What You Should Think About Advertising

“Advertising is the art of convincing people to spend money they don’t have for something they don’t need.”

–Will Rogers

Proponents of capitalism, especially in its most extreme forms, seem enamored with economic efficiency. Though love is a positive emotion, it is also no substitute for reason in the conduct of government. After all, love is blind. Thus it is that love of capitalism blinds its most ardent admirers to a host of significant imperfections. Multiple quirks change the daily lives of participants in a capitalist economy for the worse, yet the price of doing business in the private sector is almost never acknowledged.

It is true that capitalism promotes competition between independent economic entities. It is hard to imagine Thomas Edison as a do-nothing layabout who only produced numerous technological breakthroughs out of a craving for personal net worth. Yet it is not entirely ridiculous to suggest that capitalism promotes innovation. In an area where the underlying technology is relatively new, mercenary motives can drive organizations to invest in genuinely useful research and development.

To some degree this is possible in any enterprise. A local pizza parlor may innovate by popularizing an unorthodox yet tasty combination of toppings. An independent gardener may refine pleasing topiary techniques. Is this sort of innovation truly driven by capitalism?

Living by the bottom line typically produces a hugely distorted perception of value. To the gross domestic product, the excellent $12 pizza has no more value than the dull $12 pizza. If one requires quality ingredients and caring employees supported by a living wage while the other can be assembled by unskilled teens content to be paid the legal minimum, corporate players in the pizza business are as likely to put resources behind popularizing the inferior product they are to actually produce the superior product.

This is one of the ways advertising influences the quality of goods and services available in the marketplace. According to theory, capitalism promotes the creation of value by market mechanisms that reward producers of superior products and make it difficult to peddle inferior products. If the world were as simple as a game of Candyland, that theory might hold true. As it happens, reality drives all large scale vendors to engage in marketing — the deliberate distortion of public perceptions as they apply to the desirability of goods and services.

In fairness, sometimes the role of marketing is not to distort. If the most common sort of treatment for sinus congestion among young children is determined to be unhelpful and pose some small risk, the public is served by campaigns to spread information about which rival products rely on other, safe and effective, substances. Yet when is the last time anyone heard of a marketing initiative that was constructed to stop at the limit of providing facts presented in a neutral context? No economic paradigm prevents the dissemination of useful public information. Yet capitalism’s reliance on brand competition motivates the dissemination of public misinformation.

Nowhere is this more evident than in the niche of prescription pharmaceutical advertising to the general public. In the United States (among the very few places on Earth where this sort of advertising is permitted,) billions of dollars are spent every year to promote demand for prescription pharmaceuticals. Yet as a society we have long held to the notion that only licensed physicians should make decisions about who ought to be consuming which prescribed substances. That paradigm along with capitalism does justify marketing that would influence professional physicians’ opinions about commercial pharmaceuticals. However, it does nothing to justify marketing that drives up end user demand for substances with significant, and sometimes hazardous, physiological consequences.

Capitalism is particularly quirky as it applies to American health care. Short of actual medical malpractice, there is little incentive to promote quality. The elite may benefit from a small marketplace of top tier specialists, but even the average American millionaire often relies on do-nothing insurance intermediaries more than the personal reputations of physicians. Quantity has become the essence of profitability. As with overbooking airline flights, overcrowding waiting rooms and streamlining patient-doctor interactions is a winning strategy in purely economic terms. The end result is a strong incentive to avoid the kind of contentious discussions in which a patient convinced his or her personal happiness can be found in a particular pill would instead be better served by some other medication or even a prescription-free approach.

The problem becomes even bigger when traced back to the work of the pharmaceutical companies themselves. Developing a remedy for a lifelong condition becomes a bad direction for large corporations driven by their own bottom lines. On the other hand, a treatment that controls symptoms only through lifelong consumption of a particular substances — now that’s the stuff of soaring profits. So it is that the ballyhooed brilliance of “big pharma” in our capitalist society is keenly focused on the trivial variation in heartburn pills or allergy treatments. Truly heal a man and he will take your medicine for a day. Make him feel better without actually healing him and he will take your medicine for a lifetime.

In the end, it boils down to the gulf between what is real value and what is incorporated into conventional measures of GDP. Home schooling, public schooling, and private schooling are all approaches that have produced great successes and great failures in terms of preparing children to understand the adult world. Under the lens of contemporary capitalism, these activities have very different values. Yet those values are not measured by the scholastic abilities of growing students. Instead they are measured by the transfer of currency and the consumption of resources as the process occurs. Is that really the most sensible way to find value in life?

To be fair, some people have done great things specifically because of a mercenary mentality. An ideal economic paradigm applied to the real world should recognize the power of profit to create incentives. Yet it is far from ideal to recognize that and only that while minimizing or even ignoring the tremendous amount of value brought into this world by people acting on other motives. All that which is bought and sold as part of conventional commerce is really a small subset of all that which is worth having or experiencing.

I advocate legal commerce making all drugs available to sane adults with no intent to victimize others. Yet I do not advocate general audience advertising for any substance with potentially harmful side effects. A society that refuses to service a real demand for alcohol will find criminal elements prospering from that refusal. On the other hand, a society that openly promotes demand for alcohol will find increased levels of drunkenness. There is a middle ground, and it does not take much brilliance to see how it might be reached through sensible public policies.

It is downright staggering the size of advertising and marketing efforts as a component in the prices of everything from name brand soda to newly manufactured cars. This non-trivial component of our economy directly adds almost no value to the human experience. It is true that advertising supports media, but it is hardly the case that there would be no demand for information and entertainment in the absence of advertisers willing to bankroll major media organizations.

In the end all this economic activity makes our lives busier and costlier, but is it really a net good? The answer to that depends on how much one sees the benefits of capitalism, indirectly but necessarily supported by marketing, as good. Free markets have their benefits, but they also have their disadvantages. Among the largest of them is the widespread failure to recognize that, in spite of the terminology, “free markets” actually come with an enormous price that is almost never recognized by defenders of the purest strains of ideological capitalism.


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