I have long been intrigued by the power of advertising, which I see as almost universally harmful. I wrote this on the subject in my book, The Courageous State (page 172):
The nature of advertising has to be understood. Advertising is not the neutral act of informing market participants of the qualities of the products that might be available to them, as economists would like to think it is. Instead advertising and its related activities of marketing and market research create the opportunity to sell those things for which need (let alone desire) does not exist. As such advertising is not a response to the market; advertising is instead the force that creates markets.
In this case advertising provides biased information that is in very many cases targeted very specifically at audiences whose vulnerability has been profoundly understood by the advertiser. The whole purpose of advertising (small ads and maybe job recruitment apart) is not to inform, but is to spread dissatisfaction. Its intention is to make the person who is the target of the advertising campaign feel that their current consumption is inadequate and that they must have the item being promoted to achieve a proper sense of well-being. Advertising, therefore, is not an action designed to promote the benefits of ownership of the product it refers to; instead advertising is deliberately designed to make a person feel their current position is inadequate but that this current state would be remedied if only they consumed more of a particular item.
Nothing has made me change my mind. So what to do about advertising in the light of the need for a Green New Deal and a cut in consumption of useless items that we could all do without? This also comes from The Courageous State. It addresses the issue of tax and advertising. I see tax as the main corrective mechanism here, except for advertising aimed at children. That I would like to ban.
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. Nor will other businesses now, but they will have to adapt. That is the goal.
I am aware that some will take issue, not least on BBC impartiality. I think debate is, however, worthwhile.
And a key issue to address as we changed attitudes in the way that has to happen if our future is to be secure.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Agree with what you say Richard. In addition I would draw attention to the fact that the consumer pays the cost of advertising, all advertising expenditure is added to the price of the product. Advertising expenditure (along with military expenditure) is inflationary. It produces income in the form of wages, salaries and dividends for which there is no equivalent production.
Not quite about advertising, and the idea behind a Green New Deal is sound…
But, my concerns are the recent shambolic rollout of Smart Meters, the fact that the last Green Deal was beset with problems and on my recent visit to the Scottish Highlands had a lot of anti windfarm posters in the small communities where they are to be positioned
The Green Deal was not the Green New Deal
And in principle smart metering is sound – it just needs to be done properly
Problem is, there is sizable opposition to smart meters, along with wind farms, which I note you do not comment on, add to the fact that government projects do not have the best track record of going to plan.
Tell me whose projects do go to plan?
And who is it who stacks up the cost over-runs for government – them, or the contractors who failed to anticipate the problems?
Smart Meters do not have a good reputation, a starter for ten (more are available via google)
https://forums.moneysavingexpert.com/showthread.php?t=5736826&highlight=smart+meters
Also this:
https://www.scotsman.com/news/environment/scottish-wind-farm-paid-96m-to-switch-off-1-4846602
There is sizeable wind farm opposition in small Highland communities:
https://www.pressandjournal.co.uk/fp/news/highlands/1580956/highland-village-wont-be-encircled-by-wind-turbines/
Something you again have failed to acknowledge.
Smart meters can work
They have not
And wind should, in the main, be offshore
Next?
To answer your other question, projects hit problems because upper management fail to engage with “foot soldiers”
An example being Crossrail, drivers, signallers and permanent way staff all commented on the flaws of the system, but they were largely ignored.
Same happens in education, teachers aren’t listened, to doctors and nurses are also ignored when they raise concerns about their hospital and the NHS.
Either politicians or upper management on an ego trip think they know best.
Unfortunately, these things are not found in surveys (although a lot of large companies use them to pretend they listen to front line staff)
They are found in canteens, wards, classrooms, offices and factories up, down and across the UK.
There are bigger divides than leaving the EU, unfortunately, as human beings we are are own worst enemy.
Having had a 5 year fight to attempt to make a windfarm operating company (Eneco- a Dutch company) to stop the shadow flicker in the rooms of my house in my particular part of the north east of Scotland, I can understand why there is resistance.
Needless to say, Aberdeenshire Council did nothing, to force mitigation or make the use of a control-system (specifically mentioned in the company’s Environmental Impact Assessment, along with my property!) compulsory.
I am a supporter of renewable energy and applaud the Scottish Government’s targets and their encouragement of onshore and offshore windfarms. However, wrongly sited turbines, useless local authority planning departments and large land-owners being the only “locals” to benefit from the installation, make it all the more important for the ordinary residents to make their voices heard.
PS, I eventually performed a campaign of video-taking and hired a legal team (including experts in shadow flicker nuisance), to force the windfarm operators to install a control system and also to compensate me for the 5 years of my time, stress, nuisance and their ignorance of my concerns and complaints. When you threaten to force a cessation order as the first request to the court (remove their revenue by stopping the turbines), it usually makes corporate entities pay attention; their revenue is their weak spot!
Hi Richard,
Agree totally with regard to advertising – it is designed to bring about frustration. As well as banning advertising to children I would also suggest that gambling advertising should be banned.
With regard to over-consumption of “things” I would like to bring up another significant issue – products with failure deliberately engineered in. An anecdotal piece of evidence: I have a dishwasher that is 5 years old. In the time that I have owned it 2 rubber hoses have failed. I am not qualified to say whether rubber hoses in this application should be more robust (I suspect they should) but they should be possible to easily and cheaply replace. However in one instance the hose in question was only available as a part bonded to the sump of the dishwasher and in the other it was necessary to purchase a drain pump which included the faulty hose. Both of these seemed to be designed to create a repair that was time consuming/expensive enough to cause the whole dishwasher to be replaced.
Fortunately this eco-warrior/cheapskate got out the screwdriver and repaired it without having to pay anyone else. Students of advertising tag-lines might be able to guess where I bought the offending item from the fact that I mutter “the awful everyday” whenever I have to take it apart to fix it again!
“products with failure deliberately engineered in”
Its called ‘planned obsolescence’. It works hand-in-hand with superflous “upgrades” to sustain demand and production levels. Capitalism would be lost without it.
I do hope and expect that in an impending General Election (if allowed to take place) that the Labour manifesto would be explicit in the ways that such tax deductible means are tackled head on.
The Mad Men and Gambling firms would obviously hate it and paint it as some commie plot to remove ‘choice’.
The voters would understand if put in equally simplistic terms of ‘your kids won’t be tempted by the ubiquitous gambling tv ads and posters everywhere they look, in every sport they would otherwise innocently enjoy.’
“The Mad Men and Gambling firms would obviously hate it and paint it as some commie plot to remove ‘choice’. ”
I like “choice” in clothing. Is a fridge a fashion item? I think not.
A fridge – properly engineered could last 200 years (just take a component approach and design for field maintenance)
Ditto clothes and dish washing machines (with some kind of standardised electro-mech interface for the controller – which is the bit that often goes wrong)
.
I have nothing much against advertising – apart from that the wrong word is used: “grooming” that’s the right word since it accrurately defines the relationship between citizen and erm…. groomer. The “grooming” “industry” might find recruitment more difficult if there was a name change to reflect the reality of what it does.
Citizens are “groomed” to buy vast quantities of pointless “stuff”. 4×4 are a case in point: more expensive to buy, more expensive to use. people still buy them.
We call 4x4s “wanks” – not in memory of the good Dr that invented the wankel engine – rather as a reflection of those that drive them (think about it).
BTW: the Pajero 4×4? – feel free to look up what “Pajero” means in Spanish slang – I snigger every time I see one..
My wife calls them wank tanks
Just for the record …..
Count me in.
If your local bus or train service was advertised like the latest cars have been over the years, the overcrowding would be even worse but at least it would be implanted in the public’s mind that public transport was a desirable thing.
Eventually however, the cognitive dissonance created by the adverts as they clash with reality (think about the M1 or M25) I think will change public opinion eventually.
I think…………..
Right to repair is becoming an issue. Companies are chasing legislation which limits repair of their units, whenever, to their own designated people, the idea being, I assume, that your mate down the pub with a 3d printer won’t be allowed to cheaply print that vital replacement spare part for your unit thus upsetting the aftermarket applecart. Expect to see more on this subject. Meanwhile, here’s a taster FYI https://www.wired.com/story/john-deere-farmers-right-to-repair/
Apple do it now…
Yep, and manufacturers have been making cars that you can’t fix yourself.
Its a bit like Monsanto making agricultural plants that don’t bear seed. The farmers have to buy the stock off them (and that ain’t the half of it). Its an enforced dependency relationship.
“the media would of course suffer from a loss of income”
Well there’s the rub and the main thing that media content providers have suffered from lately is having their ad revenue captured by parasitic “digital disruptors” (mainly Facebook and Google) that steal the customer interface while providing no content and no support for content providers.
So my immediate thinking would be to accompany the sort of legislation that R. Murphy proposes with regulation that prevents or discourages the theft of their revenue by internet monopolies. The ideal result would see content providers being no worse off (perhaps better off) while the advertisers, Google and Facebook take the hit. This, should it be achieved, would have a dual benefit. To explain:
Publishers and other content providers are currently being taxed by the internet monopolies
thusly: https://www.ft.com/content/cf362186-d840-11e7-a039-c64b1c09b482
while Google and Facebook avoid their real tax obligations – like this:
https://static.financieel-management.nl/documents/16690/EU-Tax-Revenue-Loss-from-Google-and-Facebook.pdf
With Facebook and Google syphoning off 85% of digital advertising revenue and digital ads accounting for about 60% of the total advertising spend, the main impact, or at least half the impact of R. Murphy’s ad tax proposals would hit Facebook and Google – which is not merely delightful in itself but it serves as an indirect way of clawing back some of the corporate tax that the internet giants have been dodging for years. The impact might even be bigger than the total value of their current tax liability (maybe?). That is not to suggest that the EU and others should not continue their conventional pursuit of these mighty tax dodgers but it would certainly help in the meantime.
https://www.emarketer.com/content/more-than-60-of-uk-media-ad-spending-is-digital
Now as far as the content providers are concerned it might help to consider the expedience in this case as well as the principle. Many are facing extinction at the hands of the digital parasites. To that end they deserve recourse. Tackling that problem could be complex and difficult but that doesn’t mean that it couldn’t or shouldn’t be done.
The main proposals thus far involve competition laws that allow content providers to bargain with the internet giants on a more even footing and perhaps even bargain collectively. Another proposal is that large scale internet platforms be classified as media companies for regulatory purposes. The implications of that last idea are huge and very interesting. The internet giants respond to that in turn by saying that they are not media creators but merely distributors and that has invited the increasingly common response that they should be regulated like monopoly utilities (water for example) who are also ‘distributors’. The ‘regulated utility’ idea could see them subjected to a form of price cap that would limit their share of advertising revenue.
In Australia, the trade union representing journalists and other media workers suggested: “an access-per-user fee or percentage of revenue charge be levied on digital platforms of scale, such funding to be retained for a contestable Public Interest Journalism Fund” Which is interesting.
As to the expedience that I had mentioned earlier. Given the huge mass of revenue that content providers have lost at the hands of digital platforms it conceivable that, for them, the benefits of digital competition reform could outweigh the losses from a reform of tax rules for advertising. If that were the case then the overall reforms (and the reformers) would enjoy the support of the media. The reformers could inadvertently tap the power of the real media. As for the ‘distributors’, well what what could they do? Despite their wealth and market power, or because of it, no one really likes very them very much these days. Others don’t think about them at all.
A smart combination of digital platform regulation and the rules on tax and advertising could be a win-win for embattled content providers, the people and the state.
Some links that I forgot:
https://www.accc.gov.au/system/files/Media%2C%20Entertainment%20and%20Arts%20Alliance%20%28April%202018%29.pdf (first 2 pages)
This one is worth a look:
https://qz.com/1189960/george-soros-goes-after-facebook-fb-and-google-goog-at-davos/
BTW Richard, I’m surprised that you had no response to the idea of your proposal (directly and indirectly) clawing back some of the tax that Google and Facebook have thus far been avoiding.
It 5akez about ten years for an idea to come to fruition, I find
Which is a bit of a shame really as the scam the Facebook and Google are running against content providers will need to be addressed a lot quicker than that.
I was reading the Luton Times And Advertiser for 2 May 1879 yesterday. It makes our present media etc. look like naive amateurs.
@Demetrius
“I was reading the Luton Times And Advertiser for 2 May 1879 yesterday”
I think I’ve got a backlog of things to read, but having 139 years of the Luton Times and Advertiser to catch up on is truly daunting 🙂
Our Bosch dishwasher has a water inlet valve that has just given up the ghost. It was not so long ago that they were trying to flog us a repair scheme.
Apparently it is not a part that you can replace by yourself so we are going to scrap it and go back to hand washing as a one off repair.
Sod them.
Or the Government can pay back the wages it has taken off me since 2010 and then maybe I can afford to have it repaired.
Well – eSpares have them & a video of how to fit them yourself. Lots of other YouTube videos as well. Ive not repaired a dishwasher but have used these videos to repair a tumble drier etc. HTH
https://www.espares.co.uk/product/es1660898?utm_source=google+shopping&utm_medium=shopping&utm_campaign=google+shopping&mkwid=sGt4jns3i&pcrid=174054713172&kword=&match=&plid=&pdv=c&gclid=Cj0KCQiAg_HhBRDNARIsAGHLV52n_8oO-bFhkvrEFyfBEiNMkXlmRu5-M21EXE2MqfuGPfO3fN-ZY-YaAoLREALw_wcB
I love the way that this forum has randomly transformed into a discussion about dishwashers and planned obsolescence. And why not? I say. FYI:
https://www.pcworld.idg.com.au/article/648793/apple-samsung-fined-planned-obsolescence/
https://topdocumentaryfilms.com/light-bulb-conspiracy/
@PSR
Don’t give up on the dishwasher – it should be possible to repair yourself – they are actually not very complicated appliances.
Also, try searching for the part you need on ebay – when I was forced to replace the drain pump on mine recently the Electrolux part was £67 but managed to get the identical part from ebay for £29.
Apologies Richard – hope you don’t mind your blog becoming an appliance repair resource 🙂
You are forgiven
I’ll call it the Green New Deal in action…
‘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. ‘
Could you expand on who decides on political impartiality ?
What is your opinion?
note: someone else is posting as Matt now so I’ve added a ‘B’ to avoid confusion.
I used to get into furious rages about pernicious advertising but then I discovered I could opt out by adjusting my habits,
these days I’m pretty indifferent about it,
online I use adblockplus set at full strength, if sometimes a site won’t allow me to use it (usually a US site) then it’s highly likely the site has no actual content worth viewing,
for facebook there’s a cracking add-on called FBP, Fluff Busting Purity, it uses a simple tick box interface and java script to allow you to hide any element of facebook you find irritating, in extreme you can reduce your home page to pretty much a blank sheet, it’s in the chrome store and firefox add-on section so it must be pretty legit.
I stopped watching live tv, recording in advance likely programmes of interest and FFWD’ing through the ads,
now I only watch box sets or stuff off the internet that has all the ad breaks edited out,
I’ve given friends with young children DVD’s I’ve picked up in charity shops of the entire output of Oliver Postage & Peter Firmin’s classics such as The Clangers & Bagpuss along with other contemporay output such as Camberwick Green and they say their children are utterly transfixed by them and won’t watch anything else,
if I was raising young children I’d probably supply enough viewing in such a dvd format they’d never get round to watching live tv,
I don’t buy magazines or newspapers, online newspapers are a joke anyway, btl most commentors seem to utterly refute the bias or selective ignorance of the article’s writer yet this is blithely ignored by the paper and their drivel continues, Pravda was always merely a reference point for the current official lie anyway.
if anything I’m more concerned now about avoiding the Intergrity Initiatives weasel words embedded in the media, this is a darker form of advertising.
I wonder if advertisers have jumped the shark of late and that many other people are using tactics similar to mine to sidestep advertising, there does seem to be a trend to box sets and online consumption of media, adblockers are almost ubiquitous and being built into browsers now.
I’ve given up waiting for the establishment to take any action to improve my lot and chosen a path of Gandhiesque peaceful non co-operation instead.
boycott advertising and let the hand of the shrinking market strangle the advertisers and their propagators.
P.S. I call the 4×4 types ‘The Panzer People’
Matt B says:
“online I use adblockplus set at full strength, if sometimes a site won’t allow me to use it (usually a US site) then it’s highly likely the site has no actual content worth viewing”
So how are they meant to pay their staff and fund their continued existence? I can see the merits of blocking those freakin’ things that monitor and track you although laws could (and should) deal with that more effectively than users could. Nonetheless, content providers need to get their revenue somehow. People have come to expect that everything on-line should be totally free. That’s not sustainable or realistic.
well I do whitelist independent sites and blogs I visit regularily,
Richards site has nothing to block apart from some functionality analytics and if you want to support him you can buy his book,
most bloggers I visit have printed books or e-books you can purchase and donation options, I’m bypassing Patreon now and just go direct with paypal,
newspapers are unbearable without an adblocker, they struggle to load as they’re so infested with crap,
I’m so disappointed with the Grauniad & Indie I’ve shunned any subscription and stopped reading them, idk if I’d read them if they were paying me!
youtube is unbearable without an adblocker,
anyway IP has been financialised now, most rights get bought up and used for rent seeking, I wonder what percentage of revenue for IP actually goes to the original content creator.
in fact the best way to suppress a publication or documentary is to buy the rights now.
apparently a lot of the stuff you’d have thought you could access on bbc iplayer isn’t available because the bbc has sold or lost control of the rights.
in many instances you subsidised it’s creation through the licence fee and taxation and now are expected to pay a second time.
where does the financialisation of everything end?
I also think that we should change the law to stop the sale of fake branded goods being an offence that is enforced by public bodies i.e. Trading Standards. If the producers of high priced branded goods want to protect their markets they should be forced to enforce this themselves and not rely on public enforcement through local authorities.
The rule of law really should be available to all or it is not the rule of law
I agree that the rule of law should apply to all but enforcement that is purely undertaken to ensure market exclusivity and price stability has to be the responsibility of the manufacturers and not the public purse. In fact such public enforcement merely makes less wealthy people pay exorbitant prices in order to maintain social status, consequently such actions, through advertising, add to the wealth inequalities that blight the country.
Then change the law on copyright
I have to say on this one the EU is getting things very wrong….
I think it very interesting to think a Green New Deal together with advertising and over consumption. In the 1980ies, Swiss economist Hans Christoph Binswanger worked on what then was called the ecological tax reform. As far as I understand this is essentially what is discussed as Green New Deal today. He also wrote about over consumption and the need to create an economic system that is not based on growth, as well as on basic income. Unfortunately, searching the web now, his work seems not to be available in English.
There were those doing it in English too
I’ve always liked the quote from Sinclair Lewis: “Advertising is a valuable economic factor because it is the cheapest way of selling goods, particularly if the goods are worthless.”
🙂