WEBVTT NOTE 9. The Advertiser 1 00:00:00.000 --> 00:00:08.520 Chapter 9. The Advertiser Advertising has long had a bad press. The case 2 00:00:08.520 --> 00:00:15.920 against it is detailed and seemingly compelling. It is claimed that advertising entices people, 3 00:00:15.920 --> 00:00:22.280 forcing them to buy products they would otherwise not buy. It preys on the fears and psychological 4 00:00:22.280 --> 00:00:27.960 weaknesses of people. It is misleading, with its juxtaposition of a beautiful woman and 5 00:00:27.960 --> 00:00:33.440 and a commercial product implying that she is somehow part of the deal. 6 00:00:33.440 --> 00:00:38.140 It is foolish what with its contests, marching bands and jingles. 7 00:00:38.140 --> 00:00:40.980 It is an insult to our intelligence. 8 00:00:40.980 --> 00:00:46.320 The argument is usually capped with an appeal to our selfish natures. 9 00:00:46.320 --> 00:00:47.840 Advertising is very costly. 10 00:00:47.840 --> 00:00:53.880 A minute of prime television time or a full page advertisement in a popular magazine or 11 00:00:53.880 --> 00:00:57.780 newspaper can run into thousands of dollars. 12 00:00:57.780 --> 00:01:03.140 The advertising industry as a whole is a multi-billion dollar industry. 13 00:01:03.140 --> 00:01:08.500 If we banned advertising, it is alleged, all of this money could be saved. 14 00:01:08.500 --> 00:01:14.660 The money could then be used to improve the product, or lower its price, or both. 15 00:01:14.660 --> 00:01:19.780 The advertising industry could be replaced with a governmental board, which would present 16 00:01:19.780 --> 00:01:23.220 objective descriptions and ratings. 17 00:01:23.220 --> 00:01:28.740 Instead of sexy misleading jingles, we would have product descriptions, perhaps summarized 18 00:01:28.740 --> 00:01:34.300 by a grade level of grade A, grade B, etc. 19 00:01:34.300 --> 00:01:40.240 In any case, the advertisers, who are non-productive and essentially parasitical, would be put 20 00:01:40.240 --> 00:01:42.120 out of business. 21 00:01:42.120 --> 00:01:46.860 There is much that is wrong with this view of advertising, but it is not without its 22 00:01:46.860 --> 00:01:49.080 historical precedence. 23 00:01:49.080 --> 00:01:54.400 In fact, it is only the most recent in a long line of arguments purporting to show that 24 00:01:54.400 --> 00:01:59.800 one or another industry is parasitical and unproductive. 25 00:01:59.800 --> 00:02:06.480 The physiocrats, a school of economic thought in mid-18th century France, thought all industries 26 00:02:06.480 --> 00:02:10.920 except farming, fishing and hunting were wasteful. 27 00:02:10.920 --> 00:02:16.240 They reasoned that anything not connected with the soil was sterile and dependent and 28 00:02:16.240 --> 00:02:20.180 and Parasitical upon the Soil-Based Industries. 29 00:02:20.180 --> 00:02:25.340 Other economists have distinguished between goods which were considered productive and 30 00:02:25.340 --> 00:02:28.160 services which were not. 31 00:02:28.160 --> 00:02:34.040 Still others have held that all goods but only some services were productive. 32 00:02:34.040 --> 00:02:40.000 For example, it has been denied that monetary services such as financial intermediation, 33 00:02:40.000 --> 00:02:44.840 brokerage, banking and speculation have any value. 34 00:02:44.840 --> 00:02:49.040 It is easy nowadays to see the limitations of these theories. 35 00:02:49.040 --> 00:02:56.120 A good need not come directly from the soil to be productive, nor need a service be tangible 36 00:02:56.120 --> 00:02:59.560 such as medical care to be productive. 37 00:02:59.560 --> 00:03:04.520 We know that brokers bring people together at lower costs than they could manage on their 38 00:03:04.520 --> 00:03:05.740 own. 39 00:03:05.740 --> 00:03:11.180 We know that the non-tangible product of the insurance industry provides for the pooling 40 00:03:11.180 --> 00:03:14.680 and consequent lessening of risks. 41 00:03:14.680 --> 00:03:21.160 And even in these sophisticated times, the advertising industry enjoys a widespread reputation 42 00:03:21.160 --> 00:03:23.480 as a parasite. 43 00:03:23.480 --> 00:03:25.200 How strong is the case? 44 00:03:25.200 --> 00:03:31.600 First, it seems clear that advertising does not lure or force people to buy what they 45 00:03:31.600 --> 00:03:34.720 would not otherwise buy. 46 00:03:34.720 --> 00:03:40.240 Advertising attempts to persuade people, perhaps in ways some members of the community find 47 00:03:40.240 --> 00:03:48.280 and objectionable, but it does not and cannot coerce. Fraudulent advertising is logically 48 00:03:48.280 --> 00:03:56.160 equivalent to theft and is not to be confused with advertising per se. If the seller advertises 49 00:03:56.160 --> 00:04:03.740 wheat but delivers rocks, he has actually stolen the money price of wheat. Subliminal 50 00:04:03.740 --> 00:04:08.500 Traditional advertising, if it exists, would be considered coercive. 51 00:04:08.500 --> 00:04:15.120 But it cannot be claimed that ordinary advertising is coercive without completely obliterating 52 00:04:15.120 --> 00:04:19.300 the distinction between coercion and persuasion. 53 00:04:19.300 --> 00:04:24.600 Second, advertising does have an informational content. 54 00:04:24.600 --> 00:04:29.680 This is conceded even by its most fervent detractors, although they think that the government 55 00:04:29.680 --> 00:04:31.900 could do a better job. 56 00:04:31.900 --> 00:04:37.380 But governmental action in the field of advertising is no less advertising just because it is 57 00:04:37.380 --> 00:04:39.660 government advertising. 58 00:04:39.660 --> 00:04:45.700 If anything, there are more problems which are harder to deal with in government-issued 59 00:04:45.700 --> 00:04:47.020 advertisements. 60 00:04:47.020 --> 00:04:53.140 Unencumbered by the usual necessity to make profits by pleasing consumers, when the government 61 00:04:53.140 --> 00:04:57.780 gets out of hand, there is very little that can be done. 62 00:04:57.780 --> 00:05:03.540 Several advertising for United States war bonds or the military draft are but two examples 63 00:05:03.540 --> 00:05:05.540 that come to mind. 64 00:05:05.540 --> 00:05:12.620 Third, the importance of advertising in helping new companies and thus encouraging competition 65 00:05:12.620 --> 00:05:15.220 should not be underestimated. 66 00:05:15.220 --> 00:05:20.340 If advertising were prohibited, the large established companies would have a powerful 67 00:05:20.340 --> 00:05:22.860 advantage in the market. 68 00:05:22.860 --> 00:05:28.540 Even with things as they are, older firms are more likely to monopolize a given industry 69 00:05:28.540 --> 00:05:30.220 than newer ones. 70 00:05:30.220 --> 00:05:37.140 Advertising, by giving a comparative advantage to newcomers, lessens the degree of concentration 71 00:05:37.140 --> 00:05:38.940 in the economy. 72 00:05:38.940 --> 00:05:45.920 Finally, much, if not all, of the advertising that violates community standards of intelligence 73 00:05:45.920 --> 00:05:53.720 and Decency can be traced to and blamed on governmental edicts in other areas. 74 00:05:53.720 --> 00:06:00.200 For example, the government does not allow airlines to compete with one another in non-trivial 75 00:06:00.200 --> 00:06:01.840 areas. 76 00:06:01.840 --> 00:06:08.900 Their advertising campaigns bombard us with news about early bird specials, new decor, 77 00:06:08.900 --> 00:06:14.520 the number of seats in an aisle, airplanes named after stewardesses, etc. 78 00:06:14.520 --> 00:06:22.280 I'm Mary Beth. Fly me to Miami. If airlines were free to compete with respect to price, 79 00:06:22.280 --> 00:06:29.400 the passengers might be spared this constant reiteration about non-essential affectations. 80 00:06:29.400 --> 00:06:35.600 The same is true for banks. Banks are limited in the amount of interest they can pay to 81 00:06:35.600 --> 00:06:42.600 depositors, 0% to demand depositors, 5.5% to 7.5% to time depositors as of this date. 82 00:06:44.520 --> 00:06:55.520 They compete, therefore, with each other as to which can give the best kitchen utensils, radios, etc., as lures for new depositors. 83 00:06:55.520 --> 00:07:07.520 Note that since they can charge as much as the market will bear for loans, they spend far less advertising money to try to convince anyone to borrow money from them. 84 00:07:07.520 --> 00:07:15.520 The true blame for advertisements of this kind belongs not to the advertising industry, but to the government. 85 00:07:15.520 --> 00:07:23.520 These four arguments, when taken together, constitute a valid defense against the critics of advertising. 86 00:07:23.520 --> 00:07:30.520 Yet they do not strike at the heart of the matter, for they ignore the main fallacy of the critics, 87 00:07:30.520 --> 00:07:39.520 The assumption that deep down there is a distinction to be made between motivational advertising and informational advertising. 88 00:07:39.520 --> 00:07:47.520 That motivational advertising is bad in various ways, while informational advertising is good. 89 00:07:47.520 --> 00:07:56.520 The truth is, however, that exposing people to information and motivating them are so inextricably bound up together 90 00:07:56.520 --> 00:08:16.520 For a better perspective, consider several examples where it is not they who are trying to impart information and motivation to us, but we who are trying to impart information and motivation to them. 91 00:08:16.520 --> 00:08:22.520 Most of us, for instance, have had the experience of being interviewed for a new position. 92 00:08:22.520 --> 00:08:24.920 How do we prepare? 93 00:08:24.920 --> 00:08:29.840 We commence by writing an advertising brochure about ourselves. 94 00:08:29.840 --> 00:08:35.560 This document is sometimes called a resume by those anxious to obfuscate and to hide 95 00:08:35.560 --> 00:08:41.420 the fact that each of us is, at almost all times, an advertiser. 96 00:08:41.420 --> 00:08:46.880 In this advertising brochure, we put the facts of our employment life as they pertain to 97 00:08:46.880 --> 00:08:49.280 the prospective job. 98 00:08:49.280 --> 00:08:54.640 And in splendid advertising tradition, we try to make these facts appear as flattering 99 00:08:54.640 --> 00:08:56.260 as possible. 100 00:08:56.260 --> 00:09:02.040 We hire a professional typist to help entice an employer into hiring us. 101 00:09:02.040 --> 00:09:08.060 And we have the brochure printed on fine paper in order to create an impression as a good 102 00:09:08.060 --> 00:09:10.640 advertiser should. 103 00:09:10.640 --> 00:09:15.620 Strictly speaking, we are only providing information on the brochure. 104 00:09:15.620 --> 00:09:21.480 It is merely informational advertising on the face of it, but the attempt to present 105 00:09:21.480 --> 00:09:29.620 the information in a favorable light involves us willy-nilly in motivational advertising. 106 00:09:29.620 --> 00:09:33.160 During the interview we continue to advertise. 107 00:09:33.160 --> 00:09:36.680 We package ourselves as best we can. 108 00:09:36.680 --> 00:09:41.620 Even though we might not do so every day, at the job interview we will give special 109 00:09:41.620 --> 00:09:44.820 attention to grooming effects. 110 00:09:44.820 --> 00:09:51.660 Even when not engaged in job hunting, we advertise by constantly trying to portray ourselves 111 00:09:51.660 --> 00:09:53.860 in a good light. 112 00:09:53.860 --> 00:09:58.060 Even unconsciously we try to package ourselves well. 113 00:09:58.060 --> 00:10:05.520 From the very cradle, parents are busy advertising us or laying the groundwork for future advertising. 114 00:10:05.520 --> 00:10:12.020 How else can we explain those ballet, violin and piano lessons and visits to the orthodontist 115 00:10:12.020 --> 00:10:14.400 or skin doctor? 116 00:10:14.400 --> 00:10:20.400 The Jewish mother, with her constant exhortations about good posture and good eating habits, 117 00:10:20.400 --> 00:10:26.640 eat, eat, children are starving in Europe and you are not eating, is the great unsung 118 00:10:26.640 --> 00:10:29.860 heroine of the advertising business. 119 00:10:29.860 --> 00:10:33.060 And the Jewish mother's bragging about her children? 120 00:10:33.060 --> 00:10:35.460 Just more advertising. 121 00:10:35.460 --> 00:10:40.020 As we grow up, we carry on the fine traditions of advertising. 122 00:10:40.020 --> 00:10:43.000 We wear clothing that flatters our figures. 123 00:10:43.000 --> 00:10:56.000 When we diet, or try to, at least part of our expenditures on education, psychiatry, hair grooming and clothing can only be understood as advertising expenditures. 124 00:10:56.000 --> 00:11:04.000 Later on we purchase cars, houses, recreation, in large part as advertisements for ourselves. 125 00:11:04.000 --> 00:11:21.000 Incidentally, the greater expenditures as a percentage of income on luxury items, such as clothing and cars, made by groups who are discriminated against, such as women and blacks, can be explained by advertising. 126 00:11:21.000 --> 00:11:28.000 They feel they must engage in greater advertising expenses in order to counteract the discrimination. 127 00:11:28.000 --> 00:11:35.000 The rest need not invest so heavily in advertising because we are in. 128 00:11:35.000 --> 00:11:44.000 Even members of the radical left, who are among the bitterest critics of advertising, engage in advertising themselves. 129 00:11:44.000 --> 00:11:53.000 This should not be surprising since we are defining advertising in its proper but broad sense of creative and interesting packaging. 130 00:11:53.000 --> 00:12:05.000 Usually, whenever the radical left has access to a bulletin board, the messages placed on it are at first uniformly small, neat and similarly printed. 131 00:12:05.000 --> 00:12:14.000 After a while, in order to attract attention, some of the messages are printed in different colors and on different size placards. 132 00:12:14.000 --> 00:12:20.400 Eventually in the competition to attract attention, larger and larger placards are used, with 133 00:12:20.400 --> 00:12:24.360 bolder printing, coloring and illustrations. 134 00:12:24.360 --> 00:12:30.720 In their attempt to spread information, they are led, as if by an invisible hand, to engage 135 00:12:30.720 --> 00:12:33.640 in motivational advertising. 136 00:12:33.640 --> 00:12:40.300 The reason radicals write messages such as, off the pig, or fuck the state, on walls or 137 00:12:40.300 --> 00:12:47.020 for Buildings in Big Red Letters is not entirely out of a desire to shock, it is also out of 138 00:12:47.020 --> 00:12:53.660 a desire to impart the revolutionary message by first attracting attention to it. 139 00:12:53.660 --> 00:13:00.280 If it is not read, however informational it may be, it will impart no information. 140 00:13:00.280 --> 00:13:05.540 But as much can be said for the typical soap opera advertisement. 141 00:13:05.540 --> 00:13:10.700 Anyone who has ever been called upon to give a speech where there was a distinct possibility 142 00:13:10.700 --> 00:13:17.340 of putting the audience to sleep will understand the difficulty of distinguishing between imparting 143 00:13:17.340 --> 00:13:21.100 information and packaging a speech. 144 00:13:21.100 --> 00:13:27.220 Surely, no more boring a speech can be imagined than a lecture on economics. 145 00:13:27.220 --> 00:13:32.460 The public speaker or teacher will engage in certain practices, such as maintaining 146 00:13:32.460 --> 00:13:37.620 and Eye Contact, Telling Jokes or Posing Rhetorical Questions. 147 00:13:37.620 --> 00:13:41.500 These are sometimes known as public speaking techniques. 148 00:13:41.500 --> 00:13:48.400 A more appropriate term would be advertising techniques, packaging the product well, making 149 00:13:48.400 --> 00:13:54.740 it appear interesting, highlighting the talk, bringing points into focus and capturing the 150 00:13:54.740 --> 00:13:57.340 attention of the audience. 151 00:13:57.340 --> 00:14:02.220 These advertising techniques have about as much to do with the subject of the talk as 152 00:14:02.220 --> 00:14:08.540 As bicycling has to do with Coca-Cola, as deep, throaty, sexy female voices have to 153 00:14:08.540 --> 00:14:14.460 do with shaving cream, or as the sporting events of the more than one beer men have 154 00:14:14.460 --> 00:14:16.740 to do with beer. 155 00:14:16.740 --> 00:14:18.420 That is not the point. 156 00:14:18.420 --> 00:14:25.300 The point is that if one hopes to get information across, even to people who are well motivated, 157 00:14:25.300 --> 00:14:31.660 such as the student in the economics class who has to stay awake to receive a good grade, 158 00:14:31.660 --> 00:14:37.780 One must engage in advertising techniques. If this is important when dealing with people 159 00:14:37.780 --> 00:14:44.380 who are well motivated, imagine how much more important it is to advertise information when 160 00:14:44.380 --> 00:14:51.500 your audience is not well motivated. Television advertising should be interpreted at least 161 00:14:51.500 --> 00:14:59.040 as favorably, if not more so, than the advertising engaged in by public speakers. They are both 162 00:14:59.040 --> 00:15:05.880 Both attempts to impart information by making that information interesting and attractive. 163 00:15:05.880 --> 00:15:11.120 But the television ad faces the additional burden of keeping the viewer away from his 164 00:15:11.120 --> 00:15:12.960 refrigerator. 165 00:15:12.960 --> 00:15:19.520 If all content which was not strictly informational was banned, we would have to prevent speakers 166 00:15:19.520 --> 00:15:23.560 and teachers from even attempting to be interesting. 167 00:15:23.560 --> 00:15:29.760 They would not be allowed to tell jokes, maintain eye contact, or discuss questions with the 168 00:15:29.760 --> 00:15:31.360 audience. 169 00:15:31.360 --> 00:15:37.180 These techniques are above and beyond the strict imparting of information. 170 00:15:37.180 --> 00:15:43.320 Like television advertising gimmicks, they are attempts to waylay the audience. 171 00:15:43.320 --> 00:15:50.320 Is it possible to ban motivational advertising while allowing informational advertising? 172 00:15:50.320 --> 00:15:52.240 No. 173 00:15:52.240 --> 00:15:58.800 Information can be presented well or badly, that is, in such a way as to bore and alienate 174 00:15:58.800 --> 00:16:07.520 the audience or charm and amuse it, but it must be packaged or presented in some way. 175 00:16:07.520 --> 00:16:13.200 For example, imagine that a magic carpet was invented and it was decided that information 176 00:16:13.200 --> 00:16:19.880 about it was to be given out, the flying speed, cruising range, upkeep costs, how to roll 177 00:16:49.880 --> 00:16:58.880 It might seem inspirational. The carpet certainly could not be shown in action, that is, with an attractive woman on it. 178 00:16:58.880 --> 00:17:08.880 We could not risk fooling people into believing that if they bought the carpet, they would get a copy of the inspirational music, or of the inspirational woman. 179 00:17:08.880 --> 00:17:18.880 If we could not use a professional announcer, could we use a non-professional one, or just an ordinary man off the street? We could not. 180 00:17:18.880 --> 00:17:31.880 Some advertising companies with their low cunning are already using testimonials from the man in the street with great success, proving that this procedure has a motivational content. 181 00:17:31.880 --> 00:17:36.880 If the information cannot be read, can it be printed? 182 00:17:36.880 --> 00:17:41.240 But what kind of typeface should be used? 183 00:17:41.240 --> 00:17:47.760 Certainly not a style that would induce someone to horrors, buy the flying carpet. 184 00:17:47.760 --> 00:17:52.920 It would have to be an almost indecipherable typeface so that people could hardly read 185 00:17:52.920 --> 00:17:53.920 it. 186 00:17:53.920 --> 00:17:59.560 Otherwise, at a low enough price, many people would be led down the garden path into making 187 00:17:59.560 --> 00:18:01.160 a purchase. 188 00:18:01.160 --> 00:18:07.120 The whole message would have to be presented in a purposely inferior manner so as not to 189 00:18:07.120 --> 00:18:11.200 attract any attention to itself. 190 00:18:11.200 --> 00:18:16.680 Clearly there is no way to separate the package from what it contains. 191 00:18:16.680 --> 00:18:21.240 There is no way to present pure information. 192 00:18:21.240 --> 00:18:27.920 To believe in the presentation of information without motivation is foolishness of the highest 193 00:18:27.920 --> 00:18:29.920 degree. 194 00:18:29.920 --> 00:18:35.100 The objection that advertising adds to the cost of the product is an objection that has 195 00:18:35.100 --> 00:18:37.840 not been clearly thought out. 196 00:18:37.840 --> 00:18:42.520 Would the critics object because wrapping a product adds to the cost? 197 00:18:42.520 --> 00:18:44.280 Or transporting it? 198 00:18:44.280 --> 00:18:45.720 They would not. 199 00:18:45.720 --> 00:18:51.320 It is understood that these additional costs are necessarily incurred if the product is 200 00:18:51.320 --> 00:18:54.360 to be made available to the consumer. 201 00:18:54.360 --> 00:18:57.800 But the same is true of advertising. 202 00:18:57.800 --> 00:19:06.500 As the magic carpet previously mentioned costs $950 to manufacture, $10 to wrap it and $40 203 00:19:06.500 --> 00:19:08.500 for transportation. 204 00:19:08.500 --> 00:19:13.440 If customers want to take advantage of the wrapping and delivery services, they must 205 00:19:13.440 --> 00:19:16.380 pay the full $1,000. 206 00:19:16.380 --> 00:19:25.500 But they have the choice of picking up a wrapped carpet at $960, an unwrapped one for $950, 207 00:19:25.500 --> 00:19:31.500 or an unwrapped one delivered to their homes for $990. 208 00:19:31.500 --> 00:19:34.380 So it is with advertising costs. 209 00:19:34.380 --> 00:19:41.060 If it costs $100 to advertise the carpet, the customers have a choice between the advertised 210 00:19:41.060 --> 00:19:48.600 brand for $1100 and an unadvertised brand, which presumably they could find if they searched 211 00:19:48.600 --> 00:19:52.060 long enough, for $1000. 212 00:19:52.060 --> 00:19:59.500 If a substantial number of consumers were willing to find unadvertised brands or outlets, manufacturers 213 00:19:59.500 --> 00:20:06.960 would be foolish to advertise. However, some consumers may not be so enterprising or energetic 214 00:20:06.960 --> 00:20:13.860 in shopping for unadvertised brands at cheaper prices. This would give the manufacturer the 215 00:20:13.860 --> 00:20:19.440 incentive to advertise, and the costs of the advertisements would be added to the purchase 216 00:20:19.440 --> 00:20:21.040 This Price. 217 00:20:21.040 --> 00:20:26.360 It is true, therefore, that advertising would add to the cost of the product. 218 00:20:26.360 --> 00:20:33.640 But then, it is true that advertising is necessary in order to bring the product to the people. 219 00:20:33.640 --> 00:20:40.800 If some refused to buy unwrapped, undelivered magic carpets, but would buy wrapped, delivered 220 00:20:40.800 --> 00:20:46.200 ones, could it be said that wrapping costs and delivery costs were added to the total 221 00:20:46.200 --> 00:20:53.340 Governmental costs unnecessarily? Decidedly not. In the same manner, advertising does 222 00:20:53.340 --> 00:20:58.660 not add unnecessarily to the costs of the product. 223 00:20:58.660 --> 00:21:05.040 What of a governmental ratings board for advertising? Before giving the government still another 224 00:21:05.040 --> 00:21:11.200 task because of alleged imperfections in the market, consider the dismal record of 225 00:21:11.200 --> 00:21:13.400 and the Government to date. 226 00:21:13.400 --> 00:21:18.780 The graft and corruption unearthed by Ralph Nader and his associates should give pause 227 00:21:18.780 --> 00:21:21.080 for thought. 228 00:21:21.080 --> 00:21:29.440 Regulation agency after regulation agency, from ICC and CAB to FTC, FPC and others, have 229 00:21:29.440 --> 00:21:35.640 been shown to be regulating industry not for the benefit of the consumer, but for the benefit 230 00:21:35.640 --> 00:21:39.480 of the industry as against the consumer. 231 00:21:39.480 --> 00:21:45.000 This is not just an accident, there is a reason for it. 232 00:21:45.000 --> 00:21:52.300 Each of us is a purchaser of literally thousands of items, but producers of only one. 233 00:21:52.300 --> 00:21:58.720 Our ability to influence regulatory legislation passed by the state is, therefore, much more 234 00:21:58.720 --> 00:22:03.600 concentrated as producers than as consumers. 235 00:22:03.600 --> 00:22:08.960 Government agencies, accordingly, tend to regulate in favor of the producing industry, 236 00:22:08.960 --> 00:22:12.080 rather than the mass of consumers. 237 00:22:12.080 --> 00:22:18.200 In fact, government regulatory agencies tend to be set up by the very industries they are 238 00:22:18.200 --> 00:22:20.200 to regulate. 239 00:22:20.200 --> 00:22:27.080 Milton Friedman, in the chapter entitled Occupational Licensure in Capitalism and Freedom, brilliantly 240 00:22:27.080 --> 00:22:33.440 demonstrates the dismal record of governmental rating agencies in the medical field. 241 00:22:33.440 --> 00:22:39.160 There is no reason to assume that a rating agency in advertising would be any different. 242 00:22:39.160 --> 00:22:45.360 Rather, it would not be surprising if the calls for governmentally regulated objective 243 00:22:45.360 --> 00:22:51.880 informational advertising were begun by the larger established advertising firms as a 244 00:22:51.880 --> 00:22:58.880 way of slowing down the rising competition from smaller firms and newcomers. 245 00:22:58.880 --> 00:23:04.700 But the strongest argument against governmental regulation of advertising is not the empirical 246 00:23:04.700 --> 00:23:10.240 one showing its dismal record to date, strong though that may be. 247 00:23:10.240 --> 00:23:13.540 The strongest argument is the logical one. 248 00:23:13.540 --> 00:23:20.560 The reasoning employed by those who want governmental regulation contains a self-contradiction. 249 00:23:20.560 --> 00:23:26.040 On the one hand, they assert that the American people are unalterably gullible. 250 00:23:26.040 --> 00:23:31.680 They must be protected because, left to their own devices, they become victims. 251 00:23:31.680 --> 00:23:37.840 They can be made to think, for example, that if they use a certain brand of aftershave lotion, 252 00:23:37.840 --> 00:23:41.140 they will end up with the girl in the ad. 253 00:23:41.140 --> 00:23:46.400 On the other hand, the argument assumes that the boobs are smart enough to pick political 254 00:23:46.400 --> 00:23:50.480 leaders capable of regulating these sirens. 255 00:23:50.480 --> 00:23:52.760 This is impossible. 256 00:23:52.760 --> 00:23:59.000 In any case, if the public is sufficiently enamored of objective information on consumer 257 00:23:59.000 --> 00:24:05.840 products, it can avail itself of the services of firms and organizations such as Consumer 258 00:24:05.840 --> 00:24:11.840 Reports, Good Housekeeping, the Better Business Bureau, commercial testing laboratories and 259 00:24:11.840 --> 00:24:16.140 other private enterprise certification agencies. 260 00:24:16.140 --> 00:24:18.120 The free market is flexible. 261 00:24:18.120 --> 00:24:21.560 It can provide this kind of service, too. 262 00:24:21.560 --> 00:24:28.220 But the inability to separate motivational and informational advertising still holds. 263 00:24:28.220 --> 00:24:34.620 When Consumer Reports states that zilch flakes are the best flakes to buy, it is necessarily 264 00:24:34.620 --> 00:24:40.300 motivating people to buy zilch over and above other flakes. 265 00:24:40.300 --> 00:24:48.300 It cannot provide information without providing any motivation to do anything. 266 00:24:48.300 --> 00:24:52.940 Advertising can be defended only when it occurs on the free market. 267 00:24:52.940 --> 00:24:58.300 In the case of government or government-aided big business advertising, none of the free 268 00:24:58.300 --> 00:25:00.340 market defenses hold. 269 00:25:00.340 --> 00:25:06.340 Here, people are forced to pay for the advertising, whether they choose to buy the product or 270 00:25:06.340 --> 00:25:07.740 not. 271 00:25:07.740 --> 00:25:13.980 When the government advertises, it is with tax money, collected on an involuntary basis. 272 00:25:13.980 --> 00:25:21.060 The advertising in which the government engages is highly motivational, Uncle Sam wants you, 273 00:25:21.060 --> 00:25:23.940 and not infrequently fraudulent. 274 00:25:23.940 --> 00:25:29.800 It is strange that government advertising has been so completely ignored, even by the 275 00:25:29.800 --> 00:25:33.860 most vociferous critics of advertising. 276 00:25:33.860 --> 00:25:39.940 Imagine what would ensue if a private businessman were to engage in fraudulent advertising on 277 00:25:39.940 --> 00:25:47.500 on even 1% of the scale committed by Franklin Roosevelt, Lyndon Johnson or Richard Nixon, 278 00:25:47.500 --> 00:25:54.700 who campaigned on advertised peace planks and yet involved the country in foreign wars. 279 00:25:54.700 --> 00:26:01.180 How can we entrust punishment of fraudulent advertising to the worst fraudulent advertisers 280 00:26:01.180 --> 00:26:04.540 of all time, the government? 281 00:26:04.540 --> 00:26:10.780 Finally, advertising must be defended by those who believe in freedom of speech, for that 282 00:26:10.780 --> 00:26:13.660 is all advertising is. 283 00:26:13.660 --> 00:26:19.100 It is all too easy to defend the right to speak of those whose speech we favor in any 284 00:26:19.100 --> 00:26:20.480 case. 285 00:26:20.480 --> 00:26:26.180 But if the rights of free speech are to mean anything at all, those who are not in public 286 00:26:26.180 --> 00:26:29.540 favor must be defended. 287 00:26:29.540 --> 00:26:34.500 Students anxiously await a defense by the American Civil Liberties Union of the free 288 00:26:34.500 --> 00:26:37.500 speech rights of advertisers. 289 00:26:37.500 --> 00:26:43.500 This organization was ominously quiet during the banning of cigarette commercials from television.