consumer-goods sector ought by now to be highly competitive, sensitive to price fluctuations, instead there is oligopolistic concerns the size of Coca-Cola and countless other firms of the same proportion. The fact is, the largest consumer-goods firms long abandoned reliance upon crude supply and demand measures to make production decisions. 

The development of large industries devoted to consumer goods, while relatively free from government intervention (especially in the U.S.), did not otherwise rely solely on the “invisible hand” of the unregulated marketplace. Instead, consumer-based industries sought to inspire market demand by doses of propaganda through all available mass media. 

The author Susan Strasser has traced the development of the marketing economy during Victorian times, detailing in particular the selling of the Crisco brand by Procter and Gamble. She writes, “The corporations that made and distributed mass-produced goods did not necessarily set out to create needs, nor did they do so in any straightforward way. Procter and Gamble made Crisco in order to sell it. The company employed home economists to develop recipes, but did not in fact care what consumers did with the product as long as they bought it. Its goal, in Thorstein Veblen’s words, was the `quantity-production of customers’, the making of consumer markets. Sometimes manufacturers produced needs among children for products that parents bought. Those with goods in established product categories put most of their marketing effort into producing a demand for a particular brand, not a need for the product itself.” (Strasser, Satisfaction Guaranteed: The Making of the American Mass Market, 1989, p. 17) 

Strasser observes the economic mechanism of the marketing economy: “The manufacturers who adopted the conveyer belts and gravity slides of low production... needed to dispose of their huge outputs. Because mechanization demands large amounts of capital, they sought predictability and control; they could not afford large overstocks and they wanted to free themselves from dependence on wholesalers. They took their cue from a few industries, such as book publishing and patent medicines, where manufacturers courted customers directly, placing advertisements in magazines, selling by mail, or offering commissions to salesmen who went from house to house and put on public displays, the fabled medicine shows. Copyright and patent holders held monopolies on their products, and the largest and most successful flow producers could purchase Uneeda biscuits or Ivory soap only form the National Biscuit Company or Procter and Gamble, they would have to pay the manufacturers’ prices.”[ii]. (Strasser, Satisfaction Guaranteed, 1989, p. 19).

Thus it is that the mass media grew up in tandem with the inception and development of large industrial trusts devoted almost entirely to the consumer marketplace. Printed books and other materials were the first goods produced for a mass marketplace, and periodical literature in particular was crucial to the creation of an abstract marketplace for the sale of mass-produced goods. 

In the nineteenth century, when printing was industrialized under factory conditions, the new mass-circulation dailies and periodical weeklies or monthlies were economically sustainable through revenues provided by consumer advertising. So it was with the later development (in America) of broadcast radio and television. 

The commercial messages delivered through these media, while not literally brainwashing, employ many of the techniques of psychological manipulation. Advertising conditions consumers to accept the machine-technological way of life, the necessary apparatus for the creation of mass consumer goods. 

The goods and services offered by industry, submitting to the whimsical and “trivial” of everyday concerns and anxieties, are the salve, the tonic for the personal and social estrangement which occurs in society governed by technological imperatives. Mass-media entertainment, paid for the advertising of goods and services, is a crucial part of this nexus. 

The main difference between advertising expenditure and programme expenditure by governments is that while the former is financed on a private, volitional basis, the latter is not. 

However, the state is deeply implicated in the business of advertising. First, the main vehicle for it, broadcast media, are legally public utilities in most jurisdictions. Private concerns that lease these utilities, and the industries that finance these concerns through advertising dollars, do so at the pleasure of the state. Second, business tax law in most places allow corporations to write-off the expense of advertising, so that, while only large concerns can afford to spend the big bucks necessary for a really effective ad campaign, they can also profit from by eliminating the cost from the total taxes they must pay. 

Thus, consumers pay for the expense of the marketing industry twice, in the greater expense of the goods they buy, and in the larger chunk of their personal incomes taken by governments to make up the shortfall in revenues caused by ad-expense tax write-offs. More generally, though, the culture of the “entertainment sector” (the fortunes of which is completely dependent on advertising revenues) resembles that of the social economy rather than that of the regular price economy. 

This is no less true in spite of the fact that firms in the marketing industry compete vigorously for their clients’ business. In a state-dominated economy, private firms also compete assiduously with one another for the right to government business. This does not mean, however, that private companies’ revenues that come from state coffers are automatically more efficient, just because they are private firms. 

It is competition, not the mere fact of private ownership, which promotes efficiency and improved goods. Where one’s largest or only customer is the government, there is far less pressure to offer goods and services at a premium, precisely because the threat of competition from other firms is absent. 

Similarly, marketing firms win business for reasons having to do far less often with rational supply and demand decision-making, than with their ability to persuade clients of the probability of success of the “campaign” (the analogy of that word with army generals’ pursuit of the enemy in battle is entirely appropriate). 

However, since the exact relationship between any marketing campaign and any increase in sales cannot be established (it is said that half of advertising campaigns fail to have any influence at all, positive or negative, on sales), the success of any marketing firm relative to others depends not on their ability to produce anything, or carry out some service with demonstrable success, but on political connections and active lobbying. 

Advertising as often as not has no influence whatsoever on sales. But the fear that a competitive rival will usurp their market position is enough to encourage modern captains of industry to continue to perennially invest in the marketing of their goods, rather than in the goods themselves. 

The same logic has kept junta regimes throughout history expropriating the “surplus” of actual wealth-creators in order to finance their arms races. With regard to the entertainment or marketing sector of the economy, however, it is not only that business people feel constrained by competitive forces to spend such a great amount of their capital on advertising. 

The marketing/consulting industry is responsible, as we noted above, not only for representing clients from other parts of industry, but also for collecting vital information on the public. This information is the bread and butter of the marketing economy. It is also proprietary; as those who have the responsibility of handling it usually have to sign some sort of legal agreement not to reveal its contents to anyone. If they do, they could face expensive lawsuits. 

The term “information economy” is usually associated with computers and related technology, but in fact the information sector of the economy first took off after the war, when the average computer was still the size of a room. “Information” is exactly what the marketing sector of the general economy trades in. 

The social and cultural position of those who staff it, is roughly analogous to that held by scribes in the Latin church during the Middle Ages, which is to say, it has a monopoly hold on the vital data needed to operate the primary media of communication. Since people who work in this sector of the economy are recompensed handsomely by their clientele, they have plenty of cash to spread around. 

Those not directly involved in the “information” economy thus again lose out, as producers and middlemen pay less attention to the manufacture of more utilitarian things affordable to the common people in favour of baubles favoured by information professionals and those directly employed by them. 

The socioeconomic position of those within the information economy of advertising/marketing is also analogous to that of functionaries that staff the institutions of the social economy. Both groups are economic parasites, imposing their own distinct sorts of tithes on the productive activity of others. Any sophisticated economy requires some sort of non-productive parasitism, of course. 

But is the degree of parasitism evident with the contemporary information economy serving a socially useful good at all, except for enriching a relative few at the expense of many others? Advertising/marketing, at least through mass media, are financed by private business, but its principles are contrary to those of rational self-interest. Moreover, “the media,” or electronic means of communication, would never have achieved the primacy that they have without the vast sums spent on subsidizing them by advertising promotion. 

Thus, any consideration of “the effects of television” (and more broadly, all mass media) and “the influence of advertising” are really inseparable. These cultural forms are, however, generally analyzed not only in isolation, but primarily in terms of their content. 

Thus, there has been the constant worry, since the introduction of television, about how violence depicted on TV inspires actual violence in real life, or about how advertising encourages people to buy things “they don’t need or don’t want.” 

But if we assume, correctly, that human beings, as physical and social animals, have indigenous needs and wants, a fuller understanding of how “the media” condition their audiences will be gained. 

 Thus, the information/marketing economy is not, as depicted by some observers, an inevitable opponent of the state economy. In fact, both sectors have the same object of subsidizing certain forms of consumer activity at low or no charge, in order to maintain a dominant social, economic and political position. Advertising, as with “corporate sponsorship,” is indeed the alternative means of subsidy when government subsidies are insufficient or unavailable. This is the case with art and sport events, as noted. 

Television and radio networks that don’t survive on advertising subsidy, do so on government subsidy instead. The Internet functioned for many years on the subsidy of the U.S. Department of Defence, long before anyone but defence analysts or scientists had ever heard of it. 

The Internet has been a boon to marketing intelligence, however, because with the active participation of consumers in a mass computer network, companies can track their actual Web-surfing behaviour, right down to the name and number of Web sites they visit, even the contents of their host personal computer. 

Goods or services subsidized by taxes or by advertising revenue (which is a tithe on the cost of the product itself) are “in common” in that rarely could their activities be sustained by supply and demand means. 

The significant part of the workforce that now earns its living from the marketing economy, while officially employed by the private sector, are no necessary enemies of the public sector. All government departments, as well as their political masters, now are big clients of the marketing/information economy. 

Moreover, big business, by placing their stock not in a product but in an advertised image, have attempted to bury under a mound of mass-media propaganda their actual motivations for selling their product in the first place, that is, to make money. There is a fundamental symbiosis between the marketing and welfare sectors, as complementary methods of managing markets and people. 

The theoretical foundations of the modern welfare economy, laid down by Maynard Keynes and others, specifically identify the state as agent to encourage broad consumption, to avoid the catastrophic loss in spending confidence as occurred during the Great Depression. For their part, firms dependent on marketing aim to increase consumption, as well, the more so the better. 

While big business has long called for smaller government, in rhetoric, in actuality it long reconciled itself to the social economy and the consumers it made out of the bottom fifth of the population. 

The model information/welfare economy is not the United States, Canada, Britain, France or Germany, but tiny Sweden. There, the government for decades levied heavy personal and surtaxes to support a very generous welfare regime. The state does not, however, own very much of the general economy. Beyond strict health and social regulations, Swedish firms are able to do business as they wish. 

The government’s role in the marketplace is mainly to provide big tax-breaks to firms that invest in research and development. The tax savings accrued provide the capital for R&D, but also enforce industrial concentration. The Swedes have socialized not production, but consumption. The result, given the aims, has been very successful. Swedes live in social-security, and Swedish firms have burgeoned into global consumer giants. The Scandinavian experience shows that consumerism and welfarism, far from being adversarial, are mutually-dependent pillars of the modern engineered society.

Engineering and Freedom, Part 9

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Commercial broadcasters refer to advertising, euphemistically, as “interruptions” of regular programming. 

But given that the customers of broadcast media firms are not the viewers, but the advertisers, it would be more useful to think of the programming as interruptions of the commercial “messages.” The raison d’etre of the commercial media are the ads, as seen in the fact that in mass-circulation magazines, the first thing a reader is presented with when opening the front cover is not its table of contents, but rather an advertisement. 

The glossier the magazine, the more impossible it is to find the table of contents; to get people to look at the ads is the reason also that most mass-circulation magazines, rather than placing the text of their feature articles in a serial fashion, almost always break them up, using the device “continued on page...”. 

Feature content, whether it is in magazines or on broadcast media, is what attracts consumers. The advertising, what pays for this content, is in psychological terms the associative stimuli to the primary stimuli of what is usually called programme “content.” 

Without the primary stimuli, no one would bother with the associative stimuli. However, because the primary stimuli, the programming, is entertainment which is offered virtually without charge, the associative stimuli is almost automatically guaranteed a vast audience. 

And, since this audience is given entertainment to “relax” to with virtually no effort on their part, they are at their most vulnerable to the conditioning power of the ad stimuli. Barry Skinner introduced his behavioural psychology theories during the 1930s, the decade in which commercial broadcasting over radio was institutionalized in the United States (Skinner’s master, John B. Watson, had been dismissed from a professorship, due to sexual impropriety, and then went to work for the J. Walter Thompson ad agency). 

The environment of broadcast media, the “media ecology” as some have called it, is really a vast “Skinner box,” the device the psychologist constructed in order to his demonstrate his theories of behaviour. Within this box, a lab mouse was conditioned to perform a certain behaviour, pressing a lever, and it was rewarded, on occasion, with a food pellet. 

Eventually, Skinner translated his ideas into popular works, in which he argued that human beings should give up their “freedom and dignity” in order to live in a conditioned utopia. 

Apparently, he didn’t notice that many of his countrymen, and to a lesser extent, those elsewhere in the Occident, had given up their psychic liberty, if not their self-respect, to the massive experiment in operant conditioning called commercial broadcasting. 

Except, perhaps, that where the lab mouse was expected to press a lever to receive his reward, the TV viewer is expected not to do anything, not to turn the channel and not watch something else, which would cause him to miss the advertising. 

When they do, programmers immediately remove the primary stimuli, the programming, and replace it with something that it will attract more viewers to the associative stimuli, the ads. Some critics refer, inaccurately, to the habitual use of TV and other media, as well as the consumer behaviour that follows from it, as an “addiction.” 

In fact, actual addicts usually realize their dependency on an alien substance. Those involved in and influenced by the “information” economy (which is, by now, practically everyone), do not realize that they have a dependency at all. 

And, where the addict will do almost anything to get his fix, consumers dependent on “the media” for entertainment would quickly reject it if they were made to pay its full cost. However, it is the goal of mass-media advertisers and programmers (not a conscious one, likely), to attract the youngest possible audience to what they have to offer. 

This is why, for example, commercial-television programmes can charge such a premium when they are rated as “popular” with young viewers, even for shows that have significantly less viewership than others that are popular with those over fifty years of age. 

The young, unlike the elderly, have greater psychic room to be persuaded by mass means, and thus are of much better use to the controllers of broadcast media. Commercial advertisers, without any real recognition of this fact, act in the same fashion as do ordinary propagandists of totalitarian regimes, in seeking to brainwash the young into diffidence of their elder kin relations. 

The “teenager,” who came into his/her own truly during the late 1940s and ‘50s, was the earliest of the market-research industry’s explication of society in terms of age-relative demographics. 

This category has now been joined by the similar fractionalizing of the progress of life into “twenty-something,” “thirty-something,” the “over-fifty”, and now, “tweens” and younger. Once, children’s programming was at worst merely cloying and ridiculous to adults. Today such shows serve as nothing but advertisements for the merchandise that yields their production companies profits far in excess of what they receive from putting together the actual television programmes. 

Indeed, since most children’s programming includes advertisements for other children’s products, they are advertisements paid for by other advertisements! This has occurred even as the “content” of the most popular children’s shows has become as non-violent and apparently innocuous than entertainment for kids has ever been. 

If kids’ shows consist of bright-painted, perpetually-grinning dinosaurs, cuddly animated bears, and most tellingly, alien babies wearing television heads with antennae sticking out, and if all these characters do is gibber and occasionally sing a song, their parents will fail to notice that their children are being conditioned by a constant barrage of ads to be demand-fed in the manner of a lab mouse in a Skinner box. 

People blamed the best-selling book by Dr. Benjamin Spock on baby and child care for “permissive” society of the post-‘60s generation. But could any instruction manual on child-rearing be more permissive than the electronic device the very existence of which was to stimulate the passion to consume in anyone that came into contact with it? If even grown adults require forbearance not to be taken in by its hypnotic glow, how are children to resist it at all? 

The lure of the television, for both adult and child, is summed up in the phrase, “TV is the cheapest babysitter.” Like nothing else, TV keeps kids out of trouble, by rivetting their attention and leaving them stationary for long periods at a time, whilst the parents do the necessary household chores and get some rest. 

Studies on the adverse behavioural effects on children of TV shows always focus on “content,” on the number of violent acts per hour, the relative number of “stereotyped” gender images in a programme, etc. missing the bigger point that the form of the medium itself, by encouraging physical sedation, with the simultaneous exposure of many advertised inducements for food with mal-nutritional value, is a formula for slow death by obesity. This is as much an adult as a pediatric problem, of course, first in the U.S. and then in any other country that possesses commercial television in any abundance. 

Part 10 of Engineering and Freedom 

Engineering and Freedom, Part 8

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Classical economists assume that the “market” will most effectively regulate prices and production. 

However, markets can certainly exist outside the classic supply and demand principles. The state can, by subsidizing whole or in part the costs of some product or service, create markets.  This is what occurs when governments spend billons on welfare and industrial programmes, for example. 

Markets created by these expenditures are distinct from those under conditions of laissez-faire, because demand and supply exist without price regulation (as the costs of production and consumption are subsidized). 

Economic decision-making in the welfare state sector are subject to political, not mercantile, competition, as the many varied clients of the government organize to ensure the maintenance of their programmes and subsidies. 

This social economy is the “bread” to the “circuses” that are subsidized by the marketing economy. Advertising has provided for free, through the mass media, entertainment that few among its audience would pay for voluntarily. The very fact that it is available for free means that people will watch and listen to it: this audience is the market created by the advertising industry. 

The masses attend to mass-media product simply because it costs them little but their time to do so. There is a psychological disconnect between their consumption of mass entertainment, and the great cost of this entertainment. 

Ordinary consumers in most countries are surtaxed each time they make a legal purchase. They are also subject to a hidden tithe, the added expense of the advertising and promotion of any good or service. 

The profession of marketing has the aim precisely betraying and denying the market. Susan Strasser, a historian of the advertising industry, wrote that, 

In creating the techniques to make people want things, marketers developed principles that belied neoclassical economic theory. According to that theory, price — determined in the marketplace by supply and demand — functions as an information feedback system, telling producers how much of their product to make. When prices go up, the rational manufacturing firm (which can theoretically regulate supply but not demand) will increase output; when they go down, it will cut back on production. In actual practice, manufacturers operate on the new principle that demand could be created by the manufacturer. They initiated market research in order to procure direct market information that might make planning possible before production. Market investigation supported market creation... Furthermore, manufacturers attempted to set prices directly, not only to their own wholesale customers but also to retailers and consumers; price became, in modern jargon, an element of the `marketing mix’, an attribute of the product. With heavy investments in the machinery of mass production and in massive quantities of raw materials, no manufacturer could afford to be the passive actor of neo-classical economics... (Susan Strasser, Satisfaction Guaranteed: The Making of the American Mass Market, Toronto, Random House of Canada, 1989, pp. 27-28) 

Advertising thwarts competition in several ways. First, by inciting a conditioned response among consumer to the mass-media repetition of brand name, slogan or jingle, advertising encourages impulse-buying. Second, advertising is a costly part of doing business, an expense which does not contribute directly to efficiency or productivity. Advertising costs discourage entry by smaller, novel actors into the marketplace. 

The expense of marketing also contributes to the consolidation of industrial operations. Nearly all the major mass-media advertising brand-names belong to multi-divisional, multinational corporations. Only such large concerns can afford the vast costs of promotion and advertising. 

By subsidizing the expense of radio and television (the infrastructure, programming and advertising), consumer-goods firms have created a market for their products — the mass-media audience — that would not exist without the mass-media themselves. 

Commercial broadcasting provides entertainment, and the casual viewer or listener is estranged from the sophisticated infrastructure responsible for creating mass entertainment. He doesn’t pay for it directly (the costs of marketing being hidden in the price of the advertised goods and services), and so he doesn’t attach any monetary value to it. 

The average viewer becomes as dependent upon the mass media as the “client” of the welfare states does to his hand-out, because both offer rewards without much effort. 

The sponsorship of cultural and sports events by large corporations, which has grown steadily in recent years, is of interest here. In effect, corporate sponsorships have come to subsidize these events (often, as governments once did).  

They are popular; obviously there is a “market” for jazz festivals, certain athletic events, and so on. Yet, without the sponsorship either of government or corporations, they would be economically unsustainable. 

A corporate sponsor of a cultural event does not get, and does it expect, a profit from the expense of sponsoring it. What they hope to create is a market, not for the jazz, which already exists, but for the product and brand being advertised. Corporate event-sponsorship is just the latest twist on how business has insinuated itself on the public sphere through the subsidy of goods and services that cannot be sustained by a paying marketplace alone. 

In the past, media of communication were subsidized or otherwise held as legal monopolies by the state, a tradition which holds today for publicly-financed broadcasting or publishing in some countries. Commercial broadcasting, by definition, has always operated courtesy the subsidy of the advertising monies of industry. 

Vast new markets for radio and television were created during the earlier part of the twentieth century, not because there was such a such great demand for these media beforehand, but because the costs of the production of the home appliances necessary to consume their programme content, as well as the programming itself, were “sold” to the public at far below their actual material cost. 

The means were different, but the goal for big business of spending millions on advertising was identical to the vast expenditures governments have undertaken in the past to subsidize previous forms of media, that is, to monopolize the means of communication. In essence, advertising-financed media are propagandists for the gospel of big business, just as government-subsidized media tend to be biassed in favour of the state. 

However, commercial programming has proven far more adept at attracting the attention of the masses, because it is in the interests of the advertisers to provide for free or at low cost content that will bring viewers to watch the ads. Broadcast media have always been legally public utilities. The subsidies given them by the state and especially big business have created a demand for the programming and the requisite equipment for viewing it, that probably would not have ever existed if the full cost of the programming and the infrastructure necessary to create it were borne exclusively by the viewership. 

They were thus established as a distinct sort of utility, one subsidized not mainly by taxes or state-debt expenditure, but by the expense of advertising. Information is always been essential to the conduct of war. Generals need accurate data about the shape of the battlefield as well as the strength of the enemy. They also want to be as secretive as possible with their own activities, so as to surprise the enemy. In the twentieth century, when the conduct of war spread to the whole population, so too did the need of state to begin again to regulate the flow of information. For the junta regimes that were created to fight the Great Wars, the traditional practice of collecting accurate information was employed, but extended also to the “battlefield” of the civilian population, many of whom could have had divided loyalties. 

The censorship of information, to keep the activities of the regime secret from the enemy, was achieved by the rigid control of all media of communication, in both the Axis and Allied countries, and on both sides the general population was “censored” from understanding the enemy by liberal doses of propaganda. Modern propaganda and counter-intelligence methods were developed not by the Soviets or Nazis, but by the democratic West. 

During the First Great War, Allied governments succeeded in re-making the Germans and Austrians into “Huns,” through depictions (in the new cinema medium) of “kaisers” spearing babies on their helmets, before raping their mothers, and so on. Commercial artists were drafted to encourage the masses to sign up for battle, donate to the war cause, go to work in the factories, etc. 

Western governments also put together the first systematic internal espionage operations, to track the movements of enemy aliens. By the Second Great War, intelligence agencies in the U.S., Canada and Britain became institutionalized, and continued with the advent of the Cold War. All the countries fighting the original Great War, no matter what their relative consumer sophistication, experiencing war-induced deprivation, temporarily mocking the conditions of past civilizations. 

However, commercial advertisers drafted to work in the war cause came to understand more fully the persuasive power of propaganda, and applied it to civilian life. The 1920s thus saw a great boom in the consumer economy, guided by advertising in mass-circulation magazines as well as the new medium of radio. 

Radio had been around since the early century, mostly as a hobbyist’s tool. The medium’s spread to the civilian population was blocked by its requisition by the military governments fighting the First World War. However, radio’s technological evolution was speeded by the technological selection pressure of wartime. By the end of the conflict, radio was sophisticated enough to be used for civilian broadcasting. Unlike the mass-circulation magazine, however, the character of the broadcasting audience could not be readily discerned. 

Periodicals have subscription lists, for example, but anyone at all could be listening to a radio broadcast without a trace of who they were. There was no way of identifying just who was and who was not liking a particular programme. Thus it was difficult to sell sponsors on the popular merits of any particular programme content. Broadcast firms had to roll up their sleeves, go out and ask the public what they liked to hear. 

From this, modern marketing techniques were developed. Marketing seeks to divine the greatest amount of information from the smallest possible exposure to the general public. The goal of marketing espionage, like its military counterpart, is to gather accurate, secret information about competitive rivals, while carrying on public campaigns of disinformation in the form of advertising. 

Like traditional espionage, market intelligence requires collecting detailed information from the general public to ensure that their “loyalty” is assured. Commercial broadcasting is essentially the utilization of the media weapons used by all governments during the Great Wars, to the same end of brainwashing the general public, and reducing pressure from competitive rivals. Advertising, especially through electronic media, is as conducive to oligopoly as armaments production is to the creation of a relatively few large-scale states, and for the same reason. 

Only highly-populated societies can afford to sustain arms production indefinitely, just as only large companies have the resources to pour into the production of ads in magazines, radio and television. The costs of both advertising and armaments encourage predation in commerce and politics, so that the going-concerns have the resources to pay for their costs. 

Both arms and ads help maintain the market hegemony of large concerns simply because smaller concerns can ill afford the expense of either. Both advertising and arms have the ultimate effect of managing or denying consumer demand. The junta state does this simply by expropriating all or most resources to the creation of arms so that the means of satisfying consumer demand goes unfulfilled. 

Oligopolistic industry does so by pouring resources into media of persuasion which are aimed at conditioning the public to the normalcy of their status in the first place. These media, which are virtually all electronic means of communication, supply a market which could not be sustained by the conventional laws of supply and demand. 

The commercial development of all the broadcast media, as well as mass-circulation magazines, and most recently Internet “e-commerce,” has been undertaken by industrial concerns subsidizing a want — entertainment — in order to find a market for to advertise their wares. The logic behind the big-business sponsorship of media programming is identical, on much larger scale, to what prompts liquor and tobacco concerns to underwrite arts and sport events. 

Industry, by paying the cost of entertainment production presented through mass media, is guaranteed a big audience because the programming, and the media as well, is offered so cheap. However, if this programming, and the media that are necessary to consume it, were offered on a regular market basis, effectively there would be no market for it, because it would too expensive. In reality, the programming would not be produced at all, nor would the mass media be as “mass” in their scope as they in fact are with the advertising subsidy. 

Part 9 of Engineering and Freedom 

Engineering and Freedom, Part 6

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Formerly, the word “communication” conveyed the idea of what terms such as “transport” or “transportation infrastructure” mean to people today. 

“Communication” means literally to “bring people together,” and this is precisely what technologies such as the rail train, the automobile and the airplane carry out. 

However, all of these automated forms of communication require expensive and elaborate infrastructure in order to be functional. This infrastructure, in order to be realized, had to rely on subsidies provided by the state. In the past, transportation of people and goods was synonymous with the “communication” (in the contemporary sense) of news and information from elsewhere because news could travel only as fast as people. 

The shipping of goods en masse by turnpike, canal and railroad communications went together with the advertisement of these goods in periodical media. 

With the invention of the telegraph in the 1840s, communication of information transcended the communication of goods and people. Just as the railroad resolved the problems inherent in the communication of goods over long distance, the telegraph resolved the problem of the communication of “news” over distance. 

The railroad and the telegraph newspaper together created the abstract “market,” as opposed to the situated marketplace. General-interest newspapers, subsidized by advertising dollars and fed with information by the telegraph, were the only medium with enough reach to create mass interest in the goods on promotion. 

However, the subsidy of postal communications was key to the newspaper boom in the period after the founding of the United States. Paul Starr, in the Creation of the Media, observes that 

[The U.S. postal] network far exceeded the postal systems of any other country. As of 1828 ... the number of post offices per 100,000 inhabitants had grown to 74 in the United States, compared to 17 in Great Britain and 4 in France. In fact, the per capita volume of mail was about the same in the United States as in France, but the American postal network was more comprehensive. The French authorized a new post office only where it could generate $200 in revenue, a principle that would have closed 90 percent of the post offices in the United States. A radical new conception of postal communication emerged in the earliest years of the republic. ... the postal service as a medium of civic communication and nation‑building was embodied in the legislation that became the new system's charter, the Post Office Act of 1792. The law ... had three key elements: It made Congress itself responsible for designating postal routes, gave newspapers special discount rates and privileges, and categorically barred government officials from violating the privacy of letters. By assuming direct control of postal routes, Congress opened a direct political channel for local demands that would spur the development of a broader network. The clamor from localities for new post offices and post roads was incessant, but Congress was not merely acceding to local interests; it wanted to tie the western territories to the union, and postal service helped to achieve that purpose. From 1792 to 1828, Congress established 2,476 new postal routes, abandoning the principle that every route had to be self‑supporting. In 1825, it authorized the postmaster general to designate a post road to the courthouse of any new county seat. As the Post Office did not run a deficit in this period, the federal government was, in effect, using surpluses from the older states to subsidize service into newer ones; almost half of every dollar in revenue from the mid Atlantic states went to support routes in the South and West. (Paul Starr, The Creation of the Media: Political Origins of Modern Communications, New York, Basic Books, 2004, p. 88.) 

“In contrast,” Starr continues, “British North America as of the 1830s had a far more limited postal system. From Quebec east to New Brunswick, there were more than 100,000 people but only seven post offices. While the Canadian Post Office returned a surplus annually to the British Treasury, it was unable to respond to continual pleas for service from new settlements. Rates were high, and the volume of postal communication was low. In 1846, an assembly petitioned the queen for more adequate postal service so Canadians might be on an equal footing with the citizens of the United States .... In the United States, the subsidies to newspapers adopted in 1792 were critical to the emergence of the first national news network.” (Starr, The Creation of the Media, p. 89).

The situation in Europe was quite different. Not only did the state provide no subsidies to newspapers sent through the post, all nations (Britain included, until 1855) imposed “stamp” taxes on newsprint and advertisements. This had the effect, Starr writes, of inhibiting the emergence of “publics”, as existed in the United States. 

Private capital accumulation was not adequate enough to finance nationwide postal networks, in the U.S. or anywhere else. The costs of transporting printed information over the long distances, even of the original 13 states, would have been too high in order to sustain a large enough reading public, to support in turn mass-market publications. 

State-run postal systems operate by having short-distance mail subsidize the costs of long-distance routes, which is why a postage stamp costs the same, whether mailed across town or across the country. The subsidized postal system in the early United States gave publishers the opportunity to have regional and national audiences. 

These rates were, moreover, the same for big players as well as the smaller ones. “Infrastructure” means, literally, “between structure,” and historically, the state has established the ground, or network, by which communication throughout the polity takes place. 

Later on, after the first Great War, industrialists took to the new medium of radio to broadcast to an even larger audience — more numerous because it included even those who could not or didn’t like to read newspapers or other periodicals. Both radio and then television were developed not through the direct sale of entertainment product to viewers, but rather, through the purchasing of air-time to advertisers, and the industries that underwrite them. 

Broadcast media, like mechanized transport, would not have become generalized network systems if they relied for their financing market demand based on price. Just as no ordinary motorist could really afford to bear solely the costs of automobile transport, no average viewer could afford to shoulder the direct cost of the entertainment programmes she enjoys watching or listening to. 

Where private industry did not finance through advertising the construction of broadcast media networks (ie. everywhere except the United States), it was the state that did so. 

The “new” media such as the Internet and wireless telephony, which are seen popularly as manifestations of the capitalist ethos at its anarchical best (or worst), in fact are the products of government/military research and development. 

What might be called “the problem of communication” has been throughout history both the end and the cause of much government intervention and regulation of the civil society. In ancient times, only the most centralized of governments were able to build sophisticated road communications to bring far-flung, diverse populations together. Some states were able to achieve a high degree of centralization through the control of a natural waterway, such as the ancient Egyptians did with the Nile. 

In modern times, governments have solved the problem of industrial overproduction by building canals and railways between markets. Governments also stepped in to build highways to accommodate automobile traffic, as well as airport facilities. 

Advanced transport facilities serve to liberate people from “journey”, travel as ponderous and even dangerous travail. At the same time, they come under the regulation of state, which subsidizes some or all of the costs of sophisticated media of communication. Of all means of transport, sailing has always been the least dependent on state subsidy in order to prosper. 

Governments have been involved in the construction of naval fleets and port facilities, but nautical communication can function very well without a centralized authority for financial support. 

The great commercial city-states of ancient and modern times were nearly all sea-bound traders. The cities of the Hansea league of the twelfth and thirteenth centuries became a powerful confederation through the mastery of the North Sea trade, until their independence was swallowed up by the land-based feudal monarchies of Europe. 

Empires arise from the meeting of land and sea, when those dependent on the commodities-wealth of territory bump up against the shipping-based wealth of the cities. The former usually subjugates the latter, using the conquered city as a capital by which to control both land and sea communications. 

The financing of sophisticated communications technologies such as the rail train, the car, the airplane, radio, television, wireless and the Internet, contradicts the classical-liberal idea of capital accumulation. 

Where production is regulated by prices only, a firm can increase profits by improving productivity, or introducing some innovation — the proverbial “building the better mousetrap.” With these profits, the business would re-invest some (or ideally all) of the profits into further improvements in production, with the aim of increasing profits even more, which can again be re-invested for a better profit margin, and so on. 

This is a gradual process, though, where technology progresses by increments. It is a valid description of certain, relatively simple (but still important) technologies. The sophisticated, networked technologies under discussion here required great outlays of capital at the initial stages, in order to be functional at all. 

Private business was often involved in the development of these media from the beginning, or became involved subsequently. But it was the state which provided the impetus for them. The cash economy is self-regulatory, because demand and production are determined by prices. The market price to consumers of modern technologies would have been too much for any but a wealthy minority to bear. 

However, these same media depended upon mass demand to function, as well. Accordingly, the state subsidized the cost of their infrastructure, in order to inspire such a level of demand. Investment in transportation and communication was a form of socialism, but practised by all modern and modernizing governments, no matter what their political persuasion. 

The automobile, the airplane, the other internal-combustion technologies, as well as the mass media, effectively formed the engineered environment of modern times. Material culture is fed by the mass production, that so depends on regulation and subsidy of transportation in order to be a going concern. Commercial enterprise and exploitation has taken place within the engineered civilization, on a scale not witnessed in the past, but it did not come about as a result of market demand, nor could the price-driven marketplace accommodate its development. Internal combustion, and the earlier types of engines, objectified the body’s digestive system, and thus automated the action of the hands and legs in production and transport. It gave rise to the industrial engineering of the nineteenth century, and the automobile and airplane in the twentieth. 

During the course of the last century, engineering advanced from the automation of physical actions and processes, to objectifying the nerves and senses in electric communications media such as the phonograph, radio, the movies, television, and most recently, the Internet. 

The mass media, all of which present a counterfeit of direct experience, are really the objectified and extended voices and countenances of they who own and control them. These technologies, and particularly the broadcast media, have been used to engineer markets and society for decades, to the detriment of reason and individual freedom. 

In the early industrial era, capitalism was synonymous with heavy manufacturing and resource extraction, and the proletariat were alienated from work through the limited use of their skills in the mass production process. 

The face of big business, which was the big businessman’s face and name, was a very ugly one indeed. Business during the nineteenth century had learned how to automate many of the physical actions, and even some of the gross mental aspects (the telegraph’s imitation of the electric charge of nerves) of the human body. 

It yet had no means, however, to bring together mentally the fragmentation of talent and skill that raw industrialism represents. Broadcasting, first with radio and then with television, was developed as an instrument of propaganda, initially for commercial purposes during the 1920s, and then increasingly for political ones during the ‘30s and ‘40s, by totalitarian regimes and by Western governments that fought the totalitarians. 

After the war, though, broadcasting became exclusively the domain of commercial propaganda, as the more overt political boosterism of state broadcasting was toned down for purposes of “neutrality” (socio-political propaganda was left to the state school system). 

Axiomatically, advertising spreads the gospel of its sponsor, presenting the product only with “the best face.” Early on, business hired stars of stage and screen to personify their products. Hosts of TV news, sports and chat programmes are unlike movie stars in that they are not supposed to provoke the audience. An even, calm disposition must be kept by TV hosts at all times. In so far as the faces that appeared on commercial television had to be acceptable to its customers — big business — TV personalities have become, too, the acceptable face of the business-financiers of electronic media. 

Television was a godsend to the public relations side of business, at least, because unlike other forms of mass media, it can actually present a face, an actual person’s face, communicated immediately to millions of people. 

The ubiquity of corporate spokespersons since the beginning of commercial television, reflects the desire of businesses to create icons — “icon” in the sense of representative, rather than celebrity hero — to stand in for themselves and their entire organization. 

The spokesperson usually has absolutely no input in the decisions which he is to convince millions of people are wise or good for them. In so far as they are simply faces and voices for the decisions of others, for all intents and purposes they are nothing more than the masquerades or imposters, for the collective decision-making of corporate or bureaucratic management. In essence, television allowed business corporations to become “incorporated” in the symbolic, as opposed to legal, sense. 

Businessmen had extended the mechanical powers of the human body through their possession and management of capital property. The electronic image allowed them to extend also their own powers to appear and to speak to the masses, through the hiring of media spokespersons. 

Spokespersons were the idols, the living fetishes, representing concerns whose actions and decisions were suitably obscured by the attention that the many paid to the fetishes. Broadcast advertising employs the tactic of the medicine man or spiritual healer the world over, who distracts his trusting crowd with the one hand, in order to do a sleight with the other hand, to achieve his seemingly miraculous feat. 

This is the technique of professional magicians, too, and advertising has always had a subliminal association with evil, the devil in the older sense of a trickster rather than as a bloodthirsty man-wolf. It is the corporate spokesperson himself who is the idol, the fetish is the product itself, and the advertisement the sleight-of-sight-and-sound which distracts the audience from the merits or lack thereof of the product itself. 

The corporation itself fulfills its legal wish to be an artificial person by becoming, through its spokespersons and public relations representatives, an actual symbolic person, its reality maintained by constant doses of media exposure. 

Corporations and bureaucracies, in putting their best face forward through media marketing, are doing no more than what any individual person does when in public, but on a massive, global scale. 

They take the same risks as any person who assumes an appropriate face for the public, only to find that image betrayed by word of her behaviour outside the eyes of the public. 

On the model of the corporate spokespersons, politicians and celebrities have learned to use electronic media to sell themselves to the public, thereby taking the risk that this image will be undermined by their behaviour when outside the sight of the cameras. 

Nevertheless, the growing expense of marketing through electronic media has meant that only larger concerns can shoulder the cost of it. When this principle is applied to the electronic media itself, it means that the total number of information sources available to people in any particular medium is limited. Media which are financed by the monies of corporate and government advertising are considered “mainstream.” 

Those media which are not so subsidized are called “fringe,” “underground” or more recently, “alternative.” Corporations, through broadcast advertising, seek to inspire behaviour that is the very opposite of what they require of their own personnel in order maintain themselves as an on-going concern. 

Work life, particularly at the junior and senior executive levels, requires a high degree of commitment, planning, organization and hard work. Yet the consumer ethic, as expressed in advertising, seeks to undermine all of these values in favour of spontaneity, leisure and profligate expenditure (See Daniel Bell, The Cultural Contradictions of Capitalism, New York, Basic Books, 1976).   

Moreover, advertising wants to foment not judicious and individualistic decision-making in purchases, but instead, the type of herd behaviour generally associated with “fads” or “crazes,” where people buy something just because everyone else is buying it. This is social behaviour in its most basic form, where the logic and correctness of any action is simply that others around you are doing it, too. 

Encouraging pack behaviour is in keeping, on the other hand, with what might be termed the “communistic” nature of modern business organizations. Virtually any ladder-climber today knows that to get ahead in the business game, work comes first, and family, friends, romance and everything else non-work comes second. This is only a symptom of a more general trend, where work and work-life itself has become the primary social unit for many people. Increasingly, corporate management seeks to control not only the skills of its workforce, but their minds, too, with racial and gender sensitivity training and cult-like “motivational training.” 

Part 7 of Engineering and Freedom