To subdue the enemy without fighting is the supreme excellence. - Sun Tzu

Tuesday, February 07, 2006

Adam Smith's Folly

He couldn't predict psychological advertising.

Corporations with inferior products but superior advertising will have more customers than businesses with superior products but inferior advertising.

Modern advertising is not defined by facts but by psychology. Look at a car commercial: Certainly they may talk about the gas mileage and safety ratings (while providing no context for the reliability of said safety ratings), but only interspersed between shots of the vehicle doing impossible things which you will never do.

Food commercials: Perhaps there is a variety of smiling people eating the food- Does this quantifiably and rationally argue the superiority of the food? Of course not. These commercials create the impression that you will also be smiling and happy if you eat this food.

Wal-Mart even gets to lie. They claim to "always" have the lowest prices, but this is simply not the case, as can be shown by comparing prices of products not in the sunday flyer. And of course their commercials show the warehouses as magical fun-lands full of smiling, happy people, which you can also be if you shop there.

Honest, locally-owned small businesses cannot compete with psychological advertising, which take massive ad agencies and millions of dollars. But it is by far the most effective form of advertising- That is, the ratio of customers gained to dollars spent on advertising improves explosively with psychological advertising, even though that money creates no real wealth, paying for itself by manipulation.

The solution is difficult. I would like to advocate worker ownership of factories and firms, and no company should be larger than just a few buildings. This would keep businesses too small to engage in effective, widespread psychological advertising. But for now, it is the responsibility of each individual to doubt and relentlessly question everything which is controlled by the corporations. Remember: They only want your money.


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