The Freeman 1972 - The Ludwig von Mises Institute

ISRAEL M. KIRZNERADVERTISING has been badlytreated by many scholars whoshould know better. Not onlyMarxists and liberals, but evenconservatives have given advertisinga bad press. Let us examinesome of the criticisms.• First, many advertising messagesare said to be offensive - byesthetic or ethical and moral standards.Unfettered, unhampered,laissez-fairecapitalism, it is contended,would propagate such messages in away that could very well demoralizeand offend the tastes and morals ofmembers of society.• Second, advertising, it is argued,is deceitful, fraudulent, full of lies.Misinformation is spread by advertising,in print, on the airwaves, andthis does harm to the members of society;for that reason advertisingshould be controlled, limited, taxedaway.Dr. Kirzner is Professor of Economics at NewYork University. He is the author of The Ecort0?'licPoint of View, Market Theory and thePrice System, and An Essay on Capital•. This.:lrticle is transcribed from a lecture.• Third, it is argued that whereadvertising is not deceitful, it is atbest persuasive. That is, it attemptsto change people's tastes. It attemptsnot to fulfill the desires of man butto change his desires to fit that whichhas been produced. The claim of themarket economist has always beenthat the free market generates theflow of production along the linesthat satisfy consumer tastes; theirtastes determine what shall be produced- briefly, consumer sovereignty.On the contrary, the critics of advertisingargue, capitalism has developedinto a system where producersproduce and then mold men's mindsto buy that which has been produced.Rather than production being governedby consumer sovereignty, quitethe reverse: the consumer is governedby producer sovereignty.• A fourth criticism has been thatadvertising propagates monopoly andis antithetical to competition. In acompetitive economy, it is pointedout, there would be no advertising;each seller would sell as much as hewould like to sell without having to