Comments on
In Defense of Advertising
". . . a unique, well-crafted, and timely book defending the existence of advertising to its many and varied critics. . . . If you buy Rand, you must clearly buy Kirkpatrick's dismantling of the critics. . . . well worth the read for any academic, practitioner, or researcher interested in advertising, the philosophy of science, marketing's background in economic exchange, or simply for its fine writing."
--Journal of the Academy of Marketing Science, Spring 1995
"Congratulations on producing an interesting and passionate defense of advertising. . . . Well done."
--Shelby D. Hunt, Jerry S. Rawls and P. W. Horn Professor of Marketing, Texas Tech University, March 1995
"The author combines his knowledge of marketing with Randian philosophy and Misesian economics to create a truly powerful and compelling case for advertising. The general reader will benefit from the author's ability to distill the criticisms of advertising and his responses to them to their most fundamental form while the specialist in marketing, economics, and philosophy will gain a working knowledge of the other disciplines as they relate to advertising."
--The Freeman, June 1995
"Kirkpatrick presents a compelling defense of advertising as an institution in this intellectually challenging book. . . . His analysis combining reason, ethical egoism, and laissez-faire capitalism is solid. . . . an important advancement in the theory of advertising and its relationship to society."
--Journal of Consumer Affairs, Summer 1995
" . . . a highly sophisticated theoretical thesis . . . . [This defense] stimulates the reader to reflect on many social, economic, and moral issues."
--Southern Business and Economic Journal, October 1995
"Every advertising professional is required, at some point, to come out in defense of his or her activity--even within each one's confines of family or circle of friends--and this book In Defense of Advertising provides us with all the thoughts we need. In fact, it is well worth reading even for purposes other than mustering defensive arguments, for this is a book which gives us a better understanding of what we do."
--Roberto Duailibi, President, DPZ Propaganda, Säo Paulo, Brazil. From the Foreword to Em Defesa da Propaganda, Portuguese translation published in Brazil in 1997
"For those who study advertising and ponder its social and economic effects, [this book] provides an intriguing and well-articulated challenge to what has become the common wisdom in these matters. . . . Kirkpatrick charges all of us to rethink our assumptions and [he] provides the historical and philosophical ammunition to do it."
--The Journal of Media Economics, 11(2) 1998
****
In Defense of Advertising:
Arguments From Reason, Ethical Egoism, and Laissez-Faire Capitalism
Jerry Kirkpatrick
Smashwords Edition
Claremont, California
****
Publisher's Cataloging-in-Publication Data
Kirkpatrick, Jerry.
In defense of advertising : arguments from reason, ethical egoism, and laissez-faire capitalism / Jerry Kirkpatrick.
1. Advertising--Philosophy. 2. Advertising--Economic aspects. I. Title
HF5821.K49 2007
659.1 20--dc22 2006906784
Copyright © 1994, 2007 by Jerry Kirkpatrick
Hardcover edition published in 1994 by Quorum Books, an imprint of Greenwood Publishing Group, Westport, CT
Paperback edition published in 2007 by TLJ Books, Claremont, CA
Smashwords Edition, License Notes
This ebook is licensed for your personal enjoyment only. It may not be re-sold or given away to other people. If you would like to share the book with another person, please purchase an additional copy for each person. If you're reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of the author.
Library of Congress Catalog Card Number: 2006906784
TLJ Books, P. O. Box 1165, Claremont, CA 91711
****
Copyright Acknowledgments
The author and publisher gratefully acknowledge permission to reprint material from the following copyrighted sources.
From "A Philosophic Defense of Advertising," by Jerry Kirkpatrick, in Journal of Advertising 15:2 (June 1986), 42-48, 64.
From "Platonic Competition," by George Reisman, in The Objectivist (August-September, 1968), Aug: 9-11, 16, Sept: 7, 8-9, 10.
From "Advertising," by Israel Kirzner, in The Freeman (September 1972), 5-6.
From Human Action, by Ludwig von Mises, © 1949. Used with permission of Contemporary Books, Inc.
From Socialism: An Economic and Sociological Analysis, by Ludwig von Mises, translated by J. Kahane (London: Jonathan Cape Ltd., 1936; reprint, Indianapolis: Liberty Fund, Inc., 1981).
From Capitalism: The Unknown Ideal by Ayn Rand. Copyright ©1962, 1963, 1964, 1965, 1966 by Ayn Rand. Used by permission of New American Library, a division of Penguin Books USA Inc.
From Introduction to Objectivist Epistemology, by Ayn Rand, edited by Harry Binswanger and Leonard Peikoff. Copyright ©1966, 1967 by The Objectivist, Inc. Used by permission of New American Library, a division of Penguin Books USA Inc.
From The Virtue of Selfishness, by Ayn Rand. Copyright ©1961, 1964 by Ayn Rand. Used by permission of New American Library, a division of Penguin Books USA Inc.
****
To Linda
****
Contents
1. The Original Sin of Capitalism
The Assault on Consciousness
The "Social" and Economic Criticisms of Advertising
The Nature of Marketing and Advertising
The Power of Ideas
2. Two Philosophic World Views
The Authoritarianism of the Critics' World View
The Liberalism of the Alternative
The Critics vs. Reason
Appendix: The Fallacies of Myopic Marketing
3. The Alleged Coercive Power of Advertising
"Subliminal" Advertising Allegedly Deceives and Manipulates
"Persuasive" Advertising Allegedly Creates the Needs and Wants It Aims to Satisfy
Fraud, Puffery, and the Federal Trade Commission
4. The Alleged Offensiveness of Advertising
The Moral Issue
The Legal Issue
Appendix
5. The Economic Foundations of Advertising: Three Views
The Neoclassical School
The Chicago School
The Austrian School
The Doctrine of Pure and Perfect Competition
6. Refuting The Doctrine of Pure and Perfect Competition
The Reductio Ad Absurdum
The Epistemological Issue
Ayn Rand's Epistemology
Attacking Perfect Competition's Underlying Premises
7. The Alleged Monopoly Power of Advertising
Advertising Allegedly Erects Barriers to Market Entry
Advertising Allegedly Increases Prices
Advertising Creates Value
The Meaning of Monopoly Power
8. The Benevolence of Advertising
****
Preface to the Paperback Edition
Essentially, this edition is a reprint of the 1994 hardcover. Typographical errors have been corrected and the type has been reset. Bibliographic data have been added to all references to George Reisman's book Capitalism: A Treatise on Economics, which in 1994 had not yet been published. And the year and one percentage in the movie theater "experiment" (in chapter 3) allegedly demonstrating the effectiveness of subliminal advertising have been corrected, as well as one reference added that argues the whole thing was a hoax. The non-neutral gender language remains. Other than that, the text is unchanged--because this is a theoretical defense of advertising and theory does not often change.
The passage of time, though, does weaken the memory, especially as it might relate to the five famous (or notorious) television commercials used in the text as illustrations. A historical refresher seems in order, and considering that none of my students was even born when one of the commercials was on the air, descriptive data become imperative. The commercials are for the following brands: Charmin bathroom tissue, Wisk liquid laundry detergent, Noxzema shaving cream, John Hancock financial services, and Palmolive dish detergent. Four of the five are "slice-of-life" commercials, which means that they exhibit typical situations that could actually occur--literary license allowed--in real life in relation to the product. Here are brief descriptions:
•The Charmin campaign, launched by Procter and Gamble in 1964 and running for twenty-one years, increased the brand's market share 30% in its first two years. The typical execution portrayed a store manager, Mr. Whipple, played by former vaudevillian and character actor, Dick Wilson, cautioning a couple of middle-aged female customers not to squeeze the Charmin. A takeoff on the "you break it, you buy it" admonition of some store managers (or "please don't squeeze the vegetables"), the Charmin commercials used humor to take the edge off a delicate subject. Wilson, at the age of 83, returned for a brief encore as Mr. Whipple in 1999.
•Wisk laundry detergent commercials, a recent Google search reveals, are still hated today. Launched in 1967 and running fifteen-plus years, the typical slice-of-life commercial dramatized a wife's embarrassment at the sight of her husband's ring around the collar. The solution was to pour Wisk directly on the stains. The liquid detergent was one of the first such products on the market, and research found that dirty shirt collars at the time were considered a major laundering problem. Sales for Lever Brothers tripled between 1967 and 1974.
•Noxzema shaving cream commercials ran from 1966-73. They used Hollywood and television musical director David Rose's popular tune "The Stripper" as background to Swedish model Gunilla Knutson's sultry voice, telling men: "Nothing takes it off like Noxzema's Medicated Shave . . . Take it off, Take it all off."
•Slice-of-life commercials for John Hancock, running for ten years beginning in 1986, portrayed an older, more knowledgeable person reproaching a novice, such as a younger brother, for not planning well, or at all, for the future. John Hancock, of course, was the solution. The brand experienced a 17% increase in sales in the first year, while the competition's sales were flat.
•Actress Jan Miner played Madge in Palmolive's slice-of-life commercials for twenty-seven years, from 1966-92. She also played the part in executions prepared in French, German, Danish, and Italian. As manicurist, Madge would casually talk to her customer about the gentleness of Palmolive's dish detergent; when the customer, whose fingers were immersed in a liquid, protested, Madge replied, "You're soaking in it!" A study in the 1970's found that some beauty salons actually used Palmolive as a softening solution when they ran out of the regular product.
After the hardcover edition of In Defense of Advertising came out I was occasionally asked a question that surprised me: "Why does advertising need to be defended?" When the look on my face indicated a "Did you read the book?" reply, the questioners promptly continued, "Advertising is an $xxx [fill in the current number] 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.
I understand now, and perhaps should have known then, where the questioners were coming from: their question is motivated by the premises of the critics' world view. The questioners see 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," the questioners 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.
Contrary to what my questioners might think, the criticisms of advertising do have an effect. When left unanswered, they 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 critics to be the "abuses" of advertising and big business. A philosophic and economic defense of advertising, such as this work, is still very much needed today.
Jerry Kirkpatrick
August 2006
****
Do you remember the television commercials for Noxzema shaving cream--the ones with the stripper music and Swedish model Gunilla Knutson whispering: "Men, take it off. Take it all off"? Do you remember Mr. Whipple, chiding his shoppers, "Please don't squeeze the Charmin"? And, of course, who can forget the Wisk "ring around the collar" commercials? Or, from more recent times, the John Hancock "real life, real answers" advertisements?
What do you think of these advertisements? Are they entertaining? Boring? Distasteful, obnoxious, and irritating? Or worse? Well, I like all of them. However, I have not always liked them (Noxzema excepted). Sometimes I wanted to throw my shoe at the television set when Mr. Whipple appeared, and sometimes I felt like shooting the people who wrote the "ring around the collar" ads. Even my first reactions to the "real life, real answers" ads were negative. But over time my evaluations of the ads--and the corresponding emotional reactions to them--changed.
My attitudes changed because my knowledge of advertising expanded beyond the popular misconceptions I had acquired in my youth--misconceptions that most people still hold today. Because emotions are not causeless, I identified and changed the premises that underlay the negative reactions I felt toward the four television commercials mentioned above. As a result, my emotions changed and I now feel positive emotions toward all four commercials--not the same emotion toward each, to be sure, but a positive emotion, nonetheless. I like them because they all meet the standards of both good advertising and good taste. Part of my purpose in writing this book is to convince readers of this point.
A more significant part of my purpose, however, is to address the "or worse" response you might have had to the above ads and to address the negative evaluation you might have of advertising in general. Advertising today is under attack from many quarters. The most serious charges question its very existence. Other criticisms hold that advertising is a powerful force that must be regulated by the government. These issues cannot be taken lightly. A major purpose of this book is to demonstrate that advertising is, at once, a rational, moral, productive, and above all, benevolent institution of laissez-faire capitalism.
The source of the "social" and economic criticisms of advertising is much more basic and fundamental than most people realize. In fact, a complete philosophic world view, or weltanschauung, underlies them. This means that not only do ethics and economics play a key role in the criticisms, but also metaphysics, epistemology, politics, and esthetics. Bringing to light and refuting the philosophic and economic premises of the critics of advertising is the primary goal of this work.
Finally, appeasement and apology are rampant today among business and advertising practitioners who attempt to defend advertising. (This includes business school professors who choose to defend advertising--many, however, are vocal critics.) Paraphrasing Frederic Bastiat in his introduction to Economic Sophisms, I am not engaging here in controversy with the Marxists, the socialists, or anyone else openly hostile to capitalism or to advertising. "Rather, I am trying to instill a principle into the minds of sincere men who hesitate to take a stand on the issue because they are in doubt."[1] What I hope to provide practitioners, academics, and intelligent laymen is the intellectual ammunition with which to take a hard-hitting moral stand against the critics. My goal is to dispel any doubt you may have about the legitimacy of advertising and to give you the confidence to speak with conviction when fending off the onslaught.
Throughout this book I use the word "man," in the tradition of Western-civilization scholars, to designate the concept of an animal possessing the capacity to reason. This is the meaning Aristotle (and other Greeks) gave the word anthropos, from which "man" is a translation. Indeed, the Oxford English Dictionary reports that the original meaning of the term "man" is the "thinking" or "intelligent being," not a male person. Substituting such terms as "men and women," "people," "persons," "humankind," or "human being" for the word "man" excises from the English language the concept of "rational animal." Such excision surrenders the intellectual foundation of Western civilization and its life-giving achievements. Consequently, I use the word "man" to refer equally to females and males. (Even the word "human" is not an exact synonym of "man," for according to the OED, it often means "mundane," "secular," "opposed to the divine," implying limitation or inferiority.)
My foremost acknowledgments are to the philosophy of Ayn Rand and the economics of Ludwig von Mises. My understanding of the two authors and of philosophy and economics generally, is due in no small part to the teaching and writing of Leonard Peikoff and George Reisman respectively. My understanding of psychology, which, in addition to philosophy and economics, provides a theoretical foundation for the applied sciences of marketing and advertising, is due to the invaluable teaching and writing of Edith Packer. Any errors, of course, in the application of philosophy, economics, and psychology to advertising are entirely mine.
Portions of this manuscript were read by Gary Hull and Diane and Don LeMont; I thank them for their helpful comments, as well as for the many hours of discussion--sometimes focused on advertising--we have shared over the years. Finally, I cannot thank enough the person without whom this book would not have been written, my intellectual soul mate and partner in life, Linda Reardan.
****
The Original Sin of Capitalism
ADVERTISING TODAY does not have a good press.
Arnold Toynbee, for example, reportedly said, "[I] cannot think of any circumstances in which advertising would not be an evil."[1] Not to be outdone, a professor at the New School for Social Research in New York said: "Advertising is a profoundly subversive force in American life. It is intellectual and moral pollution. It trivializes, manipulates, is insincere and vulgarizes. It is undermining our faith in our nation and in ourselves."[2] By comparison, John Kenneth Galbraith seems tame. He only accuses advertising of creating desires that otherwise would not exist and of manipulating consumers into buying unneeded new brands of breakfast cereal and laundry detergent.[3]
The list of alleged sins committed by advertising is limited only by the creativity of its critics. Advertising has been accused of everything from the cheapening of newspapers and television to media rape. Advertising, the critics say, increases prices without adding value to the product; it encourages monopoly; it corrupts editors; it foists inferior products on the unwitting and helpless consumer; it makes people buy products they do not need; it promotes dangerous products and encourages harmful behavior; it is deceptive and manipulative; it is intrusive, irritating, offensive, tasteless, insulting, degrading, sexist, racist; it is loud, obnoxious, strident, and repetitive to the point of torture; it is a pack of lies; it is a vulgar bore.
Refutation of the criticisms of advertising--from surface level to economic and philosophic fundamentals--is the purpose of this book.
THE ASSAULT ON CONSCIOUSNESS
The critics who denigrate advertising attack not only advertising but also--by logical necessity--capitalism, ethical egoism, and reason.
As an institution in the division of labor and an instrument of capitalistic production, advertising communicates to many people at one time the availability and nature of need- and want-satisfying products. In essence, advertising is salesmanship via the mass media; as such, it is the capitalist's largest sales force and most effective means of delivering information to the market. In addition, advertising by its essential nature blatantly and unapologetically appeals to the self-interest of consumers for the blatant and selfish gain of capitalists. To criticize advertising is to criticize capitalism and ethical egoism.
At the most fundamental level, the attacks on advertising are an assault on reason--on man's ability to form concepts and to think in principles--because advertising is a conceptual communication to many people at one time about the conceptual achievements of others. It is attacked for precisely this aspect of its nature. The goal of advertising is to sell products to consumers, and the means by which this goal is achieved is to communicate what advertisers call the "product concept." An advertisement is itself an abstraction, a concept of what the capitalist has produced. Thus, advertising is a conceptual communication--in a market economy--to self-interested buyers about the self-interested, conceptual achievements of capitalists. To criticize advertising--at the most fundamental level--is to assault man's consciousness.
From its earliest days, critics attacked capitalism for its dependence on the profit motive and the pursuit of self-interest. As the most visible manifestation, or "point man," of capitalism, advertising can be called the capitalist's "tool of selfishness." In a world culture based on altruism and self-sacrifice, it is amazing that advertising has lasted as long as it has. Indeed, its growth was stunted in Great Britain and Ireland for 141 years by a tax on newspapers and newspaper advertising.[4]
As a result of the deregulation of professional advertising (by doctors, dentists, and lawyers), some professionals have expressed hostility toward their associates who advertise. For example, a psychiatrist who doubled the number of patients treated by his psychiatry-neurology group by advertising on television tried at a party to shake hands with a medical doctor; the doctor replied, "Take your dirty, filthy, advertising hands off me."[5] And, of course, the chief justice of the Supreme Court, William Rehnquist, is on record as saying that the First Amendment of the United States Constitution, the free speech amendment, is demeaned by its association with advertising.[6]
A history of the last one hundred years of American advertising captures the essence of the critics' hostility toward egoism. The book is The Mirror Makers, by Stephen Fox. On the last two pages of this otherwise well-written, well-researched book, the author states:
Thus the favorite metaphor of the industry: advertising as a mirror that reflects society back on itself. Granted that this mirror too often shows our least lovely qualities of materialism, sexual insecurity, jealousy, and greed. The image in the advertising mirror has seldom revealed the best aspects of American life. But advertising must take human nature as it is found. We all would like to think we act from admirable motives. The obdurate, damning fact is that most of us, most of the time, are moved by more selfish, practical considerations. Advertising inevitably tries to tap these stronger, darker strains.[7]
If selfishness is the original sin of man, according to Judeo-Christian ethics, then surely advertising is the original sin of capitalism. More accurately, advertising is the serpent that encourages man to pursue selfish gain and, in subtler form, to disobey authority. In contemporary economics, pure and perfect competition is the Garden of Eden in which the lion lies down beside the lamb and this "dirty, filthy" advertising is entirely absent--because consumers allegedly have perfect information. Small wonder that advertising does not have a good press.
At the level of fundamental ideas, three attacks on advertising constitute the assault on consciousness. One attack attributes to advertising the coercive power to force consumers to buy products they do not need or want. At the level of metaphysics, this attack denies the volitional nature of reason, that is, free will; consequently, it denies, either explicitly or implicitly, the validity of human consciousness as such. A second attack derides advertising for how offensive it allegedly is; ultimately, critics advocate regulation to control the allegedly offensive advertising. At root--that is, at the level of ethics--this attack denies that values are objective, that values are a product of the relation between material objects and a volitional consciousness that evaluates them. Consequently, it denies the existence of rational options.
A third attack, which derives from contemporary economics, views advertising as a tool of monopoly power. At the level of epistemology, however, this attack denies the possibility of truth and certainty, because reason allegedly is impotent to know reality; all man can do is emulate the methods of physics, by conducting statistically controlled experiments, and attempt to establish an uncertain, probabilistic knowledge.
These three assaults on consciousness form the philosophic foundations of what are commonly known as the "social" and economic criticisms of advertising, the first two forming the foundation of the "social" criticisms, the third the foundation of the economic criticisms.
THE "SOCIAL" AND ECONOMIC CRITICISMS OF ADVERTISING
The quantity of literature that attacks advertising approaches the infinite. The list of complaints is long, and each one has many variations.
Explicitly or implicitly, all attacks attribute to advertising the power to initiate physical force against both consumers and competitors. The "social" criticisms assert that advertising adds no value to the products it promotes; therefore, it is superfluous, inherently dishonest, immoral, and fraudulent. The economic criticisms assert that advertising increases prices and wastes society's valuable resources; therefore, advertising contributes to the establishment of monopoly power.[8]
The "Social" Criticisms
In essence, there are two "social" criticisms. The first explicitly charges advertising with the power to force consumers to buy products they do not need or want; the second implicitly charges advertising with this power. According to the first, advertising changes the tastes and preferences of consumers by coercing them to conform to the desires of producers. For example, consumers may want safer automobiles, but what they get, according to the critics, are racing stripes and aluminum hubcaps. Forcing consumers to conform to the desires of producers, the critics point out, is the opposite of what advocates of capitalism claim about a free-market economy--namely, that producers conform to the tastes and preferences of consumers. Within the first criticism there are two forms.
The more serious claims that advertising, by its very nature, is inherently deceptive, because it manipulates consumers into buying products they do not need or want. The most specific example of this criticism is the charge of subliminal advertising. Thus, when looking at a place mat in front of you at a Howard Johnson's restaurant, with its picture of the fried clam special, you might be deceived and manipulated into changing your taste--from a hamburger to clams. How? By the sexual orgy subliminally embedded in the photograph of the clam special.[9] Freudian psychology has strongly influenced the advocates of this first form of the first "social" criticism.
The other form claims that advertising is "merely" coercive, by creating needs and wants that otherwise would not exist without it. That is, highly emotional, persuasive, combative advertising--as opposed to rational, informative, and constructive advertising--is claimed to be a kind of physical force that destroys consumer sovereignty over the free market.[10] This is Galbraith's "dependence effect," so called because our wants, he claims, are dependent on or created by the process by which they are satisfied--the process of production, especially advertising and salesmanship. Our wants for breakfast cereal and laundry detergent, says Galbraith, are contrived and artificial.[11] The psychology of behaviorism has strongly influenced this second form of the first "social" criticism.
Both forms of the "coercive power" charge refer repeatedly to the advertising of cigarettes, liquor, drugs, sports cars, deodorant, Gucci shoes, and color television sets as evidence of advertising's alleged power to force unneeded and unwanted products on the poor, helpless consumer. The charge of manipulation and deception is more serious than "mere" coercion because manipulation is more devious; a manipulator can make consumers buy products they think are good for them when, in fact, that is not the case. The charge of manipulation, in effect, views advertising as a pack of lies. The charge of "mere" coercion, on the other hand, claims that advertising is just brute force; advertising in this view, in effect, is excessively pushy.
According to the second "social" criticism, advertising offends the consumer's sense of good taste by insulting and degrading his intelligence, by promoting morally offensive products, and by encouraging harmful and immoral behavior. Prime targets of this "offensiveness" criticism are Mr. Whipple and his Charmin bathroom tissue commercials, as well as the "ring around the collar" commercials of Wisk liquid detergent and the Noxzema "take it all off" shaving cream ads. But worse, the critics allege, advertising promotes products that have no redeeming moral value, such as cigarettes, beer, and pornographic literature. Advertising encourages harmful and immoral behavior and therefore is itself immoral. Although this criticism does not begin by attributing coercive power to advertising, it usually ends by supporting one or both forms of the first "social" criticism, thus calling for the regulation or banishment of a certain type of offensive--meaning coercive--advertising.
In the textbooks, these are called "social" criticisms. At their roots, however, they are philosophic. It is by reference to philosophic principles that answers to the charges against advertising will be made.[12]
The Economic Criticisms
The economic criticism--it is really only one charge with several variations--claims that advertising is a means by which businesses establish monopoly power over the market. In essence, there are only two forms to this charge. In both, the Garden of Eden--that is, the doctrine of pure and perfect competition--is the standard by which the monopoly charge is made.
The first form claims that advertising is a barrier to entry that prevents competitors from challenging the market position of a large firm. The barrier is erected by a firm's large advertising expenditures. The alleged process of establishing monopoly power runs as follows. Heavy advertising differentiates the advertiser's product, whether or not there are real differences between it and the competition's. The differentiation created by techniques of persuasive advertising makes consumers loyal to the advertiser's brand. Brand loyalty of consumers, then, is the actual barrier that prevents other firms from entering the market. It is a barrier because the competitor would have to advertise at least as heavily to overcome it. Thus, advertising causes product differentiation, product differentiation causes brand loyalty, and brand loyalty is the barrier.
Economists frequently cite Bayer aspirin to illustrate this form of the criticism. Aspirin is aspirin, the critics say, but Bayer's heavy advertising differentiates the product in consumers' minds and makes them loyal. Competitors cannot obtain the resources necessary to compete with Bayer; hence, Bayer has restricted their freedom of competition and is therefore anticompetitive.
The other form of the monopoly argument claims that advertising increases prices. In the imperfect world in which we live, this charge says, informative advertising is used to reduce consumer ignorance, but persuasive advertising differentiates what essentially are homogeneous products. The differentiation causes consumers to prefer the advertiser's brand and to become loyal to it, thus reducing consumer sensitivity to changes in price. The reduction in sensitivity to price changes enables the advertiser to charge more than what would otherwise occur under perfect competition or through the use of informative advertising. The price premium, according to the law of demand and supply, reduces total output. Consequently, advertising is wasteful. Or: advertising causes product differentiation, product differentiation causes abnormally high prices, high prices reduce output and waste society's valuable resources.
To see this more clearly, say the critics, just observe the aspirin market. Nationally advertised brands, such as Bayer, are priced substantially higher--20 percent or more--than privately produced store brands, such as Safeway, Kroger, or A & P. These store brands, however, are seldom advertised. Hence, advertising must necessarily raise the price of the product.
THE NATURE OF MARKETING AND ADVERTISING
Marketing is the parent discipline of advertising; both are products of capitalism and the Industrial Revolution.
To be sure, elements of both marketing and advertising have existed since antiquity: the first trade between primitive people was a market transaction, and traces of media advertising (signs) have been found as long ago as Babylonian times. But it is the extensive division of labor and mass production brought about by the Industrial Revolution that gave rise to the institutions of marketing and advertising. It was not an accident that both were made predominantly illegal in socialist countries of the twentieth century--as a theory, socialism loathes such egoistic, capitalistic activities.
Marketing Is Entrepreneurship
Marketing is the function of business that identifies and anticipates the needs and wants of consumers, creates products to meet those needs and wants, and then delivers the products through various techniques of promotion and distribution. At its strategic or top management level, marketing is an expression of entrepreneurship, because it unites innovation with execution; that is, marketing unites discovering an idea with putting the idea into action. Marketing creates need- and want-satisfying products and then delivers them to consumers.[13] Advertising is a vital part of the delivery process.
The genus of marketing is entrepreneurship; its differentia is the creation and delivery of need- and want-satisfying products. An entrepreneur is the person who perceives ahead of anyone else profit-making opportunities in the marketplace, then, more importantly, acts to take advantage of those opportunities.[14] Many people throughout history have come up with brilliant ideas, but what distinguishes them from entrepreneurs is that entrepreneurs not only conceive new ideas but also act on them. Inventors, as history has shown repeatedly, are not often also entrepreneurs; Thomas Edison was an exception.
An entrepreneur, as the word's French etymology indicates, is an "undertaker," the person who initiates action or takes the first step. There are two types of entrepreneurship: financial and marketing. The financial entrepreneur is the capitalist in the traditional sense of the term: one who raises equity and debt capital, then allocates it to the most profitable opportunities; metaphorically, the financial entrepreneur provides the financial superstructure of a profit-making skyscraper. The marketing entrepreneur uses the capital to identify markets and develop new products, then to deliver the products to the markets; the marketing entrepreneur, metaphorically, provides the floors, windows, office (the product), and the elevator and stairs (the means of distribution). The marketing entrepreneur is the producer in the traditional sense of the term.[15]
Advertising Is "Just Salesmanship"
Advertising is mass-media selling. It is the communication of product information by means of the mass media, the purpose of which is to sell products to consumers.[16] At the turn of the twentieth century, when newspapers and magazines were the primary media available to advertisers, advertising was referred to as "salesmanship in print."[17] One writer referred to advertising as "multiplied salesmanship."[18] Advertising is a method of communicating to consumers that is less expensive than other methods. That is, it is cheaper to communicate to many consumers at one time through the mass media than to one person at a time, as through one-on-one personal selling, and it is more effective than relying solely on the process of word-of-mouth communication.
This means that there are only two major differences between advertising and personal selling: (1) advertising's selling message is delivered to many people at one time, whereas the salesperson's message is delivered to one (or at most, a few) at a time, and (2) advertising's message is delivered through a communication medium, such as television or newspapers, whereas the salesperson's message is delivered without the intervention of a medium, that is, it is delivered personally. The genus of advertising is salesmanship; its differentia is the means by which the selling is done, namely, via mass media.[19] To understand advertising, therefore--what it is, how it works, and the nature of its alleged power--we must always relate advertising back to its genus.
Advertising is mass-media selling. Its purpose is to sell products. This does not mean, however, that with advertising "you can sell anything to anyone." The first principle of good advertising is what the textbooks call "the primacy of the product." That is, without a good product--a product that meets the needs and wants of consumers--you have nothing; good advertising cannot sell a bad product. In fact, many an advertiser has said that the surest way to kill a bad product is to advertise it.[20]
The purpose of advertising is to sell products, but this does not mean that good advertisements must be funny or entertaining or sexy--any more than a good salesperson in order to be successful must be funny or entertaining or sexy. Humorously entertaining and sexy ads tend to win awards, but they seldom sell products. It is notorious in the advertising industry that consumers respond to such ads by remembering the joke, the music, or the sexy model, but forget the product--or worse, they attribute the ad to the competition. Advertising is salesmanship, not entertainment.[21]
There is nothing mysterious or incomprehensible about the way advertising works. In content, an advertisement says only one of three things (sometimes two or three of these in combination). In introductory campaigns, the ad says, "New product for sale." In competitive campaigns, the ad says, "Our product is better than the competition's." In reminder campaigns, it says, "We're still here, don't forget us." That is all.
In method, the persuasive structure of advertising copy is based on principles first set down by Aristotle over 2,000 years ago in the Rhetoric.[22] They are the appeal to emotion, the offer of proof, and the appeal to the credibility of the communicator. The appeal to emotion (which is not the fallacy of the same name) is a statement of the benefits consumers will get out of the product by buying and using it; it can be either a positive appeal to the desire to achieve pleasure, such as the appeal to physical attractiveness issued by some brands of toothpaste, or it can be a negative appeal to the desire to avoid pain, such as the appeal to cavity prevention issued by other brands of toothpaste. The appeal to emotion, in truth, is an appeal to values, what consumers value and are therefore looking for in products.
The offer of proof is a statement of reasons or evidence why the product will deliver the claimed benefits; in advertising, this is often referred to as "reason why" copy. Often, although not always, this reason why copy is a statement of the product's features. There is a cause and effect relationship between features and benefits: namely, features cause benefits. Consequently, for example, the reason why one brand of toothpaste will increase your physical attractiveness is because of its whitener and mouth-wash ingredients; the reason why the other brand will help prevent cavities is because of its fluoride ingredient.
Appealing to the credibility of the communicator is an appeal to the honesty and integrity of the advertiser. After all, why should anyone believe what the advertiser has said in the first two steps of the persuasion process? This includes references to the longevity of the advertiser and the use of testimonials and endorsements, expert or otherwise.
The use of these three steps of Aristotle's Rhetoric constitutes rational persuasion. There are, of course, other less rational forms of communication practiced, not just by advertisers, but--to keep a clear perspective on advertising--by politicians, teachers, journalists, and even by parents. These other forms of communication or irrational persuasion--puffery, sophistry, and deception and fraud--will be discussed in chapter 3.
The Industrial Revolution
Marketing and advertising both came into existence as products of capitalism and the Industrial Revolution. Modern industry evolved during the eighteenth century in several stages. Initially, traders bought the goods of household producers and sold them in distant markets. Some traders, however, began to provide the household producers with additional money, equipment, and materials with which to produce goods. Eventually, in order to maintain better control and because of the sheer size of the operation, some traders brought together numerous household producers, along with their equipment and materials, under one roof, the building of which became known as a "manufactory." The trader became known as a manufacturer; the selling and delivering of products was taken over by local merchants and salesmen called "commercial travelers" in Britain and "Yankee peddlers" in the United States, forerunners of the modern salesman and advertiser.[23]
What is interesting to note about these traders who became manufacturers is that they were performing both functions of entrepreneurship, finance and marketing. They are the ones who identified market opportunities for the goods of the household producers; provided capital and, often, guidance and know-how to producers who seemed promising; and took the goods to market. Insofar as they became manufacturers, and then relied on other parties to take their manufactured goods to market, the division of labor simply separated the creation function of marketing entrepreneurship from the delivery function. The two functions did not unite under one roof in any significant way until the twentieth century development of modern marketing, especially through the functions of market research and product development.[24]
Throughout the nineteenth century, as production expanded and transportation improved, manufacturers started distributing their goods hundreds and thousands of miles away from their factories. To assist their commercial travelers and Yankee peddlers, "announcements" (as early advertisements were called) were placed in newspapers to reach many more people at one time. The result was a reduction in the cost of communication over what it had been using travelers and peddlers exclusively. Thus, mass communication through advertising made it possible for manufacturers to sell their goods at a faster rate, enabling them to recover their investments more quickly. The faster recovery of investments, in turn, provided a strong incentive for the manufacturers either to reach out to still more distant markets or to develop new products.
Thus, advertising came into existence as a form of specialization in the division of labor. Advertising is a form of promotion that the marketer uses to produce economies of scale in the distribution of his products. The distribution economies, however, also create production economies by making it possible for the producer to sell an even larger quantity of goods, thus reducing the cost per unit of production. The economies created make it possible for the producer to earn greater and greater sales and profits at a faster and faster rate. One writer has referred to this phenomenon as the "multiplier effect" of advertising, giving Keynes's term a new twist.[25] Advertising is an accelerator--it speeds up the acceptance of new products, thus encouraging the development of still more new products.
The Nature of Applied Science
As disciplines of study, marketing and advertising are applied sciences. Some sciences are more fundamental than others. Philosophy, for example, is the most fundamental of all sciences--fundamental in the sense of being more basic and universal in applicability than the others. The special sciences depend on, are derivatives of, or are applications of the fundamental sciences. Physics, biology, psychology, and economics, for example, are fundamental special sciences, all of which in turn depend on philosophy. But engineering, medicine, and marketing are several steps removed from (that is, are more concrete than) the fundamental sciences and therefore are applied sciences. The applied sciences draw their most fundamental principles from their parent disciplines--engineering from physics and chemistry, medicine from biology, marketing from psychology and economics; new principles defined in the applied area, arising from new facts discovered, must be consistent with the more fundamental sciences.
The applied sciences, as concepts, are concepts of method. "Concepts of method," states Ayn Rand, "designate systematic courses of action devised by men for the purpose of achieving certain goals. . . . All the applied sciences (that is, technology) are sciences devoted to the discovery of methods."[26] Marketing and advertising are normative, or "how to," disciplines that define principles to guide man in the achievement of specific goals. The goal of marketing is the creation of need- and want-satisfying products and the delivery of them to consumers. The goal of advertising is communication to make a sale. Marketing and advertising rest most directly on, and derive their most basic principles from, psychology and economics. But psychology and economics, in turn, rest on philosophy.
By examining the fundamental sciences on which advertising rests, it will be possible to discover the roots of the criticisms of advertising.
THE POWER OF IDEAS
Accordingly, an underlying premise of this work is that ideas cause action.
As Ludwig von Mises puts it: "The history of mankind is the history of ideas. For it is ideas, theories, and doctrines that guide human action, determine the ultimate ends men aim at and the choice of the means employed for the attainment of these ends."[27] The attacks on advertising are a form of action--intellectual action that is all too frequently followed by political action to regulate and control advertising. And "ideas, theories, and doctrines"--through the critics' acceptance and internalization of false philosophic and economic ideas--are what have caused today's exceptional hostility toward advertising. Only better ideas--refutation of the false and demonstration of the true--can combat the attackers.
More specifically, it is philosophic ideas, theories, and doctrines that guide human action, for it is philosophy that determines the ultimate ends men aim at and the means men employ to attain those ends.[28] To be sure, philosophy does not determine every detail of one's life--only the broadest goals and broadest methods of achieving those goals.[29] (The special sciences guide men in the choice of details.) Ultimately, it is only by reference to philosophic ideas that the criticisms of advertising can be challenged. Only by identifying and refuting the false premises of the critics' philosophic world view can the ground be cleared for a proper defense of advertising. And only by presenting and understanding the alternative--and true--philosophic world view can the rationality, morality, productiveness, and benevolence of advertising be appreciated. It is to these two competing world views that we now turn.
****
Two Philosophic World Views
TO UNDERSTAND THE ATTACKS on advertising--and to understand what is wrong with them--we must examine the ideas that make the criticisms possible. To defend advertising properly, alternative ideas must be presented.
The world view of the critics of advertising is a collection of ideas that pictures man as a blind and helpless pawn who requires guidance from an authoritative elite. The alternative world view pictures man as a self-determined and self-responsible individual who requires political freedom as precondition to the pursuit of his own values and happiness. At the deepest level, the attacks on advertising derive from the modern philosophical assault on man's ability to think conceptually. The proper defense of advertising, therefore, must extend to and penetrate the foundations of human knowledge. This clash of world views is not just idle, academic debate, for its outcome ultimately determines the direction and survival of civilization.
THE AUTHORITARIANISM OF THE CRITICS' WORLD VIEW
The following doctrines constitute the critics' world view. In philosophy, specifically metaphysics, the branch of philosophy that studies the nature of the universe as a whole, two doctrines provide the foundation of the critics' beliefs: determinism and the mind/body dichotomy. In epistemology, the branch of philosophy that studies the nature of human knowledge and the process by which man acquires knowledge, the doctrine of intrinsicism underlies the critics' ideas. In ethics, a moral version of intrinsicism, along with the morality of altruism, permeates the attacks on advertising. In political philosophy, the unadmitted doctrine that motivates the critics is political elitism. And in esthetics, or the philosophy of art, the doctrine of the equivalence of art and advertising enables critics mistakenly to judge advertising on esthetic grounds. Finally, in economics, the doctrine of pure and perfect competition underlies the economic criticism of advertising; this doctrine itself, however, rests on the philosophic doctrines of logical positivism, the epistemology of the eighteenth-century German philosopher Immanuel Kant, the mind/body dichotomy, and the theory of concepts (or universals) known as nominalism.
Not every critic of advertising, of course, espouses all of these doctrines--they should be so consistent--but the ideas run through all the various attacks made. To demonstrate the moral and benevolent nature of advertising, it will be necessary eventually to answer each of the doctrines.
The Philosophic Doctrines
The doctrine of determinism asserts that man does not possess free will--that any freedom of choice we seem to possess is illusory, and that all of our actions are ultimately determined or caused by forces beyond our conscious control. The external environment and our inner instincts (or heredity) are the most frequently cited deterministic factors. The logical conclusion is that advertising causes ill effects on consumers--directly as a powerful force in our environment or indirectly as a devious means of tapping our inner instincts.
The mind/body dichotomy assumes that our minds (that is, consciousness and reason) are eternally at war with our bodies (and the material world in general). The doctrine stems from the notion that the inner contents of consciousness do not and cannot ever match the outer facts of reality. This notion permeates the history of philosophy. Consequently, man must choose--and, historically, men have chosen--one world or the other: either the sacred, moral world of mind or the profane, practical world of matter. This doctrine is the source of many derivative dichotomies, such as reason vs. emotion, theory vs. practice, the moral vs. the practical, the spiritual vs. the material--and in marketing and economics, respectively, informative advertising vs. persuasive advertising and production costs vs. selling costs. Since advertising--and all business enterprise--operates in the profane world of matter, according to this doctrine, it deserves no moral glory. The material world of practicality, indeed, is often denigrated as immoral.[1]
Intrinsicism--a term coined by Ayn Rand and a doctrine identified by her as false--is essentially a theory of concepts.[2] It holds that man's mind is passive and, consequently, contributes nothing to the process of concept formation, that is, to the process of acquiring knowledge of reality. The mind, according to this doctrine, is like a mirror: it simply reflects the essences of the things we observe. We expose ourselves to the objects of reality and automatically receive illumination. Conceptual knowledge is acquired without effort by looking out at the world, just as perceptual knowledge is acquired without effort by looking out at the world. The concepts we hold in our minds are reflections of these essences. The doctrine is called "intrinsicism" because the essences are held to be intrinsic to the objects of reality; for example, in each individual man, as it were, there exists embedded a nugget of the essence "manness," analogous to a nugget of ore embedded in sedimentary rock. (The opposite side of the intrinsicist coin, as Rand identifies it, is "subjectivism."[3])
The mind has no specific nature, holds intrinsicism, and therefore is a passive responder to the objects of reality that operate upon the mind. This means that concepts are not formed through a rational process; rather, they are revealed to us through nonsensory or extrasensory means. Knowledge is acquired automatically through what has variously been called mystic insight, intuition, or revelation. The intrinsicist "just sees" the truth lying before him. Those who do not see the truth are often told to keep looking or, after a period of trial, are said not to possess the superior insight or intuitive faculty that "the ones who know" happen to possess. In short, the intrinsicist "just knows" what is true because he has a strong feeling that it is so. Thus, emotions, not reason, are man's means of gaining knowledge. The doctrine of intrinsic essences ultimately reduces to mysticism and, as such, is a rejection of reason and the conceptual level of consciousness.[4]
Now determinism, the mind/body dichotomy, and intrinsicism all form an integral part of the same world view. Determinism is consistent with intrinsicism because the passive mind is acted upon by an external reality. We are determined by environmental and hereditary factors to "just see" the truth; there is no room in the theory of intrinsic essences for choice or options. The mind/body dichotomy is consistent with intrinsicism because, as in Plato's philosophy, knowledge of "true" reality--the reality of permanence and truth--requires a special insight or intuitive sense that clashes with the concrete, material reality in which we live--the reality of change and error. Reason has been reduced to a form of mystical insight; hence, there is no method of resolving the clash that occurs between the two worlds: the inner world of "true" reality and the outer world of material reality.
The doctrine of intrinsicism enters the criticisms of advertising in the notion that repetitive advertising is unnecessary and wasteful. After all, say the critics, if the product has been advertised once and the consumer clearly received the message, there is no need to advertise again. Why? The consumer now knows that the product exists; the consumer has been informed. Any additional advertising, say the critics, would be "persuasive" advertising, which in their minds is bad.[5] The point here is that the impression has been made; the assumption is that physical reality directly operates upon the human mind, writing its messages, as it were, on the soul. So also, advertising directly stamps its messages on the consumer's mind, indelibly fixing the impression in the consumer's memory.
Intrinsicism in ethics is the doctrine of intrinsic value, the moral version of intrinsic essences. If all knowledge comes to us through direct observation of essences in physical objects, then so too does moral knowledge. Values, according to this doctrine, are intrinsic to the objects and actions of reality, embedded, again, like the nugget of ore in rock. Values are self-evident and value judgments are automatic. According to intrinsicism the good
is inherent in certain things or actions as such, regardless of their context and consequences, regardless of any benefit or injury they may cause to the actors and subjects involved. It is a theory that divorces the concept of "good" from beneficiaries, and the concept of "value" from valuer and purpose--claiming that the good is good in, by, and of itself. . . . The intrinsic theory holds that the good resides in some sort of reality, independent of man's consciousness.[6]
In the marketplace, this means certain products, regardless of context or consequences of use, possess less moral value than others. For example, cigarettes and laundry detergent are said to have less intrinsic value than Eugene O'Neill plays and the recycling of paper and plastic. (As in epistemology, subjectivism in ethics is the counterpart of the doctrine of intrinsic value.[7])
Continuing to unravel the critics' world view: altruism is the theory of ethics that motivates the hostility toward capitalism and egoism. According to altruism, a morally good action is one that places others above self; as such, altruism commands self-sacrifice. It does not mean kindness or gentleness, but the act of giving up a higher value for the sake of a lower value or non-value. Considering that advertising appeals to consumers to give up a lower value--namely, money--for the sake of a higher value--goods and services, and that producers use advertising to help them give up a lower value--the goods and services--for the sake of a higher value--the money, altruism can never grant moral value to advertising.
Now, altruism is consistent with the mind/body dichotomy because man, according to altruism, must sacrifice his profane, material body to the sacred, spiritual other world. And altruism is consistent with the doctrine of intrinsic value, because personal gain cannot be achieved if man's duty is to seek values that are good "in, by, and of themselves"; man, according to altruism, is supposed to pursue these intrinsic values "for their own sake," not for personal gain or consequence. Thus, when one writer, commenting on the McDonald's "We do it all for you" slogan, says, "That, of course, is a lie. McDonald's does it all for McDonald's,"[8] it is the writer's altruistic hostility toward egoism that is speaking.
The doctrine of the equivalence of art and advertising is rampant among the critics of advertising. Such critics--as well as many laymen and practitioners--judge advertising using the standards of the fine arts. A major premise, however, supporting this defense of advertising is that, in essence, advertising is "just salesmanship," not entertainment or art. The mind/body dichotomy is the philosophic doctrine that motivates critics to evaluate advertising as art. That is, ads that are more spiritual and artlike--which usually means more humorous and entertaining, or cute and clever--are more likely to be judged favorably, whereas ads that are materialistic, earthy, and, above all, hard-selling are judged negatively.
At this point, the doctrines of determinism, the mind/body dichotomy, intrinsicism, altruism, and the equivalence of art and advertising come together to form the central doctrine that motivates the critics of advertising: political elitism, the twentieth-century version of noblesse oblige.
The mere assertion by critics that there are products consumers do not (read: should not) need or want is a claim by the critics that they are members of the "noble class" of intellectuals--the elite class--who know what is best for the lower classes of unwashed mobs. When these modern aristocrats complain that the Charmin bathroom tissue commercials are stupid, offensive, and cater to the lowest common denominator, it is their alleged moral and cultural superiority that gives them a prissy self-righteousness when discussing bad taste and advertising in the same breath. The authoritarian implications are obvious. What the elitists mean is that there are products they think consumers should not need or want. Why?
The reason is their intrinsicism. If certain products possess value "in, by, and of themselves," regardless of context or consequences of product use, and if certain people know which products are intrinsically valuable, then these people, the elite, will insist that there are certain products consumers should not need or want. The mind/body dichotomy determines which products are valuable, and the doctrine of the equivalence of art and advertising determines which advertisements are valuable.
What underlies the critics' elitism and intrinsicism, in turn, is the doctrine of determinism--the doctrine that man does not have free will, that man is just a passive responder to internal and external stimuli. Elitists, of course, are just as determined as anyone else to believe what they do, and to prefer the products they do, through no choice of their own, but they supposedly have acquired their cultural and moral superiority by virtue of their noble birth, special education (especially the possession of a PhD degree), or other privileged status that has revealed to them which are the intrinsically valuable products.
The Economic Doctrine
In economics, the doctrine of pure and perfect competition dispenses with the layman's conception of competition--namely, that it is a rivalry among producers for the same source of revenue. Dominant economic theory today--mainstream "Neoclassical" theory--holds that "pure and perfect" competition is a passive and spontaneous adaptation by participants to changes occurring in the market. It holds that no one participant has the ability to control or influence any aspect of the market, especially prices. Anyone who does exercise such control or influence is said to have introduced "impure" or "imperfect" elements into the competitive state. Hence, such a competitor becomes monopolistic and anticompetitive. Since advertising--and marketing in general--explicitly attempts to control and influence the advertiser's segment of the market, advertising, the doctrine concludes, is inherently monopolistic.
To evaluate this doctrine, however, we must resort to philosophic analysis. Indeed, the doctrine's existence is made possible by the philosophy of logical positivism, which holds that all theory is inherently probabilistic (not universal) and must be tested and verified "empirically," often through the collection of statistical data, before generalizations about a theory's supposed truth or falsity can be concluded.[9] (Actual truth or falsity, according to logical positivism, can never be concluded.) Since prediction, according to this doctrine, is the essential purpose of science, the theory to be tested does not even have to be realistic.[10] Hence, Milton Friedman declares, the main criticism of economic theory--that its assumptions are unrealistic, especially the assumptions of pure and perfect competition--"is largely irrelevant."[11]
Logical positivism, in turn, rests on the philosophy of the eighteenth-century philosopher Immanuel Kant, which states that reason is incapable of knowing reality. Any knowledge that we acquire of reality, says Kant, is necessarily tainted by the innate structure of man's consciousness. Hence, he concludes, reason is limited and objective knowledge impossible.[12]