I noted this comment in the Observer yesterday from Emma Rees, a Momentum national organiser:
For many, Labour might be the slightly nicer face of the establishment, but it's still the establishment. It has failed to present a genuine alternative to the market-driven, austerity economics that sees inequality spiral and puts profit-making above people time after time.
I think that may be true: there are a lot of people who grew tired of New Labour for precisely the reasons noted. But what worries me is the alternative.
First, since both leadership candidates say austerity is dead and I have no more reason to trust one than the other, let's assume that's true for Labour as a whole now. But in the case of Corbyn's Labour we are then offered a non-market driven economy where profit making does not have priority. That's fine: I wrote a book called The Courageous State that envisaged such a possibility. I would recommend it. But I have heard no one come near the issues I addressed that have to be on the agenda if this idea is to come close to fulfilment.
For example, let me note an issue that I have not heard anyone discuss during this election. It's called advertising. It drives markets. It creates artificial needs. It is designed to keep people in debt. It inspires over consumption. It creates misery. And all to make profit. If markets are to be contained for social good then so has advertising to be managed. And that means a lot of discomfort. No more Google, Facebook or Twitter for free, for a start. Or a lot of sport. Or most of our media. Has anyone thought this through?
I had the courage to do so in The Courageous State. I said this on solutions (although the analysis of the harm and theoretical consequences was much longer):
Taxes on advertising
Advertising is, as has been noted, designed to deliberately create feelings of dissatisfaction. Adverts are intended to undermine the prospect of a person achieving their purpose by encouraging a sense of inadequacy among their target audience because they do not have the promoted products or services, whether or not they have a real need for them. This is immensely harmful to society, not least by denying hope to those who have no prospect of acquiring the products advertised, and by breeding discontent even among those who can afford them, because so soon after they acquire such products they are informed that they must now acquire another in a continual process of artificially manufactured dissatisfaction fuelled by advertising.
Advertising is pervasive in the modern economy, but pernicious. A Courageous State will have to tackle this issue and there is no doubt that one way to do this would be through the tax system. There is, of course, advertising that is of benefit, including small advertisements in local media, job advertisements and such other announcements. Most of these could be exempted from any tax penalty on advertising simply by setting a monetary limit per advertisement below which such penalty would not apply. Above that limit, where the advertising in question would be designed to fuel demand for products and services whether or not they were a benefit to the consumer in society, there must be a radical overhaul of our tax system as it relates to advertising.
First, no tax relief on such advertising should be available within the tax system, so that the cost of advertising cannot be offset against the profits generated from trade to reduce a taxpayer's profit on which they owe tax.
Second, any value-added tax charged on the supply of advertising services to a business should be disallowed as an input in the VAT reclaims it makes from H M Revenue & Customs. In other words, that VAT then becomes a business cost of advertising.
The impact of these two moves is obvious: it is to increase the cost of advertising, and that would be deliberate. Tax has to be used to counter the harmful externalities created by the market, and the feelings of inadequacy, indifference, and alienation promoted by advertising in very many sections of society are almost universally harmful.
There would, however, be a cost to such arrangements: the media would of course suffer from a loss of income. The media has, however, itself been under scrutiny of late, and has not always emerged with its reputation intact. While media independence is vital, so is its objectivity and in that case there appears to be strong merit in using some, or all, of the additional tax revenue raised by government as a result of these proposed taxation changes on advertising to fund the media, both nationally and as important locally, but only if it agrees to act with political impartiality in the way that the BBC is obliged to do. If it did that then I think funding to compensate the media for some of the loss of revenue it will suffer as a result the loss of advertising revenue would be appropriate.
But also note that what is being suggested here is hardly without precedent: when it became obvious that business entertaining was giving rise to abuse, tax and VAT relief on it was stopped in much the same way as I now suggest for advertising. Many said that the restaurant and other trades would collapse as a result. They did not, of course, do so.
Ban advertising to children
A type of advertising that is particularly pernicious is that aimed at children. There is no parent that cannot recount the nagging of a child who wants a product that is either beyond the parent's means or that is wholly inappropriate to the child's needs who cannot also directly attribute that demand from their child to advertising aimed solely at children.
There is only one solution to this problem and that is to ban all advertising aimed at children. This will not stop children enjoying their lives to the full; indeed, as almost any parent will tell you, a cardboard box is one of the best toys ever invented, with the stick a close-run second choice. And of course, any parent will be at liberty to take their child to any toy shop whenever they like with a child able to make a better, more informed, and freer choice if advertising does not distort their prior decision-making. Creating young people able to form their own opinion is one of the strongest objectives of the Courageous State. Banning advertising aimed at children is one way to achieve this.
This type of suggestion is what turns a social movement into politics. That process requires the promotion of real policy. It also requires that solutions be offered. The above is an example of such thinking: this is seeking to transform society for the better.But most of what has come out of Jeremy Corbyn's campaign so far (even the education policy which fails to mention the problem of existing student debt as far as I can see) is nothing like this.
So is this movement really as radical as it claims?
And is it a place where real thinking is going to happen when, for example, the economic advisory panel to John McDonnell met just twice in the period it existed?
I think it's entirely fair to ask this because right now I am not seeing anything like the scale of initiative I expected if the hype and the policy announcements (which are pretty mild and candidly,often little more than back pedalling to New Labour days) are to be reconciled.
I am open to serious comment. But please don't waste my time and other reader's time with nonsense.
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Hi Richard,
Some hard to disagree with views on the effects of advertising. I also find it hard to believe ” I have no more reason to trust one than the other”. If you understand how advertising creates a non-existent ‘need’ for a product in order to satisfy an ulterior motive (such as profit), playing on and amplifying or stimulating a sense of inadequacy or fear, then you’ve perfectly understood Owen Smith!
Seriously: corporate advertising works in much the same way as pro-corporate politics’ political PR. Note the concepts of the ‘more efficient laundry powder’, the ‘more efficient’ private sector running of public services or the ‘technically’ more ‘competent’ politician at achieving the falsely sold-as-politically-neutral “skill” at winning elections.
It is a fascinating and important area of study.
Yes, advertising revenues have been shown to be just as perverse a political master as a state directive, so removing that might liberate the media from this particular guiding influence. An interesting concept. But any player in the media will always have an agenda, even if that agenda is serving the public good, or the defense of social justice. The key is to be aware of and make these agendas clear, and take them into account when considering their output. The BBC’s supposed impartiality has never been so in reality and it’s not even desirable. In one sense it would be to advocate indifference on major social issues affecting humanity.
Sincerely,
Nicholas.
The lack of serious, sustained, radical thought from Labour is dispiriting, most of the statements emanating from either wing amount to no more than cliche.
I can’t explain this, you only have to look at the posts and contributions on this site to appreciate the intellectual reservoir of ideas that can be tapped into. The basis of a new economics is there and yet it lies untouched.
I can only point to the media; it is as though they do not want a sustained programme of reform. Like advertisers they want something new everyday to generate short term interest.
There is an unhealthy relationship between political parties, the London based media and the advertising industry and this ensures that the political dialectic has no historical consistency. Why should the reform of the tax system, for instance, have to be constantly urged upon successive governments by thinkers outside of the mainstream media/political system (to no avail).
Very agreeable commentary about advertising. Great way to invest in Education maybe – this raising if tax coukd support a big investment in Education. Very good point about current student debt. People’s Quantitive Easing could sort this out. Buy up ALL current debt. Make a massive difference to future economy. My son and daughter’s debt is incredibily burdensome and contributes to the reason my son and his wife (35&36 yrs old) currently living with me.
See blog just posted
Hello Richard!
I’m bound to agree with this piece, since I’ve always loathed the sort of consumerist advertising at which you take just aim here.
But a caveat: You say: “…to act with political impartiality in the way that the BBC is obliged to do.” Yes, the Beeb is officially supposed to do that, according to its constantly-vaunted (constantly-advertised?) rules. But as MediaLens and other media-critiquing outfits make clear again and again, that’s not at all what the BBC actually does, being as it is a constant support for state policy and the attitudes of the ruling ‘elite’.
So how exactly are impartiality rules to be policed and enforced, since we see that the one media apparat in British life which is not a largely-foreign-owned commercial business (not quite yet) has acres of these rules, constantly advertised by the Beeb itself, yet which are – palpably – more honoured in the breach than the observance?
This appears to be a pretty intractable problem, when the boss-recruitment system for the Beeb is so obviously stitched up amongst the ‘elites’ themselves – as it has been from the first, as Reith famously confessed in his diaries.
That’s down to the appointment system
It’s clearly inappropriate at present
Keep in mind that there is a wide range of advertising and the most pernicious and harmful varieties are not necessarily even the most profitable. I am assuming that your comments are not intended to apply to traditional classified ads (the “used car for sale £500” variety) but in fact those are very profitable and in fact if one considers simple search ads (restricted to three short lines of text) as equivalent they are well able to fund free internet services. The trick is in crafting regulation that allows the useful exchange of information (I am looking to buy something, who is offering to sell it?) while restricting the manipulative propaganda.
Agreed
I cannot disagree with any of this. Notwithstanding the just plain rightness of banning advertising targeted at children, I’d have thought it would be just the kind of policy that would get media attention at this time of year. Forcing the Tories to have to defend the status quo would be a bonus.
I’m hopeful that whatever happens in the Labour leadership election, that an energised membership may be more likely to push these policies forward, although the fear is that this would always be swamped by the influence of the usual Think-Tanks and policy wonks on secondment from the Big Four.
Talking of whom, have you seen this regarding PWC? Seems they’re somewhat exposed to litigation in the US – if only our regulators had such an approach.
http://www.nakedcapitalism.com/2016/08/pwc.html
The author is complimentary of this man’s work, which you’ve probably come across, but was new to me – he’s worried about the stability of the current auditing system and sees it as quite a systemic risk (at least in the US):
http://www.jamesrpeterson.com/home/2015/01/draft-january-1-2015-the-financial-fragility-of-the-big-four-accounting-firms-updating-the-tipping-point.html
Welcome home!
You are right to raise the issue of advertising, which is hardly ever discussed in political & economic context. Raymond Williams described it as “the official art of capitalist society” (Problems in Materialism and Culture, 1980). I would call it “the dark art ….”. Today’s highly sophisticated and technical marketing industry, incorporating advertising and PR, pervades every area of life on the planet like a virus. Its principal practitioners are global corporations which work hand in glove with government yet are are rarely held to account. Their activities and products are an ever growing threat to democracy, social inequality, the environment and public health. It’s a very shadowy industry into which some disinfecting light should be shone. Greater taxation and regulation would be practical measures as a start.
I think it’s good to be back
Amazing holiday
I read Corbyn’s interview in the Observer and although I appreciated how different he was on headline policy I was thoroughly disheartened to see him saying that he was only going to use increases in corporate tax collection rates to pay for his ideas.
It seems to me that Labour has an intellectual glass ceiling that it has imposed on itself that it is unwilling to smash through – i.e. it is not prepared as a Government to use its sovereign powers to spend more newly created government money to invest in the economy.
Either Corbyn & Co are just ignorant of the facts (like most modern politicians) or they are saying one thing knowing full well that they will inject more cash when in power beause they are scared that the electorate (who are also mostly ignorant of fiscal policy and proper macro economics) will not believe them when they say it can be done.
Infact I do hope that Labour ARE lying and that they do indeed deliver a programme of Murphy-omics if they get into power. How else could a well-meaning Government operate against the wall of lies, deceit and sophistry which constitutes the prevailing economic orthodoxy that condemns 99% to the flaming wheel of austerity
– like the greek character Ixion- for the rest of our lives?
It is deeply frustrating
And the ‘social movement’ will not last long on this basis
Delighted to hear the vacation was amazing. It doesn’t get better than that. I hope you’re feeling suitably refreshed and reinvigorated for the forthcoming ‘autumn of discontent’!
Apologies for a second post but I’ve just happened upon this longish essay which opens up a completely different evaluation of JC’s campaign that I had not previously taken on board and which I think deserves serious consideration – https://medium.com/@ROY_MADRON/the-corbyn-model-of-leadership-a7a006405f27#.revc29w8a.
Having read it I’m re-evaluating my criticism of his leadership and potential for being ‘an agent of change’. But still not happy …..
From one of his readers’ comments I learned of ‘Sociocracy’ for the first time (https://en.wikipedia.org/wiki/Sociocracy) which may interest you as it is based on Quaker values. So much still to learn and so little time!
For further reading here’s Roy Madron’s blog, which is also new to me – http://www.rescuingdemocracy.com.
I read that piece
I am afraid I think it wishful thinking
And that it requires an era of people with a lot of time on their hands
They’re not normal working people
You’re probably right. However I don’t believe there is a sustainable quick-fix answer to the Neo-liberal hegemony. Hopefully these disparate and thus far unconnected ‘movements’ will eventually coalesce to form a critical mass of academic integrity and popular zeal that will capture the voters’ imagination. This coupled with increasing failures of the right-wing plutocracy on a global scale. Having said that, political parties still need leaders as credible messengers of any new progressive agenda and regrettably JC seemingly lacks appeal that resonates with the wider electorate. And I now seriously doubt Owen Smith is up to the task. But, as I’m not a member of their party, it is perhaps presumptuous of me to make such comment.
There is indeed no quick fix
That is why I pose the questions
I’d have thought there were plenty of products involving a high monetary advertising spend which are good for people.
Food.
Cars.
Toiletries.
Clothing.
Public service promotions (eg stop smoking advertisements).
And then we get into arguments whether things like entertainment and recreation, cosmetics, beer etc. are ‘good’ for people. Was there ever a society that didn’t have those things?
Hang on….all of these care the last are heavily associated with exploitation. Climate change, excess consumption, conspiucupis concurs tion (status symbol indicating)
You think that is good?
Do you drive a car? Or rely on goods delivered to your town by ship, plane, truck or train?
And as for cosmetics, is there any society where the men and women did not decorate themselves – whether their clothes, hair or skin?
Or enjoy themselves with entertainment and recreation?
Yes, there are some societies that don’t have alcohol, but it has been around in the West for a long time and isn’t going away any time soon.
Part of society, you might say.
If they are part of society why do they need to be promoted so heavily?
Because we don’t like monopolies except for a small range if goods and services (eg water supply).
And if competitors don’t have the opportunity to make us aware of their offerings (which would decrease if the cost of doing so increased as you suggest), it will be happy days for the incumbents.
Would Virgin have had a chance to give BA a kick in the backside without advertising? What about Apple v IBM? Subway v McDonald’s?
And you think that Subway v McDonalds has been worth the obesity caused?
Seriously?
I have always believed that a consumerist credit driven economy is not only bad for the ecology but bad morally as it creates the inequalities both internal and international. tackling it, though is a long term project. What we need is a long term vision. But what is really disturbing to me is that a policy that is really of the center is now seen as dangerously radical.
Advertising is the one and only industry dedicated to creating unhappiness
Hi Richard,
Interesting blog, and an interesting policy proposal. I’d like to think that this is the sort of policy Labour under Corbyn would consider, I take your point that neither it, nor anything similar, has been proposed so far. I do wonder whether proposing it would risk them Being pigeonholed as nanny statists, perhaps a risk worth taking of course. I serious doubt that anything remotely like your suggestion would ever come out of the Smith camp, and if it did doubt that it ever be followed through. On PQE and existing student debt, it’s a hole in Corbyn’s policy, and one that he would do well to plug but I wonder whether technically it doesn’t come under education policy and Is therefore not something that is missing from the recently announce policy as such as more something which (one hopes, naturally) is waiting to be announced.
Let’s see
I fear it is an absence of courage
Great article, I’ll add the courageous state to my very long reading list!
I would actually go further and make it a progressive tax. So for example companies with a marketing budget of less than 1M are taxed 10% on their advertising spend, 1-5M is a 20% tax..
One could go up to extremely high numbers to reduce the excesses of monopolies. A portion of the revenue could be used to fund the open access of Which!
Agree thoroughly with the article.
Have always maintained that having banking and advertising that were supposedly the two best things that Britain was good at was a passport to penury of the mind for the people.
It’s a good job Britain is also good at most of the arts – and yes, regret I do sometimes wonder if that is why we are good at the arts.
Agree too, Sachin, with the progressive tax idea and which subscription!
As to whether, Adrian, it would give the incumbents an unfair disadvantage that is a fair criticism, but I think there is hope – as even the supermarkets are now trying to support localism which is a sure sign there are definite stirrings of support from their customers.
Further, advertising is gradually being undermined to some extent by the internet of criticsm…
Additionally a recent article by a Cornwall Independent Councillor (unfortunately doesn’t seem to be available on line) says that town developments on land owned by the Council should only ever be agreed with a developer who isn’t local if there is absolutely no other possibility. That, he considers unlikely. He suggests selling or leasing plots to Smith & Co for their local business in preference to tying it all up with Tesco or Crown Estates who sub lease it to McDonalds or Morrisons.
That would be another great help against advertising and the big battalions, who, as he rather appealingly puts it, worship, not the needs of the community, but the bottom line of a spreadsheet in Zurich.
Smith & Co with a small turnover are unlikely to engender the debilitating advertising itch with their budget and, in any case, as it is local, there is likely to be more direct feedback.
More and more I tend to concur with Richard that Corbyn is not a Radical!
This is a fascinating policy idea.
How to plan this transition to an advert-free or advert-lite world is a key question.
I like the idea of banning advertising to children.
Another approach might be to steadily work your way down the list of harmful things. Most people seem to have accepted that banning cigarette advertising is fine… Perhaps we could extend this to other products like alcohol, chocolate, beauty industry products etc…
In terms of the impact on media- I think basically people need to just accept that they will have to start paying for news again in some way. It needn’t be all that expensive.
Consider that the guardian supposedly gets 120m unique monthly browsers. If half of those gave 20 quid for a year- then that is 1.2bn which would be 6 times the guardian media group’s current revenues…