Thursday, February 15, 2007

Why Does Capitalism Need To Be Defended?

I admit that I have not heard this question in precisely that form. After the hardcover edition of my book In Defense of Advertising: Arguments from Reason, Ethical Egoism, and Laissez-Faire Capitalism was published, I did hear the question this way: Why does advertising need to be defended? As advertising is the point man and product of capitalism, the two questions are intimately related.

The question about advertising initially surprised me. When the look on my face expressed a “Did you read the book?” reply, my questioners promptly continued, “Advertising in the U.S. is a $270 billion a year business. It doesn’t need to be defended!” Somehow, apparently, the amount of money spent by the industry was supposed to be its own justification. Similarly, I could imagine someone thinking or saying, “The United States is a $12 trillion a year economy. Capitalism doesn’t need to be defended!”

I soon came to realize where my advertising questioners were coming from: their question is motivated by the premises of what I call the critics’ world view. As I argue in my book, the social and economic criticisms of advertising—namely that advertising is coercive, offensive, and monopolistic—are based on false philosophic and economic ideas that at root are authoritarian.

The discussion with my questioners usually runs as follows. The questioners comment that advertising is a “big bucks” industry and, like any other big business, assume it eventually becomes immune to competition—and to criticism. “It’s just words,” they say, “like water falling off a duck’s back. The criticisms have no effect on advertisers who, after all, are so big and powerful that they can easily ignore the complaints. Therefore, advertising does not need to be defended.” QED. Subsequent discussion then brings out the premise that a little (or a lot) of legislation is needed to help cut these guys down to size. Why? Because advertising is so . . . well, coercive, offensive, and monopolistic. At that point, we are off to the litany of criticisms that ranges from alleged sexual orgies subliminally embedded in a Howard Johnson’s restaurant menu to the four-firm concentration ratio.

No doubt, anyone who has engaged the critics of capitalism has observed a similar pattern. It involves a move from surface appearances—advertising doesn’t need to be defended—to underlying causal principles that initially seem unconnected to the appearances—these big advertisers need to be brought down a few notches. It is a move from what is seen, to use Bastiat’s phrase, to what is not seen. Bastiat explained the seen and unseen in terms of economic events, but the more fundamental psychological issue here is that conscious perceptions (the seen) are shaped by the contents of one’s subconscious (the unseen). Defenders of advertising and capitalism must probe to those deeper levels and make the critics aware of, and answer, all of the buried fallacies that motivate their surface comments.

Contrary to what the critics of advertising—or capitalism—may think, their criticisms do have an effect. When left unanswered, the criticisms reinforce ignorance and misunderstandings about the nature of advertising and, by implication, capitalism. They reinforce and encourage hostility toward both. And they implicitly and explicitly provide a call for legislation to restrain what are perceived by the critics to be “abuses” of advertising and big business.


1 comment :

Daniel Rigby said...

I'm glad to see that you have a blog. I've recently finished your In Defense of Advertising book and enjoyed it very much. It's extremely difficult to find business books backed by objectivist ideals.