Business Journalism

Business journalism refers to reporting and writing about businesses and about the economy. It commonly includes other beats such as labor, workplace, technology, personal finance, investment, and consumer reporting, in addition to investigative reporting focusing on these topics. It is also known as financial journalism. Business journalism is important to corporate reputation because what is written about companies often determines how a company is perceived by its outside constituencies, such as customers and potential employees. The rest of this entry provides a review of the early history of business journalism and newspaper financial pages, a discussion about how economic changes have affected business journalism, and an evaluation of the perception of business journalism.

Throughout history, business journalism has had a profound effect on media audiences in how they live their lives and what they think about businesses. David Forsyth, who wrote The Business Press in America: 1750–1865, argues that in the beginning of civilization in the Paleolithic or Old Stone Age, man communicated about his economic issues through cave drawings. The genesis of writing and the establishment of a numerical system in the Bronze Age also stemmed from economic activity, he added. Even the Hammurabi Code established the forerunners of today’s interest rate and minimum wage laws.

With the advent of the printed word and publications, business journalism became vitally important to society, although the information was rarely critical of commerce, which was a developing concept in the 17th and 18th centuries. In addition, the first newspapers rarely worried about offending their advertisers with critical business coverage, though few wrote anything critical about business. Few papers had ads, and in those that did, the ads were often for the paper’s publisher.

“Price currents”—newspapers that offered the prices of goods and services in a specific city or town—began appearing in America in the 1750s. Among the first were a 1752 sheet printed in Nova Scotia, Canada, and another in Charleston, South Carolina, in 1774, although there is no definitive information about the first price current newspaper. These newspapers were descendants of similar papers in the Netherlands and England published as far back as the late 16th century. The New York Price Current was established in 1795, four years after the first U.S. factory had begun operation, according to Russell Baird and Arthur Turnbull’s early history of industrial and business journalism.

These price currents listed the current prices of various products offered for sale by local merchants, and they rarely, if ever, contained any editorial content. The papers were strictly for information and extremely numbers intensive. Among the products listed in most price currents were cotton, flour, furs, leather, oil, skins, tobacco, and wheat. A Philadelphia price current from 1783 also listed sample wages for workers such as carpenters, sail makers, and blacksmiths. Later, 18th-century price currents in that city also included information about shipping traffic. Baltimore and Boston also had price currents published in the late 18th and early 19th centuries. The Boston Daily Advertiser was one of these price currents. Published by Nathan Hale, the paper listed prices for foreign and domestic goods on the front page of its May 24, 1823, edition. Most of the rest of the four-page broadsheet contained shipping information and small advertisements from merchants. As a result, these early price currents had little to no effect on corporation reputation.

The First Business Pages

James Gordon Bennett’s New York Herald was the penny newspaper that regularly devoted a large amount of space to business and economics news. Started in 1835 on Wall Street, the Herald developed the best financial section of any of the mainstream newspapers. Bennett was a former economics teacher, and he often wrote what he called the “money page.” Bennett often used the page to explain why stock prices rose and fell. Also on his financial reporting staff was Thomas Prentice Kettell, who began writing a financial column for the Herald in 1835 and is considered the first financial editor of a daily newspaper in the United States. Kettell later founded United States Economist in 1852. However, most companies in the United States remained small, and the coverage was rarely, if ever, critical.

Bennett had competitors for business coverage in the early days of the penny press. The Journal of Commerce was a New York paper that actually superseded the penny newspapers. It was founded in 1827 by Arthur Tappan and was edited by Gerard Hallock from 1828 to 1861. The publication remains in existence today as a weekly magazine, converting in 2000. In the 1940s and 1950s, the paper was one of the most widely read newspapers in the United States because it published shipping schedules.

Hallock was considered an innovator in how he gathered business news. He used two small schooners to cruise the waters outside New York to find incoming ships and then come back to port with the news. When other New York papers followed, Hallock then moved to land, establishing a horse express from Philadelphia to New York that gave the Journal of Commerce news from Washington and the South a day ahead of other New York papers.

Another important business journalist during the time was William Buck Dana, who was editor of the Commercial and Financial Chronicle. After purchasing Hunt’s Merchants’ Magazine in 1861, Dana founded the paper in New York in 1865 and edited it until his death in 1910. The Chronicle was the first business weekly newspaper in the United States, and Dana was a dominant force in explaining business and the economy to his readers. Trained as an attorney, Dana modeled his newspaper after The Economist in London, and it included unsigned editorials about current business matters as well as reports on the financial conditions of banks. By 1870, the monthly Merchants’ Magazine was folded into the Chronicle. Dana’s editorials included commentaries on business law and criticism of government regulation of business and labor relations. It was at this time that business journalism began to affect corporate reputation.

One journalist in the mid-19th century who was not afraid to criticize the companies he was writing about was Henry Varnum Poor, editor of the American Railroad Journal from 1849 to 1862. He caused dramatic changes in the relationship between companies and journalists. In retrospect, Poor can be considered the first true modern-day business journalist for forcing companies to provide accurate information about their financial performance to investors and readers.

The beginning of the Wall Street Journal in 1889 was also a major development in business journalism. Today, it is one of the papers with the largest circulation in the United States, and it is considered the preeminent medium for business news and information. It has spawned competitors in all types of media. But in the 19th century, the fact that a daily newspaper could be devoted to covering the business world was unique.

Economic Change

Developments in business journalism occurred during a time of great economic change. The Industrial Revolution happened in the 19th century, and the building of factories and the growth of national economies and wealth naturally meant that the news media of the time would begin to pay more attention to business and industry. As countries shifted from primarily agrarian output to building machines such as railroad engines in factories and processing food in plants, the effect on the people was also tremendous. More people moved into the cities from rural areas and from other countries. The printing industry was revolutionized as well, making it easier for people to access pamphlets, books, and newspapers.

The 20th century saw a dramatic proliferation of business journalism aimed at a general audience. Business magazines such as Forbes, Fortune, and BusinessWeek all started in the first third of the century. Many of the muckrakers of the Progressive Era wrote about businesses and how they were influencing people’s lives. Ida Tarbell wrote about the Standard Oil Co., while Upton Sinclair wrote about the meatpacking industry. Lincoln Steffens chronicled how businesses were bribing government officials. Other industries that were examined included life insurance, real estate, and manufacturing. The muckrakers affected the reputation of companies in a negative way, and many were unsure of how to react to such coverage.

After the muckrakers, business journalism, for the most part, was not highly critical of companies until the 1960s. During this decade, writers such as Ralph Nader, Rachel Carson, and Jessica Mitford wrote scathing books about the auto industry, the chemical industry, and the funeral industry, respectively. This ushered in a new area of business journalism that began to examine more carefully the role that corporations played in people’s lives.

Other changes were occurring in society that made business journalism more important. Stock ownership became more common among U.S. households, with more than 50% of all families invested in the markets in one way or another by the end of the 20th century. Workers moved from job to job more frequently. And home ownership increased to record levels. These factors led people to want to know more about businesses and what was going on in the economy, and they turned to business media for that information.

Perceptions of Business Journalism

Business journalism, however, has been criticized in the past two decades for not being as helpful to consumers as it should be. After the technology bubble burst and the stock market fell in 2001, many blamed the frothy business journalism. And after the Great Recession of 2008 and 2009, some blamed business journalism for failing to warn people about risky home loans and the investments that caused the downfall of some large Wall Street firms. However, Gregory Miller, a Harvard Business School professor, discovered that almost a third of all fraud cases investigated by the government in the first decade of the 21st century were actually reported first by the business media.

Business journalism’s relationship with corporations and its reputation with CEOs and executives is an issue. A 1992 poll by Louis Harris and Associates for Boston-based life insurer John Hancock Financial Services Inc. found that only 54% of executives had a positive view of the quality of business journalism in America. In comparison, 79% of the journalists polled had a positive view of business journalism. Only 27% of the executives polled believed that business journalism was fair, balanced, and accurate, while 84% of journalists agreed with that statement.

In addition, the Harris poll found that just 41% of executives rated business journalism positively for producing stories that were well written and well researched. In comparison, 78% of journalists felt that business journalism was well written and well researched.

Two years later, a similar study found that the opinions of business executives about the media had not changed much. A national survey of executives and journalists by the Freedom Forum First Amendment Center found that 68% of executives felt the news media is biased against management, while 81% of journalists disagreed with the statement. About half of the executives surveyed said that they were usually not quoted accurately, while 84% of journalists believed that they do quote management accurately. Nearly three fourths of the executives believed that journalists portrayed business in a negative light, while nearly 40% of the journalists thought that business was presented in a positive light by the media.

When it comes to the relationship between the media and executives, more than 50% of the executives felt that the antagonism between the two was inevitable, while 81% of the journalists surveyed thought the same. Two thirds of the executives also thought that reporting does not enhance the status of business, while 42% of the journalists felt it did. Clearly, the adversarial relationship that began decades earlier was still prevalent in a time of a strong economy. The Freedom Forum survey also found that 56% of business journalists and 49% of editors disagreed that the relations between business executives and reporters had gotten worse in the past five years, but 45% of executives believed that the relationship had worsened.

Finally, Selzer and Co. conducted a business journalism survey of executives for the American Press Institute nearly a decade after the John Hancock survey. It discovered that opinions about business reporting among corporate leaders had not changed much. Although the survey showed that CEOs expressed little concern about accuracy, they still gave local daily newspapers low marks for content and credibility. One in three was dissatisfied with the quality of business news in the local newspaper, and more than 60% gave reporters low marks for their ability to ask intelligent questions about their business. Interview research with journalists reveals that journalists believe that classes in business are needed to help them do their jobs more effectively. They also believe that the training should be for all journalists, not just those covering business and the economy.

In the 21st century, research about business journalism is more prominent in Europe than it is in the United States. For example, media scholar Aeron Davis of Goldsmiths College in England argues that the financial media did not do enough to warn consumers about the impending economic crisis of 2008 because business news is primarily written for those in financial positions. Professor and author Ángel Arrese writes that the financial media in his country, Spain, was too reverential and respectful to many industries, such as banking.

Business journalism has become one of the most important areas of journalism in the 21st century because of the growing influence of corporations in everyday life. In addition, more consumers have become interested in news that affects them financially.