The media have increasingly excited the attentions of the left over the past 20 years or so. The consensus seems to be that the media play a significant role in sustaining capitalism, whether by encouraging people to buy needless consumer goods, or by perpetuating the idea that there is only one realistic way of organising society, or by whipping up prejudices against ethnic minorities, "scroungers" and trade union activists. By and large, the left has fumed impotently at the influence that the modern media is said to enjoy. The recent conflicts in the Middle East and the Balkans have given new opportunities to these opponents to sound off. Their fury at the complicity of the media in "imperialism" has, if anything, been more savage than their criticisms of those who are actually responsible for the interventions. For many on the left, it often seems, the media have become the most convenient whipping boys for the ills of modern capitalism. After all, they offer a softer target than those who control the media (and far more besides), while the notion that the influence of the media is all-pervasive and seemingly unbreakable provides the perfect excuse for inaction.
Financial journalism is an odd subset of the media. Its practitioners are sometimes better paid than their peers in other branches of the media, partly because they are assumed to have some specialist knowledge and are less likely to panic at the sight of sets of numbers. Yet financial journalists, for all their unavoidable closeness to the heart of the system, have not been singled out as particularly objectionable accomplices of capitalism. This may be changing, as recent events in the financial markets have turned the spotlight on the role that they perform. Why have financial journalists not been quicker to blow the whistle on the succession of corporate scandals that have been making headlines in the United States? Why did they not expose the chicanery of the "dotcom bubble" before it burst, or, to take a British example, the fleecing of savers at Equitable Life?
It is true that the investigative record of financial journalists is pathetic. Anyone who remembers the Blue Arrow scandal, in the dim and distant 1980s, may recall a cover story in the Economist that severely embarrassed the NatWest Bank and led to a lengthy trial. Yet none of the major financial shenanigans of the past 20 years has been exposed as a result of painstaking investigative work by teams of expert journalists. There are a few honorable exceptions. Greg Palast and George Monbiot dig out corporate dirt, and the back pages of Private Eye delve into dealings in the City of London. Beyond the small world of conventional financial journalism there is a large and growing body of anticorporate and "antiglobalisation" literature. Back in the mainstream, however, financial journalism serves more as a mouthpiece for companies than as their tormentor.
Why is this so? The blame lies partly with the individuals concerned. Financial journalists, like any journalists, are sometimes lazy. Given the choice between a story that is fed to them by a corporate public relations department, complete with contacts and quotes, and having to ferret something out, speak to uncooperative people and convince an editor to go out on a limb, many financial journalists have got into the habit of taking the easier option.
Corruption also plays its part. There are plenty of opportunities for companies to subvert financial journalists through the usual blandishments of foreign trips, hospitality, outings to sporting events and occasional scoops. The companies doing the subverting often have very deep pockets. Yet financial journalists are not necessarily more prone to this kind of corruption than those on trade publications, where the relationships between companies and the media tend to be even more incestuous, or those writing for the travel, sports, or fashion pages of newspapers. Political journalists are not always bought with such obvious baubles as trips to inspect factories in exotic locations or conferences in the South of France, but the promise of inside knowledge, access, influence and association with the trappings of power can be every bit as important in shaping their views, and compromising their readiness to think outside the terms of Westminster or Washington debates.
Ignorance is also part of the equation. Financial journalists are often unable to bring any particularly strong analytical skills to bear on the subjects under discussion. Few of them can make any sustainable claims to be "experts" on, for instance, the tricks of the accountancy profession or the bullshit of management consultants. They may be rather more numerate than some of their peers and they may have a higher boredom threshold when it comes to the minutiae of the financial world, but they are seldom in a position to challenge the assumptions and projections behind financial models. They may instinctively know that the expected results are implausible but they are reluctant to throw around accusations that they cannot readily substantiate and that might lead only to their exclusion from further contacts. More often than not, they are limited in their ability to criticise by their inability to obtain any detailed critical information at all, let alone within the timeframe required to produce a feature article.
However, the real determining factors that shape the nature of financial journalism go beyond the personalities and knowledge of individuals. First, mainstream financial journalists are mostly giving their readers what they want to hear. People who turn to the financial pages of the established media do so largely because of their own financial concerns. They want reassurance–that share prices and house prices are going up, that interest rates are staying low, that "confidence indicators" are improving, that jobs are secure (theirs, if nobody else’s) and that profitability is rising. Financial journalists are not employed to dash those hopes but to help to preserve the "confidence" that–as we argued in Biceps Commentary 7–is the most important commodity in contemporary capitalism.
In this context, it is hardly surprising that investigative work on the financial pages is so poorly resourced. In the case of Britain, for example, the volumes of newsprint and digging devoted to matters such as the "Martin Sixsmith affair" (a dispute between a couple of civil servants in a middle-ranking ministry) or the "Black Rod affair" (a trivial constitutional squabble indirectly involving Tony Blair and the Queen) tell their own story. If the British press gave as much attention to the circulation of corporate e-mails as it did to Martin Sixsmith’s, we might have seen rather more in the way of corporate and financial crimes being exposed.
The press doesn’t do this, because the proprietors of the media don’t want it to. The vast majority of journalism in western countries is financed, indirectly, by advertising revenues. It is hardly surprising, therefore, that the press shows only a limited desire to bite the hand that feeds. Once some corporate charlatan or other has been disgraced–be it a Robert Maxwell or a Kenneth Lay–journalists revel in the chance to dance on the corpse and to let their frustrations out. In contrast, it takes a very determined journalist, a very supportive financial editor and a somewhat foolhardy managing editor to take on someone who has yet to be publicly besmirched. As the Robert Maxwell affair demonstrated, Britain’s libel laws also give ruthless bullies a lot of latitude to defend their reputation. Thus a kind of self-censorship prevails: it is permissible to identify rotten apples, but it is effectively impossible to point out that the whole orchard is diseased .
As a result, proprietors themselves seldom have to lay down the law in order to stifle investigations and smother opinions. They do still have every interest in preventing the emergence of a culture of financial journalism in which their affairs would be open to as much scrutiny as those of their competitors. Rupert Murdoch’s tax affairs would repay a close and independent investigation,. but the Daily Mail isn’t going to mount one, nor is the Daily Telegraph. Only if Murdoch goes bust will they wade in to reveal what they were afraid to say beforehand. So long as "entrepreneurs" play within the lax rules of the system, no other media owner has any interest in drawing attention to the extent to which their rivals are exploiting those rules.
Where does this leave financial journalists? For the most part, being paid quite a lot of money to peddle half-truths. Are they any more invidious, as individuals, than any of the other journalists doing the same sort of thing? Probably not. If they want to feel better about themselves, they can probably pass more of the snippets they do pick up to the anticorporate outlets, or they can give up their expensive lifestyles and try to find something they can do with a clear conscience.
More importantly, where does this leave those who rely on financial journalists for information, if only faute de mieux. We need not waste any tears on those who take financial journalists at their word, voluntarily put their own money into a fraudulent or crazy investment scheme, and lose every penny. They must carry at least some responsibility for their own gullibility and greed, and most of them can look after themselves anyway.
As for the rest of us, at this late stage in the development of the mainstream media, we too would have only ourselves to blame if we took any journalism, let alone financial journalism, at face value, without reflecting on where the information comes from and why exactly it is being conveyed. In fact, however, one of the few hopeful signs in the current climate of neoliberal hegemony is that those who rule us tend, on the whole, to be far more gullible, far more lacking in sheer common sense, than those who are ruled. You would have to be as vain, ignorant, cloistered and paranoid as Tony Blair clearly is to take the mainstream media more seriously than they deserve to be taken–which isn’t much. Fortunately, most people are still more sceptical about what they are told than the left, in particular, gives them credit for. Indeed, it is that healthy scepticism that accounts, to some extent, for the failure of much of the left to convince any great numbers of people that it offers any reliable alternative to the current system–but that’s a separate debate.
Meanwhile, in a world governed by jawdroppingly stupid and dangerous idiots, advised and encouraged by the professional liars and fraudsters of the public relations, advertising and policy-wonk "industries", the harm that any financial journalist can do is minimal, and the good that a few of them manage to do–by exposing the extremely shaky foundations of the capitalist system–just about compensates. In relation to the world of finance, it makes more sense to focus on the activities of the financial institutions themselves, taking data from the media but forming one’s own opinions about them, than to waste time and energy on sifting claims about the supposed influence of the messengers over the message. Of course the mainstream media in any capitalist society serve the interests of capitalism: given their sources of finance, information, staff and support, what else could they be expected to do? To underestimate the importance of the media may be naive, and the work of exposing their true nature and developing alternatives is vital, but to overestimate their influence is at least equally naive, and at its worst can amount to giving up without a fight.
Financial journalism, then, is best understood as just another part of the mainstream media, to be handled with scepticism at best and utter disbelief at worst. It is true that Enron, for example, could not have deceived so many people for so long without help from financial journalists; yet it is also true that at least some of those people were all too willing to be deceived, and would have been even if the business pages did not exist. It is true, too, that most of us (at any rate, most of us outside the United States) would never even have heard of Enron if financial journalists had not helped to uncover the scandal and convey its implications to their readers and viewers. Even so, it was Enron itself that carried out the frauds (with help from various accomplices), and then, having collapsed, presented the spectacle of capitalism as it really is, thus making a bigger impact on society at large–at least for a short while, until the next big scandal–than any financial journalist could ever hope to make on his/her own initiative. Instead of getting obsessed with those who report the switches and swerves of the financial world, the left would do better to focus attention on the hucksters who own and control the rollercoaster–and, better still, to start thinking seriously about demolishing the rollercoaster and replacing it.
PS Burton is a columnist for The British Institute of Contemporary Economic and Political Studies.