Anthony J. Pennings, PhD

WRITINGS ON DIGITAL STRATEGIES, ICT ECONOMICS, AND GLOBAL COMMUNICATIONS

The North-South Politics of Global News Flows

Posted on | October 3, 2021 | No Comments

“Free flow was at once an eloquent democratic principle and an aggressive trade position on behalf of US media interests.”
– Herman, E.S., and McChesney, R. W., The Global Media [1]

As the age of digital monetarism emerged in the 1970s after the US went off the global gold standard, the “free-flow” of transborder news and data communications became a hot topic of international governance and politics. Freeing the flow of capital from the constraints of individual nation-states (including the US since the New Deal) was one of the foremost global issues of the Reagan Administration in the 1980s, and news became a contentious part of the process. Major areas of disagreement emerged between the South’s Non-Aligned Movement (NAM) and the North (Group of 5) that would shape the future of the global economy.

This research summarizes and discusses the globalization of capital movement and the information and news that lubricates its transactional systems. An international information divide, literally a divide by national boundaries, needed to be transcended for this globalization to work. I examine the perspective of what has been called the “South” – the countries that inhabit the southern hemisphere (except for Australia and New Zealand) and their historic struggles with the more developed “North.” These countries organized into a ninety-member Non-Aligned Movement (NAM) and subsequently began to attack what they considered a new type of “neo-colonialism.” While quite different, almost all these countries were concerned about corporate power’s growing strength and influence for the First World “North” countries.[2]

Governments became increasingly concerned that the computerized society with its international data flows could affect its citizens and interfere with national security, cultural sovereignty, and economic success. One of the concerns was exemplified by the debates over what was called “Transborder Data Flow” (TDF).[3] TDF was first used in discussions on privacy protection by the OECD in June of 1974. Then in a subsequent OECD seminar in 1977, the definition expanded to include nonpersonal information. South countries also expressed concerns about social and cultural information flowing in from developed countries. In contrast, news about their countries often focused on natural disasters, political instability, and other topics that did not show them in a positive light.

The South called for both a New International Economic Order (NIEO) and a New World Information Order (NWIO), which would provide a collective voice and address these issues. Galtung and Vincent listed the NIEO’s five basic points. The first was better terms of trade for the Third World. Countries of the South wanted improved and/or decreased trade with the countries of the North. Tariffs and other restrictions in the First and Second Worlds were a significant concern, as was the tendency for the South to export raw materials to the North. In contrast, the opposite flow of trade tended to be value-added products such as cars, processed foods, military arms, and electronics. Second, South countries wanted more control over productive assets in their own countries. Capital, nature, labor, technology, and management of foreign corporate branches tended to elude local concerns.[4]

These countries wanted to set up locally controlled industries leading to “import-substitution,” replacing foreign-produced products with those made within the nation. South countries also wanted more Third World interaction. This meant increased South-South trade and economic/technical cooperation between developing countries. Fourth, they also wanted more Third World counter-penetration such as financial investment in “rich” countries. Lastly, they wanted more Third World influence in world economic institutions, such as the World Bank, the IMF, and UNCTAD, as well as in the policies and activities of transnational corporations. In 1974, the NIEO was adopted by a special session of United Nations General Assembly.

These concerns were followed up by calls for a “New World Information and Communication Order” (NWICO), an important but largely rhetorical attack on the global news media, particularly the newswires like Associated Press. In 1976, UNESCO (United Nations Economic, Social, and Cultural Organization) established what later became known as the MacBride Commission, after its chair, Sean MacBride, from Ireland. The commission was charged with studying global communications. The commission’s report, Many Voices, One World (MacBride Commission 1980/2004), outlined the main international problems in communication and summarized NWICO’s primary philosophical thrust. Two years later, UNESCO passed the Mass Media Declaration that spelled out the ethical and professional obligations of the mass media and its journalists. After the MacBride Commission “vaguely” endorsed the NWICO in 1980, UNESCO passed a resolution calling for the elimination of international media imbalances and stressing the importance of news serving national development.[5]

These issues are relevant because they foreshadowed problems inherent in the internationalization of the Internet. They are also indicative of the increasing tensions building between the two as the North attempted to use the “Third World debt crisis” to institute a set of structural reforms designed to open these countries to the flows of money-capital, data processing, and finance related news. Going off gold and the oil crises in the 1970s resulted in most of these countries going heavily into debt. This left them vulnerable to pressure by the North. The Reaganomic response was swift and effective.

The MacBride Report reflected UNESCO’s traditional concerns with the “free flow” of information and calls for a “plurality” of communication channels, but it was released at a time when the new Reagan and Thatcher governments were setting out their own agendas for an international order of communications and capital flows. In the wake of international money’s new demands for information and news, they wanted to maintain a strong neoliberal stance on international communication. Despite strong international opposition, the US redrew from UNESCO and stopped paying membership dues to the United Nations.

But the primary strategy was a structural adjustment of domestic economies to open them up to money-capital and news. By making additional lending subject to the scrutiny of the International Monetary Fund (IMF), the North pressured the South to liberalize their economies and protect the free flow of information moving through their borders. Thus, in conjunction with the financial industry’s need for international data communications, the debt crisis allowed the North to pave the way for the globalization of news and, eventually, the Internet.

Consequently, the main thrust of this research argues that the road for the international Internet and e-commerce was substantially paved by the attempts to free up the global flows of financial news and information needed for the new regime of digital monetarism. Share markets were opened to international investments, and governments were pressured to privatize public utilities and other government assets. A new era of spreadsheet capitalization was emerging that allowed for inventorying and valuing of assets. Turning these assets into tradeable securities was heavily reliant on information and news flows. News became a contentious issue during the 1970s, especially for the “Third World,” which tied it to other issues of economic and informational importance.

This post argues that the road for the international Internet and e-commerce was substantially paved by the attempts to free up the global flows of financial news and information needed for the new regime of digital monetarism. The securitization of assets required information and news to adequately price and sell on global sharemarkets. Freeing the flow of capital from the constraints of individual nation-states (including the US government) was the foremost international issue of the Reagan Administration outside of the Cold War. By the 1990s, the global system had entrenched itself, and a condition of pan-capitalism developed, with South countries becoming “emerging markets.”[6] Reagan’s tax cuts became the new foreign aid as the US deindustrialized, and capital flows created a global system of digital finance supply chains.

Notes

[1] Herman, E.S., and McChesney, R. W. (1997) The Global Media: The New Missionaries of Global Capitalism. London: Cassell. p. 17.
[2] Chilote, R.H. (1984) Theories of Development and Underdevelopment. Boulder, CO: Westview Press.
[3] R. Turn, “An Overview of Transborder Data Flow Issues,” in null, Oakland, CA, USA, 1980 pp. 3-3.doi: 10.1109/SP.1980.10010
https://doi.ieeecomputersociety.org/10.1109/SP.1980.10010
[4] Galtung, J. and Vincent, R. (1992) Global Glasnost: Towards a New World Information and Communication Order. NJ: Hampton Press.
[5] Jussawalla, M. (1981) Bridging Global Barriers: Two New International Orders. Papers of the East-West Communications Institute. Honolulu, Hawaii.
[6] Tehranian, M. (1999) Global Communication and World Politics: Domination, Development, and Discourse. Boulder, CO: Lynne Rienner Publishers. p. 83.

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AnthonybwAnthony J. Pennings, PhD is Professor at the Department of Technology and Society, State University of New York, Korea. Originally from New York, he started his academic career Victoria University in Wellington, New Zealand before returning to New York to teach at Marist College and spending most of his career at New York University. He has also spent time at the East-West Center in Honolulu, Hawaii. When not in the Republic of Korea, he lives in Austin, Texas.

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    Professor at State University of New York (SUNY) Korea since 2016. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, digital economics, and strategic communications.

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