Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
Starvid:
oracles of economics, have you got any ideas?
Standard economics states that advertising plays an informative role in the market and otherwise completely ignores the uncomfortable questions of why firms invest so much in advertising or how much return they get from their advertisement investment.

This view of advertising is demolished by JK Galbraith in The New Industrial State, which I thought you were reading?

Basically Galbraith claims (if I am not mistaken this is a key part of what he calls the "revised sequence") that firms manage consumer demand through a variety of means and that advertising is a key way to both create needs and maintain a level of demand for them.

Obviousle since standard microeconomics takes consumer sovereignty as axiomatic, an analysis of how firms control consumer demand is anywhere between nonsense or anathema, depending on how well a neoclassical economist understands the extent to which Galbraith's view of advertising threatens the foundations of standard microeconomics.

The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.

by Migeru (migeru at eurotrib dot com) on Thu Aug 6th, 2009 at 04:16:15 AM EST
[ Parent ]
This view of advertising is demolished by JK Galbraith in The New Industrial State, which I thought you were reading?

Haven't gotten to that part yet, the book is pretty dense. Not really the kind where you read each page in 30 seconds.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Aug 6th, 2009 at 09:57:12 AM EST
[ Parent ]
But it is the kind of book that you don't really have to read linearly. You could skip to the chapter on advertising today, since the subject came up.

The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.
by Migeru (migeru at eurotrib dot com) on Thu Aug 6th, 2009 at 09:59:04 AM EST
[ Parent ]
One of the advantages of using an exclusive water closet is the little library of non-linear books in there that can be perused at leisure.

Oliver Stutchbury, who built Save & Prosper in the Sixties and Seventies (and also wrote tomes on the use of principle, unit trust management and capital taxes) kept the entire UK Tax code in his little room. He told me it was quite a strain to read them.

You can't be me, I'm taken

by Sven Triloqvist on Thu Aug 6th, 2009 at 10:12:52 AM EST
[ Parent ]
Economists tend to focus on the elasticity of advertising in getting a customer to purchase a given item rather than a competing item, to downplay demand creation, and to completely ignore the meta level (the 24/7 propaganda machine to go out and buy stuff that is the advertising industry).
by nanne (zwaerdenmaecker@gmail.com) on Thu Aug 6th, 2009 at 10:50:06 AM EST
[ Parent ]
nanne:
the 24/7 propaganda machine to go out and buy stuff and feel happy, strong, sexy and free that is the advertising industry

Important addendum.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Aug 6th, 2009 at 03:45:45 PM EST
[ Parent ]

Display:

Top Diaries

Occasional Series