Under the influence of more modernist film practice, as well as political and culturally inspired theory of the 1960s and 1970s, film criticism began to question systematically the cinema's ideological functions. Classical realism was one of the first sites to be investigated. In the pages of the British journal Screen , Colin MacCabe was representative of the growing resistance toward notions of classic realism, a resistance motivated by French Marxist and psychoanalytic theories, especially the work of Louis Althusser and Jacques Lacan. MacCabe and others argued that cinema cannot reveal the real as if it were some transparent window onto the world. Rather, film must be analyzed as a set of generally contradictory discourses. Theorists pushed for analyzing the wide range of discursive markers in realist films, which had become the dominant aesthetic of narrative cinema, but they also renewed attention to films that violated the classic realist norms and thus worked against easily consumed notions of the real.

The French journal Cahiers du cinéma had already turned much of its attention in the late 1960s and early 1970s away from conventional narrative cinema and toward the more marginalized forms of cinema verité, Third World political cinema, and especially the narrative experimentation by Jean-Marie Straub (b. 1933), Danièle Huillet (b. 1936), and Jean-Luc Godard (b. 1930). For Cahiers , film practice was only valuable if it undercut the illusionism of classic realism and fore-grounded the labor of production. Tout va bien ( All's Well , 1972), which opens with a scene in which Godard writes checks to cover the necessary expenses of film production, became an exemplary film for critics attacking classic realist narratives. It constantly acknowledged its constructed nature, it overtly concerned itself with the politics and economics of everyday decisions, was made by a collective (the Dziga Vertov Group), and defied representational norms of both documentary and fiction filmmaking. By this point, Cahiers du cinéma was so actively opposed to conventional narrative norms that it had stopped reviewing any commercially released movies. Much of this highly politicized narrative theory prided itself on its strict Marxist foundations, but others, including the director François Truffaut (1932–1984), argued it had become so elitist that the articles were impenetrable for anyone lacking a Ph.D. in political science. The discourse of film theory and criticism had entered a new, more academic phase that drew from the demanding changes in the fields of linguistics, philosophy, and psychoanalysis.

One of the most significant shifts in narrative analysis began in the 1960s with the French theorist Christian Metz, who built upon linguistic theory, including that of Ferdinand de Saussure, to bring structural analysis into film scholarship. Metz, along with Roland Barthes, set the groundwork for much of subsequent work on narrative, including the shift toward discourse analysis. Adopting methodology from the field of semiotics, Metz began looking for how the cinema could be said to signify, or generate, meaning. Signification is a dynamic process that depends upon material signifiers, which for cinema include representational images, titles, spoken language, dissolves, and music and their range of signifieds, or denotative and connotative meanings. Signifying practice became the term for how movies told stories. Metz started by evaluating cinematic equivalents to language and systematically defined codes at work in cinema, much as Roland Barthes defined codes in literature. With S/Z (1970) in particular, Barthes pointed out that realism depended upon a system of textual, intertextual, and extratextual codes. Narrative analysis must include breaking down a text's codes of signification, but it also involves looking at cultural contexts and restrictions.

The assumption is that language is a social force struggling to shape how we think and act. Realism was a suspect mode of culturally determined, ideological discourse, and the reader or spectator must struggle to decode the text's systems or risk blindly submitting to its logic. If realist novels offered an illusory, coherent bourgeois worldview to naturalize culture's status quo, classical cinema, with its visual and audio power to "represent accurately," would have even more cultural power. Thus, realist cinema had to be attacked for its strategies of masquerading the fictional as natural. Metz and many others began to analyze the convincing "impression of reality" generated by strong cinematic cues, and a second stage of structuralism, more interested in intertextual and extratextual codes of spectatorship and ideology, became a central component of narrative theory.

In the 1970s and 1980s, many narrative theorists increasingly shifted from defining the narrative instance to explaining the process known as enunciation. One influential linguist was Émile Benveniste. For Benveniste, story ( histoire ) tries to hide its marks of communication, presenting itself in an impersonal, objective manner. By contrast, discourse includes markers of narration. In literature, the difference could be simplified down to whether the narration presents its information as given facts or includes references to a narrator, as in "I-you." The process of address, enunciation, structures the spectator's relation with the text. The enounced is always a product of enunciation, which, like language, is a social process. The analyst uncovers these marks of communication, which many classic realist films try to disguise and cover over. Thus, enunciation theory concentrates on syntax and cinematic modes of address that might be equivalent to those in verbal communication and calls for unmasking texts that pretend to tell their stories naturally. From this perspective, classic realist texts deceitfully pretend to be objective when they are actually complex, culturally determined discourses.

Renewed debate surrounding the specificity of cinema merged with interest in linguistics, psychoanalysis, and cultural studies and localized attention onto the cinematic apparatus and the spectator, or film subject. French and British theorists as varied as Jean-Louis Baudry, Colin MacCabe, Raymond Bellour, Jean-Louis Comolli, and Stephen Heath became increasingly concerned with the cinema's ability to "position the subject." Lacanian notions of subjectivity, based in part on the developmental move from imaginary to symbolic stages, privileged interest in point of view structures in the cinema. One assumption was that just as the young human subject was positioned by cultural structures, the film subject was determined by cinema's forms and modes of address. Baudry and others questioned the camera lens as a tool of ideology, built as it was to replicate monocular perspective and transform the social individual into a spectatorial subject. Now, Lumière's film of a train pulling into the station could be seen as a means for organizing and perhaps taming the social spectator. Further, Bellour explored how character desire and its submission to the "law" in classical cinema, and the films of Alfred Hitchcock in particular, structure narrative films as Oedipal journeys, replaying our inherent struggles for subjectivity. Metz too investigated the cinema as an "imaginary signifier" that satisfied, repeatedly, the spectator's regressive, voyeuristic drives.

The cinematic spectator was not only defined by the visual structures of the cinema, but narratives became evaluated for how they reinforced or challenged dominant cultural issues. If spectators were positioned visually, they were also positioned culturally within the mythic or symbolic structures of dominant ideology. Narratives, and commercial classical narratives in particular, became suspect for reinforcing bourgeois, typically patriarchal perspectives. The spectator could thus be doubly positioned, once by the apparatus, a second time by socially determined, and determining, narrative structures. Narrative and spectatorship thus became key concerns for feminist theorists. Laura Mulvey, Mary Ann Doane, and Annette Kuhn in particular directed feminist attention beyond the narrative surface of patriarchal main-stream cinema. Issues of race, class, and gender went beyond cataloging types of representations and were analyzed throughout the cinema's camerawork, editing, soundtrack, and plot structures.

While much of the theoretical legacy of enunciation theories of narrative, psychoanalysis, and cultural studies continues to thrive and inform film studies, it often reduces narrative analysis to serving as symptoms for larger social issues. Some narrative theorists, including Seymour Chatman, remained focused on the processes specific to cinematic narration. Work on intertextuality and narrative, much of it inspired by the literary theorist Gérard Genette, proved particularly pertinent to film studies. Moreover, the theorist and historian David Bordwell argued that enunciation theory remains too deeply indebted to verbal communication to be fully applicable to the cinematic experience. These new perspectives have led to rigorous investigation into motion picture narratives and challenges to recent theories of spectatorship. Many narrative theorists refused to reduce spectators to passive, predetermined subjects, but rather posited active participants in the production of meaning. Bordwell argued for a cognitive-based investigation of film practice and found that Russian Formalism, with its precise attention to story, plotting, and style, provided a methodology that functions well with cognitive vocabulary to reveal how spectators perceive and process cinematic images and sounds to comprehend narrative. Films deliver motivated cues and spectators apply an array of cognitive schemata to construct and understand fictional film worlds. Murray Smith enlivened the area of spectator identification, offering a highly functional grid to understand how films cue audiences to sympathize and identify with fictional characters. Cognitivism has contributed strongly to the rethinking of narrative films in relation to concrete models of human perception and comprehension.

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