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Media Makes Money

by Frank Stiles

The business pages of New Zealand's City dailies provide a service to the countries businessmen by tolling them who is dead or promoted, or taken over, or declared bankrupt, or likely to become any of these things.

The pages also serve to boost the influence of a newspaper in business and commercial areas, while providing a drawcard for business sector advertising.

But in providing some description of the comings and goings of money, and it's effect on the people who manipulate it, the business pages provide another equally important service.

They provide the manipulators of the country's wealth and labour with cracker-barrell justifications for their work, and for the capitalist system as a whole.

When one considers that most businessmen have had neither the time nor the inclination to study the overall theories which back the system they profit by, it becomes clear that these little anecdotal apologies for capitalism provide an enormously important service to those who read it.

It allows them to come up with pat answers at cocktail parties, to their local grocer, and to people canvassing for political parties.

It provides the ideological base for their manipulation of money and others' labour.

In this section of our dailies, 'unbiased journalism is often thrown to the wind, and little pretence is made of any sort of objectivity.

Turning to the example opposite, we learn a little more of the methods employed within the business community to back up their own ideas and beliefs - so essential to the sane continuation of their work.

The Post's' 'Commercial Editor' begin's his apology for the growth of monopoly - which he mysteriously confuses with 'free enterprise' - with a guarded and low-key remmdet of a forth-coming propaganda campaign by the New Zealand Chambers of Commerce.

And, in the best tradition of New Zealand propaganda he criticises companies for trying to increase the sale of their shares by pretending they are more profitable, when they are not.

The basis of his criticism seems to be that people who won't be investing in the company may hear of these claims of huge profits, and turn them to their own ends, perhaps, although he doesn't say this - by using them in wage negotiations.

The Post's Commercial Editor, however, has the answer to this "a great public relations exercise is needed' which will presumably allow the companies to continue making the profits, and advertising them as such to potential investors, but convincing the workers and their Trade Unions that things aren't quite so rosy after all.

Having told industrialists how not to perpetuate the awful socialist myth that people go into business to make money, the Post's commercial editor launches into what can only be described as remarkable example of how statistics while true in themselves, can lie.

The Post says, basically that there is no 'bosses', but rather a large number of ordinary people - really quite a lot like you and me - behind the huge monopolies in New Zealand.

In a remarkable exercise which indicates either that the newspaper's commercial editor has an ideological axe to grind, or that he knows little or no arithmetic, he attempts to prove his patently false belief by inferring that power in 'Watties Industries" is controlled by the number of individual shareholders on a democratic basis of one share-holder - one vote.

That, at least would be the conclusion a person who knew nothing of the workings of public companies would infer.

In fact, of course, the power is divided up on the basis of one share - one vote, meaning that those with the large blocks of shares control the policy of the company and reap most of the profits.

Even if the 11, 041 share holders holding between one and 400 shares held the maximum of 400, their total shareholding would only come to 4,416,400 shares....compared with the minimum (on the Post's figures) of 4,080,102 shares held by what the Post describes as 'the big boys' - institutions like mutual insurance funds, pensions and superannuation funds and the like.

So by minimising the shareholding of the big investors, and maximising that of the small investors, we discover that the 102 big investors hold almost the same number of shares as the 11,041 small investors.

In fact, if the true figures were known, it would be found that the big investors hold far more shares that the little investors, as many big investors will hold more than 40,000 shares, and most of the small investors will hold well under 400 shares.

The exact figures cannot be extracted from the Post's analysis, but it is clear that the Post has suceeded in misleading it's readers by analysing the numbers of shareholders, rather than the number of shares held by individual shareholders.

They have thereby succeeded in perpetuating the myth that monopolies are nothing more than the expressed will of thousands of ordinary New Zealanders and provided a classic example of the distorttions of truth in truth in the interests of the bosses.

Commercial Editor

Echoing our words just a fortnight ago . . . "now there's a public relations job, if ever there was one," it was interesting to hear this week that the New Zealand Chambers of Commerce had begun an all-out drive to get the free enterprise message across to all sectors of the community.

A campaign is on to raise funds and a comprehensive "education" programme is planned.

As we are all becoming increasingly aware, the profit motive is regarded by some in our, midst as immoral and in-decent. And to be fair, many businesses in the past have done little to correct this attitude.

Play Up

When times have boon good, the profits made by companies, particularly those listed on the Stock Exchange and depending on investor confidence for their survival, have tended to be played up.

These companies have endeavoured to make their performance seem as profitable as possible. They thought that nothing would inspire investor (that is to say shareholder) confidence as much as a substantial boost in net profit.

But in these inflationary times, the tact that a company's net profit has increased by x million dollars, compared with a similar period in time, is meaningles.

And to quote the increase as a percentage is just as use less.

Wide Gulf

It is not the amount of profit that is the important fact . . . but the profitability. There is an increasingly wide gulf between the two, with inflation on the one hand and the traditional method of accounting on the other.

One has to Lake into account the amount of shareholders' funds that were used to generate the earnings: and the effect of inflation which is currently running at somewhere higher than 15 percent. The cost of replacing plant and stocks, not to mention buildings, must also be taken into account.

This is one area where a great public relations exercise is needed.

The Rosses

And, perhaps even more important, there is a great need to explain the relationship between what has come to be known as "them or us" . . . the bosses and the workers.

But who are the bosses?

Trade union leaders, and others, talk about the bosses as if there was some faceless monster hidden away in some luxurious ivory tower, whose main aim was to grind down the employees.

Take one example, a company which has come under much unfavourable comment since announcing its profit result for the January 31 half year.

As we remarked a fortnight ago, this company announced a 43 percent profit increase for the half year just when the Monetary' and Economic Council was warning the country about the hard times that were in store.

Who then is this "Mr Wattie" that the Carp lady was referring to on TV this week?

"He" is 25,846 individual shareholders, including 12,470 men and 11,792 women, with the remainder being companies and estates.

Of these, 11,041, or just over 40 percent of the total shareholders, hold up to 400 shares each. At the current market price of around 96c for the Wattie shares this makes a maximum investment of $384.

There are another 10,943 who have a holding of between 401 and 2000 — maximum $1920. These make up another 40 percent plus.

Then there are 2113 shareholders who bold between 2001 and 4000 shares each — a maximum investment of $3840. "Bloated capitalists?"

Hardly.....

There are, admittedly, 1511 shareholders who hold sizeable parcels of between 4001 and 20,000 — and a parcel of 20,000 Watties at the current market value is worth about $19,200, And a further 135 who hold between 20,001 and 40,000 shares each, which could be worth up to $38, 400.

Then there are the 102 "big boys." mainly institutions such as the mutual insurance funds, pension and super annuation funds, and the like, with over 40,000, shares.

But over 80 percent of the total shareholders in Watties hold fewer than 2000 shares each.

That's who "them" is.

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