The market for loyalties: electronic media and the global competition for allegiances.

AuthorPrice, Monroe E.

This Essay is about a market--I call it the "market for loyalties"--in which large-scale competitors for power, in a shuffle for allegiances, often use the regulation of communications to organize a cartel of imagery and identity among themselves. Government is usually the mechanism that allows the cartel to operate and is often part of the cartel itself. This market produces "national identity," to use the European term, or "community," to use the less discriminating Americanism.(1) Management of the market yields the collection of myths, ideas, and narratives employed by a dominant group or coalition to maintain power. For that reason alone, control over participation in the market has been, for many countries, a condition of political stability.

The market for loyalties has existed everywhere and at all times. What differs about today's market is the range of participants, the scope of its boundaries, and the nature of the regulatory bodies capable of establishing and enforcing rules for participation and exclusion. This market metaphor may help to explain the legal and political responses to the dramatic transformations now underway in media industries as telecommunications become more global, eluding the reach of national legislation. As new forms of communication--satellites, electronic highways, relentlessly global telephony--transcend existing political boundaries, they call into question historic political ties and threaten to destabilize existing national and multilateral regimes.(2)

In Part I of this Essay, I describe the workings of a market for loyalties, distinguishing it from a market for goods and from a marketplace of ideas and illustrating its operation in countries, particularly in Western Europe. In Part II, I focus on constitutional, statutory, and administrative aspects of media regulation in the United States to demonstrate that the market for loyalties functions within the context of the First Amendment. In Part III, I argue that changes in media technology are creating new global pressures in the market for loyalties, altering the capacity of governments to perform their historic function of regulating their own segment of the market and transforming local, national, and global regulatory arrangements.

  1. DEFINING THE MARKET

    1. Elements of the Market for Loyalties

      The market for loyalties must be contrasted with the "marketplace of ideas," the compelling metaphor that has played so substantial a role in the development of First Amendment jurisprudence in the twentieth century. The marketplace of ideas is a particular incarnation of the market for loyalties, one that has an established definition and a history of proponents and detractors.(3) An active, thriving bazaar with atomized buyers and sellers, the marketplace of ideas is, in its purest form, free from anticompetitive conduct. Ease of entry is assumed, and the government plays a limited role, if it plays any role at all. Because truth is thought to prevail in the resulting competition among ideas, no governmental regulation of competition is justified. The market for loyalties, as a model, more closely approximates actual market practice than does the marketplace of ideas. Like the market for goods, the marketplace of ideas frequently reflects monopolistic and oligopolistic practices, including efforts by competitors to exclude new entrants.

      It is easier to describe a market for goods than a market for loyalties.(4) In a market for automobiles or sugar, well-developed traditions identify buyers and sellers, determine a market-clearing price, and describe the means for settling accounts. Extensive literature exists on monopolistic and oligopolistic practices affecting markets for goods and on the legal, regulatory, and negotiated arrangements governing prices and the division of markets. For centuries, theorists have debated the power of the state to favor domestic products and shield industries from foreign competition. Even in countries that pride themselves on their commitment to a free-market economy, government can play a dramatic role in establishing the rules of the game, encouraging production, and striking a balance between protectionism and unregulated competition.(5)

      There is little in the way of a similar literature identifying the buyers and sellers of ideology and the nature of transactions among them.(6) For example, the supply side in the market for loyalties has a structure that is badly served by reductionist terms like "state," or "government," or "political party." The sellers in this market are all those for whom myths and dreams and history can somehow be converted into power and wealth--classically states, governments, interest groups, businesses, and others. The "buyers" are the citizens, subjects, nationals, consumers--recipients of the packages of information, propaganda, advertisements, drama, and news propounded by the media. The consumer "pays" for one set of identities or another in several ways that, together, we call "loyalty" or "citizenship."(7) Payment, however, is not expressed in the ordinary coin of the realm: It includes not only compliance with tax obligations, but also obedience to laws, readiness to fight in the armed services,(8) or even continued residence within the country.(9) The buyer also pays with his or her own sense of identity.

      The payment of taxes as evidence of one's loyalty provides an interesting example. In most modern societies, because of the complexity of social and business transactions, strict compliance with tax regimes is somewhat voluntary. Since New York City charges an income tax over and above that of its state, some residents move to Long Island, New Jersey, or Connecticut to avoid it. Many of those who remain have, for complex reasons, no choice. But for others, there is a degree of loyalty manifested by their willingness to pay the additional cost of adhesion.(10)

      Compliance with the draft is not a perfect sign of a community's loyalty to its government because of a history of exemptions, deferrals, inequities, and, ultimately, the end of conscription. But studies of compliance, desertion, or the burdens of raising an army through means other than conscription suggest that the cost of loyalty is sometimes quite high.(11) History is studded with cases where mass desertion has meant the end of an empire; where, all of a sudden, the duty to fight for a particular cause can no longer be enforced.(12)

    2. Media Law and Restrictions on Competition

      Legislation is commonly used by the controlling group or groups in the market to enforce and reinforce identities useful to them. Such legislation allocates market shares, with the intent of creating cartels of allegiances where possible. As in the market for goods, competitors in the market for loyalties seek to use the force of law, as well as collusion, to restrict supply and establish barriers to entry.(13) For instance, worldwide, government-operated and -controlled companies with established monopolies over communications technology have fought the introduction of private competition or the expansion of cable television.(14) Controlling which viewpoints have access to the means of mass communication either can serve as an integrating and assimilating influence that subtly reinforces a vision of cohesion, or can reinforce existing cultural divisions in society.(15) In Italy, for example, the very architecture of public broadcasting was designed to accommodate the existing system of political parties, with the Christian Democrats controlling the first channel, the Socialists the second, and the former Communists the third.(16) In Germany, by constitution and statute, public broadcasting corporations must adhere to a rule of "internal pluralism" supervised by a Rundfunkrat, or council, chosen in such a way that all of society's opinions, values, interests, and perspectives are adequately represented.(17) The statutory ideal is for broadcasting to mirror society's composition, but the consequence has been a rough parceling out of licenses among dominant political parties.(18)

      Issues of cohesion and identity arise in the broader context of European integration. Under Article 10(1) of the European Convention on Human Rights and Fundamental Freedoms, the right to freedom of expression embraces the right to receive information and ideas without regard to frontiers.(19) In 1990, the European Court of Human Rights added teeth to this provision in Groppera Radio A.G. v. Switzerland(20) and Autronic A.G. v. Switzerland.(21) In those cases, the Court ruled that Article 10 rights apply not only to the printed press but also to radio and television. Although the court acknowledged a limited right for receiving states to protect their technical licensing schemes, state-imposed barriers to transfrontier television would generally offend the principles set out in the Convention.(22) The Television Broadcasting Directive of the European Community,(23) and the virtually equivalent European Convention on Transfrontier Television of the Council of Europe,(24) affirm a regional-market approach. In the 1990's, the focus has shifted from the regulation of transmission across the borders of individual European states to the protection, mainly through the imposition of quotas, of European program production from foreign attack.(25) During the negotiations of the Uruguay Round of the General Agreement on Tariffs and Trade in 1993, the European Union (EU) sought to exclude film and television programming from the general lowering of trade barriers on the ground that a European cultural space ought to be preserved, strengthened, and protected from the influx of American entertainment.(26)

      Turkey provides a recent and dramatic historical example of government efforts to maintain control over competition in the market for loylaties. Since the rise of Kemal Ataturk, the Turkish government has considered Islamic sects, groups now...

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