Beyond the

Free Market:

The Corporate Liberal

Character of Uncommercial Broadcasting

By Thomas Streeter

As the professions of the middleman lose

their economic basis, the private lives of
countless people are becoming those of
agents and go-betweens; indeed the entire private domain is being engulfed by a
mysterious activity that
ilif

bears all the features of commercial life without there being

;<-

actually any business to transact.

Adorno, Minima Moralid1

Gestures towards a simple, reified sense of the economic The focus of this study is managerial culture. It approaches the question of markets, neither in terms of
seem to be a regular feature of talk concerning commercial broadcasting. Broadcasting industry executives, it
broadcast managers' personal beliefs nor in terms of
has been remarked, Justify major decisions to themselves impersonal industrial structures, but in terms of the
and others by pointing to the self-evident exigencies of
point of interaction of beliefs and structures. A promian abstracted market/'so predictably, so confidently,
nent feature of the culture of the businesses of commerthey sound like vulgar Marxists-"2 The social and
cial broadcasting is that it is at once institutionally
political legitimacy of commercial broadcasting itself
corporate and politically liberal. Corporations are
rests largely on an assumption that private ownership of
impersonal bureaucracies whose legitimacy rests on the
broadcast stations by definition constitutes a "free
terms of market Individualism. The career managers
market." The dominant forms of criticism of commercial that operate commercial broadcasting on a day-to-day
broadcasting, moreover, typically argue that the ecobasis, therefore, are in a peculiar position: they are
nomic market's driving mechanism of self-interest comes dedicated bureaucrats given an administrative command
into conflict with the
to behave like freepublic interest, without
wheeling entrepreever pausing to
neurs.
question the applicability of the notion of
In this peculiar context,
"market" in the first
at the same time that
their economic function
place. Even critical
media scholars who
has declined, markets
preface their studies of
have taken on a
ritualistic role in the
television with fashionable references to
culture of the broadcast
"corporate capitalism"
industry. The result is
seem to studiously
what I will call "bureauavoid probing the
cratic market simulameaning of that term
tion." Broadcast
better to be brief and vague, it seems, than to be taken for managers are driven to create situations that simulate
a vulgar, economic reductionistand thereby leave the
market relations when portrayed in the bureaucratic
reified monolith of the "economic" intact, waiting in the
language of flow charts, statistics, and administrative
wings. In sum, industry champions and critics, insiders
hierarchies. Much of the high drama of commercial
and outsiders, all tend to take for granted the belief that
televisionthe ratings race, the rise and fall of series,
commercial broadcasting operates first and foremost
rocketing and plummeting careers, and so forththus
according to the iron laws of the economic marketplace.
might be understood not as actual market behavior, but
as a set of rituals that represent market behaviors using
the codes of administrative logic, as bureacratic simulaDrawing on several major strands of contemporary
economic theory, this essay casts doubt on the belief that tions of markets.
commercial broadcasting is market-driven. Commercial
broadcasting is better understood as a scries of elaborate,, The New Contours of American Political
interlocking bureaucratic systems than as isolated units
Economy
competing in an open marketplace. It is driven more by
the exigencies of regularity, predictability, and selfFormer FCC chair Mark Fowler once decribed his agency
maintenance than by the forces of classical market
as a. "New Deal Dinosaur." Calling it a dinosaur might
competition.
have been controversial, but describing it as a product of

The social and political legitimacy of commercial broadcasting

itself rests largely on an assumption that private ownership of
broadcast stations by definition
constitutes a "free market"

the New Deal was not. Fowler was invoking the

common belief that our existing framework of broadcast
policy expresses the New Deal penchant for government
interventionism, and that his own scheme of "deregulation" marks a shift in the opposite direction. Typically,
shifts such as the changes from the conservative probusiness Republicanism of the 1920s to the liberal
reformism of the New Deal in the 1930s are thought of as
shifts of emphasis within the broad framework of
"capitalism" or "free enterprise" that has characterized
the U.S. political economy throughout its more than two
hundred year history.
Media scholars have tended to neglect the challenges to
this model that have been posed by two distinct schools
of economic history: the "managerial school" of economists such as Alfred Chandler, and a group of Marxist
scholars of American economic history such as James
Weinstein and David Noble. In different ways, both of
these schools of thought argue that contemporary
business practices and their associated forms of political
behavior are in fact radically different from those of the
first century of U.S. history, but have remained largely
unchanged since about 1910 or 1920. According to
Alfred Chandler,

[t]he processes of production and distribution, the. methods by

which they were managed, the enterprise, that administered
them, and the resulting structure of industries and of the
economy itselfall were, by World War 1, much closer to the
ways of the 1970s, Abusinessman of today would find himselj
at home in the business world of 1910, but the business world
of 1840 would be a strange, archaic, and arcane place. So, too/
the American businessman of 1840 would find the environment of fifteenth-century Italy more familiar than that of his
own nation seventy years later.3
The political import of the new economic situation is
controversial. Chandler believes the corporate economic
system to be inherently efficient and productive (his
works are standard reading at the Harvard Business
School), while the Marxist historians see this latest
variant of capitalism as oppressive. They would both,
however, probably agree that Mark Fowler has more in
common with the New Dealers he denigrates than with
the founding fathers he venerates.4

The Decline of the Free Market

Perhaps the most important and certainly the most
ignored result of this twentieth-century shift in the
political economic structure is that the free market
governed by the classical
economic competition described
by Adam Smith has been
gradually displaced as the
central governing force in the
economy. One reason this trend
is ignored is that there is much
debate and confusion about the
meaning of the word competition.
"Economic competition" is not
just another term for exchange
relations, or for struggle between
groups of individuals. Feudal
lords exchanged goods and
money and struggled mightily
with each other, and yet both
Adam Smith and Karl Marx
would agree that what went on

in the middle ages was quite

distinct from, and in some sense the
opposite of, capitalist economic
competition. The importance of
Smith's classical vision of numerous
buyers and sellers competing
against one another in a free
competitive market is not just that it
provides a liberal Utopia. The
marketplace brought a kind of
mathematical certainty to social life. In an open marketplace, if your goods were inferior or priced too high you
would inevitably be forced out of business and die an
economic death; no noble status, political connections, or
government patents could save you. Open economic
competition was the guarantor of the iron laws of motion
of capitalism.5 The word competition, therefore, implies
a law-like certainty, not just rivalry.
In the twentieth-century corporate economy, instead of
numerous players in the marketplace, in many cases we
now have only a handful. When corporations make
inferior goods or price them too high, they don't die,
they just lose market share, and the executives responsible are more often demoted than fired.* What seems to
have faded from sight, therefore, is not the general
struggle for power and profit, but the .ability to easily
characterize that struggle in terms of iron economic laws.
In such circumstances, what has happened to the laws of
motion of capitalism? What's to distinguish corporate
rivalries from non-capitalist struggles between feudal
lords?
One common answer is that we have a new mode of
production, that our economy is simply not essentially
competitive and that as a consequence new noneconomic
forces such as technology and bureaucracy have asserted
themselves alongside traditional economic forces. Many
others have countered with new theories and definitions
of competition that try to locate economic laws operating
in changed but nonetheless primary ways within the
corporate economy. While some, such as Milton
Friedman, have denied the decline of competition
outright, many others have devised various theories of
"altered competition"from the liberal camp, for
example, theories of "imperfect" competition, and from

the Marxists, theories of "monopoly competition."

My purpose in this essay is not to try to resolve this
dispute. The point is simply that the field of economics
no longer underwrites the practice of automatically
assuming that corporations and their executives do what
they do because of competition. Competition of the
classical sort is no longer dominant, and the question of
whether or not it has been replaced by some new form of
competition is a matter of debate. Ample justification
exists, in other words, for approaching talk of markets
and competitions skeptically, and for exploring the role
of nonmarket forces in shaping corporate behavior.

Overcapacity and Corporate Consciousness

What effect has this economic shift away from classical
competition had on the thought and behavior of the
people who make most of the decisions within the
corporate economy? In general, it has led to a new
concern for what Robert Wiebe calls the new values of
"continuity and regularity, functionality and rationality,
administration and management."' It has led to a new
industrial logic that views the business world as a system
to be efficiently maintained and to a conception of the
manager as that system's engineer, armed with the tools
of administration, technology, and science. The ideas
that came to dominate American political and social
thought in the early part of this century, Wiebe writes,
were bureaucratic ones, peculiarly suited to the fluidity and
impersonality of an urban-industrial world. They -pictured a'
society of ceaselessly interesting members and concentrated
upon adjustments within it... predictability meant probability. Thus the rules, resembling orientations much more than
laws, stressed techniques of constant watchfulness and
mechanisms of continuous management.9
The new managerial concern for continuity and
regularity is motivated in part by the perceived problem
of overcapacity, or in Marxist language, overproduction.
The tendency to produce too mucha risk already
inherent to capitalist enterpriseris greatly exacerbated
by advanced industrial technologies where the financial
risk is focused almost exclusively at the moment of initial

investment. Pat Weaver, the man who led NBC into the
television era, once said,
The growth of our economy has reached the point where
production becomes less of a problem than consumption. It is
no trick today, as it was earlier in this century, to make great
quantities of goods. Instead, the trick is to sell them to people
who can afford to pay for them.10
Several years later, he elaborated on the same argument:
Automation in factories [has] made it more difficult for
manufacturers to cut back production when demand
slackened... Thus the automated business needs a constant,
dependable, unfluctuating
demand for its output. This
and other solutions to steady
demand mean a new kind of
sellinga complete change
in emphasiseducational
'.

selling to wean consumers

from old habits into new
ways of keeping a new

era. . ."

from controlling production to controlling distribution

and consumption, from producing more product to
making sure that products are distributed and purchased. Uppermost in the minds of corporate management, then, is reducing risk by managing, channeling
and regularizing the flood of goods that flows through
the nation's industrial systemwhat Weaver called
maintaining a "constant, dependable, unfluctuating
demand."13 Commercial broadcasting is structured as a
device for helping regularize demand by serving as a
vehicle for national advertising. Commercial broadcasting, in other words, is constructed more as a means to
circumvent the "natural" market than as an extension of
the market into the sphere of culture.

Commercial broadcasting, in
other words, is constructed more
as a means to circumvent Hie
"natural" market than as an
extension of the market into the
sphere of culjure.

The concern for overcapacity has two effects that

are particularly important
for understanding broadcasting. First, managers become
less interested in competing than in avoiding competition by introducing order and stability into the industrial
system. Nineteenth century entrepreneurs might have
been willing to take the gamble of simply releasing their
goods on the open market, but today's managers find
such tactics unacceptable. As William Paley once said, "
.. .sudden revolutionary twists and turns in our planning for the future must be avoided. Capital can adjust
itself to orderly progress. It always does. But it retreats
in the face of chaos."12 Today's managers thus seek
ways to hedge their bets. The game, in sum, has changed
from one of marketplace competition to one of system
maintenance. The marketplace has been supplanted by
what Chandler calls the "visible hand of management."
Second, the concern for overcapacity leads to an attempt
to manage demand as well as supply. Interest shifts

Broadcasting and
Corporate
Structure

>;''''

If the displacement of
the market is the
most overlooked trail
of the American
economy in the
twentieth-century,
the rise of the giant
corporation is the
most noticed; and it is exactly this kind of multi-unit,
vertically integrated oligopolistic corporate enterprise
that sits center stage in the drama of broadcast industry
behavior and development. Large size, however, is only
the most obvious characteristic of the modem corporation. Understanding the patterns of behavior that have
taken the place of the market in bro.adcasting requires a
look at the structure of the corporate behemoths like
RCA, General Electric, Westinghouse, and their relatively
smaller cousins like CBS, ABC, and Warner Communications.
!.Jv

In Chandler's definition, what he calls the "modern

business enterprise" has "two specific characteristics: it
contains many distinct operating units and it is managed
by a hierarchy of salaried executives."14 While at first
glance these characteristics seem hardly surprising, when
taken seriously they undermine the way we normally

otypes, copies, spinoffs, and recombinants are all

think about businesses. We tend to think of companies
administrative means of reducing risk and maintaining
as single factories or simple aggregates of factories, as
autonomous, self-interested elementsas individuated
the system by introducing predictability and regularity
atoms in a Newtonian social universe. But corporations, into day-to-day operation. Bernard Miege has characin Chandler's view, are structures, not isolated elements. terized this general phenomenon as "flow culture," the
They are adminstrative systems that coordinate and
product of a system where "programming must be
rationalize the activities of numerous units of production uninterrupted, constantly renewed and therefore
and distribution. They are quite consciously structured,
produced on an unbroken conveyer belt."1' The essential
in other words, not to make short term profits by
difference, perhaps, between what Gitlin calls today's
"recombinant culture" and, say, the sonata formula of
producing as much as they can as cheaply as they can,
but to manage, channel, and regularize the flow of goods Bach's time is that recombinant culture is conditioned on
the internal dynamics specific to a bureaucratic industrial
from raw material to consumer, to supply "a constant,
dependable, unfluctuating demand" for the output of
system.
"automated business." The concerns that dominate
decision-making thus
The Managerial
generally involve ensuring
Class
The famous penchant for
the smooth coordination of
the different parts of a
Alongside concerns
crassly formulaic thinking in
complex verticallyabout overcapacity,
integrated industrial
broadcasting programming fulthe new position of
system. What was
managers within the
supposed to be the lone
fills the industry's structural
industrial system is
desire of homo econotnalso crucial in
need for regularity, predictabilicus-the maximization of
understanding the
profits through increases
bureaucratic
ity, and internal coordination.
in productionis now a
character of contemsecondary concern.
porary corporate
consciousness. The everyday details of corporate
The values of stability and system-maintenance override operation are no longer decided by owners of businesses
those of marketplace competition in many areas within
who act In order to make a profit for themselves.
the broadcast industry. Relations between networks and Control of corporations no longer rests entirely, or even
affiliates, advertisers and broadcasters, and independent predominantly, in the hands of owners or holders of
producers and broadcasters all tend to become formalstock; it has shifted to the middle layers of professional
ized and regularized, and the values of stability and
managers and other experts such as engineers. This
predictability prevail. It is extremely rare for a broadcast changes not only the location of decision-making, but its
station to change its affliliation, for example, and when a nature as well. Managers are interested in their careers
station does "jump ship/' the event prompts the question before they are interested in profits for the company, and
"What went wrong?" It is treated, in other words, as an
while careers and company profits sometimes coincide,
exceptional matter for concern throughout the industry,
they often do not.17 Not only has this led to a new social
not as normal marketplace behavior.
strata called variously the "professional," "managerial,"
or simply "new" class, it has also changed the structure
The famous penchant for crassly formulaic thinking in
of decision-making within business. New communities
broadcasting programming similarly fulfills the indusof interest have formed along professional lines, boltry's structural need for regularity, predictability, and
stered by trade associations, professional education
internal coordination. The use of track record talent,
programs, and the general social camaraderie evident in
"tried and true" program formulae, character stere-

the frequent mixing of business and pleasure that occurs

on the golf course, at health clubs, and the like. The
resulting shift in loyalty from employer to social group
engenders the familiar pattern of "revolving doors"
within and between industries, the creation of "industry
insider" groups, and a process of collective decisionmaking among those insiders that cuts across boundaries
between businesses.

10

integral component of the corporate industrial system.

The social phenomenon of the "managerial class,"

moreover, sheds new light on the role of technical and
bureaucratic consciousness in corporate affairs. While
managerial concerns for regularity and predictability in
part serve the functioning of the industrial system itself,
they also help form cultural and 'social bonds among
managers. Even in cases where specialized technical to
guage such as that used in market research fails to shed
Media industry watchers are familiar with the way
light on actual audiences and consumers, such language
careers can wind their way through the business. Grant
Tinker, for example, began as an advertising executive,
can help knit together diverse parts of the industry by
became a network executive and husband of a television establishing unity of behavior and expectation in the fan
of uncertainty. (Think, for example, of the'creation, use,
star, moved on to head a major production company,
and abuse of the "yuppie" demographic category by the
and from there to chairman of the board of NBC. Gitlin
marketing commuhas usefully analyzed
nity.) AsGitlin
the Hollywood televisuggests, because
sion production industry
Formalized strategies based on
tactics like program
as a "little society at one
testing "secrete the
with itself," replete with
quantitative data help to support
old-boy networks, backaura of reason," they
serve to "lubricate to
end deals, and repeated
jhetelevision industry's claim to
instances of "failing
abrasive relations
between
networks M
upwards."1* LesBrowi}
be democratically "giving the audi
and others have noted
their suppliers."21
the conspicuous sharing
Formalized strategies
ence what it wants."
of personnel and
based on quantitatra
reciprocal influence
data also help to wan
between the advertising
off threats both from
industry and the broadcast networks.19 Former FCC
outside the industrythe ratings system grounds the
member Nicholas Johnson has denounced the cozy,
television industry's claim to be democratically "givinj
exclusive set of relationships he calls the broadcast
the audience what it wants"and from within itate
industry "subgovernment," which includes network
decision based on ratings is safe for one's career, but on
. management, communications lawyers, trade magazines based on intuition would be dangerously impolitic.
and lobbying associations.20
The role of the ratings was nicely illustrated recently
These phenomena, however, are not best understood
when the industry was faced with the appearance of l
or three different and inconsistent ratings reports that
merely as some kind of degenerate cronyism, or as a
residual remnant of medieval guild consciousness in an
accompanied the introduction of competitors to Nielsa
otherwise modern society. In the absence of any more
The industry did not respond as one would expect in)
democratic means of managing industry, the work of
genuine market situation. In a market, one would
"system maintenance," of assuring a well-coordinated
assume that advertisers, at least, would have an inters
and steady flow between the various parts of the
in the most accurate measures possible; and it would
industrial order requires exactly the kind of cooperation
seem more than likely that the broadcasters' desire to
and mutual cognizance that professional communities
maintain good relations with their patrons would lead
provide. Under existing conditions, the "new class" is an them to share that interest. But, both groups havebea

much less concerned with accurate knowledge of their

audience than with smooth operation of the system they
inhabit. Industry members invariably complained, not
about the chronic inaccuracy made evident by the
disparities, but about the difficulty of doing business
when more than one number is available because of the
uncertainty this introduces into the buying and selling of
advertising time. The issue was not confusion about the
audience/but confusion in the day-to-day affairs of the
corporate system. Uncertainty about the audience is
acceptable, it seems, but uncertainty in dealings within
the corporate system is not.
Bureaucratic Consciousness in a Liberal Context
Large administrative systerns, professional communities,
and bureaucratic logic can be found in a broad variety of
broadcast systemspublic broadcasting in the U.S. and
European public service systems, for example. To get at
the specific nature of our commercial broadcast system,
it is necessary to consider the relations between corporate-bureaucratic structures and American political
liberalism.

thought, however, has not been frictionless. Numerous

tensions exist between the bureaucratic interior and the
liberal exterior of the corporate liberal world. The
question is, then, what is the relation between corporatebureaucratic structures and a liberal society that defines
itself in terms of private property and the marketplace?24
Bureaucracies invariably define themselves as neutral
and transparent, as simply the most rational means to
collective ends. An alternative approach might be to
think of bureaucracies as systems of signification or
representation, as means of simulating aggregate goals or
purposes. This would then dislodge bureaucracy's selfdefinition by loosening the mechanistic link between the
bureaucratic "signifier" (administrative means) and the
bureaucratic "signified" (collective goals). Combine the
notion of bureaucracy as a means for simulating goals
with the nominally liberal political system which is a
condition for the existence of the corporate system, and
you arrive at the notion of bureaucratic market simulation. When faced with the absence or breakdown of traditional market relations, our bureaucratically structured

Woodrow Wilson once said in a campaign speech:

What is liberty? ... Suppose that I were building a great piece
of powerful machinery ... Liberty for the several parts would
consist in the best possible assembling and adjusting of them
all, would it not? The piston of an engine [will] run with
absolute freedom,.. not because it is left alone or isolated, but
because it has been associated most skillfully and carefully with
the other parts of the great structure,22
Corporate consciousness rarely resembles a full blown
ideology of social engineering, technl, or instrumental
reasoning. The language of liberty, rights, and individual freedoms remains central to the political discourse of
our society. Instead, as Wilson's statement suggests, a
panoply of bureaucratic and technocratic terms and
procedures have come to fill a shell of traditional liberal
ideals. As Wiebe describes it, "[bjureaucratic thought
filled the interior" of our dominant social consciousness.23
This rapprochement between bureaucratic and liberal

11

business world sometimes sets out to establish an

administrative counterpart to the market, using a
simulation of the market using the language and procedures of bureaucracy.

12

the community of media management with a dilemma; a

tricky administrative problem.

Their solution to this dilemma is called the Copyright

Royalty Tribunal (CRT), an organization set up in the
mid-1970s by Congress under prodding from the media
The point here is not that commercial broadcasting is
industry. The CRT collects money from cable operators,
merely a colossal ruse, that corporations essentially dupe puts that money in a "pot," and then distributes it to
themselves and the general populace into falsely
program copyright holders. Cable operators pay an
believing that they are engaged in market relations when amount set by a formula based on their subscriber rate,
they are not. The corporate environment is complexly
and program copyright holders receive payments
structured in a way that encourages some procedures
according to a similar formula. The CRT is set up, in
and strategies, discoursum, to maintain a
ages others, and genersystem of property
ally sets boundaries to
rights and market
Bureaucracies invariably
what can and can't be
exchange relations for
done. Mastering the
the ephemeral, elecdefine themselves as
structure of that environtronically reproducible
ment, its grammars and
good of television proneutral and transparent, simply
codes, its pressures and
gramming.
limits, is a large part of
the most rational means to
what managerial skill is
At first glance, this
all about. The structure
appears to be what it
collective ends.
of that environment,
does. Money flows
its"discursive economy,"
from cable operators to
program producers,
is such that bureaucratic
practices are favored in day-to-day procedures, and yet
and programs flow the other way. At second glance,
on a broader level pressures are exerted and limits are set however, it becomes evident that many of the constituent
by the basic terms of liberal capitalism. Simulating
features of classical market relations are absent. On a
markets, in other words, is the product of intelligent and day-to-day basis, both copyright holders and cablecasters
skilled managers steering a course through the treacher- experience the process more like paying taxes or procurous shoals of the corporate environment. It is an
ing welfare. Costs and payments are set, not by supply
accomplishment, not a falsehood.
and demand, but by politically established bureaucratic
formulae. Entry into this particular "market" involves
To illustrate, consider the unusually clear-cut example of having the appropriate qualifications and filling out the
cable copyright. Syndicators, sports and music interests, appropriate forms, not offering to buy or sell a product.
local stations, and others all have property rights
Increasing one's profit is a matter of lobbying Congress,
associated with the material distributed on cable
not of buying more cheaply or selling more dearly. The
systems. The programs that appear on a local cable
CRT, furthermore, has numerous "side effects" uncharsystem typically have had multiple "owners" and have
acteristic of markets but characteristic of bureaucracies.
passed through many hands along the way. Given the
First, nonmarket rationale often play a crucial role in the
huge volume of programming that fills a typical cable
process. In a frank if modest redistributive effort, for
system, however, regular direct payments to the thouexample, Congress allocated an extra-large percentage of
sands of individual copyright owners would be a
the CRT "pot" to public broadcasting, and none to the
practical impossibility. Cable copyright, in sum, presents three networks. Even when "market criteria" are used to
make decisions, the formulae used to calculate payments

inevitably favor some at the expense of others and thus

become matters for intra-industry political disputes. The
CRT is a bureaucratic, political entity and behaves like
one; it just happens that one of its directives, one of its
administrative functions, is to simulate a market. It is a
bureaucratic simulation of market relations bctvyccn
cable operators and program producers.25

51e
-

ito

Jnt
i
fcrs
'.tr-

iof
jto
nts

to program producers, and programs flow the other way.

Consumer product manufacturers, the other link in the

chain, are faced with a situation arguably, though less
obviously, similar to that of program producers. A
massive institutional system of manufacturing and
distribution like Procter and Gamble, for example,
cannot afford the risk of subjecting its elaborate operaThe CRT, of course, is on its face an exceptional case, In
tions to the whims of a truly open marketplace for
the case of advertiser-supported, commercial broadcastconsumer goods. At the same time, however, P&G can
ing in general, bureaucratic market simulation is less
hardly'resort to a monopolistic, centralized system of
overt and more subtle. The basic conditions, however,
planning along the lines of state socialist enterprises; its
are the same. Just as the
legal and political leCRT "solved" the
gitimacy, its right to
problem of the lack of
existence, rests on the
normal market relations
belief that it is a private
enterprise selling goods
in the area of cable
copyright, commercial
in a marketplace
broadcasting in the U.S.
fashion. While P&G's
likewise "solves" the
strategies for dealing
problem of a lack of
with the problem are
market relations in the
numerouse.g., domifields of consumer
nation of distribution
product manufacture
channels, product difand television program
ferentiation as a means
production and
to monopolize shelf
distribution.
space in storesthe system of commercial telvision advertising is clearly one of its most important tactics.
For producers and distributors of broadcast programs,
From P&G's point of view, the importance of television
the market breakdown problem is obvious: the absence
advertising is that it simultaneously allows two things:
of a ticket booth in broadcasting precludes a genuine,
an adminstratively formalizable and predictable set of
direct market relation between audience-buyers and
procedures (fixed program schedules, the data of market
producer-sellers. One solution to this problem is payresearch and ratings, etc.) that can be safely incorporated
TV, which uses various technologies to recreate the ticket into its corporate system, and a set of procedures that apbooth.26 Advertising-supported television, on the other
proximate or simulate actual marketplace barter over
hand, simulates the ticket booth with a bureaucraticallygoods with consumers. One of the primary incentives
organized triangle of exchange where advertisers pay
for regularly purchasing massive amounts of advertising
broadcasters; and, the audience, in theory, pays advertime on television, therefore, is that the practice, within
tisers through the purchase of consumer products. Skep- the grammar of bureaucratic systems of representation,
ticism might exist about television advertising's overall
simulates a seller offering wares to a buyer in a marketeffectiveness in selling products to consumers. But such
place. P&G's career managers, of course, also generally
doubts are secondary as long as this triangle of exchange believe that purchasing advertising increases product
ensures a steady enough flow of income for system
sales. Their motivation to maintian smooth relations
maintenance and simulates a market relation, at least as
within the system of manufacture and distribution,
represented on a simple organizational flow chart;
however, is more immediate than the desire to increase
money flows from consumers to advertisers to networks
sales to consumers, and the advertiser-supported system

An alternative approach
might be to think of
bureaucracies as systems of
signification or representation, as a
means of simulating aggregate
goals or purposes.

13

of broadcasting might be more useful for the first task

than it is for the second.
Woven into the generally lumbering, bureaucratic
behavioral habits of broadcast corporations are strands
of high drama: the network ratings race, the constant
manipulation of program schedules, the continuous
struggles between producers and networks over scripts
and other program details, the rise and fall of series,
rocketing and plummeting careers, and so forth. Clearly,
this curious mix is shaped by numerous different forces:
classical market constraints sometimes play a part, as do
the drives to expand turf and rise through the ranks.
Bureaucratic market simulation, however, suggests at
least one way that the different strands of this mix can be
related. Corporate practices such as the ratings race may
not construct a real marketplace, but may instead serve
as administrative stand-ins for the market.

14

sometimes at odds with the interest in short term

maximization of profit for their employers. The ground
rules of the system in which they operate, however, are
circumscribed by the terms of liberal capitalism, central
to which is a belief in the efficiency and democratic
character of the market. Paradoxically, therefore, one of
the functions that managers must perform for system
maintenance is the creation of an appearance of market
behavior. Industry managers are constantly caught
between the drive toward stability and the pressure to
maintain'a market.
So in response to this dilemma, the industry uses ratings,
but in a way that does more to ensure internal industry
stability than a clear understanding of its audience. And
the industry regularly drops low-rated programs and
upper-level executives, in an apparent show of competitive bravado, but it just as regularly rehircs the same
executives and contracts with the same program producers; organizational reshuffling thus comes to stand for
competition,2* By means of such procedures, the circle is
squared and the bureaucratic corporation is symbolically
reconciled with liberal capitalism.

A few industry heretics provide support for this view. ^

For example, industry executive Deanne Barkley is a
skeptic who thinks that network scheduling strategies
are generally irrelevant: ".. .but don't you see, how does
Fred Silverman justify his existence, or any of those
people who are there. I maintain you could run a
Conclusion
network with ten people. All these people justify their
existence by making decisions, pretending to make
The notion of bureaucratic market simulation should at
decisions as to what's on."2' Of course, this is not a view . least serve as a heuristic that corrects some of the habits
of things likely to be popular within the industry, at least that pervade discussions of the commercial media.
not on the network end of things. Taken to its logical
Many otherwise highly sophisticated studies of media
conclusion, it would suggest that in classical economic
seem content to account for the structure of the "cultural
terms operating a network is largely a matter of keeping
industries" with a mixture of simplistic moralism and
undifferentiated contents flowing through electronic
reductive economism: this is capitalism, the argument
plumbing, and that network executives are hardly
goes, where greed dominates, and what capital wants it
different in function from the nameless technicians who
must get. Commercial media, the implication seems to
maintain municipal water supplies and sewer systems.
be, exist in some elemental state where you just take the
lid off and let greed run rampant. This is too simple.
Whether or not network executives are overpaid, much
Commercialism is not just the absence of political or
about industry behavior suggests that what they do is
social control. A commercial system requires complex
related to the market ritually rather than directly.
political and social conditions in order to exist.
Program producers as well as advertising, network and
broadcast station executives are in most cases people
This essay, then, has suggested an analysis of some of
with careers, not invested capital, and they thus share an those conditions. One important condition of commerinterest in maintaining and expanding the bureaucraticial broadcasting, it has been argued, is the fact that the
cally organized, smoothly operating system of producpeople who make television the way it is are caught
tion and distribution that employs them, an interest

between the drive to uphold a liberal system of property

rights and market relations without which their employers, and hence their jobs, would have no justification for
existence. One response to this dilemma has been the
construction of a system that bureaucratically simulates
market relations between program producers and the
broadcast audience, and between consumer product
manufacturers and consumers. As the middlemen in
these relations, broadcasters, networks, and advertisers
thus serve not so much as intermediaries in a chain of
actual market relations, but as providers of bureaucratic
simulations of market relations between consumers and
corporations.

intensive pockets and niches that the corporations see fit

to leave alone. Furthemore, the deregulatory belief that
government regulation is responsible for the decline of
the marketplace is revealed as a case of misdirected
blame and the deregulatory solution of removing
government regulation as absurdly and dangerously
Quixotic.
To fully explore the features and implications of the
complex institutional mix. that is commercial broadcasting, however, one would have to place that mix in a
larger context. There is an obvious but by no means
simple relation between corporate liberal broadcasting
and the consumer culture that has yet to be fully
explored, for example, and an equally important and
complex relation between the broadcast industry and the
new twentieth century forms of state structures, such as
the independent regulatory agency. Each of these, in
turn, needs to be understood against the background of
the centrifugal expansion and accompanying integration
of the American economy within the nation and within
the world system.

While skeptical, this approach does not rest its arguments on some hypothetical, invisible force, such as
autonomous technology or the capital-labor contradiction. While ingenious and elaborate attempts have been
made to fit the facts of broadcasting into one or another
classical economic theorymost notably the public
goods approach of neo-liberal economics and the
commodity audience theories of Marxist media scholarsfew would argue that either of these approaches
have completely resolved the issue satisfactorily, as yet.
Acknowledgments
Thus, while the notion of bureaucratic market simulation
certainly does not eliminate the possibility that studying I would like to thank Michael Curtin, Bob McChesney, Randy
and Lynn Spigelfor their helpful comments on this essay, and
broadcasting through the lenses of classical economic
Stevenson for her research assistance.
theories can yield important insights, it does shed some
light on industry behavior without resorting to hypothetical invisible mechanisms. It rests its account on the
circumstance, beliefs, and habits of real people: the career
managers who do most of the decision-making in the
industry.
The implications of this picture of broadcast industry
behavior for the understanding and politics and broadcast structure are many. Certainly, in broadcasting as in
many other industries, the entrepreneurial, unfettered
autonomy of modern corporationschampioned by the
right and dreaded by the leftis largely mythical.
Corporations are massive bureaucracies, controlled by
career managers who spend their time and efforts
struggling to maintain and enhance the "system" and
their place in it. The truly competitive, entrepreneurial
heroes of free market narratives have been pushed to the
fringes of the economy, to small, usually risky or labor-

Vogt
Nancy

15

Notes
'Theodor Adorno, Minima Moralia: Reflections from Damaged Life,
Trans, E.F.N. Jephcott. New York: Verso, 1978, p. 23.
JTodd

Gitlin. Inside Prime Time (New York: Pantheon) 1985,

p. 25.
'Alfred D. Chandler, Jr. The Visible Hand; The Managerial
Revolution in American Business. Cambridge: Harvard
University Press, 1977, p. 455.
4Outside

of the new work in economic history, the terms

usually used to signal the new twentieth-century variant of
capitalism collectively reflect the vagueness with which it is
understood: the unilluminating term "late-capitalism" merely
perpetuates the orthodox Marxist's fantasy of capitalism's
impending doom, and "monopoly capitalism" ingores the
predominance of oligopoly over monopoly in today's economy.
It may be inevitable that the more illuminating terms available,
such as "welfare-state capitalism," "managerial capitalism,"
and "corporate capitalism," emphasize one aspect of the
complex new socio-economic formation at the expense of
others. The term I will use here, "corporate liberalism," thus
should be understood not as comprehensive, but as a shorthand term that emphasizes only one aspect that is important to
my argumentthe way that commercial broadcasting is
shaped by the accommodation of liberal patterns of thought
and action to the development and continued existence of the
modem industrial corporationwithout suggesting that other
aspects are less important.
5"For

[classical economists], and for Marx most of all, competition was an elemental force, comparable to the force of gravity,
which keeps the parts of the system in place and interacting
with each other in intelligible ways." Paul M. Sweezy, Four
Lectures on Marxism (New York: Monthly Review Press, 1981),
p. 57.

16

.complex situation with the term "market" or "free enterprise"

is wholly inadequate.
'Marx himself, in an aside on the formation of the then still
embryonic "stock companies," remarked, "This is the abolition
of the capitalist mode within capitalist production itself, a selfdestructive contradiction, which represents on its face a mere
phase of transition to a new form of production... It is private
production without the control of private property." Capital,
vol. Ill, Kerr ed., chap. 27, p. 519; quoted in Sweezy, 1981, p. 58.
Robert H. VViebe, The Search for Order 1877-1920. New York:
HOI and Wang, 1967.
Weibe,1967,p. 145.
*Pat Weaver, Memorandum/'The Course to be Followed,"
Sept. 10,1949, p. 2, quoted hi William Boddy, "Operation
frontal lobes versus the living room toy: the battle over
programme control in early television." Media, Culture and
Society Vol. 9 (1987), p. 352.
"Pat Weaver, "Selling in a new era," Speech to the Advertising
Club of New Jersey, May 24,1955, quoted in Boddy, 1987,
p. 353.
"William S. Paley, FCC Informal Engineering Conference Vol. II,
pp. 252-3, June 16,1936, quoted in Waldrop &: Borkin, Television: A Struggle for Power (1938) pp. 72-73.
>3The

question of whether or not management is successful at

controlling demand through advertising and the commercial
media is a thorny problem and has consequently generated a
great deal of speculation and debate. For the purposes of my
argument, however, the important point is that managers think
they are part of an industrial system that uses advertising to
manage demand, and structure their day-to-day behaviors and
institutional environments accordingly.

"Chandler, 1977, p. 1.
^Classical markets still exist here and there. By most accounts,
the generally volatile and freewheeling market for advertising
"Joseph Turow. Media Industries: The Production of News and
time more closely conforms to the free, open, and unfettered
Entertainment. (New York: Longman, 1984; Gitlin, 1985).
marketplace of Adam Smith's ideal than the relatively limited
and oligopolistic conditions that tend to dominate in areas like
"Bernard Miege, 'The Logics at work in the new cultural
program supply, internetwork competition, and the consumer
industries." Media, Culture, and Society, Vol. 9 (1987), p. 276.
product industry (VVillard G. Manning and Bruce M. Owen,
"Television Rivalry and Network Power," Publk Policy, Vol. 24,
"Chandler's "managerial capitalism" is currently the most
No. 1 (Winter 1976), p. 36). But, occasional pockets of classical
prominent of the various theories that have been constructed
market activity don't make a market economy. The point is
simply that what we call commercial broadcasting is a complex . around the fact that the rise of the corporations fostered and
interwoven mix of bureaucratic and economic relations existing was fostered by a new social strata of managers, engineers, and
other specialists who have risen to importance as a determinant
in a contradictory political context, and that describing this
of industrial behavior. Many others have contributed to the

concept as well. See for example, David F. Noble's America by

Design: Science, Technology, and the Rise of Corporate Capitalism,
(New York: Oxford, 1977), and John Kenneth Galbraith's notion
of the "technostructure," in The NEW Industrial State, (Middlesex: Penguin, 1969).
"Gitlin, 1985, p. 142.
"Les Brown, Television: the business behind the box. (New York:
Harcourt Brace Jovanovich 1971).
"Nicholas Johnson, "A New Fidelity to the Regulatory Ideal,"
Georgetown Law Journal, 59 (March 1971), pp. 883-884.
"Gitlin, 1985, p. 45.
23Quoted In R. Jeffrey Lusting, Corporate Liberalism: the Origins
of Modem American Political Theory 1890-1920. Berkeley. The
University of California Press, 1982, pp. 29-30.

"Wiebe, 1967, p. 163.

'"Chandler's answer to this question involves the concept of
market "internalization." Corporations, he suggests, did not
really eradicate the pattern of market relations that characterized the laissez-faire economic system of the nineteenth
century, instead, they transformed those relations. By
coordinating the activities of what had previously been
numerous independent suppliers, distribututors, manufacturers, and retailers, Chandler argues, corporations "internalized"
the relationships that had previously been governed by market
mechanism. The diffuse and helter-skelter market patterns of
allocation and distribution of the nineteenth century, he
suggests, were thus reorganized and brought under the
centralizing umbrella of the more coordinated, rational and
efficient corporate administrative system.
Chandler's work elegantly explains the logic and history of the
extension of bureaucracy into business life, but he serves more
or less as an unreflective apologist for this phenomenon,
assuming that the simple success of the "managerial revolution" in American business proves its inherent productivity,
rationality, and superiority. This assumption is bolstered by his
use of case studies such as the railroads, where consolidation
and introduction of administrative logic in the nineteenth
century allowed for a much more efficient and effective
coordination of scheduling and pricing.
The fact that bureaucratic methods help make the trains run on
time need not, however, stand as proof that administrative
practice should be extended to all areas of life. Chandler's
work unqucstioningly accepts the self-concept of bureaucratic
administration, which invariably defines itself as the more

rational and efficient means to achieve a collective end. The

work of Chandler, therefore, Is itself an expression of what I am
calling corporate liberalism, and it assumes that corporate
relations, like the supposedly "natural" market relations that
preceded them, are Inherently efficient, rational, progressive,
arid driven by the inexorable forces of technological and
economic necessity.
jyThis

is not to deny that the activities of the CRT have complex

and important economic significance. Many, if not all
norunarket bureaucratic systems (e.g., income tax or welfare)
have economic consequences, but we do not therefore call them
"markets." Nor does the fact that one can argue for a change in
the formula because of shifts in "market conditions" change
matters. More importantly, market rationale are rationale;
persuading a bureaucracy to reduce your costs on the grounds
that demand is down is not the same thing as the responding to
a market.
Significantly, the broadcast industry strenuously resisted
efforts to establish pay-TV in the late 1950s, thus rejecting this
rather obvious and direct method of establishing market
relations in favor of the much less direct method of advertiser
sponsorship.
"Quoted in Gitlin, 1985, p. 62.
JISome readers

may point out the dramatic layoffs at CBS in the

1980s as counterexamples, as a case where marketplace
pressure did assert itself in a direct and drastic manner. The
exceptional character of this case alone may be enough to
prevent It from damaging my general argument. But even in
the case of the CBS layoffs, the trade press reports that almost
all upper-level management are still happily employed within
the industry, either with competing firms or as consultants,
University professors, and the like. (Diane Mermigas, "Where
are they now," Electronic Media, Sept. 19,1988, p. 1.)

Thomas Streeter is an Assistant Professor at the Department of Communication Arts, University of Wisconsin
Madison. He has recently published work on cultural
studies and broadcast policy in CSMC, Rowland and
Watkins' Interpretating Television and Media, Culture and
Society.

17