Economics Dictionary of ArgumentsHome
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| Advertising: In economics, advertising is the strategic communication used by firms to inform, persuade, or remind consumers about products or services. It aims to influence demand, differentiate products, and increase market share, often impacting consumer preferences and price elasticity. Advertising is considered a key factor in shaping competition and market behavior. See also Market, Competition._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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John Kenneth Galbraith on Advertising - Dictionary of Arguments
Rothbard III 977 Advertising/Galbraith: An informal poll taken among the people, asking whether they would accept, or know what to do with, an extra few thousand dollars of annual (real) income, would find almost no one who would refuse the offer because of excessive affluence or satiety - or for any other reason. Few would be at a loss about what to do with their increased wealth. Rothbard: Professor Galbraith, of course, has an answer to all this. These wants, he says, are not real or genuine ones; they have been "created" in the populace by advertisers, and their wicked clients, the producing businessmen. The very fact of production, through such advertising, "creates" the supposed wants that it supplies. Galbraith's entire theory of excess affluence rests on this flimsy assertion that consumer wants are artificially created by business itself.(1) Rothbard III 978 Advertising/RothbardVsGalbraith: There are many fallacies in Galbraith's conventional attack on advertising. 1) In the first place, it is not true that advertising "creates" wants or demands on the part of the consumers. It certainly tries to persuade consumers to buy the product; but it cannot create wants or demands, because each person must himself adopt the ideas and values on which he acts - whether these ideas or values are sound or unsound. Galbraith here assumes a naive form of determinism - of advertising upon the consumers, and, like all determinists, he leaves an implicit escape clause from the determination for people like himself, who are, unaccountably, not determined by advertising. If there is determinism by advertising, how can some people be determined to rush out and buy the product, while Professor Galbraith is free to resist the advertisements with indignation and to write a book denouncing the advertising? 2) Secondly, Galbraith gives us no standard to decide which wants are so "created" and which are legitimate. By his stress on poverty, one might think that all wants above the subsistence level are false wants created by advertising. Of course, he supplies no evidence for this view. But (…) is hardly consistent with his views on public or governmentally induced wants. 3) Thirdly, Galbraith fails to distinguish between fulfilling a given want in a better way and inducing new wants. Unless we are to take the extreme and unsupported view that all wants above the subsistence line are "created," we must note the rather Odd behavior attributed to businessmen by Galbraith's assumptions. Why should businessmen go to the expense, bother, and uncertainty of trying to create new wants, when they could far more easily look for better or cheaper ways of fulfilling wants that consumers already have?(2) >Marketing research/Rothbard. 1. In addition to wicked advertising, wants are also artificially created, according to Galbraith, by emulation of one's neighbor: "Keeping up With the Joneses." But, in the first place, what is wrong With such emulation, except an unsupported ethical judgment of Galbraith's? Galbraith pretends to ground his theory, not on his private ethical judgment, but on the alleged creation of wants by production itself. Yet simple emulation would not be a function of producers, but of consumers themselves- unless emulation, too, were inspired by advertising. But this reduces to the criticism of advertising discussed in the text. And secondly, where did the original Jones obtain his wants? Regardless of how many people have wants purely in emulation of others, some person or persons must have originally had these wants as genuine needs of their very own. Otherwise the argument is hopelessly circular. Once this is conceded, it is impossible for economics to decide to what extent each want is pervaded by emulation. 2. On the alleged powers of business advertising, it is well to note these pungent comments of Ludwig von Mises: „It is a widespread fallacy that skillful advertising can talk the consumers into buying everything that the advertiser wants them to buy.... However, nobody believes that any kind of advertising would have succeeded in making the candlemakers hold the field against the electric bulb, the horse-drivers against the motorcars, the goose quill against the steel pen and later against the fountain pen.“ (Mises, Human Action, New Haven, Conn.: Yale University Press, 1949. Reprinted by the Ludwig von Mises Institute, 1998. p. 317)_____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Galbraith I John Kenneth Galbraith The Affluent Society London 1999 Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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> Counter arguments against Galbraith
> Counter arguments in relation to Advertising
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