Academic discipline that explores the relationship between individuals and society and between markets and the state, using methods drawn from economics, political science, and sociology. The term is derived from the Greek terms polis (city or state) and oikonomos (one who manages a household). Political economy is thus concerned with how countries are managed, taking into account both political and economic factors. The field today encompasses several areas of inquiry, including the politics of economic relations, domestic political and economic issues, the comparative study of political and economic systems, and the study of international political economy.
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Presenting an analysis its authors call the "propaganda model," the book argues that since mass media news outlets are now run by large corporations, they are under the same competitive pressures as other corporations. According to the book, the pressure to create a stable, profitable business invariably distorts the kinds of news items reported, as well as the manner and emphasis in which they are reported. This occurs not as a result of conscious design but simply as a consequence of market selection: those businesses who happen to favor profits over news quality survive, while those that present a more accurate picture of the world tend to become marginalized.
The book further points out issues with the dependency of mass media news outlets upon major sources of news, particularly the government. If a particular outlet is in disfavor with a government, it can be subtly 'shut out', and other outlets given preferential treatment. Since this results in a loss in news leadership, it can also result in a loss of readership/viewership. That can itself result in a loss of advertising revenue, which is the primary income for most of the mass media (newspapers, magazines, television). To minimize the possibilities of lost revenue, therefore, outlets will tend to report news in a tone more favorable to government and business, and giving unfavorable news about government and business less emphasis.
The documentary film Manufacturing Consent: Noam Chomsky and the Media, directed by Mark Achbar and Peter Wintonick was based in part on Chomsky and Herman's work; the remainder of the film serves as a biography of Chomsky.